Mattel 2023 annual report

2023 was a milestone year for Mattel. We extended our leadership in our key toy

categories and gained market share overall, achieved extraordinary success with the

Barbie movie, and further strengthened our nancial position.

Full year Net Sales were comparable to the prior year, with growth in three of four

regions,

Gross Margin expansion, and a signicant increase in cash ow. We ended

2023 with the strongest balance sheet we have had in years, and with more resources

to continue to execute our strategy. We achieved an investment grade credit rating,

resumed share repurchases for the rst time since 2014, and repurchased $203 million

of our common stock in 2023. Aligned with our capital allocation priorities, Mattel’s

Board of Directors approved a new $1 billion share repurchase program in early 2024.

Execution on our toy strategy was strong, considering we entered 2023 with a challenging retail inventory headwind and

faced a toy industry decline during the year. Among the highlights of the year, we grew market share in our three leader

categories: Dolls, Vehicles, and Infant, Toddler, and Preschool, as well as in Building Sets. Barbie was the #1 Doll

property and #2 toy property overall and Hot Wheels was the #1 Vehicles property.

Monster High was the largest

growth property in Dolls,

Disney Princess and Disney Frozen performance was strong in its rst full year back at Mattel

and Mattel Creations (our collector direct-to-consumer business) continued to grow strongly, with user trafc up over

90%. Recognizing our innovation in toy design, Mattel received an industry leading 15 Toy of the Year nominations and

seven awards from the Toy Association.

We also made meaningful progress on our entertainment strategy across lm, television, digital, live experiences, and

publishing. The Barbie movie was a showcase for the cultural resonance of our brands, our ability to attract and

collaborate with leading creative talent, and our demand creation expertise. The lm was a cultural phenomenon,

achieving the largest global box ofce in 2023 and becoming the industry’s 14th largest box ofce of all time.

The

Barbie movie was nominated for eight Academy Awards, including Best Picture, and received the Oscar for Best

Original Song. Mattel Films has announced the development of our rst animated movie, Bob the Builder, as part of a

robust lm slate that includes 15 movies with some of the leading talent in the industry.

Mattel Television Studios premiered 12 series and specials, including Monster High, Hot Wheels, Polly Pocket, Barbie,

Thomas & Friends, Fireman Sam, and Pictionary, as well as a Monster High movie sequel. In digital gaming, Hot Wheels

Unleashed 2 Turbocharged was released, the first standalone Barbie game on Roblox was launched, achieving over

170 million visits since October 2023,

and the Mattel163 mobile gaming joint venture with NetEase grew to almost

$200 million in revenue.

Through our live experiences, Mattel fans came together in over 200 global cities to create

meaningful connections with our brands. We also launched our own book publishing business, Mattel Press, with sales

and distribution managed by Simon & Schuster.

We continued to improve operations and successfully concluded the Optimizing for Growth cost savings program,

which achieved total annualized gross cost savings of $343 million between 2021 and 2023, above our initial target of

$250 million and revised target of $300 million. In February 2024, we announced a new Optimizing for Protable Growth

cost savings program, which will target an additional $200 million of annualized gross cost savings between 2024 and

2026. The program’s aim is to achieve additional efciencies and cost savings opportunities that we believe can further

improve our productivity, protability, and competitive position.

Over the last few years, we transformed Mattel from a toy manufacturer into an IP company that is managing franchises.

At its core, Mattel is a creative company driven by innovation. Our iconic brand portfolio, including some of the most

beloved franchises in the world, is our key asset and we engage fans through our franchise brands as well as other

popular properties that we own or license in partnership with global entertainment companies. Toys are foundational to

our strategy, and it is where we create the initial emotional connection with consumers. People who buy our products

are more than just consumers, they are fans, and that relationship enables us to expand fan engagement into new

Ynon Kreiz

Chairman and CEO

entertainment verticals and capture more value for Mattel. Building off our successes to date, we continue to advance our

strategy and now look to grow our toy business protably and capture the full value of our IP outside the toy aisle.

Our commitment to corporate citizenship continued as part of our aim to contribute to a more diverse, equitable,

inclusive, and sustainable future. Mattel received recognition for its workplace culture from Forbes, Fast Company, the

Healthiest 100 Workplaces in America, and the Great Place to Work Institute. For the fourth year in a row, Mattel

received a score of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index, the nation’s foremost

benchmarking survey and report measuring corporate policies and practices related to LGBTQ+ workplace equality. We

published our 2022 Citizenship Report, which highlighted the progress we have made across our three environmental,

social, and governance pillars: sustainable design and development, responsible sourcing and production, and thriving

and inclusive communities.

As a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the

world, we are committed to empowering generations to explore the wonder of childhood and reach their full potential.

We do that by creating innovative products and experiences that inspire fans, entertain audiences, and develop children

through play. We are proud of the work we do every day, the societal impact of our brands, and the important

contribution we make in the communities where we live, work, and play. I would like to thank the entire Mattel team for

their dedication to our purpose and mission, and the signicant progress we have made over the past few years.

We appreciate your ongoing support of Mattel and believe we are well positioned to continue the successful execution

of our strategy to protably grow our IP-driven toy business and expand our entertainment offering, and to create

long-term stockholder value.

Sincerely,

Ynon Kreiz

Chairman and Chief Executive Ofcer

(1) Excludes American Girl; (2) Source: Circana/Retail Tracking Service/G10/OCT-DEC 2023/Total Toys and Dolls, Vehicles, Infant Toddler & Preschool, and

Building Sets Supercategories/Projected Dollars; Circana/Retail Tracking Service/G10/JAN-DEC 2022-2023/Total Toys & Dolls Supercategory/Projected

Dollars; Circana/Retail Tracking Service/G10/JAN-DEC 2022-2023/Vehicles Supercategory/Projected Dollars; Circana/Retail Tracking Service/G10/JAN-DEC

2023/Dolls Supercategory/Projected Dollars; (3) Source: Warner Bros.; (4) Source: Roblox; (5) Source: Mattel163 joint venture

Mattel, Inc.

Form 10-K 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-K

(Mark One)

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-05647

______________________________________________________

MATTEL, INC.

(Exact name of registrant as specified in its charter)

Delaware

95-1567322

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

333 Continental Blvd.

El Segundo, CA 90245-5012

(Address of principal executive offices)

Registrant's telephone number, including area code (310) 252-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common stock, $1.00 per share MAT

The Nasdaq Global Select Market

______________________________________________________

Securities registered pursuant to Section 12(g) of the Act:

NONE

______________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-

T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging

growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the

Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the

correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the

registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $6,916,658,936 based upon the closing market

price as of the close of business June 30, 2023, the last business day of the registrant's most recently completed second fiscal quarter.

Number of shares outstanding of registrant's common stock, $1.00 par value, as of March 4, 2024: 344.0 million shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Mattel, Inc. 2024 Proxy Statement, to be filed with the Securities and Exchange Commission ("SEC") within 120 days after the closing of the registrant's

fiscal year (incorporated into Part III to the extent stated herein).

MATTEL, INC. AND SUBSIDIARIES

Page

PART I

Item 1. Business 4

Item 1A. Risk Factors 11

Item 1B. Unresolved Staff Comments 25

Item 1C. Cybersecurity 25

Item 2. Properties 26

Item 3. Legal Proceedings 26

Item 4. Mine Safety Disclosures 26

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Item 6. Reserved 29

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 29

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47

Item 8. Financial Statements and Supplementary Data 49

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 95

Item 9A. Controls and Procedures 95

Item 9B. Other Information 95

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 95

PART III

Item 10. Directors, Executive Officers, and Corporate Governance 96

Item 11. Executive Compensation 96

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 96

Item 13. Certain Relationships and Related Transactions, and Director Independence 96

Item 14. Principal Accountant Fees and Services 96

PART IV

Item 15. Exhibits and Financial Statement Schedules 97

Item 16. Form 10-K Summary 102

Signature

103

(Cautionary Note Regarding Forward-Looking Statements)

Mattel cautions investors that this Annual Report on Form 10-K includes forward-looking statements, which are

statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be identified by the fact

that they do not relate strictly to historical or current facts. The use of words such as "anticipates," "expects," "intends," "plans,"

"projects," "looks forward," "confident that," "believes," and "targeted," among others, generally identify forward-looking

statements. These forward-looking statements are based on currently available operating, financial, economic, and other

information and assumptions, and are subject to a number of significant risks and uncertainties. A variety of factors, many of

which are beyond Mattel's control, could cause actual future results to differ materially from those projected in the forward-

looking statements. Specific factors that might cause such a difference include, but are not limited to: (i) Mattel's ability to

design, develop, produce, manufacture, source, ship, and distribute products on a timely and cost-effective basis; (ii) sufficient

interest in and demand for the products and entertainment Mattel offers by retail customers and consumers to profitably recover

Mattel's costs; (iii) downturns in economic conditions affecting Mattel's markets which can negatively impact retail customers

and consumers, and which can result in lower employment levels and lower consumer disposable income and spending,

including lower spending on purchases of Mattel's products; (iv) other factors which can lower discretionary consumer

spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of

consumer debt; (v) potential difficulties or delays Mattel may experience in implementing cost savings and efficiency

enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which Mattel

and its customers and suppliers operate, which could create delays or increase Mattel's costs, such as higher commodity prices,

labor costs or transportation costs, or outbreaks of disease; (vii) the effect of inflation on Mattel's business, including cost

inflation in supply chain inputs and increased labor costs, as well as pricing actions taken in an effort to mitigate the effects of

inflation; (viii) currency fluctuations, including movements in foreign exchange rates, which can lower Mattel's net revenues

and earnings, and significantly impact Mattel's costs; (ix) the concentration of Mattel's customers, potentially increasing the

negative impact to Mattel of difficulties experienced by any of Mattel's customers, such as bankruptcies or liquidations or a

general lack of success, or changes in their purchasing or selling patterns; (x) the inventory policies of Mattel's retail customers,

as well as the concentration of Mattel's revenues in the second half of the year, which coupled with reliance by retailers on

quick response inventory management techniques, increases the risk of underproduction, overproduction, and shipping delays;

(xi) legal, reputational, and financial risks related to security breaches or cyberattacks; (xii) work disruptions, including as a

result of supply chain disruption such as plant or port closures, which may impact Mattel's ability to manufacture or deliver

product in a timely and cost-effective manner; (xiii) the impact of competition on revenues, margins, and other aspects of

Mattel's business, including the ability to offer products that consumers choose to buy instead of competitive products, the

ability to secure, maintain, and renew popular licenses from licensors of entertainment properties, and the ability to attract and

retain talented employees and adapt to evolving workplace models; (xiv) the risk of product recalls or product liability suits and

costs associated with product safety regulations; (xv) changes in laws or regulations in the United States and/or in other major

markets, such as China, in which Mattel operates, including, without limitation, with respect to taxes, tariffs, trade policies,

product safety, or sustainability, which may increase Mattel's product costs and other costs of doing business, and reduce

Mattel's earnings and liquidity; (xvi) business disruptions or other unforeseen impacts due to economic instability, political

instability, civil unrest, armed hostilities (including the impact of the war in Ukraine and geopolitical developments in the

Middle East), natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; (xvii)

failure to realize the planned benefits from any investments or acquisitions made by Mattel; (xviii) the impact of other market

conditions or third-party actions or approvals, including those that result in any significant failure, inadequacy, or interruption

from vendors or outsourcers, which could reduce demand for Mattel's products, delay or increase the cost of implementation of

Mattel's programs, or alter Mattel's actions and reduce actual results; (xix) changes in financing markets or the inability of

Mattel to obtain financing on attractive terms; (xx) the impact of litigation, arbitration, or regulatory decisions or settlement

actions; (xxi) Mattel's ability to navigate regulatory frameworks in connection with new areas of investment, product

development, or other business activities, such as artificial intelligence, non-fungible tokens, and cryptocurrency; (xxii) an

inability to remediate the material weakness in Mattel's internal control over financial reporting, or additional material

weaknesses or other deficiencies in the future or the failure to maintain an effective system of internal control; and (xxiii) other

risks and uncertainties detailed in Part I, Item 1A "Risk Factors." Mattel does not update forward-looking statements and

expressly disclaims any obligation to do so, except as required by law.

PART I

Item 1. Business.

Throughout this report "Mattel" refers to Mattel, Inc. and/or one or more of its subsidiaries. Mattel is a leading global toy

and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel creates innovative

products and experiences that inspire fans, entertain audiences, and develop children through play. Mattel is focused on the

following evolved strategy to grow its intellectual property ("IP") driven toy business and expand its entertainment offering:

• Grow toy business profitably through scaling Mattel's portfolio, optimizing operations, evolving demand creation, and

growing franchise brands; and

• Expand entertainment offering to capture the full value of Mattel's IP outside the toy aisle in highly accretive business

verticals, by growing franchise brands and accelerating content, consumer products, and digital and live experiences.

Mattel is the owner of a portfolio of iconic brands and partners with global entertainment companies to license other IP.

Mattel's portfolio of owned and licensed brands and products are organized into the following categories:

Dolls—including brands such as Barbie, American Girl, Disney Princess and Disney Frozen, Monster High, and Polly

Pocket. Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered

globally. Empowering girls since 1959, Barbie has inspired the limitless potential of every girl by showing them that they

can be anything. American Girl, with an extensive portfolio of dolls and accessories, content, gaming, and lifestyle

products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books,

featuring diverse characters from past and present.

Infant, Toddler, and Preschool—including brands such as Fisher-Price (including Little People and Imaginext) and

Thomas & Friends. As a leader in play and child development, Fisher-Price's mission is to help families by making the

most fun, enriching products for infants, toddlers, and preschoolers. Thomas & Friends is an award-winning preschool

train brand franchise that brings meaningful life lessons of friendship and teamwork to kids through toys, content, live

events, and other consumer products.

Vehicles—including brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels Mario Kart

(Nintendo)), Matchbox, and Cars (Disney Pixar). In production for over 50 years, Hot Wheels continues to push the limits

of performance and design, and ignites and nurtures the challenger spirit of kids, adults, and collectors. From die-cast

vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans

of all ages.

Action Figures, Building Sets, Games, and Other—including brands such as Masters of the Universe, MEGA, UNO,

Jurassic World (NBCUniversal), Minecraft (Microsoft), WWE, and Star Wars (Disney's Lucasfilm). Mattel's Action

Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World

and WWE, as well as product lines from Mattel-owned IP, such as Masters of the Universe. As the challenger brand in

Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of global

franchises. Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone. Other

includes Plush, which contains products associated with movie releases from licensed entertainment franchises, as well as

Mattel-owned IP.

Business Segments

Mattel's operating segments are: (i) North America, which consists of the United States and Canada; (ii) International;

and (iii) American Girl. The North America and International segments sell products across Mattel's categories, although some

products are developed and adapted for particular international markets.

For additional information on Mattel's worldwide gross billings by brand category, see Part II, Item 7 "Management's

Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

North America Segment

The North America segment markets and sells toys and consumer products in the United States and Canada across all of

Mattel's categories.

Dolls

Barbie continues to deliver innovation, purpose-driven marketing campaigns, and engaging toys connected to a strong

system of play. Barbie has broad product offerings, with product lines designed to appeal to children of multiple age groups,

complemented by a Barbie Signature line with high-quality dolls that appeal to fans of all ages. In 2024, Barbie will look to

continue to capitalize on the successful live action theatrical movie to help drive the full Barbie franchise, including toys,

consumer products, and gaming. Barbie will be celebrating its 65

anniversary with numerous activations, and also launch

exciting new product lines and play patterns.

Mattel is also excited to build upon its strong partnerships with Disney for the Disney Princess and Disney Frozen

product lines. Monster High will look to build upon the success of its global re-launch, including planned new content and

product offerings.

Infant, Toddler, and Preschool

In 2024, Fisher-Price will continue its focus on engaging consumers as a trusted partner for families with infants,

toddlers and preschoolers, by continuing to create brand love through innovative products and enriching the first five years of

childhood for every family. Consumer-centric innovation will continue to drive new product offerings, including the expansion

of Linked Play within Infant and new innovative toys from Imaginext, including new licensed entertainment offerings. Fisher-

Price will add Fisher-Price Wood and continue its strong momentum in the Little People product line with the expansion of the

Little People Barbie line and Little People Collector line.

Vehicles

In 2024, industry leader Hot Wheels will look to continue its strong momentum as a multigenerational franchise with

consumer interest that remains at historic highs. Hot Wheels product offerings are expected to excite consumers with innovation

in both die-cast vehicles and tracks and playsets. These offerings will be supported by an all-new animated children's series on

Netflix, Hot Wheels Let’s Race, and the expansion of the Hot Wheels Racerverse line. Hot Wheels also seeks to further expand

die-cast vehicle distribution, targeting fans of all ages.

Die-cast pioneer Matchbox expects to continue to bring exciting new products to market following its successful 70

anniversary, including new sustainable die-cast products, and new episodes of the globally popular YouTube series, Matchbox

Adventures.

Mattel will continue to partner with Disney Pixar for Cars to drive innovation, including fresh new product offerings to

support key marketing events in 2024.

Action Figures, Building Sets, Games, and Other

Mattel Action Figures will continue to collaborate with key licensor partners, such as Disney Pixar, Microsoft,

NBCUniversal, and WWE, to bring innovative products to the global marketplace. Mattel's 2024 Action Figures product lines

will include toys tied to Netflix content for NBCUniversal’s Jurassic World (Jurassic World: Chaos Theory) and Masters of the

Universe (Masters of the Universe: Revolution) as well as new innovation within Minecraft and WWE.

In Building Sets, MEGA inspires creativity through authentic building experiences for builders of all ages and fans of

global franchises. Partnerships with some of the world's top franchises, including Pokémon and Hot Wheels, invite consumers to

try MEGA building sets, while innovative building play, authentic details, compatible quality, and accessible value encourages

consumers to stay in the MEGA building set collection. Parents of preschoolers can continue to discover how the MEGA Bloks

preschool building system enhances playtime and early childhood development beyond the Big Building Bag.

Mattel Games consists of some of the most beloved Games IP in the world including UNO, Pictionary, Skip-Bo, Blokus,

and many others. Mattel will focus on its expansion of Games into its direct-to-consumer business, collectability, and

innovation. Additionally, Mattel expects to introduce new game extensions and partnerships that celebrate pop culture.

International Segment

Products marketed and sold by the International segment are generally the same as those marketed and sold by the North

America segment, although some are developed or adapted for particular international markets. Mattel's products are sold

directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and

through agents and distributors in those countries where Mattel has no direct presence. No individual country within the

International segment exceeded 8% of worldwide consolidated net sales during 2023.

American Girl Segment

The American Girl segment is a direct marketer, retailer, and children's publisher dedicated to its mission to help girls

grow up with confidence and character. American Girl is best known for its line of historical and contemporary characters that

feature 18" dolls, books, and accessories that inspire girls to face the world with courage, resilience, and kindness. The

contemporary Truly Me and Create Your Own lines encourage girls to express their imaginations and creativity by choosing a

doll that looks like them or custom-creating one that's completely unique from more than one million options. Bitty Baby

introduces younger girls to nurturing play until they are ready for WellieWishers, a sweet group of girls who focus on empathy

and being a good friend. American Girl also publishes best-selling fiction and non-fiction books, as well as an array of popular

digital content. The American Girl segment sells products directly to consumers through its website, proprietary retail stores in

the United States, and at select retailers in the United States.

Competition and Industry Background

Mattel is a worldwide leader in the manufacture, marketing, and sale of toys, games, and other products related to play,

learning, and development. Competition in the toy industry is based primarily on quality, play value, brands, and price. Mattel

offers a diverse range of products for children, fans of all ages, and families that include, among others, toys for infants,

toddlers, and preschoolers, toys for school-aged children, dolls, vehicles, action figures, building sets, games, including digital,

puzzles, plush, educational toys, technology-related products, media-driven products, and fashion-related items. The North

America segment competes with several large toy companies, including Hasbro, Jazwares, LEGO, the Pokémon Company,

Spin Master, many smaller toy companies, and manufacturers of video games and consumer electronics. The International

segment competes with global toy companies including Hasbro, Jazwares, LEGO, the Pokémon Company, Spin Master, other

national and regional toy companies, and manufacturers of video games and consumer electronics. Foreign regions may include

competitors that are strong in a particular toy line or geographical area but do not compete with Mattel or other international toy

companies worldwide. The American Girl segment competes with companies that manufacture dolls and accessories, and with

children's book publishers and retailers.

There is increasing competition among the above companies due to trends towards shorter life cycles for individual toy

products and an increasing use of more sophisticated technology among consumers. In addition, Mattel competes with

companies that sell non-toy products, such as electronic consumer products, video games, as well as content and other

entertainment companies. Competition continues to be heavily influenced by the fact that a small number of retailers account

for a large portion of all toy sales, allocate the shelf space from which toys are viewed, and have direct contact with parents and

children through in-store and online purchases. Such retailers can and do promote their own private-label toys, facilitate the sale

of competitors' toys, showcase toys online based on proprietary algorithms, and allocate shelf space to one type of toy over

another. Online distributors are able to promote a wide variety of toys and represent a wide variety of toy manufacturers.

Seasonality

Mattel's business is highly seasonal, with consumers making a large percentage of all toy purchases during the traditional

holiday season. A significant portion of retailer purchasing typically occurs in the third and fourth quarters of Mattel's fiscal

year in anticipation of holiday buying. These seasonal purchasing patterns and requisite production lead times create risk to

Mattel's business associated with the underproduction of popular toys and the overproduction of less popular toys that do not

match consumer demand. The seasonality of Mattel's business increases the risk that Mattel may not be able to meet demand for

certain products at peak demand times or that Mattel's own inventory levels may be adversely impacted by the need to pre-build

products before orders are placed. In addition, this seasonality may cause Mattel's sales to vary significantly from period to

period.

In anticipation of retail sales during the traditional holiday season, Mattel significantly increases its production in advance

of the peak selling period, resulting in a corresponding build-up of inventory levels in the first three quarters of its fiscal year.

Seasonal shipping patterns generally result in significant peaks in the third and fourth quarters in the respective levels of

inventories and accounts receivable, which may result in seasonal working capital financing requirements.

Sales

Mattel's products are sold throughout the world. Products within the North America segment are sold directly to retailers,

including omnichannel retailers, discount and free-standing toy stores, chain stores, department stores, other retail outlets, and,

to a limited extent, wholesalers. Mattel also operates small retail outlets at certain corporate offices as a service to its employees

and as an outlet for its products. Products within the International segment are sold directly to retailers and wholesalers in most

European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those

countries where Mattel has no direct presence. Mattel also has retail outlets in Latin America that serve as outlets for its

products. American Girl products and its children's publications are sold directly to consumers and select retailers in the United

States. Mattel has retail space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American

Girl stores, and in five other cities across the United States for its American Girl boutique stores, each of which features

children's products from the American Girl segment. Additionally, Mattel sells certain of its products directly to consumers

through its e-commerce platform and various third-party e-commerce channels.

During 2023, Mattel's three largest customers (Walmart at $1.13 billion, Target at $0.67 billion, and Amazon at

$0.60 billion) accounted for approximately 44% of worldwide consolidated net sales. During 2022, Mattel's three largest

customers (Walmart at $0.95 billion, Target at $0.76 billion, and Amazon at $0.64 billion) accounted for approximately 43% of

worldwide consolidated net sales. Within countries in the International segment, there is also a concentration of sales to certain

large customers that do not operate in the United States, none of which exceeded 10% of worldwide consolidated net sales. The

customers and the degree of concentration vary depending upon the region or nation. See Part I, Item 1A "Risk Factors" and

Part II, Item 8 "Financial Statements and Supplementary Data—Note 14 to the Consolidated Financial Statements—Segment

Information."

License Agreements

Mattel has license agreements with third parties that permit Mattel to utilize the trademark, characters, or inventions of

the licensor in products that Mattel sells. A number of these licenses relate to product lines that are significant to Mattel's

business and operations.

Mattel has entered into agreements to license entertainment properties, including among others, Disney Consumer

Products (including Disney Princess and Disney Frozen, Star Wars, Disney Pixar (including Cars and Toy Story) and certain

other Disney films and television properties), NBCUniversal (including Jurassic World, Trolls, and Fast and Furious),

Paramount (relating to its Nickelodeon properties), Warner Bros. (including DC Universe and Harry Potter), Microsoft

(including Minecraft and Halo), WWE, and Pokémon.

Royalty expense for 2023, 2022, and 2021 was $249.8 million, $230.8 million, and $184.3 million, respectively. See Part

II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital

Resources—Commitments" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated

Financial Statements—Commitments and Contingencies."

Mattel licenses a number of its trademarks and other property rights to others for use in connection with the sale of their

products.

Trademarks, Copyrights, and Patents

Most of Mattel's products are sold under and are associated with trademarks, trade names, and copyrights, and some of

these products incorporate devices or designs for which patent protection has been, or is being, pursued. Trademarks,

copyrights, and patents are significant assets of Mattel in that they provide product recognition, acceptance, and exclusive rights

to Mattel's innovations around the world.

Mattel customarily seeks trademark, copyright, and/or patent protection covering its products, and it owns or has

applications pending or registrations for U.S. and foreign trademarks, copyrights, and patents covering many of its products.

Although a number of these trademarks, copyrights, and patents relate to product lines that are significant to Mattel's business

and operations, Mattel does not believe it is dependent on a single trademark, copyright, or patent. Mattel believes its rights to

these properties are adequately protected, but there can be no assurance that its rights can be successfully asserted in the future

or will not be invalidated, circumvented, or challenged.

Manufacturing and Materials

Mattel manufactures toy products for all segments in both company-owned facilities and through third-party

manufacturers. Products are also purchased from unrelated entities that design, develop, and manufacture those products. To

provide greater flexibility in the manufacture and delivery of its products, and as part of a continuing effort to reduce

manufacturing costs, Mattel has concentrated production of most of its core products in company-owned facilities and generally

uses third-party manufacturers for the production of non-core products.

Mattel's principal manufacturing facilities are located in China, Indonesia, Malaysia, Mexico, and Thailand. In

conjunction with Mattel's cost savings programs, in 2021, Mattel discontinued production at its plant located in Canada. In

addition, Mattel intends to discontinue production at a plant located in China in 2024. To help avoid disruption of its product

supply due to political instability, civil unrest, future pandemics or other health crises, economic instability, changes in

government policies or regulations, natural and manmade disasters, and other risks, Mattel produces its products in various

facilities across multiple countries. Mattel believes that the existing production capacity at its owned and third-party

manufacturers' facilities is sufficient to handle expected volume for the foreseeable future.

Mattel bases its production schedules for toy products on customer orders and forecasts, taking into account historical

trends, results of market research, and current market information. Actual shipments of products ordered and order cancellation

rates are affected by consumer acceptance of product lines, strength of competing products, marketing strategies of retailers,

changes in buying patterns of both retailers and consumers, and overall economic conditions. Unexpected changes in these

factors could result in a lack of product availability or excess inventory in a particular product line.

The majority of Mattel's raw materials are available from numerous suppliers but may be subject to fluctuations in price.

See Part I, Item 1A "Risk Factors."

Advertising and Marketing

Mattel supports its product lines with extensive advertising and consumer promotions. Advertising takes place at varying

levels throughout the year and peaks during the traditional holiday season. Advertising includes television commercials, social

media, catalogs, and internet advertisements. Promotions include in-store displays, merchandising materials, major events

focusing on products, and tie-ins with various consumer products companies.

During 2023, 2022, and 2021, Mattel incurred advertising and promotion expenses of $524.8 million (9.6% of net sales),

$534.3 million (9.8% of net sales), and $545.7 million (10.0% of net sales), respectively.

Financial Instruments

Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows. Mattel seeks to mitigate its

exposure to foreign exchange risk by monitoring its foreign currency transaction exposure for the year and partially hedging

such exposure using foreign currency forward exchange contracts primarily to hedge its purchase and sale of inventory and

other intercompany transactions denominated in foreign currencies. These contracts have maturity dates of up to 24 months. In

addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for

international borrowings. Mattel does not trade in financial instruments for speculative purposes.

For additional information regarding foreign currency contracts, see Part II, Item 7A "Quantitative and Qualitative

Disclosures About Market Risk" and Part II, Item 8 "Financial Statements and Supplementary Data—Note 12 to the

Consolidated Financial Statements—Derivative Instruments."

Government Regulations

Mattel's products sold in the United States are subject to the provisions of the Consumer Product Safety Act, as amended

by the Consumer Product Safety Improvement Act of 2008, and the Federal Hazardous Substances Act, and may also be subject

to the requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act and the regulations promulgated

pursuant to such statutes. These statutes and the related regulations ban from the market consumer products that fail to comply

with applicable product safety laws, regulations, and standards. The Consumer Product Safety Commission may require the

recall, repurchase, replacement, or repair of any such banned products or products that otherwise create a substantial risk of

injury and may seek penalties for regulatory noncompliance under certain circumstances. Similar laws exist in some U.S. states.

Mattel believes that it is in substantial compliance with these federal and state laws and regulations.

Mattel's products sold worldwide are subject to the provisions of similar laws and regulations in many jurisdictions,

including the European Union ("EU") and Canada. Mattel believes that it is in substantial compliance with these laws and

regulations.

Mattel maintains a quality control program to help ensure compliance with applicable product safety requirements.

Nonetheless, Mattel has experienced, and may in the future experience, issues in products that result in recalls, withdrawals, or

replacements of products. A product recall could have a material adverse effect on Mattel's business, financial condition, and

results of operations, depending on the product affected by the recall and the extent of the recall efforts required. A product

recall could also negatively affect Mattel's reputation and the sales of other Mattel products. See Part I, Item 1A "Risk Factors."

Mattel's advertising and marketing activities are subject to the Federal Trade Commission Act and the Children's

Television Act of 1990 and may also be subject to other rules and regulations promulgated by the Federal Trade Commission,

and the Federal Communications Commission, as well as laws of certain countries that regulate advertising, advertising to

children, and related activities. In addition, Mattel's web-based products and services and other online and digital

communications activity are or may be subject to U.S. and foreign privacy-related regulations, including the U.S. Children's

Online Privacy Protection Act of 1998 and the EU General Data Protection Regulation and related national regulations.

Privacy-related laws also exist in some U.S. states, such as the California Consumer Privacy Act, as amended by the California

Privacy Rights Act, and other state laws that took effect in 2023, or are yet to take effect. Mattel believes that it is in substantial

compliance with these laws and regulations.

Mattel's worldwide operations are subject to the requirements of various environmental laws and regulations in the

jurisdictions where those operations are located. Mattel believes that it is in substantial compliance with these laws and

regulations. Mattel's operations are from time to time the subject of investigations, conferences, discussions, and negotiations

with various federal, state, and local environmental agencies within and outside the United States with respect to the discharge

or cleanup of hazardous waste. Mattel is not aware of any material cleanup liabilities. In addition, Mattel continues to monitor

existing and pending environmental laws and regulations within the United States and elsewhere related to climate change and

greenhouse gas emissions.

Mattel is subject to various other federal, state, local, and international laws and regulations applicable to its business.

Mattel believes that it is in substantial compliance with these laws and regulations.

Human Capital

As of December 31, 2023, Mattel had approximately 33,000 employees (including temporary and seasonal employees)

working in over 35 countries worldwide to create innovative products and experiences that inspire fans, entertain audiences,

and develop children through play. Approximately 28,400 employees (86% of the total workforce) are located outside the

United States, with a significant global manufacturing labor workforce of approximately 23,600 employees. The remaining

workforce focuses on the design, marketing, sales, finance, and other aspects of Mattel's business.

Mattel believes recruiting, developing, and motivating a talented global workforce are important to its long-term growth

and success. Through Mattel's focus on employee engagement, diversity, equity, and inclusion, training and development,

health and safety, and employee well-being, Mattel endeavors to create a supportive and rewarding environment where

employees are encouraged to collaborate, innovate, and grow. Mattel's Board of Directors, Compensation Committee, and

Governance and Social Responsibility Committee are involved in the oversight of how the company fosters its culture and

receive regular updates on Mattel's workforce management.

Mattel was ranked among Forbes 2023 World's Best Employers and 2023 America's Best Midsize Employers; named to

Fast Company's list of the Best Workplaces for Innovators in 2023; recognized by U.S. News as one of the Best Companies to

Work For 2023-2024; named to Newsweek America’s Greatest Workplaces for Women 2023 and America's Greatest

Workplaces for Diversity 2024; and honored by Computerworld as one of the Best Places to Work in IT in 2023 and 2024.

Mattel has once again been recognized for its diversity, equity, and inclusion efforts, including by the Human Rights Campaign

Foundation as a 2023-2024 "Equality 100 Award" recipient. For the fourth consecutive year, Mattel received a perfect score on

the Human Rights Campaign Foundation's Corporate Equality Index.

Workplace Culture

Mattel is committed to fostering a culture where all employees have the opportunity to realize their full potential.

Management regularly collects feedback to measure employee engagement and job satisfaction on an ongoing basis through its

annual global engagement survey, which is used to help improve the employee experience and strengthen its workplace culture.

Mattel values a wide range of ideas and voices that help evolve and broaden its perspectives, with a reach that extends to

consumers, customers, business partners, and suppliers.

In September 2023, Mattel published its 2022 Citizenship Report, which described goals and initiatives related to its

diversity, equity, and inclusion efforts. The report highlighted Mattel's progress on its goals as of December 31, 2022, including

the following:

• Maintained 100% base pay equity in 2022 for similar work performed in similar markets by gender globally and by

ethnicity in the United States.

• Continued to achieve a high level of representation for women, who comprised 57% of Mattel's global workforce and

48% of managers and above in 2022.

• Continued to achieve a high level of representation for ethnically diverse employees, who made up 45% of U.S.

employees in 2022.

• Mattel remains focused on actions to increase such representation, including strengthening relationships with schools,

networks, and organizations to establish a talent pipeline of women for Technology, Supply Chain, and Finance

positions.

* Excludes manufacturing labor and temporary and seasonal employees.

Mattel believes that Mattel's Employee Resource Groups ("ERGs") are an integral component of fostering an inclusive

culture and enhancing engagement at Mattel. Mattel employees have created and continue to lead ten ERGs, which bring

together members and allies of underrepresented identities across the global organization. The ERGs organize learning

opportunities, cultural celebrations, and community outreach, elevate important issues, encourage open and honest

conversations, and collect critical feedback.

Employee Development and Well-Being

Mattel believes continuously developing skills and capabilities for the future is essential to operating as an IP-driven,

high-performing toy and family entertainment company. Additionally, offering the opportunity for employees to continuously

learn and grow their careers at Mattel is a key driver of its employee engagement strategy. In 2023, employees at all levels

around the globe participated in several hundred thousand hours of online classes and instructor-led training regarding

professional development, management development, and technical training.

Mattel is focused on creating a safe and healthy workplace for all of its employees. This is reflected in a comprehensive

set of standards and oversight processes that establish Mattel's expectations for responsible working conditions, environmental

protections, social compliance, health, and safety in both its own manufacturing facilities and those of its supply chain partners.

Mattel offers several benefits to promote employee well-being, including flexible work hours and/or paid time off, health

and welfare insurance options, retirement plans, and basic and supplemental employee life insurance for eligible individuals, as

well as programs targeted at matters such as maintaining work/life balance and improving health and happiness.

Available Information

Mattel files its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy

Statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange

Act of 1934, as amended (the "Exchange Act"), with the SEC. The SEC maintains an Internet website that contains reports,

proxy, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Mattel's internet website address is http://corporate.mattel.com. Mattel makes available on its internet website, free of

charge, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements,

and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as

reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

Item 1A. Risk Factors.

If any of the risks, events, and uncertainties described below actually occurs, Mattel's business, financial condition and

results of operations could be adversely affected, and such effects could at times be material. The risk factors listed below are

not exhaustive. Other sections of this Annual Report on Form 10-K include additional factors that could materially and

adversely impact Mattel's business, financial condition and results of operations. Moreover, Mattel operates in a very

competitive and rapidly changing environment. New factors emerge from time to time, and it is not possible for management to

predict the impact of all of these factors on Mattel's business, financial condition, or results of operations, or the extent to

which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-

looking statements. These factors are also currently, and in the future may be, amplified by the global economic or geopolitical

climate and additional or unforeseen circumstances, developments, or risks. Given these risks and uncertainties, investors

should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements

contained in this Annual Report on Form 10-K and any other public statement made by Mattel or its representatives may turn

out to be wrong. Mattel expressly disclaims any obligation to update or revise any forward-looking statements, whether as a

result of new developments or otherwise.

Business Operations

Mattel and its license partners are not always able to successfully identify and/or satisfy consumer preferences, which

could cause Mattel's business, financial condition, and results of operations to be adversely affected.

Mattel's business and operating results depend largely upon the appeal of its products, driven by both innovation and

marketing. Consumer preferences, particularly with children as the end users of Mattel's products, are continuously changing

and can vary by geographical markets. Product life cycles and consumer preferences continue to be affected by the rapidly

increasing use and proliferation of social and digital media by consumers, and the speed with which information is shared.

Mattel is not always able to identify trends in consumer preferences or identify and satisfy consumer preferences in a timely

manner. Significant, sudden shifts in demand are caused by "hit" toys and trends, which are often unpredictable and can result

in short consumer life cycles. Mattel offers a diverse range of products for children, fans of all ages, and families that includes,

among others, toys for infants, toddlers, and preschoolers, toys for school-aged children, youth electronics, digital media, hand-

held and other games, puzzles, educational toys, and fashion-related items. Mattel competes domestically and internationally

with a wide range of large and small manufacturers, marketers, and sellers of toys, video games, consumer electronics such as

tablets and mobile devices, and other play products, as well as retailers, which means that Mattel's market position is always at

risk. Mattel's ability to maintain its current product sales and increase its product sales or establish product sales with new,

innovative toys, depends on Mattel's ability to satisfy play preferences, enhance existing products, develop and introduce new

products, and achieve market acceptance of these products. These challenges are intensifying due to trends towards shorter life

cycles for individual toy products, the phenomenon of children outgrowing traditional toys at younger ages, an increasing use of

more sophisticated technology in toys, including machine learning and artificial intelligence ("AI"), and an evolving path to

purchase.

In addition, entertainment media has become increasingly important for consumers to experience Mattel's brands and its

license partners' brands. The extent to which Mattel's and its license partners' entertainment offerings are successful can

significantly impact the demand for Mattel's products and its financial performance. Consumer acceptance of Mattel's and its

license partners' entertainment offerings is impacted by factors beyond its control, including critical reviews, promotions, the

popularity of movies and television programs released into the marketplace at or near the same time, the availability of

alternative forms of entertainment, general economic conditions, and public preferences generally.

Mattel's failure to successfully meet the challenges outlined above in a timely and cost-effective manner could decrease

demand for its products and entertainment offerings and may adversely affect Mattel's business, financial condition, and results

of operations.

High levels of competition and low barriers to entry can make it difficult to achieve, maintain, or build upon the success

of Mattel's brands, products, and product lines.

Mattel faces competitors who are also constantly monitoring and attempting to anticipate consumer tastes, seeking ideas

which will appeal to consumers, and introducing new products that compete with Mattel's products. In addition, competition for

access to entertainment properties has lessened, and may in the future continue to lessen, Mattel's ability to secure, maintain,

and renew popular licenses to entertainment products developed by other parties and licensed to Mattel on beneficial terms, if at

all, or require Mattel to pay licensors higher royalties and higher minimum guaranteed payments to obtain or retain these

licenses. As a licensee of entertainment properties, Mattel has no guarantee that a particular property or brand will translate into

a successful toy, game, or other product. In addition, the barriers to entry for new participants in the toy products industry and

entertainment industry are low. In a very short period of time, new market participants with a popular product idea or

entertainment property can become a significant source of competition for Mattel and its products. Reduced demand for

Mattel's brands, products, and product lines as a result of these factors may adversely affect Mattel's business, financial

condition, and results of operations.

Inaccurately anticipating changes and trends in popular culture, media, fashion, or technology can adversely affect

Mattel's sales, financial condition, and results of operations.

Successful movies, television programs, video games, and characters in children's literature affect play preferences, and

many products depend on media-based intellectual property licenses including trademarks, trade names, copyrights, patents,

trade secrets, and rights under intellectual property license agreements and other agreements with third parties. Media-based

licenses can cause a line of toys or other products to gain immediate success among children, parents, or families. Trends in

media, and children's characters change swiftly and contribute to the transience and uncertainty of play preferences. Mattel

attempts to respond to such trends and developments by modifying, refreshing, extending, and expanding its product offerings

on an annual basis.

Mattel spends considerable resources in designing and developing toys and other products based on its and its license

partners' planned content releases. Mattel also relies heavily on the efforts of third parties, such as studios and other content

creators and distributors, with respect to the development of content, marketing support, and release dates, which has an impact

on the success of such content and the associated toys and other products. In many cases, Mattel does not fully control when or

if any particular project will be greenlit, developed, or released. Third parties may change their plans with respect to projects

and release dates, or may decide to cancel development. Other developments, such as labor strikes or theater closures, have at

times caused, and could in the future cause, delays in the release of new movies and television programs, and any such delay or

cancellation may adversely impact Mattel’s sales of the associated toys and other products.

Mattel expects that children will continue to be interested in product offerings incorporating sophisticated technology,

such as video games, consumer electronics, and social and digital media, at increasingly younger ages. To the extent Mattel

seeks to introduce sophisticated technology products, such products tend to have higher design, development, and production

costs, follow longer timelines, and require different competencies compared to Mattel's more traditional toys and games. The

pace of change in product offerings and consumer tastes for sophisticated technology products is potentially even greater than

for Mattel's more traditional products, and consequently the window for consumer interest in such products may be shorter than

for traditional toys and games.

Any inability by Mattel to accurately anticipate trends in popular culture, media, fashion, or technology may cause its

products not to be accepted by children, parents, fans, or families and may adversely affect its sales, financial condition, and

results of operations.

Mattel's failure to successfully market or advertise its products could have an adverse effect on Mattel's business,

financial condition, and results of operations.

Mattel's products are marketed worldwide through a diverse spectrum of advertising, marketing, and promotional

programs, including the use of digital and social media to reach consumers. Mattel's ability to sell products is dependent in part

upon the success of these programs. As such, Mattel's business, financial condition, and results of operations could be adversely

affected by its failure to successfully market its products or by an increase in its advertising, marketing, or promotional costs.

Mattel's business is highly seasonal and otherwise subject to fluctuations in demand, and its operating results depend, in

large part, on sales during the relatively brief traditional holiday season. Events that disrupt Mattel's business during its

peak demand times can adversely and disproportionately affect Mattel's business, financial condition, and results of

operations.

Mattel's business is subject to risks associated with the underproduction of popular toys and the overproduction of toys

that are less popular with consumers. Sales of toy products at retail are highly seasonal, with a large percentage of all toy

purchases occurring during the relatively brief traditional holiday season. As a result, Mattel's operating results depend, in large

part, on sales during the holiday season. Retailers attempt to manage their inventories tightly, which requires Mattel to ship

products closer to the time the retailers expect to sell the products to consumers. This in turn results in shorter lead times for

production. Management believes that the increase in "last minute" shopping during the holiday season and the popularity of

gift cards (which often shift purchases to after the holiday season) may negatively impact customer re-orders during the holiday

season.

In addition, as a result of the seasonal nature of Mattel's business, Mattel may be adversely affected, in a manner

disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events, such as

pandemics or other public health crises, terrorist attacks, economic shocks, severe weather due to climate change or otherwise,

earthquakes or other catastrophic events, that harm the retail environment or consumer buying patterns during its key selling

season, or by events, such as strikes, disruptions in transportation, or port delays, that interfere with the manufacture or

shipment of goods during the critical months leading up to the holiday purchasing season.

If Mattel does not correctly anticipate demand for its products, Mattel may not be able to secure sufficient quantities or

cost-effective production of its products or it could have costly excess production or inventories.

To ensure adequate inventory supply, Mattel must forecast inventory needs. If Mattel fails to accurately forecast customer

demand, it may experience excess inventory levels or a shortage of product to deliver to its customers. Inventory levels in

excess of customer demand have in the past resulted in, and may in the future result in, inventory write-downs or write-offs, and

the sale of excess inventory at discounted prices or through less preferred distribution channels, which could harm Mattel's

profit margins and impair Mattel's brand image. If Mattel underestimates the demand for its products, its manufacturing plants

or third-party manufacturers may not be able to produce products to meet customer requirements, which has in the past resulted

in, and may in the future result in, delays in the shipment of Mattel products.

Mattel has significant customer concentration, such that economic difficulties or changes in the purchasing policies or

patterns of its key customers could have an adverse effect on Mattel's business, financial condition, and results of

operations.

A small number of customers account for a large share of Mattel's worldwide consolidated net sales. In 2023, Mattel's

three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 44% of worldwide

consolidated net sales (Walmart at $1.13 billion, Target at $0.67 billion, and Amazon at $0.60 billion) and its ten largest

customers, in the aggregate, accounted for approximately 50% of net sales. This concentration exposes Mattel to risk of a

material adverse effect if one or more of Mattel's large customers were to significantly reduce purchases for any reason, favor

competitors or new entrants, redeploy their retail floor space to other product categories, or increase their direct competition

with Mattel by expanding their private-label business. Customers make no binding long-term commitments to Mattel regarding

purchase volumes and make all purchases by delivering one-time purchase orders. Any customer reducing its overall purchases

of Mattel's products, reducing the number and variety of Mattel's products that it carries, and the shelf space allotted for Mattel's

products, or otherwise seeking to materially change the terms of the business relationship at any time could adversely affect

Mattel's business, financial condition, and results of operations.

Liquidity problems or bankruptcy of Mattel's key customers could have an adverse effect on Mattel's business, financial

condition, and results of operations.

Mattel's sales to customers are typically made on credit without collateral. There is a risk that key customers will not pay,

or that payment may be delayed, because of bankruptcy, contraction of credit availability to such customers, weak retail sales,

or other factors beyond the control of Mattel, which could increase Mattel's exposure to losses from bad debts. In addition,

when key customers cease doing business with Mattel as a result of bankruptcy, or significantly reduce the number of stores

operated, it can have an adverse effect on Mattel's business, financial condition, and results of operations.

Failure to successfully implement new initiatives or meet product introduction schedules can have an adverse effect on

Mattel's business, financial condition, and results of operations.

Mattel has in the past announced, and in the future may announce, initiatives to reduce its costs, optimize its

manufacturing footprint, increase its efficiency, improve the execution of its core business, globalize and extend Mattel's

brands, catch new trends, create new brands, offer new innovative products and improve existing products, enhance product

safety, develop people, improve productivity, simplify processes, and maintain customer service levels, as well as initiatives

designed to drive sales growth, capitalize on Mattel's scale advantage, and improve its supply chain. These initiatives involve

investment of capital and complex decision-making as well as extensive and intensive execution, and the success of these

initiatives is not assured. Failure to achieve any of these initiatives could harm Mattel's business, financial condition, and results

of operations.

From time to time, Mattel anticipates introducing new products, product lines, or brands at a certain time in the future.

There is no guarantee that Mattel will be able to manufacture, source, ship, and distribute new or continuing products in a

timely manner and on a cost-effective basis. Unforeseen delays or difficulties in the development process or significant

increases in the planned cost of development for new Mattel products may cause the introduction date for products to be later

than anticipated or, in some situations, may cause a product or new product introduction to be discontinued. Failure to

successfully implement any of these initiatives or launches, or the failure of any of these initiatives or launches to produce the

results anticipated by management, could have an adverse effect on Mattel's business, financial condition, and results of

operations.

Mattel's business depends in large part on the success of its vendors and outsourcers, and Mattel's brands and

reputation are subject to harm from actions taken by third parties that are outside Mattel's control. In addition, any

significant failure, inadequacy, or interruption from such vendors or outsourcers could harm Mattel's ability to

effectively operate its business.

As a part of its efforts to cut costs, achieve better efficiencies, and increase productivity and service quality, Mattel relies

significantly on vendor and outsourcing relationships with third parties for services and systems including manufacturing,

transportation, logistics, and information technology. Any shortcoming of a Mattel vendor or outsourcer, particularly an issue

related to compliance or reputation, or affecting the quality of these services or systems, risks damage to Mattel's reputation and

brand value, and potentially adverse effects to Mattel's business, financial condition, and results of operations. In addition,

problems with transitioning these services and systems to, or operating failures with, these vendors and outsourcers cause

delays in product sales and reduce the efficiency of Mattel's operations, and significant capital investments could be required to

remediate the problem.

The production and sale of private-label toys by Mattel's retail customers may result in lower purchases of Mattel-

branded products by those retail customers.

In recent years, consumer goods companies, including those in the toy business, generally have experienced the

phenomenon of retail customers developing their own private-label products that directly compete with the products of

traditional manufacturers. Some retail chains and online retailers that are customers of Mattel, including three of its largest

retail customers, Walmart, Amazon and Target, sell private-label toys designed, manufactured, and branded by the retailers

themselves. These toys may be sold at prices lower than comparable toys sold by Mattel and may result in lower purchases of

Mattel-branded products by these retailers and reduce overall consumer demand for Mattel products. In some cases, retailers

who sell these private-label toys are larger than Mattel and have substantially more resources than Mattel.

Mattel depends on key personnel and may not be able to hire, retain, and integrate sufficient qualified personnel to

maintain and expand its business.

Mattel's future success depends partly on the continued contribution of key executives, designers, and technical, sales,

marketing, manufacturing, entertainment, and other personnel. If Mattel fails to retain, hire, train, and integrate key personnel,

Mattel's ability to maintain or expand its business could be harmed. Recruiting and retaining qualified personnel is costly and

highly competitive. Labor shortages and increased labor costs as a result of increased competition for qualified talent, higher

employee turnover rates, increases in employee benefit costs, wage inflation, or other disruptions to Mattel's workforce can

negatively impact its business. In addition, changes to Mattel's current and future work environments may not meet the needs or

expectations of its employees or be perceived as less favorable compared to other companies' policies, which could negatively

impact Mattel's ability to hire and retain qualified personnel.

Market Conditions

The deterioration of global economic conditions could adversely affect Mattel's business, financial condition, and results

of operations.

Mattel designs, manufactures, and markets a wide variety of toy products worldwide through sales to retailer customers

and directly to consumers. Mattel's performance is impacted by the level of discretionary consumer spending, which remains

relatively weak in many countries around the world in which Mattel does business. Consumers' discretionary purchases of toy

products are often impacted by a number of factors beyond Mattel's control, including, inflation, job losses, foreclosures,

bankruptcies, reduced access to credit, interest rates, tax rates, investment losses, lower consumer confidence, and other macro-

economic factors that affect consumer spending behavior. These or other factors can reduce the amount that consumers spend

on the purchase of Mattel's products. Deterioration of global economic conditions have at times adversely affected Mattel's

business and financial results. Unfavorable economic conditions can also impair the ability of those with whom Mattel does

business to satisfy their obligations to us. Future deterioration of global economic conditions or disruptions in credit markets in

the markets in which Mattel operates could potentially have a material adverse effect on Mattel's liquidity and capital resources,

including increasing Mattel's cost of capital or its ability to raise additional capital if needed, or otherwise adversely affect

Mattel's business, financial condition, and results of operations.

In addition to experiencing potentially lower revenues during times of economic difficulty, in an effort to maintain sales

during such times, Mattel may need to increase promotional spending or take other steps to encourage retailer and consumer

purchase of its products. Those steps may increase costs and/or decrease profit margins and are not always successful. During

periods of increased inflation, such as Mattel is currently facing, Mattel has increased prices of certain products, and may in the

future need to increase prices further in order to cover increased costs of goods sold, which may reduce demand for products.

There can be no guarantee that Mattel will be able to successfully increase prices in the future or that the price increases Mattel

has already taken will offset the entirety of additional costs it has incurred and may incur in the future. The inability to

adequately increase prices to offset increased costs and inflationary pressures, or otherwise mitigate the impact of these macro-

economic conditions and market disruptions, may also increase costs and/or decrease profit margins.

Significant increases in the price of commodities, transportation, or labor, if not offset by declines in other input costs,

or a reduction or interruption in the delivery of raw materials, components, and finished products from Mattel's

vendors, could adversely affect Mattel's business, financial condition, and results of operations.

Cost increases, whether resulting from rising costs of materials, transportation, services, labor, or compliance with

existing or future regulatory requirements, impact the profit margins realized by Mattel on the sale of its products. Because of

market conditions, timing of pricing decisions, and other factors, there can be no assurance that Mattel will be able to offset any

of these increased costs by adjusting the prices of its products. Increases in prices of Mattel's products may not be sustainable

and could result in lower sales. Mattel's ability to meet customer demand depends, in part, on its ability to obtain timely and

adequate delivery of materials, parts, and components from its suppliers and internal manufacturing capacity. Mattel has

experienced shortages in the past, including shortages of raw materials and components. Additionally, as Mattel cannot

guarantee the stability of its major suppliers, major suppliers may stop manufacturing components at any time with little or no

notice. If Mattel is required to use alternative sources, it may be required to redesign some aspects of the affected products,

which may involve delays and additional expense. Reductions or interruptions in supplies or in the delivery of finished

products, whether resulting from more stringent regulatory requirements, disruptions in transportation, port delays, labor strikes

or disputes, lockouts, loss or impairment of key manufacturing facilities, discontinuity or disruptions in information technology

systems, changes in trade policy, an outbreak of a severe public health crisis, natural disasters, including severe weather due to

climate change or otherwise, the occurrence or threat of wars or other conflicts, or a significant increase in the price of one or

more supplies (or an inability to procure sufficient supplies), such as fuel or resin (which is an oil-based product used in

plastics), or otherwise, have at times adversely affected and could in the future adversely affect Mattel's business, financial

condition, and results of operations.

Significant changes in currency exchange rates or the ability to transfer capital across borders could have an adverse

effect on Mattel's business, financial condition, and results of operations.

Mattel operates facilities and sells products in numerous countries outside the United States. During 2023, Mattel's

International segment net sales were 41% of Mattel's total consolidated net sales. Furthermore, Mattel's net investment in its

foreign subsidiaries and its results of operations and cash flows are subject to changes in currency exchange rates and

regulations. Highly inflationary economies of certain foreign countries can result in foreign currency devaluation, which

negatively impacts Mattel's profitability. Mattel's efforts to mitigate the exposure of its results of operations to fluctuations in

currency exchange rates by aligning its prices with the local currency cost of acquiring inventory, distributing earnings in U.S.

dollars, and partially hedging this exposure using foreign currency forward exchange contracts may ultimately be unsuccessful.

Government action may restrict Mattel's ability to transfer capital across borders, such as recently enacted currency control

regulations in China, and may also impact the fluctuation of currencies in the countries where Mattel conducts business or has

invested capital. Significant changes in currency exchange rates, reductions in Mattel's ability to transfer its capital across

borders, and changes in government-fixed currency exchange rates, including the Chinese yuan, could have an adverse effect on

Mattel's business, financial condition, and results of operations.

An increasing portion of Mattel's business may come from new and emerging markets, and growing business in new and

emerging markets presents additional challenges.

An increasing portion of Mattel's net revenues may come from new and emerging markets, including China and India.

Operating in new and emerging markets, each with its own unique consumer preferences and business climates, presents

additional challenges that Mattel must meet. In addition, sales and operations in new and emerging markets are subject to other

risks associated with international operations. Such risks include complications in complying with different laws in varying

jurisdictions; dealing with changes in governmental policies and the evolution of laws and regulations that impact Mattel's

product offerings and related enforcement; difficulties understanding the retail climate, consumer trends, local customs and

competitive conditions in foreign markets, which are often quite different from those in the United States; difficulties in moving

materials and products from one country to another, including port congestion, strikes and other transportation delays and

interruptions; potential challenges to Mattel's transfer pricing determinations and other aspects of its cross border transactions;

and the impact of tariffs, quotas, or other protectionist measures.

Failure to properly manage these risks could adversely affect Mattel's business, financial condition, and results of

operations.

Disruptions due to political instability, civil unrest, future pandemics or other public health crises, or earthquakes or

other natural disasters out of Mattel's control and actions taken by governments, businesses, and individuals in response

to such events could adversely affect Mattel's business, financial position, sales, and results of operations.

Mattel's business and operations could be materially and adversely affected by political instability, civil unrest, future

pandemics or other public health crises, earthquakes, natural disasters, and other natural or man-made economic, political, or

environmental disruptions. Disruptions, and government responses to any disruption, could adversely affect Mattel's business,

financial position, sales, and results of operations and may vary based on the length and severity of the disruption. For example,

the COVID-19 pandemic and the actions taken by governments, businesses, and individuals in response thereto affected how

Mattel and its suppliers and partners operated their businesses, caused supply chain disruption and retail store closures, and

adversely affected Mattel's operating results. The impact of any new outbreaks of COVID-19, other variants, or other public

health crises on Mattel's business and financial results will depend on future developments, which are highly uncertain and

cannot be predicted.

Mattel owns, operates, and manages manufacturing facilities and utilizes third-party manufacturers and suppliers

throughout Asia, primarily in China, Indonesia, Malaysia, Vietnam and Thailand, and in Mexico. Risks from political

instability, civil unrest, and other geopolitical or macro-economic conditions exist in certain of these countries, which could

temporarily or permanently damage the manufacturing operations of Mattel or its third-party manufacturers located there. In

addition, Mattel has significant operations near major earthquake faults, including its corporate headquarters in El Segundo,

California. A catastrophic event where Mattel has important operations, such as an earthquake, tsunami, flood, typhoon, fire,

power outage, or other natural or manmade disaster, including as a result of climate change, could disrupt Mattel's operations or

those of its business partners and impair production or distribution of its products, damage inventory, interrupt critical

functions, or otherwise affect its business negatively.

Any one of these factors, or a combination thereof, could impact Mattel's ability to meet demand for its products or could

increase the costs of its products. To the extent any of these disruptions become prolonged or recur, particularly during

seasonally high periods of production or distribution, Mattel's ability to meet demand may be materially impacted. Insurance for

certain disruptions may not be available, affordable, or adequate. Such disruptions in the markets in which Mattel, its

employees, consumers, customers, business partners, licensees, licensors, suppliers, and manufacturers operate, can have, and at

times in the past have had, a significant negative impact on Mattel's business, liquidity, financial position, sales, and results of

operations. In addition, the contingency plans Mattel has developed to help mitigate the impact of disruptions in its

manufacturing operations and supply chain may not prevent its business, financial position, sales, and results of operations from

being adversely affected by a significant disruption to its manufacturing operations or suppliers.

Political developments, including trade relations, and the threat or occurrence of war or terrorist activities, and/or trade

actions could adversely impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial

markets, and general economic conditions.

Mattel's business is worldwide in scope, and political instability, civil unrest, the deterioration of the political, economic,

or social situation in a country in which Mattel has significant sales or operations, or the breakdown of trade relations between

the United States and a foreign country in which Mattel has significant manufacturing facilities or other operations, could

adversely affect Mattel's business, financial condition, and results of operations. A change in trade status between the United

States and a foreign country could result in a substantial increase in the import duty of toys manufactured in that foreign

country and imported into the United States. For example, the United States has implemented certain trade actions directed at

China, including imposing increased tariffs on certain goods imported into the United States from China, which has resulted in

retaliatory tariffs by China. China has also implemented various trade actions directed at the United States. Further trade actions

by the United States or China could result in diverting more production to, or sourcing from, countries other than China, and

could cause customers in some countries or regions, such as China, to seek domestic or non-U.S. sources for products that

Mattel sells, or to be pressured or incentivized by foreign governments not to purchase goods of U.S. companies, all of which

could harm Mattel's future sales in these markets.

In addition, the United States, United Kingdom, and European Union, among other jurisdictions, have each imposed

export controls, as well as financial and economic sanctions, currency controls, and other trade actions, on certain products,

technologies, industry sectors, and parties in Russia as a result of the Russia-Ukraine war, which have resulted and could further

result in retaliatory measures and actions by Russia. Any increased trade barriers or restrictions on global trade imposed by the

United States, or further retaliatory trade measures or currency controls taken by China, Russia, or other countries in response,

could further adversely affect Mattel's business, financial condition, and results of operations. The outcomes of, and disruptions

associated with, upcoming elections in the United States and other jurisdictions in which Mattel operates could alter the

political, economic, and regulatory landscape in ways that are unfavorable to Mattel's interests.

The occurrence of war or hostilities between countries or threat of terrorist activities, and the responses to and results of

these activities, could adversely impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial

markets, and general economic conditions. For example, the global economy has been negatively impacted as a result of the

Russia-Ukraine war, and Mattel's operations in Russia have experienced significant disruption. Mattel has paused all shipments

into Russia and expects, for the foreseeable future, decreased revenues from Russia and Ukraine.

Global climate change, evolving stakeholder expectations for sustainability matters, and Mattel's related goals present

challenges to its business and reputation that could adversely affect Mattel.

The effects of global climate change create financial, operational, and reputational risks to Mattel's business, both directly

and indirectly. There is a general consensus that greenhouse gas ("GHG") emissions are linked to global climate change, and

that these emissions must be reduced dramatically to avert the worst effects of climate change. Mattel's operations may be

vulnerable to the adverse effects of climate change, which are predicted to increase the frequency and severity of weather

events and other natural cycles such as wildfires, heatwaves, floods, and droughts. The effects of climate change may cause

disruptions in Mattel's operations, including its supply chain and the productivity of its third-party manufacturers, increase

Mattel's production costs, impose capacity restraints, and impact the types of products that consumers purchase, all of which

may cause Mattel to suffer losses and additional costs to maintain or resume operations. Mattel may be subject to decreased

availability or less favorable pricing for certain commodities that are necessary for Mattel's products.

In addition, Mattel may incur capital expenditures, compliance costs, and other costs to comply with increasingly

stringent environmental laws, compliance reporting, and enforcement policies. Governments around the world are increasingly

focused on enacting laws and regulations regarding climate change and regulation of GHG emissions. Lawmakers and

regulators in the United States and certain jurisdictions where Mattel operates have proposed or enacted regulations requiring

reporting of GHG emissions and the restriction thereof, including increased fuel efficiency standards, carbon taxes or cap and

trade systems, restrictive permitting, and incentives for renewable energy. For example, in October 2023, California enacted

legislation addressing the disclosure of GHG emissions, climate-related risks, environmental claims, and the use or sale of

voluntary carbon offsets. The Securities and Exchange Commission recently adopted a mandatory climate change reporting

framework that is likely to materially increase the amount of time, monitoring, diligence and reporting costs related to these

matters. Global efforts have been made and continue to be made in the international community toward the adoption of

international treaties or protocols that would address global climate change issues. In January 2023, the EU enacted the

Corporate Sustainability Reporting Directive, which will require sustainability reporting across a broad range of sustainability

topics for both EU and non-EU companies.

A variety of other stakeholders, including regulators, investors, advisory firms, rating agencies, and customers, are

establishing laws, regulations, expectations, and/or assessments reflecting their expectations for corporate practices related to

climate change and other corporate responsibility matters. In August 2021, Mattel announced its goal to reduce absolute Scope

1 and Scope 2 GHG emissions 50% by 2030 (versus a 2019 baseline). Mattel has subsequently established additional goals

related to sustainability matters. Such goals are based on Mattel management's current assumptions related to scientific or

technological developments, carbon markets, the workforce and hiring market, and other matters that are subject to change in

the future and which are outside of Mattel's control, as well as standards for measuring progress that are still in development,

and subject to a number of significant risks and uncertainties. Mattel's efforts to be responsive to climate change, to reduce its

carbon footprint, and regarding other sustainability matters cannot provide assurance that Mattel will successfully achieve its

sustainability goals, that related costs may not be higher than expected, that proposed regulation or deregulation related to

climate change and other sustainability matters will not be more aggressive than Mattel's measures and result in higher costs (or

require additional resources), or that any investments Mattel makes in furtherance of achieving such goals will meet

expectations for all stakeholders or any applicable binding or non-binding legal standards, any one of which could have an

adverse effect on Mattel's financial condition, results of operations, or reputation.

Climate-related litigation has increased in recent years, including claims involving the failure of organizations to mitigate

their impacts on climate change, the failure of organizations to adapt to climate change, and the insufficiency of disclosure

around material financial risks or inaccuracy of climate-related disclosure. Additionally, as consumers and customers continue

to put an increased priority on purchasing products that are sustainably manufactured and packaged, Mattel may need to incur

increased costs in order to effectively source materials that are more sustainable, as well as increased costs for additional

transparency, due diligence, and reporting. If Mattel's sustainability practices do not meet, or are not viewed as meeting,

investor or other stakeholder expectations and standards (which are continually evolving and may emphasize different priorities

than the ones Mattel chooses to focus on), or if Mattel does not or appears not to achieve its sustainability goals, then investors,

consumers, and other stakeholders could lose confidence in Mattel and its brands, damaging Mattel's reputation and negatively

impacting operations.

Financial and Accounting

To the extent Mattel is unable to realize the anticipated cost savings from its previously announced cost savings

programs or incurs additional and/or unexpected costs to realize such cost savings, Mattel's business, financial

condition, and results of operations could be adversely affected.

Mattel has implemented and continues to implement a series of cost savings programs as described in Part II, Item 7

"Management's Discussion and Analysis of Financial Condition and Results of Operations—Cost Savings Programs."

There can be no assurance that Mattel will be able to realize the cost savings from its previously announced cost savings

programs in the anticipated amounts or within the anticipated timeframes or at all, or that the impact of the efforts to achieve

such cost savings will not be significantly different than currently anticipated. In addition, any cost savings that Mattel realizes

may be offset, in whole or in part, by reductions in net sales or through increases in other expenses. Failure to realize the

expected cost savings from these cost savings programs could have an adverse effect on Mattel's business, financial condition,

and results of operations.

The amounts of anticipated cost savings and anticipated expenses related thereto are based on Mattel's current estimates,

but they involve risks, uncertainties, assumptions, and other factors that may cause actual results, performance, or achievements

to be materially different from those described herein. Assumptions relating to the plans and amounts related thereto involve

subjective decisions and judgments with respect to, among other things, the estimated impact of certain operational adjustments,

including marketing efficiency, labor management, material input cost fluctuations, plant transition costs, and other cost and

savings adjustments, as well as future economic, competitive, industry and market conditions, and future business decisions, all

of which are inherently uncertain and may be beyond the control of Mattel's management. Although Mattel's management

believes these estimates and assumptions to be reasonable, there can be no assurance that the assumptions or estimates

described herein will prove to be accurate or that the objectives and plans expressed will be achieved. Neither Mattel's

independent registered public accounting firm nor any other independent registered public accounting firm, has examined,

compiled, or performed any procedures with respect to these amounts, nor have they expressed any opinion, or any other form

of assurance, on such information or their achievability.

Mattel has in the past engaged, and may in the future engage, in acquisitions, mergers, dispositions, or other

strategic transactions, which can affect Mattel's revenues, profit, profit margins, debt-to-capital ratio, capital

expenditures, or other aspects of Mattel's business. In addition, Mattel has certain anti-takeover provisions in its bylaws

that may make it more difficult for a third party to acquire Mattel without its consent, which may adversely affect

Mattel's stock price.

Mattel regularly considers, and from time to time engages in, discussions and negotiations regarding acquisitions,

mergers, dispositions, or other strategic transactions that could affect the profit, revenues, profit margins, debt-to-capital ratio,

capital expenditures, or other aspects of Mattel's business. There can be no assurance that Mattel will be able to identify suitable

acquisition targets or merger partners or that, if identified, it will be able to complete these transactions on terms acceptable to

Mattel and to potential acquisition targets or merger partners. There can also be no assurance that Mattel will be successful in

integrating any acquired company into its overall operations, or that any such acquired company will operate profitably or will

not otherwise adversely impact Mattel's results of operations. Further, Mattel cannot be certain that key talented individuals at

those acquired companies will continue to work for Mattel after the acquisition or that they will continue to develop popular

and profitable products or services. In addition, Mattel has certain anti-takeover provisions in its bylaws that may make it more

difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel's stock price.

The level of returns on pension plan assets and the actuarial assumptions used for valuation purposes could affect

Mattel's earnings in future periods. Changes in standards and government regulations could also affect its pension plan

expense and funding requirements.

Assumptions used in determining projected benefit obligations and the fair value of plan assets for Mattel's pension plan

are evaluated by Mattel in consultation with outside actuaries. In the event that Mattel determines that changes are warranted in

the assumptions used, such as the discount rate or expected long term rate of return, its future pension benefit expenses could

increase or decrease. Due to changing market conditions or changes in the participant population, the actuarial assumptions that

Mattel uses may differ from actual results, which could have an impact on its pension and postretirement liability and related

costs. Funding obligations are determined based on the value of assets and liabilities on a specific date as required under

relevant government regulations for each plan. Future pension funding requirements, and the timing of funding payments, could

be affected by legislation enacted by the relevant governmental authorities.

If Mattel's goodwill becomes impaired, Mattel's results of operations could be adversely affected.

Goodwill accounts for a significant amount of Mattel's assets. Mattel tests its goodwill for impairment annually or more

often if an event or circumstance indicates that an impairment may have occurred. For purposes of evaluating whether goodwill

is impaired, goodwill is allocated to various reporting units, which are at the operating segment level. Declines in profitability

of Mattel's reporting units may impact the fair value of its reporting units, which could result in an impairment of its goodwill,

adversely affecting its results of operations. For more information, see Part II, Item 7 "Management's Discussion and Analysis

of Financial Condition and Results of Operations—Application of Critical Accounting Policies and Estimates—Goodwill" and

Part II, Item 8 "Financial Statements and Supplementary Data—Note 3 to the Consolidated Financial Statements—Goodwill

and Intangible Assets, Net."

Mattel's stock price has been volatile over the past several years and could decline in the future, resulting in losses for

Mattel's investors.

All the factors discussed in this section or any other material announcements or events can affect Mattel's stock price. In

addition, quarterly fluctuations in Mattel's operating results, changes in investor and analyst perception of Mattel's business

risks and conditions of its business, Mattel's ability to meet earnings estimates and other performance expectations of financial

analysts or investors, unfavorable commentary or downgrades of Mattel's stock by research analysts, fluctuations in the stock

prices of Mattel's peer companies or in stock markets in general, and general economic or political conditions can also cause the

price of Mattel's stock to change. A significant drop in the price of Mattel's stock would expose Mattel to the risk of securities

class action lawsuits, which could result in substantial costs and divert management's attention and resources, with the potential

to adversely affect Mattel's business. For example, Mattel and certain other defendants have recently been party to certain class

actions and certain derivative actions. For more information, see Part II, Item 8 "Financial Statements and Supplementary Data

—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—Litigation."

Mattel identified a material weakness in its internal control over financial reporting which, if not remediated

appropriately or timely, could affect Mattel's ability to record, process, and report financial information accurately,

impair its ability to prepare financial statements, negatively affect investor confidence, and cause reputational harm.

Effective internal controls are necessary for Mattel to provide reliable and accurate financial reporting and financial

statements for external purposes in accordance with generally accepted accounting principles. A failure to maintain effective

internal control over financial reporting could lead to violations, unintentional or otherwise, of laws and regulations. As

disclosed in Part II, Item 9A "Controls and Procedures," Mattel determined that there is a material weakness in its internal

control over financial reporting and as a result, its disclosure controls and procedures and internal control over financial

reporting are not effective as of December 31, 2023. While Mattel is actively engaged in the planning for, and implementation

of, remediation efforts to address the material weakness, there can be no assurance that the efforts will fully remediate the

material weakness in a timely manner. If Mattel is unable to remediate the material weakness, or is otherwise unable to

maintain effective internal control over financial reporting or disclosure controls and procedures, Mattel's ability to record,

process, and report financial information accurately, and to prepare financial statements within required time periods, could be

adversely affected. Litigation, government investigations, or regulatory enforcement actions arising out of any such failure or

alleged failure could subject Mattel to civil and criminal penalties that could materially and adversely affect Mattel's reputation,

financial condition, and operating results. The material weakness, remediation efforts, and any related litigation, government

investigations, or regulatory enforcement actions will require management attention and resources and cause Mattel to incur

unanticipated costs, and could negatively affect investor confidence in Mattel's financial statements, cause Mattel reputational

harm, and raise other risks to its operations.

Legal and Regulatory

Mattel relies extensively on information technology in its operations, and any material failure, inadequacy, interruption,

or security breach of that technology could have an adverse effect on its business, financial condition, and results of

operations.

Mattel relies extensively on information technology systems across its operations, including for management of its supply

chain, sale and delivery of its products and services, reporting its results of operations, collection and storage of consumer data,

personal data of customers, employees and other stakeholders, and various other processes and transactions. If Mattel does not

allocate and effectively manage the resources necessary to build, sustain, and protect an appropriate technology infrastructure, it

could be subject to transaction errors, processing inefficiencies, loss of customers, business disruptions, shutdowns, or loss of or

damage to intellectual property through security breach. Many of these systems are managed by third-party service providers.

Mattel relies on such third parties to provide services on a timely and effective basis, but Mattel ultimately does not control

their performance. Mattel uses third-party technology and systems for a variety of reasons, including, without limitation,

encryption and authentication technology, employee email, content delivery to customers, regulatory compliance, back-office

support, and other functions. A small and growing volume of Mattel's consumer products and services are web-based, and some

are offered in conjunction with business partners or such third-party service providers. In addition, Mattel's distributors,

suppliers, and other external business partners utilize their own information technology systems that are subject to similar risks

to Mattel as described above. Their failure to perform as expected or as required by contract, or a cyber-attack on them that

disrupts their systems, could result in significant disruptions and costs to Mattel's operations or, in the case of third-party

service providers, a penetration of Mattel's systems. Mattel and its business partners and third-party service providers collect,

process, store, and transmit consumer data, including personal and payment information, in connection with those products and

services. Failure to follow applicable regulations related to those activities, or to prevent or mitigate data loss or other security

breaches, including breaches of Mattel's business partners' technology and systems, can expose Mattel or its customers to a risk

of loss or misuse of such information, which can adversely affect Mattel's operating results, result in regulatory enforcement,

other litigation and potential liability for Mattel, and otherwise harm its business. Mattel's ability to effectively manage its

business and coordinate the production, distribution, and sale of its products and services depends significantly on the reliability

and capacity of these systems and third-party service providers.

Mattel has exposure to security risks similar to those faced by other large companies that have data stored on their

information technology systems, such as security breaches, cyber-attacks, and other hacking activities such as denial of service,

malware, and ransomware, and is not always successful in preventing attacks or other cyber incidents. For example, in July

2020, Mattel experienced a ransomware attack. That attack was contained, Mattel restored its operations, and no exfiltration of

any sensitive business data or retail customer, supplier, consumer, or employee data was identified; however, there can be no

assurance that Mattel will be able to mitigate negative impacts in the same way in the event of future attacks or other cyber

incidents.

The systems and processes that Mattel has developed to protect personal information and prevent data loss and other

security breaches, including systems and processes designed to prevent, detect, and minimize the impact of a security breach at

a third-party provider as well as enhancements to the security of Mattel's systems and processes following the July 2020

ransomware attack, do not provide absolute security, and any failure or inadequacy of such systems or processes could have an

adverse effect on Mattel's business, financial condition, and results of operations. While Mattel carries cyber and business

continuity insurance commensurate with its size and the nature of its operations, there can be no guarantee that costs incurred as

a result of cyber events will be covered completely. The recent global shift to remote work environments (including for Mattel's

employees, customers, sellers, suppliers, vendors, and other third parties) may amplify these security risks or introduce

additional security vulnerabilities. Additionally, AI may increase the frequency or efficacy of cyberattacks against Mattel.

Mattel's information systems require an ongoing commitment of significant resources to maintain, upgrade and enhance

existing systems and develop or contract for new systems in order to keep pace with continuing changes in information

processing technology, emerging cybersecurity risks and threats, evolving industry, legal and regulatory standards and

requirements, and other changes in Mattel's business, among other things. Mattel has made and expects to continue to make

significant investments in updating and integrating IT systems; however, those investments could turn out to be insufficient or

fail to yield the expected results. If Mattel's or its third-party service providers' systems fail to operate effectively or are

damaged, destroyed, or shut down, or there are problems with transitioning to upgraded or replacement systems, or there are

future security breaches in these systems, any of which could occur as a result of natural disasters, software or equipment

failures, telecommunications failures, loss or theft of equipment, acts of terrorism, circumvention of security systems, or other

cyber-attacks, including denial-of-service attacks, Mattel could experience delays or decreases in product sales and reduced

efficiency of its operations. Additionally, any of these types of events could lead to violations of privacy laws, loss of

customers, or loss, misappropriation or corruption of confidential information, trade secrets, or data, which could expose Mattel

to potential litigation, regulatory actions, sanctions, or other statutory penalties, any or all of which could adversely affect its

business and cause it to incur significant losses and remediation costs.

If Mattel fails to comply with applicable U.S. and foreign laws related to privacy, data security, AI, and data protection,

it could adversely affect Mattel's operating results and financial condition.

As a global company, Mattel is subject to a variety of continuously evolving and developing laws and regulations in the

United States and abroad regarding privacy, data protection, AI, and data security, including those related to the collection,

storage, handling, use, disclosure, transfer, and security of personal data. For example, Mattel is or may become subject to a

variety of laws and regulations such as the European Union's General Data Protection Regulation ("GDPR"), EU Artificial

Intelligence Act ("EU AI Act"), China's Personal Information Protection Law ("PIPL"), California's Consumer Privacy Act

("CCPA"), or the U.S. Children's Online Privacy Protection Act of 1998 ("COPPA") regarding privacy, data protection, AI

(including automated decision-making) and data security. These laws and regulations are continuously evolving and

developing, creating significant uncertainty as privacy and data protection laws may be interpreted and applied differently from

country to country and may create inconsistent or conflicting requirements. For example, the GDPR, which greatly increases

the jurisdictional reach of EU law and became effective in May 2018, added a broad array of requirements for handling

personal data, including the public disclosure of significant data breaches, and imposes substantial penalties for non-

compliance. The EU AI Act, which is expected to become effective in the coming years, imposes certain requirements and

limitations on developers and deployers of AI systems designated as "high risk," including in some cases AI systems designed

for interaction with children. The requirements will apply to companies based outside the EU but operating on the EU market,

and will carry the potential for substantial penalties for non-compliance. China's PIPL imposes additional operational

requirements relating to processing personal information and provides for penalties and enforcement mechanisms. China has

recently enacted complex and highly restrictive cybersecurity, data localization, and cross border data transfer laws. The CCPA

requires covered companies to provide additional disclosures and data rights to data subjects. The California Privacy Rights Act

("CPRA"), which became operative on January 1, 2023, established the California Privacy Protection Agency to enforce

Californians' privacy rights under the CCPA. Since the CCPA was enacted, several other states have enacted and are in the

process of enacting similar comprehensive privacy schemes, certain of which also impose obligations on companies developing

and using AI or automated decision-making technologies.

Mattel's ongoing compliance with the GDPR and other privacy and data protection laws, such as the PIPL, CCPA,

CPRA, and COPPA, as well as initiatives to comply with new legal regimes relating to privacy, data protection, and AI,

imposes significant costs and challenges that are likely to increase over time, including as Mattel introduces sophisticated

digital and smart technology products, including products that incorporate AI. Given that the scope, interpretation, and

application of these laws and regulations are often uncertain and may be in conflict across jurisdictions, it is possible that these

obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict

with other rules or Mattel's practices. Any failure, or perceived failure, by Mattel or third-party service providers to comply

with Mattel's privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the

unauthorized release or transfer of personal data, may result in governmental enforcement actions, litigation, or negative

publicity, and could have an adverse effect on Mattel's operating results and financial condition.

Mattel faces risks related to protecting its proprietary intellectual property and information and is subject to third-

party claims that Mattel is infringing on their intellectual property rights, either of which could adversely affect Mattel's

business, financial condition, and results of operations.

The value of Mattel's business depends on its ability to protect its intellectual property and information, including its

trademarks, trade names, copyrights, patents, trade secrets, and rights under intellectual property license agreements and other

agreements with third parties, in the United States and around the world, as well as its customer, employee, and consumer data.

From time to time, third parties have challenged, and may in the future try to challenge, Mattel's ownership of its intellectual

property in the United States and around the world. Responding to any infringement claim, regardless of its validity, may be

costly and time-consuming and may divert management and key personnel from business operations. Findings of infringement

on the intellectual property rights of any third party by Mattel, its distributors, its licensors, or its manufacturers may require

obtaining a license to use those rights, which may not be obtainable on reasonable terms, if at all.

In addition, Mattel's business is subject to the risk of third parties counterfeiting its products or infringing on its

intellectual property rights. The legal landscape for some new technologies, including AI (particularly generative AI), remains

uncertain, and development of the law in this area could impact Mattel's ability to protect against potentially infringing uses

associated with both the development and use of AI. In addition, the availability of copyright protection and other legal

protections for IP generated by certain new technologies, such as generative AI, is uncertain. The steps Mattel has taken may

not prevent unauthorized use of its intellectual property, particularly in foreign countries where the laws may not protect its

intellectual property as fully as in the United States. Mattel at times resorts to litigation to protect its intellectual property rights,

which could result in substantial costs and diversion of resources. Mattel's failure to protect its proprietary intellectual property

and information, including with respect to any successful challenge to Mattel's ownership of its intellectual property or

significant infringements of its intellectual property, could have an adverse effect on Mattel's business, financial condition, and

results of operations.

Mattel has acquired, and may in the future acquire, certain intellectual property from third parties. Declines in the

profitability of these acquired brands may impact Mattel's ability to recover the carrying value of the related assets and could

result in an impairment charge. Reduction in net earnings caused by impairment charges could harm Mattel's results of

operations.

Unfavorable resolution of, or adverse developments in, legal proceedings, other investigations, or regulatory matters

could have an adverse effect on Mattel's business, financial condition, and results of operations.

Mattel is, from time to time, involved in litigation or other disputes, investigations, and regulatory matters. An

unfavorable resolution of these matters could have an adverse effect on Mattel's business, financial condition, and results of

operations. Regardless of their outcome, these matters may result in substantial costs and expenses, significantly divert the

attention of management, or interrupt Mattel's normal business operations. There can be no assurance that Mattel will be able to

prevail in, or achieve a favorable settlement of, any of these matters. For more information, see Part II, Item 8 "Financial

Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—

Litigation."

Mattel is subject to various laws and government policies or regulations in numerous jurisdictions, violation of which

could subject it to sanctions. In addition, changes in such laws or policies or regulations may lead to increased costs,

changes in Mattel's effective tax rate, or the interruption of normal business operations that could adversely affect

Mattel's business, financial condition, and results of operations.

Mattel operates in a highly regulated environment in the United States and international markets. U.S. federal, state, and

local governmental entities, and foreign governments regulate many aspects of Mattel's business, including its products and the

importation and exportation of its products, and these laws and regulations can change frequently. These policies or regulations

include accounting standards, taxation requirements (including changes in applicable income tax rates, new tax laws, and

revised tax law interpretations), product safety and other safety standards, trade restrictions, duties and tariffs (including

international trade laws and regulations, export controls, and economic sanctions), regulations regarding currency and financial

matters, anticorruption standards (such as the U.S. Foreign Corrupt Practices Act), environmental matters, advertising directed

toward children, product content, and privacy and data protection, as well as other administrative and regulatory restrictions. In

addition, as Mattel enters into new areas of investment, product development, or other business activities, it will have to learn to

navigate the regulatory framework surrounding those areas, which may be continuing to develop. For example, Mattel has

launched several non-fungible token projects, and its own digital collectibles marketplace. Mattel may continue to make

investments involving cryptocurrency and may transact in cryptocurrency, and must comply with applicable regulations, which

continue to evolve. The steps Mattel takes to comply with these laws, regulations, and policies do not ensure that Mattel will be

in compliance in the future. Compliance with these various laws, regulations, and policies imposes significant costs on Mattel's

business, and failure to comply could result in monetary liabilities and other penalties and could lead to negative media

attention and consumer dissatisfaction, which could have an adverse effect on Mattel's business, financial condition, and results

of operations.

New tax laws and interpretations of tax law are taken into account for financial statement purposes in the quarter or year

that they become applicable. The Organization for Economic Co-operation and Development reached an agreement among

various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar

Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two rules. Mattel is

continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some

of the legislative changes could impact Mattel’s effective tax rate and tax liabilities. When and how these rules are adopted or

enacted by various countries in which Mattel does business could increase tax complexity and uncertainty and may adversely

affect Mattel’s worldwide effective tax rate, income tax expense, and cash flows. Mattel is subject to regular review and audit

by both domestic and foreign tax authorities. Tax authorities are increasingly scrutinizing the tax positions of companies and

Mattel has tax audits pending in several jurisdictions. If the U.S. or foreign tax authorities change applicable tax laws or

successfully challenge how or where Mattel's profits are currently recognized, Mattel's overall taxes could increase, and

Mattel's business, financial condition or results of operations may be adversely impacted.

In addition, increases in import and excise duties and/or sales or value added taxes in the jurisdictions in which Mattel

operates could affect the affordability of Mattel's products and, therefore, reduce demand.

From time to time, issues with products lead to product liability, personal injury or property damage claims, recalls,

withdrawals, replacements of products, or regulatory or other actions by governmental authorities, which could divert

resources, affect business operations, decrease sales, increase costs, and put Mattel at a competitive disadvantage, any of

which could have an adverse effect on Mattel's business, financial condition, and results of operations.

Mattel has in the past experienced, and may in the future experience, issues with products that lead to product liability,

personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions by

governmental authorities. These issues and activities have resulted in increased governmental scrutiny and inquiries, harm to

Mattel's reputation, reduced demand by consumers for its products, decreased willingness by retailer customers to purchase or

provide marketing support for those products, adverse impacts on Mattel's ability to enter into licensing agreements for products

on competitive terms, absence or increased cost of insurance, or additional safety and testing requirements. For example, the

insurance terms Mattel negotiated for certain prior periods were less favorable than preceding periods as a result of past claims,

product liability incidents, changes in market conditions, and other factors. These issues and activities can divert development

and management resources, adversely affect Mattel's business operations, decrease sales, increase legal fees and other costs, and

put Mattel at a competitive disadvantage compared to other manufacturers not affected by similar issues with products, any of

which could have an adverse effect on Mattel's business, financial condition, and results of operations.

Mattel's current and future operating procedures and product requirements may increase costs, adversely affect its

relationship with vendors, and make it more difficult for Mattel to produce, purchase, and deliver products on a timely

basis to meet market demands. Future conditions may require Mattel to adopt further changes that may increase its

costs and further affect its relationship with vendors.

Mattel's current operating procedures and product requirements, including testing requirements and standards, have

imposed costs on both Mattel and the vendors from which it purchases products. Changes in business conditions, including

those resulting from new legislative and regulatory requirements, have in the past caused, and in the future could cause, further

revisions of Mattel's operating procedures and product requirements. Changes in Mattel's operating procedures and product

requirements can delay delivery of products and increase costs. Mattel's relationships with its existing vendors may be

adversely affected as a result of these changes, making Mattel more dependent on a smaller number of vendors. Mattel is not

currently dependent on a single supplier or group of suppliers. Some vendors may choose not to continue to do business with

Mattel or not to accommodate Mattel's needs to the extent that they have done in the past. In addition, rising production costs,

contraction of credit availability, and labor shortages have caused a substantial contraction in the number of toy manufacturers

in China and other countries in Asia, decreasing the number of potential vendors to manufacture Mattel's products. Because of

the seasonal nature of Mattel's business and the demands of its customers for deliveries with short lead times, Mattel depends

upon the cooperation of its vendors to meet market demand for its products in a timely manner. There can be no assurance that

existing and future events will not require Mattel to adopt additional requirements and incur additional costs, and impose those

requirements and costs on its vendors, which may adversely affect its relationship with those vendors and Mattel's ability to

meet market demand in a timely manner.

Indebtedness

Mattel's substantial indebtedness could adversely affect its ability to raise additional capital to fund its operations, limit

its ability to react to changes in the economy or its industry, and expose it to interest rate risk to the extent of its variable

rate debt.

At December 31, 2023, Mattel had $2.33 billion of indebtedness on a consolidated basis, consisting primarily of 3.375%

Senior Notes due 2026, 5.875% Senior Notes due 2027, and 3.750% Senior Notes due 2029, as well as Senior Notes issued in

prior years. In addition, Mattel has $1.40 billion of commitments under its revolving credit facility. For more information, see

Part II, Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal

Financing and Debt."

Subject to the limits contained in the credit agreement that governs Mattel's revolving credit facility, the indentures that

govern the notes, and Mattel's other debt instruments, Mattel may incur substantial additional debt from time to time to finance

working capital, capital expenditures, investments or acquisitions, or for other purposes. To the extent Mattel does so, the risks

related to Mattel's high level of debt would increase. Specifically, Mattel's substantial indebtedness could have important

consequences. For example, it could:

• Require Mattel to dedicate a substantial portion of its cash flow from operations to payments on Mattel's indebtedness,

thereby reducing the availability of Mattel's cash flow to fund acquisitions, working capital, capital expenditures,

research and development efforts, and other general corporate purposes;

• Increase Mattel's vulnerability to, and limit Mattel's flexibility in planning for or reacting to, changes in its business

and the industries in which it operates;

• Restrict Mattel from making strategic acquisitions or cause Mattel to make non-strategic divestitures;

• Expose Mattel to the risk of increased interest rates as borrowings under its revolving credit facility will be subject to

variable rates of interest;

• Expose Mattel to additional risks related to currency exchange rates and repatriation of funds;

• Place Mattel at a competitive disadvantage compared to its competitors that have less debt; and

• Limit Mattel's ability to obtain additional debt or equity financing for working capital, capital expenditures, business

development, debt service requirements, acquisitions, and general corporate or other purposes.

Mattel's credit ratings have fluctuated in recent years. If Mattel's credit ratings decline, its cost of issuing new debt could

increase. Mattel may be hindered from obtaining, or required to incur incremental costs to obtain, additional credit in tight

credit markets. Further, Mattel's ability to issue additional debt could be adversely affected by other factors, including market

conditions. The interest rate margins, unused line fee, and letter of credit fronting fee under Mattel's revolving credit facility

may fluctuate based on Mattel's credit ratings. For example, if Mattel's credit ratings decline, its debt service obligations under

its revolving credit facility may increase even if the principal amount borrowed remains the same.

In addition, the indentures governing the notes and the agreements governing Mattel's revolving credit facility contain

affirmative and negative covenants that limit Mattel's ability to engage in activities that may be in its long-term best interests.

Mattel's failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in

the acceleration of all of Mattel's debts.

To service Mattel's indebtedness, Mattel requires a significant amount of cash and Mattel's ability to generate cash

depends on many factors beyond Mattel's control.

Mattel's ability to make cash payments on and to refinance its indebtedness, and to fund planned capital expenditures,

depends on Mattel's ability to generate significant operating cash flow in the future. This, to a significant extent, is subject to

general economic, financial, competitive, legislative, regulatory, and other factors that are beyond Mattel's control.

Mattel's business may not generate sufficient cash flow from operations and future borrowings may not be available

under Mattel's revolving credit facility in an amount sufficient to enable Mattel to pay its indebtedness or to fund its other

liquidity needs. In such circumstances, Mattel may need to refinance all or a portion of its indebtedness upon or before

maturity. Mattel may not be able to refinance any of its indebtedness, including its revolving credit facility and the notes, on

commercially reasonable terms or at all. If Mattel cannot service its indebtedness, Mattel may need to take actions such as

selling assets, issuing additional equity, reducing or delaying capital expenditures, strategic acquisitions, investments, and

alliances. There can be no assurance that such actions, if necessary, will be effected on commercially reasonable terms or at all.

The credit agreement governing Mattel's revolving credit facility and the indentures governing the notes will restrict Mattel's

ability to sell assets and use the proceeds from such sales.

If Mattel is unable to generate sufficient cash flow or is otherwise unable to obtain funds necessary to meet required

payments of principal, premium, if any, and interest on its indebtedness, or if Mattel otherwise fails to comply with the various

covenants in the instruments governing its indebtedness, Mattel could be in default under the terms of the agreements governing

such indebtedness. In the event of such default, the holders of such indebtedness will have the right to elect to declare all the

funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under Mattel's

revolving credit facility will have the right to elect to terminate their commitments thereunder, cease making further loans, and

institute foreclosure proceedings against Mattel's assets, and Mattel could be forced into bankruptcy or liquidation. Declines in

Mattel's operating performance may require Mattel to obtain waivers in the future from the required lenders under its revolving

credit facility to avoid being in default. If Mattel breaches its covenants under its revolving credit facility and seeks a waiver,

Mattel may not be able to obtain a waiver from the required lenders. If this occurs, Mattel would be in default under its

revolving credit facility, the lenders could exercise their rights, as described above, and Mattel could be forced into bankruptcy

or liquidation.

Mattel's variable rate indebtedness subjects Mattel to interest rate risk, which could cause Mattel's debt service

obligations to increase significantly.

Borrowings under Mattel's revolving credit facility will be at variable rates of interest and will expose Mattel to interest

rate risk. If interest rates continue to increase, Mattel's debt service obligations on the variable rate indebtedness will increase

even though the amount borrowed remains the same, and Mattel's net income and cash flows, including cash available for

servicing its indebtedness, will correspondingly decrease. Assuming Mattel's revolving credit facility is fully drawn up to the

maximum commitment level and the interest rates are above the interest rate floor set forth in the credit agreement governing

Mattel's revolving credit facility, each one-eighth point change in interest rates would result in a $1.75 million change in annual

interest expense on Mattel's indebtedness under its revolving credit facility. Any interest rate swaps that Mattel enters into with

respect to its variable rate indebtedness may not fully mitigate Mattel's interest rate risk.

Mattel is dependent upon its lenders for financing to execute its business strategy and meet its liquidity needs. If

Mattel's lenders are unable to fund borrowings under their credit commitments or Mattel is unable to borrow, it could

adversely affect Mattel's business, financial condition, and results of operations.

There is risk that one or more of Mattel's lenders, even those with strong balance sheets and sound lending practices,

could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including but not

limited to extending credit up to the maximum amount permitted by a credit facility and otherwise accessing capital and/or

honoring loan commitments. If Mattel's lenders are unable to fund borrowings under their credit commitments or Mattel is

unable to borrow, it could be difficult to replace Mattel's revolving credit facility on similar terms, which could adversely affect

Mattel's business, financial condition, and results of operations.

Mattel's stock repurchase program could affect the price of its common stock and may be suspended at any time, and

there is no guarantee that repurchases under the program, if any, will enhance stockholder value.

Mattel has a stock repurchase program, under which it is currently authorized to repurchase up to $1.00 billion of its

common stock. The stock repurchase program does not obligate Mattel to repurchase any dollar amount or number of shares

and may be suspended at any time without prior notice, which could cause the market price of Mattel's common stock to

decline. The amount and timing of repurchases under Mattel's share repurchase program, if any, are influenced by many factors

and may fluctuate based on Mattel's operating results, cash flows, priorities for the use of cash, the market price of Mattel's

common stock, and its possession of potentially material nonpublic information. There is no guarantee as to the exact number

of shares to be repurchased by Mattel, if any. Repurchases pursuant to the stock repurchase program could affect Mattel's stock

price and increase its volatility. The existence of a stock repurchase program could also cause Mattel's stock price to be higher

than it would be in the absence of such a program. Additionally, repurchases under the stock repurchase program utilize

Mattel's cash reserves, which could impact its ability to pursue possible future strategic opportunities and acquisitions. There

can be no assurance that any stock repurchases will enhance stockholder value because the market price of Mattel's common

stock may decline below the levels at which it repurchased shares of common stock.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

Risk Management and Strategy

Mattel has processes in place for assessing, identifying, and managing material risks from cybersecurity threats, which

include developing, implementing, and maintaining cybersecurity measures and controls. Mattel considers the following

factors, among others, to assess whether adequate protections are in place to address risks from known and anticipated

cybersecurity threats: likelihood and severity of risk; impact on Mattel and others, including retail customers, suppliers,

consumers, or employees, if a risk materializes; feasibility and cost of controls; and impact of controls on operations.

As part of its cybersecurity risk management program, Mattel utilizes cybersecurity assessors, consultants, auditors, and

other third-parties to assist its internal team with network security, cloud security, endpoint security, data loss prevention, and

security information and event management. In addition, Mattel utilizes a variety of third-party technology, information

systems, and service providers to help identify, isolate, and mitigate security incidents.

Mattel seeks to identify vulnerabilities and mitigate risks from cybersecurity threats posed by its use of third-party

technology, information systems, and service providers through oversight by Mattel's information technology ("IT")

organization through a variety of processes, including conducting onboarding due diligence, imposing contractual obligations

related to privacy and information security, and regularly monitoring the performance of third parties providing critical support

systems.

To support incident response preparedness, Mattel has developed a cybersecurity incident response plan and conducts an

annual simulated incident exercise. The cybersecurity incident response plan addresses cybersecurity incidents that directly

impact Mattel or arise from Mattel's use of third-party technology, information systems, and service providers. Mattel also

utilizes business continuity and disaster recovery plans to prepare for potential disruptions in technology that Mattel relies upon.

Further, Mattel monitors novel and advanced cybersecurity threats and provides ongoing employee security awareness training.

As part of Mattel's overall risk management program, Mattel's IT organization has a governance, risk, and compliance

group that provides oversight regarding IT-related risks, including cybersecurity risks, and monitors Mattel's IT control

environment. This group also works with Mattel's Internal Audit team to assess Mattel's cybersecurity processes. In addition,

Mattel's IT organization has a steering committee comprised of internal privacy and cybersecurity experts, chaired by Mattel's

Chief Information Security Officer ("CISO"), which is responsible for the development and maintenance of Mattel's privacy

and information security programs and regularly reports to Mattel's Chief Technology Officer ("CTO").

Mattel is subject to cybersecurity threats that could have a material adverse impact on its results of operations, financial

condition, and liquidity, as further discussed in Item 1A "Risk Factors" under the headings of Legal and Regulatory. Mattel is

not aware of having experienced any cybersecurity threats or incidents to date that have materially affected or are reasonably

likely to materially affect Mattel, its business strategy, results of operation or financial condition. However, there can be no

assurance that Mattel will be able to mitigate negative impacts in the same way in the event of future attacks or other cyber

incidents.

Governance

Mattel's CISO has more than twenty years of cybersecurity industry experience at Mattel and elsewhere and is

responsible for coordinating cybersecurity efforts within Mattel, with a focus on cybersecurity threat prevention, detection, and

mitigation, as well as enhancement of privacy and security measures, including security updates, security architecture and

engineering, and identity access management. Mattel's CISO reports to the CTO, regularly communicating risks and other

relevant information related to cybersecurity threats and incidents. Mattel's CTO has significant leadership, cybersecurity, and

technology experience, is responsible for overseeing the monitoring and mitigation of cybersecurity threats, and advises and

consults Mattel's senior management regarding material cybersecurity risks.

A team led by the CISO implements and maintains systems designed to detect and prevent cybersecurity threats, monitors

important developments that may present risk to Company and third-party systems, and oversees the results of internal and

third-party security reviews. The CISO provides regular updates to Mattel's CTO regarding critical and major severity security

incidents involving Company systems, security incidents involving third parties that have the potential to impact Mattel's

operations or involve sensitive customer, supplier, consumer, or employee data, and mitigation and remediation implemented to

address such threats or incidents.

The Audit Committee of the Board of Directors (the "Audit Committee") oversees the Company's assessment and

management of material cybersecurity risks. The CTO reports to the Audit Committee on Mattel's cybersecurity, including

material cybersecurity risks and mitigation, at least annually. The CTO reports and escalates cybersecurity incidents to

management and the Audit Committee as appropriate.

Item 2. Properties.

Mattel owns its corporate headquarters in El Segundo, California, consisting of approximately 360,000 square feet, and

an adjacent office building consisting of approximately 55,000 square feet. Mattel also leases buildings in El Segundo

consisting of approximately 327,000 square feet. All segments use these facilities. Mattel also owns facilities in East Aurora,

New York, consisting of approximately 607,000 square feet, which is used by the North America segment and for brand and

corporate support functions. American Girl owns its distribution facility in DeForest, Wisconsin, consisting of approximately

350,000 square feet. Mattel also owns its principal manufacturing facilities located in Indonesia, Malaysia, Mexico, and

Thailand.

Mattel maintains leased offices in the United States, in Arkansas, California, and Minnesota, and leased warehouse and

distribution facilities in California, Pennsylvania, Texas, and in Mississauga, Canada, all of which are used by the North

America segment. Mattel leases corporate office space in Middleton, Wisconsin for American Girl, retail and related office

space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American Girl stores, and in five

other cities across the United States for its American Girl boutique stores. Internationally, Mattel has offices and/or warehouse

space in over 30 countries. Mattel leases facilities used by the International segment in various foreign jurisdictions, including

China, Mexico, and the United Kingdom. Mattel also leases office space and principal manufacturing facilities in China, which

support the North America, International, and American Girl segments.

For all remaining leases that are scheduled to expire within the next twelve months, Mattel may negotiate new lease

agreements, renew existing lease agreements, or utilize alternate facilities. See Part II, Item 8 "Financial Statements and

Supplementary Data—Note 8 to the Consolidated Financial Statements—Leases." Mattel believes that its owned and leased

facilities, in general, are suitable and adequate for its present and currently foreseeable needs.

Item 3. Legal Proceedings.

See Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—

Commitments and Contingencies—Litigation."

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of

Equity Securities.

Market Information

Mattel's common stock, par value $1.00 per share, is traded under the symbol "MAT" on The Nasdaq Global Select

Market.

Holders of Record

As of March 4, 2024, Mattel had approximately 15,000 holders of record of its common stock.

Dividends

See Part II, Item 8 "Financial Statements and Supplementary Data—Note 7 to the Consolidated Financial Statements —

Stockholders' Equity—Dividends."

Recent Sales of Unregistered Securities

During the fourth quarter of 2023, Mattel did not sell any unregistered securities.

Issuer Purchases of Equity Securities

During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million. During 2022 and

2021, Mattel did not repurchase any shares of its common stock.

The following table provides certain information with respect to Mattel's purchases of its common stock during the fourth

quarter of 2023:

Total Number of Shares

Purchased (a)

Average Price Paid per

Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs

Approximate

Dollar Value of Shares

that May Yet Be

Purchased Under the

Plans or Programs (b)

Period:

October 1 - 31

1,710,604 $ 18.82 1,710,221 $ 60,975,153

November 1 - 30

3,173,304 19.23 3,171,631 —

December 1 - 31

3,835 18.88 — —

Total

4,887,743 $ 19.08 4,881,852 $ —

(a) The total number of shares purchased includes 5,891 shares withheld from employees to satisfy minimum tax withholding

obligations that occur upon settlement of equity awards, which 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

approved a $500.0 million increase to Mattel's share repurchase authorization and, as of December 31, 2023, such

authorization was exhausted. On February 5, 2024, the Board of Directors authorized a new $1.00 billion share

repurchase program. During February 2024, Mattel executed $100.0 million of share repurchases under the new program.

Repurchases under the program will take place from time to time, depending on market conditions. Mattel's share

repurchase program has no expiration date.

Performance Graph

The following graph compares the performance of Mattel's common stock with that of the S&P 500 Index and the S&P

500 Consumer Discretionary Index. The Cumulative Total Return listed below assumes an initial investment of $100 on

December 31, 2018 and reinvestment of dividends.

Period Ending

Index Value

Comparison of Five Year Cumulative Total Return

Mattel, Inc., S&P 500, and S&P 500 Consumer Discretionary Index

Mattel, Inc. S&P 500 S&P 500 Consumer Discretionary

2018 2019

2020 2021 2022

2023

100

150

200

250

December 31,

2018 2019 2020 2021 2022 2023

Cumulative Total Return:

Mattel, Inc.

$ 100.00 $ 135.64 $ 174.67 $ 215.82 $ 178.58 $ 188.99

S&P 500

$ 100.00 $ 126.17 $ 143.39 $ 178.85 $ 155.42 $ 180.90

S&P 500 Consumer Discretionary

$ 100.00 $ 126.53 $ 165.74 $ 211.63 $ 167.12 $ 207.71

Item 6. Reserved.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes.

See Item 8 "Financial Statements and Supplementary Data." Note that amounts within this Item shown in millions may not foot

due to rounding.

Mattel has omitted discussion of 2021 results where it would be redundant to the discussion previously included in Part

II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Mattel's Annual

Report on Form 10-K for the year ended December 31, 2022.

The following discussion includes currency exchange rate impact, a non-GAAP financial measure within the meaning of

Regulation G promulgated by the SEC ("Regulation G"), to supplement the financial results as reported in accordance with

generally accepted accounting principles in the United States ("GAAP"). The currency exchange rate impact reflects the portion

(expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange

rates. Mattel uses this non-GAAP financial measure to analyze its continuing operations and to monitor, assess, and identify

meaningful trends in its operating and financial performance. Management believes that the disclosure of this non-GAAP

financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business

performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for

GAAP financial measures.

The following discussion also includes the use of gross billings, a key performance indicator. Gross billings represent

amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other

allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic

results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records

the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally

recorded by customer and not associated with categories, brands, or individual products.

Overview

Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in

the world. Mattel creates innovative products and experiences that inspire fans, entertain audiences, and develop children

through play. Mattel is focused on the following strategy to grow its IP-driven toy business and expand its entertainment

offering:

• Grow toy business profitably through scaling Mattel's portfolio, optimizing operations, evolving demand creation, and

growing franchise brands; and

• Expand entertainment offering to capture the full value of Mattel's IP outside the toy aisle in highly accretive business

verticals, by growing franchise brands and accelerating content, consumer products, and digital and live experiences.

Russia - Ukraine War

The ongoing war between Russia and Ukraine has led to volatility and disruption in these countries. The length and

impact of the ongoing war is highly unpredictable. While Mattel has no direct operations in Ukraine, its operations in Russia

have experienced significant disruption. Mattel paused all shipments into Russia in early 2022, and net sales in these countries

have declined during the years ended December 31, 2023 and 2022. Mattel's net sales in these two countries represented less

than 1% of total net sales during the years ended December 31, 2023 and 2022, respectively.

Recent Developments

During 2023, Mattel made additional progress to execute its strategy to grow its IP-driven toy business and expand its

entertainment offering, as it gained market share, achieved success with the Barbie movie, and further strengthened its financial

position.

Mattel's full year net sales were comparable to the prior year, with meaningful sales growth in the second half of the year

as shipping patterns realigned with historical trends. Mattel's full year results included an improvement to operating cash flows

and gross margin expansion, with significant contributions from cost savings actions, pricing, and benefits from the theatrical

release of the Barbie movie during the second half of 2023. Full year gross margin improved to 47.5% in 2023, from 45.7% in

2022.

Mattel ended the year with a cash balance of $1.26 billion, compared to $761.2 million in the prior year. The increase in

cash was the result of Mattel's cash flows from operations, which were $869.8 million in 2023, driven by improved working

capital, partially offset by cash used for capital expenditures and share repurchases.

During 2023, Mattel resumed its share repurchase program and completed $203.0 million of share repurchases,

exhausting the remaining share repurchase authorization under the program. On February 5, 2024, the Board of Directors

authorized a new $1.00 billion share repurchase program. During February 2024, Mattel executed $100.0 million of share

repurchases under the new program.

Additionally, in February 2024, Mattel announced the Optimizing for Profitable Growth program, a multi-year cost

savings program that follows the Optimizing for Growth program and is designed to achieve further efficiency and cost savings

opportunities, primarily within Mattel's global supply chain, including its manufacturing footprint, with targeted annual gross

cost savings of $200.0 million between 2024 and 2026.

Mattel is operating in a macro-economic environment that may impact consumer demand. To the extent the macro-

economic environment worsens, it may have a material effect on Mattel's results of operations and financial condition. Refer to

Part I, Item 1A "Risk Factors" for further discussion regarding potential impacts on Mattel's business.

Results of Operations

Consolidated Results

The following table presents Mattel's consolidated results for 2023 and 2022:

For the Year Ended

Year/Year ChangeDecember 31, 2023 December 31, 2022

Amount

% of Net

Sales Amount

% of Net

Sales %

Basis Points

of Net Sales

(In millions, except percentage and basis point information)

Net sales

$ 5,441.2 $ 5,434.7 — %

Cost of sales

2,857.5 52.5 % 2,953.3 54.3 % -3 % (180)

Gross profit

2,583.7 47.5 % 2,481.4 45.7 % 4 % 180

Advertising and promotion expenses

524.8 9.6 % 534.3 9.8 % -2 % (20)

Other selling and administrative expenses

1,497.3 27.5 % 1,271.6 23.4 % 18 % 410

Operating income

561.7 10.3 % 675.5 12.4 % -17 % (210)

Interest expense

123.8 2.3 % 132.8 2.4 % -7 % (10)

Interest (income)

(25.2) -0.5 % (9.4) -0.2 % 169 % (30)

Other non-operating (income) expense, net

(2.3) 47.8

Income before income taxes

465.4 8.6 % 504.3 9.3 % -8 % (70)

Provision for income taxes

269.5 135.9

(Income) from equity method investments

(18.4) (25.4)

Net income

$ 214.4 3.9 % $ 393.9 7.2 % -46 % (330)

Sales

Net sales in 2023 were $5.44 billion, relatively flat as compared to $5.43 billion in 2022. Net sales were impacted by

higher gross billings of $53.6 million, which were partially offset by increases in sales adjustments of $47.0 million.

Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade

discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales

adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer

and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's

consolidated gross billings by categories, along with supplemental information by brand, for 2023 and 2022:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Gross Billings by Categories

Dolls $ 2,394.2 $ 2,084.0 15 % 2 %

Infant, Toddler, and Preschool 1,000.8 1,117.5 -10 % 1 %

Vehicles 1,641.0 1,450.8 13 % 2 %

Action Figures, Building Sets, Games, and Other 1,065.8 1,396.1 -24 % 1 %

Gross Billings $ 6,101.8 $ 6,048.3 1 % 1 %

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie $ 1,537.8 $ 1,490.6 3 % 1 %

Hot Wheels 1,432.4 1,251.4 14 % 2 %

Fisher-Price 852.6 935.9 -9 % 1 %

Other 2,279.0 2,370.4 -4 % 1 %

Gross Billings $ 6,101.8 $ 6,048.3 1 % 1 %

Gross billings were $6.10 billion in 2023, an increase of $53.6 million, or 1%, as compared to $6.05 billion in 2022, with

a favorable impact from changes in currency exchange rates of one percentage point. The increase in gross billings was due to

higher billings of Dolls and Vehicles, partially offset by lower billings of Action Figures, Building Sets, Games, and Other and

Infant, Toddler, and Preschool.

Dolls gross billings increased 15%, of which 10% was due to higher billings of Disney Princess and Disney Frozen

products, 6% was due to higher billings of Monster High products, and 2% was due to higher billings of Barbie, driven

primarily by licensing revenues associated with the release of the Barbie movie.

Infant, Toddler, and Preschool gross billings decreased 10%, of which 7% was due to lower billings of Fisher-Price

products.

Vehicles gross billings increased 13%, of which 12% was due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings decreased 24%, of which 14% was due to lower billings

of Jurassic World products and 9% was due to lower billings of Lightyear products, following their theatrical releases during

the second quarter of 2022.

Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer

promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer

purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers.

Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts

receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments

increased to $660.6 million in 2023, as compared to $613.6 million in 2022. Sales adjustments as a percentage of net sales

increased to 12.1% in 2023 from 11.3% in 2022. The increase to sales adjustments as a percentage of net sales was primarily

due to higher promotional activities among key retailers, as well as a shift in customer mix resulting in a higher proportion of

sales with higher average sales adjustment rates.

Cost of Sales

Cost of sales decreased by $95.8 million, or 3%, to $2.86 billion in 2023 from $2.95 billion in 2022. Within cost of sales,

product and other costs decreased by $139.3 million, or 6%, to $2.28 billion in 2023 from $2.42 billion in 2022, freight and

logistics expenses increased by $24.4 million, or 8%, to $327.0 million in 2023 from $302.6 million in 2022, and royalty

expense increased by $19.0 million, or 8%, to $249.8 million in 2023 from $230.8 million in 2022.

Gross Margin

Gross margin increased to 47.5% in 2023 from 45.7% in 2022. The increase in gross margin was primarily due to

incremental realized savings from the Optimizing for Growth program of 130 basis points, favorable mix of 110 basis points,

which primarily related to the release of the Barbie movie, favorable pricing, net of higher sales adjustments of 100 basis

points, and cost deflation of 60 basis points, partially offset by unfavorable fixed cost absorption due to lower production

volume and other supply chain costs of 220 basis points.

Advertising and Promotion Expenses

Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying

fees for television, print, and online advertisements, (ii) non-media costs, which include commercial and website

production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs; and

(iv) generic advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales

were relatively flat in 2023 at 9.6% in 2023, compared to 9.8% in 2022.

Other Selling and Administrative Expenses

Other selling and administrative expenses were $1.50 billion, or 27.5% of net sales, in 2023, as compared to

$1.27 billion, or 23.4% of net sales, in 2022. The increase in other selling and administrative expenses was primarily due to

higher incentive compensation of $152.2 million, market-related pay increases of $38.1 million, higher severance and

restructuring charges of $34.7 million, and a prior year gain on sale of assets of $26.9 million, partially offset by incremental

realized savings from the Optimizing for Growth program of $46.0 million.

Interest Expense

Interest expense was $123.8 million in 2023, as compared to $132.8 million in 2022. The decrease was primarily due to

lower interest expense of $8.2 million in 2023 due to the $250.0 million repayment of the 2013 Senior Notes due March 2023 in

the fourth quarter of 2022.

Interest (Income)

Interest income increased to $25.2 million in 2023, as compared to $9.4 million in 2022, due to higher average interest

rates on invested cash in 2023.

Other Non-Operating (Income) Expense, Net

Other non-operating income, net was $2.3 million in 2023, as compared to other non-operating expense, net of

$47.8 million in 2022. In the fourth quarter of 2022, the liquidation of Mattel's subsidiary in Argentina was substantially

completed, and Mattel recognized its cumulative currency translation adjustments of $45.4 million as a loss in other non-

operating expense, net. See Item 7A "Quantitative and Qualitative Disclosures About Market Risk—Argentina Operations" for

more information.

Provision for Income Taxes

Mattel's provision for income taxes was $269.5 million in 2023, as compared to $135.9 million in 2022. In 2023, Mattel

completed an intra-group transfer of certain IP rights, resulting in a net tax expense of $161.4 million related to the write-down

of certain foreign deferred tax assets and the establishment of certain U.S. deferred tax assets. The 2023 income tax provision

included a net tax expense of $9.9 million, including $19.2 million related to reassessments of prior year's tax liabilities based

on the status of audits and settlements in various jurisdictions, partially offset by $9.2 million of benefits from the expiration of

certain statutes of limitations. The 2022 income tax provision included an $11.0 million tax expense related to certain foreign

subsidiaries' deferred tax liabilities of undistributed earnings and a $15.2 million tax benefit related to reassessments of prior

year's tax liabilities based on the status of audits and settlements in various jurisdictions.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant

judgment and extensive analysis of all available evidence to determine whether it is more likely than not that these assets will

be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of

sustained profitability and three years of cumulative pretax income for each tax jurisdiction. Changes in the valuation

allowances in 2022 primarily related to utilization and expiration of tax attributes and currency fluctuations. As of December

31, 2022, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were

approximately $16 million and $74 million, respectively. Changes in the valuation allowances in 2023 primarily related to

changes in the assessment of the future realizability of certain deferred tax assets, utilization and expiration of tax attributes, and

currency fluctuations. As of December 31, 2023, Mattel's valuation allowances on its U.S. federal and state deferred tax assets

and foreign deferred tax assets were approximately $14 million and $71 million, respectively. As of December 31, 2023 and

2022, Mattel had recorded net deferred tax assets of $243.1 million and $416.5 million, respectively.

The Organization for Economic Co-operation and Development (OECD) reached an agreement among various countries

to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many

countries continue to announce changes in their tax laws and regulations based on the Pillar Two rules. Mattel is continuing to

evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of the

legislative changes could impact Mattel's effective tax rate and tax liabilities. When and how these laws and regulations are

adopted or enacted by various countries in which Mattel operates could increase tax complexity and uncertainty and may

adversely affect Mattel's worldwide effective tax rate, income tax expense and cash flows.

Segment Results

North America Segment

The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories,

along with supplemental information by brand, for the North America segment for 2023 and 2022:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Net Sales $ 3,003.2 $ 2,987.8 1 % — %

Segment Operating Income 793.4 765.9 4 %

Net sales for the North America segment in 2023 were $3.00 billion, an increase of $15.4 million or 1%, as compared to

$2.99 billion in 2022. The increase in net sales was the result of an increase in gross billings of $32.2 million, partially offset by

an increase in sales adjustments of $16.8 million.

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Gross Billings by Categories

Dolls

$ 1,153.8 $ 940.3 23 % — %

Infant, Toddler, and Preschool

618.6 698.3 -11 % — %

Vehicles

812.4 736.9 10 % — %

Action Figures, Building Sets, Games, and Other

633.5 810.6 -22 % — %

Gross Billings

$ 3,218.3 $ 3,186.1 1 % — %

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie

$ 840.4 $ 776.3 8 % — %

Hot Wheels

690.8 617.9 12 % — %

Fisher-Price

532.0 584.5 -9 % — %

Other

1,155.1 1,207.3 -4 % — %

Gross Billings

$ 3,218.3 $ 3,186.1 1 % — %

Gross billings were $3.22 billion in 2023, an increase of $32.2 million, or 1%, as compared to $3.19 billion in 2022. The

increase in the North America segment gross billings was primarily due to higher billings of Dolls and Vehicles, partially offset

by lower billings of Action Figures, Building Sets, Games, and Other and Infant, Toddler, and Preschool.

Dolls gross billings increased 23%, of which 11% was due to higher billings of Disney Princess and Disney Frozen

products, 7% was due to higher billings of Barbie, driven primarily by licensing revenues associated with the release of the

Barbie movie, and 5% was due to higher billings of Monster High products.

Infant, Toddler, and Preschool gross billings decreased 11%, of which 7% was due to lower billings of Fisher-Price

products and 2% was due to lower billings of Power Wheels products.

Vehicles gross billings increased 10%, due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings decreased 22%, of which 14% was due to lower billings

of Jurassic World products and 8% was due to lower billings of Lightyear products, following their theatrical releases during

the second quarter of 2022.

Sales adjustments increased to $215.1 million in 2023, as compared to $198.3 million in 2022. Sales adjustments as a

percentage of net sales increased to 7.2% in 2023 from 6.6% in 2022. The increase to sales adjustments as a percentage of net

sales was primarily due to higher promotional activities.

Cost of sales decreased by $27.5 million, or 2%, to $1.63 billion in 2023 from $1.65 billion in 2022, as compared to a 1%

increase in net sales, primarily due to a decrease in product and other costs of $60.5 million, partially offset by an increase in

freight and logistics expenses of $24.5 million.

Gross margin increased to 45.9% in 2023 from 44.9% in 2022, primarily due to incremental realized savings from the

Optimizing for Growth program of 130 basis points, favorable mix of 110 basis points, which primarily related to the release of

the Barbie movie, cost deflation of 60 basis points, and favorable pricing, net of higher sales adjustments of 50 basis points,

partially offset by unfavorable fixed cost absorption and other supply chain costs of 250 basis points.

North America segment operating income was $793.4 million in 2023, as compared to segment operating income of

$765.9 million in 2022, due to higher gross profit of $42.9 million, partially offset by higher other selling and administrative

expenses of $15.9 million.

International Segment

The following tables provide a summary of Mattel's net sales, segment operating income, and gross billings by categories,

along with supplemental information by brand, for the International segment for 2023 and 2022:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Net Sales

$ 2,230.8 $ 2,220.0 — % 3 %

Segment Operating Income

299.1 295.8 1 %

Net sales for the International segment in 2023 were $2.23 billion, relatively flat as compared to $2.22 billion in 2022.

Net sales were impacted by higher gross billings of $41.1 million, which were partially offset by increases in sales adjustments

of $30.4 million.

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Gross Billings by Categories

Dolls

$ 1,026.2 $ 909.7 13 % 4 %

Infant, Toddler, and Preschool

382.2 419.2 -9 % 4 %

Vehicles

828.6 713.9 16 % 4 %

Action Figures, Building Sets, Games, and Other

432.3 585.5 -26 % 3 %

Gross Billings

$ 2,669.4 $ 2,628.2 2 % 4 %

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie

$ 697.4 $ 714.2 -2 % 3 %

Hot Wheels

741.6 633.5 17 % 4 %

Fisher-Price

320.6 351.4 -9 % 4 %

Other

909.8 929.1 -2 % 3 %

Gross Billings

$ 2,669.4 $ 2,628.2 2 % 4 %

Gross billings for the International segment were $2.67 billion in 2023, an increase of $41.1 million, or 2%, as compared

to $2.63 billion in 2022, with a favorable impact from changes in currency exchange rates of four percentage points. The

increase in the International segment gross billings was due to higher billings of Dolls and Vehicles, partially offset by lower

billings of Action Figures, Building Sets, Games and Other and Infant, Toddler, and Preschool.

Dolls gross billings increased 13%, of which 12% was due to higher billings of Disney Princess and Disney Frozen

products and 8% was due to higher billings of Monster High products, partially offset by lower billings of Enchantimals

products of 4% and lower billings of Barbie products of 2%.

Infant, Toddler, and Preschool gross billings decreased 9%, of which 7% was due to lower billings of Fisher-Price

products.

Vehicles gross billings increased 16%, of which 15% was due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings decreased 26%, of which 13% was due to lower billings

of Jurassic World products and 9% was due to lower billings of Lightyear products, following their theatrical releases during

the second quarter of 2022, and 2% was due to lower billings of other Action Figures products.

Sales adjustments increased to $438.6 million in 2023, as compared to $408.2 million in 2022. Sales adjustments as a

percentage of net sales increased to 19.7% in 2023 from 18.4% in 2022. The increase to sales adjustments as a percentage of net

sales was due to higher promotional activities among key retailers and higher net foreign currency transaction losses from the

remeasurement of certain accounts receivable denominated in foreign currencies in 2023 of $11.4 million.

Cost of sales increased by $20.8 million, or 2%, to $1.23 billion in 2023 from $1.21 billion in 2022, as compared to a

slight increase in net sales, primarily due to an increase of product and other costs of $11.9 million and higher royalty expense

of $10.2 million.

Gross margin in 2023 decreased to 44.7% from 45.6% in 2022, primarily due to unfavorable foreign currency exchange

of 320 basis points and unfavorable fixed cost absorption from lower production volumes and other supply chain costs of 320

basis points. This was partially offset by favorable pricing actions, net of higher sales adjustments of 170 basis points,

incremental realized savings from the Optimizing for Growth program of 150 basis points, favorable mix of 130 basis points,

which primarily related to the release of the Barbie movie, and cost deflation of 100 basis points.

International segment operating income was $299.1 million in 2023, as compared to segment operating income of

$295.8 million in 2022, primarily due to lower other selling and administrative expenses of $7.6 million and lower advertising

and promotion expenses of $5.7 million, offset by lower gross profit of $10.0 million.

American Girl Segment

The following table provides a summary of Mattel's net sales and segment operating income for the American Girl

segment for 2023 and 2022:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Net Sales

$ 207.2 $ 226.9 -9 % — %

Segment Operating (Loss) Income

(5.7) 0.2 N/M

N/M - Not meaningful

Net sales for the American Girl segment in 2023 were $207.2 million, a decrease of $19.6 million, or 9%, as compared to

$226.9 million in 2022. The decrease in net sales was the result of declines in gross billings of $19.8 million. Gross billings

decreased to $214.2 million in 2023 from $234.0 million in 2022, primarily due to lower billings of Truly Me dolls of $20.4

million.

Sales adjustments were $7.0 million in 2023, as compared to $7.1 million in 2022.

Cost of sales decreased by $8.2 million, or 8%, to $97.9 million in 2023 from $106.1 million in 2022, as compared to a

9% decrease in net sales, primarily due to a decrease of product and other costs of $9.8 million.

Gross margin in 2023 decreased to 52.8% from 53.2% in 2022, primarily due to cost inflation of 130 basis points,

partially offset by incremental realized savings from the Optimizing for Growth program of 70 basis points and favorable

product mix and other of 20 basis points.

American Girl segment operating loss was $5.7 million in 2023, as compared to segment operating income of

$0.2 million in 2022, primarily due to lower gross profit of $11.4 million, offset by lower advertising and promotion expenses

of $3.2 million and lower other selling and administrative expenses of $2.3 million. The decrease in other selling and

administrative expenses was primarily due to lower rent expense of $7.9 million and lower miscellaneous other selling and

administrative expenses, partially offset by a gain on the sale of the American Girl corporate office and distribution center in the

prior year of $15.2 million, which reduced other selling and administrative expense in 2022.

Cost Savings Programs

Optimizing for Growth (formerly Capital Light)

In February 2021, Mattel announced the Optimizing for Growth program (the "OFG program"), a multi-year cost savings

program that integrates and expands upon the previously announced Capital Light program, which had targeted annual gross

cost savings of $250 million from actions expected to be completed beginning 2021 through 2023. In February 2023, Mattel

expanded the OFG program and increased the targeted annual gross cost savings from $250 million to $300 million, reflecting

additional initiatives, including actions to further streamline Mattel's organizational structure. As of December 31, 2023, Mattel

concluded the OFG program and, excluding previous actions taken under the Capital Light program, achieved annualized gross

cost savings of approximately $343 million.

Of the $343 million in gross cost savings, approximately 60% benefits cost of sales, 30% benefits other selling and

administrative expenses, and 10% benefits advertising and promotion expenses. Total cash expenditures associated with the

OFG program, excluding previous actions taken under the Capital Light program, were approximately $170 million.

The cost of actions for the OFG program, excluding previous actions taken under the Capital Light program, were as

follows:

Optimizing for Growth – Actions Total Cost

Employee severance

$55 million

Real estate/supply chain optimization and other restructuring costs

$33 million

Non-cash charges (a)

$58 million

Total severance and restructuring costs

$146 million

Information technology enhancements and other investments

$82 million

Total actions

$228 million

(a) Non-cash charges include $45.4 million of currency translation losses that were recognized within other non-operating

expense, net, in the consolidated statement of operations during 2022 as a result of Mattel's liquidation of its subsidiary in

Argentina, which was substantially completed in 2022.

Cumulatively, in conjunction with previous actions taken under the Capital Light program prior to 2021, Mattel achieved

annual gross cost savings for the OFG program of $418 million as of December 31, 2023. The total cash expenditures were

approximately $208 million, and total non-cash charges were $73 million. Of the $418 million annual gross cost savings,

approximately 70% benefits cost of sales, 20% benefits other selling and administrative expenses, and 10% benefits advertising

and promotion expenses.

In connection with the OFG program, Mattel recorded severance and other restructuring costs in the following cost and

expense categories within operating income in the consolidated statements of operations:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In millions)

Cost of sales (a) $ (1.3) $ 10.7 $ 2.9

Other selling and administrative expenses (b) 32.3 23.6 32.3

$ 31.0 $ 34.3 $ 35.2

(a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are

included in segment operating income in "Note 14 to the Consolidated Financial Statements—Segment Information."

(b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated

statements of operations are included in corporate and other expense in "Note 14 to the Consolidated Financial Statements

—Segment Information."

As of December 31, 2023, Mattel had recorded cumulative severance and other restructuring charges related to the OFG

program, including previous actions taken under the Capital Light program, of approximately $196 million, which included

approximately $73 million of non-cash charges. Non-cash charges include $45.4 million recorded in non-operating expense,

net, during 2022, related to the liquidation of Mattel's subsidiary in Argentina.

During 2021, in conjunction with the OFG program, Mattel completed the sale of a manufacturing plant based in Mexico,

which included land and buildings, resulting in a pre-tax gain of $15.8 million.

Optimizing for Profitable Growth

On February 7, 2024, Mattel announced the Optimizing for Profitable Growth program, a multi-year cost savings

program that follows the OFG program and is designed to achieve further efficiency and cost savings opportunities, primarily

within Mattel’s global supply chain, including its manufacturing footprint (the "OPG program"). The OPG program includes

cost savings actions in connection with discontinuing production at a plant in China as previously announced in the third

quarter of 2023, that were not included in the OFG program. Targeted annual gross cost savings from actions associated with

the OPG program, which are expected to be completed beginning 2024 through 2026, are $200 million. Of the $200 million in

targeted annual gross costs savings, approximately 70% is expected to benefit cost of sales and 30% is expected to benefit other

selling and administrative expenses. Total expected cash expenditures under the OPG program are expected to be between $130

and $165 million.

The costs associated with the OPG program are expected to include the following:

Optimizing for Profitable Growth – Actions Estimate of Cost

Employee severance

$90 to $105 million

Other restructuring costs

$10 to $20 million

Non-cash charges

up to $5 million

Total estimated severance and restructuring costs (a)

$100 to $130 million

Investments

$30 to $40 million

Total estimated actions

$130 to $170 million

(a) Total estimated costs include $30 to $35 million of severance and other restructuring costs and up to $5 million of non-

cash charges associated with the discontinuing of production at a manufacturing plant in China, which was previously

announced during the third quarter of 2023.

As of December 31, 2023, in connection with the OPG program, Mattel recorded $25.3 million of severance costs within

other selling and administrative expense in the consolidated statements of operations and is included in corporate and other

expense in "Note 14 to the Consolidated Financial Statements—Segment Information."

Other Cost Savings Actions

Mattel executed other cost savings actions in 2023 not included in the OFG program or the OPG program to streamline its

organizational structure. In connection with these actions, Mattel recorded severance expense of $3.4 million within other

selling and administrative expenses in the consolidated statement of operations.

Income Taxes

See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of

Operations—Provision for Income Taxes."

Liquidity and Capital Resources

Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, short-term borrowing

facilities, including its $1.40 billion senior secured revolving credit facility (the "Revolving Credit Facility"), and access to

capital markets to fund its operations and obligations. Such obligations may include capital expenditures, debt service, future

royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and

payments related to benefit plans. Of Mattel's $1.26 billion in cash and equivalents at December 31, 2023, $578.1 million was

held by foreign subsidiaries, including $57.2 million held in Russia. Mattel's cash held in Russia can be used within the country;

however, its movement out of Russia is currently limited.

Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which

could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer

preferences, or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or

component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely

affected by factors such as, but not limited to, global economic crises and tight credit environments, an inability to comply with

its debt covenants and its Revolving Credit Facility covenants, or deterioration of Mattel's credit ratings. However, based on

Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from

operations, availability under the Revolving Credit Facility, and access to capital markets, will be sufficient to meet working

capital and operating expenditure requirements for the next twelve months and in the long-term.

The Tax Cuts and Jobs Act, enacted on December 22, 2017 (the "U.S. Tax Act"), provides Mattel with a reduced cost to

access the earnings of its foreign subsidiaries. With the passage of the U.S. Tax Act, repatriations of foreign earnings generally

will not be taxable for U.S. federal income tax purposes, but may be subject to state income tax and/or foreign withholding tax,

in addition to any local country distribution requirements. As such, Mattel has evaluated its intentions related to its indefinite

reinvestment assertion and has recorded a $23 million deferred tax liability related to approximately $556 million of foreign

earnings that will not be indefinitely reinvested.

Current Market Conditions

Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates.

Consistent with prior periods, Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations,

and borrowings under the Revolving Credit Facility to meet its short-term liquidity needs. At December 31, 2023, Mattel had

no outstanding borrowings under the Revolving Credit Facility and approximately $9 million in outstanding letters of credit

under the Revolving Credit Facility.

Market conditions could affect certain terms of other debt instruments that Mattel enters into from time to time.

Mattel monitors the third-party depository institutions that hold Mattel's cash and equivalents. Mattel's emphasis is

primarily on safety and liquidity of principal, and secondarily on maximizing the yield on those funds. Mattel diversifies its

cash and equivalents among counterparties and securities to minimize risks.

Mattel is subject to credit risks relating to the ability of its counterparties in hedging transactions to meet their contractual

payment obligations. The risks related to creditworthiness and nonperformance have been considered in the fair value

measurements of Mattel's foreign currency forward exchange contracts. Mattel closely monitors its counterparties and takes

action, as necessary, to manage its counterparty credit risk.

Mattel expects that some of its customers and vendors may experience difficulty in obtaining the liquidity required to buy

inventory or raw materials. Mattel monitors its customers' financial condition and their liquidity in order to mitigate accounts

receivable collectability risks, and customer terms and credit limits are adjusted, if necessary. Additionally, Mattel uses a

variety of financial arrangements to support the collectability of accounts receivable of customers deemed to be a credit risk,

including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash

in advance of shipment.

Mattel sponsors defined benefit pension plans and postretirement benefit plans for its employees. Actual returns below

the expected rate of return, along with changes in interest rates that affect the measurement of the liability, would impact the

amount and timing of Mattel's future contributions to these plans. Mattel expects to make cash contributions totaling

approximately $14 million to its defined benefit pension and postretirement benefit plans in 2024, substantially all of which will

be for benefit payments for its under-funded plans.

Cash Flow Activities

Cash flows provided by operating activities were $869.8 million in 2023, as compared to $442.8 million in 2022. The

increase in cash flows provided by operating activities was primarily due to $525.8 million of improvements to working capital,

which included $477.4 million of favorability from changes to accounts payable and accrued liabilities and $464.8 million of

favorability from lower inventories, partially offset by the impact of higher accounts receivable of $396.2 million. The

improvements to working capital were partially offset by changes in net income, excluding the changes to deferred tax assets of

$176.4 million and other non-cash items.

Cash flows used for investing activities were $142.4 million in 2023, as compared to $144.2 million in 2022. The

decrease in cash flows used for investing activities was primarily due to a $26.2 million decrease in capital expenditures and

$15.5 million in higher net proceeds from foreign currency forward exchange contracts, partially offset by $31.3 million lower

proceeds from the sale of assets.

Cash flows used for financing activities were $226.6 million in 2023, as compared to $260.6 million in 2022. The

decrease in cash flows used for financing activities was primarily due to the $250.0 million repayment of the 3.15% Senior

Notes due March 2023 in 2022, partially offset by $203.0 million of share repurchases in 2023.

During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million. During 2022,

Mattel did not repurchase any shares of its common stock. Mattel's share repurchase program was first announced on July 21,

2003. On July 17, 2013, the Board of Directors approved a $500.0 million increase to Mattel's share repurchase authorization

and, as of December 31, 2023, such authorization was exhausted. On February 5, 2024, the Board of Directors authorized a new

$1.00 billion share repurchase program. Repurchases under the program will take place from time to time, depending on market

conditions. Mattel's share repurchase program has no expiration date.

During 2023 and 2022, Mattel did not pay any dividends to holders of its common stock. The payment of dividends on

common stock is at the discretion of the Board of Directors and is subject to customary limitations.

Seasonal Financing

See Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal

Financing and Debt."

Credit Ratings

In 2023, Fitch maintained Mattel's credit rating of BB+ with a positive outlook. In 2023, Moody's maintained Mattel's

credit rating of Baa3 with a stable outlook. In 2023, Standard & Poor's changed Mattel's credit rating from BB+ to BBB- and

maintained a positive outlook. In February 2024, Fitch changed Mattel's credit rating from BB+ to BBB- with a stable outlook

and Standard & Poor's changed Mattel's credit rating from BBB- to BBB with a stable outlook.

Financial Position

Mattel's cash and equivalents increased $500.1 million to $1.26 billion at December 31, 2023, as compared to

$761.2 million at December 31, 2022, primarily due to cash flow provided by operating activities of $869.8 million, partially

offset by share repurchases of $203.0 million and capital expenditures of $160.3 million.

Accounts receivable increased $221.6 million to $1.08 billion at December 31, 2023, as compared to $860.2 million at

December 31, 2022, primarily due to the increase in net sales of $218.8 million in the fourth quarter of 2023 compared to the

prior year.

Inventories decreased $322.5 million to $571.6 million at December 31, 2023, as compared to $894.1 million at

December 31, 2022, primarily due to higher net sales in the fourth quarter of 2023, and higher inventory production and cost

inflation in 2022.

Prepaid expenses and other current assets decreased $6.0 million to $207.5 million at December 31, 2023, as compared to

$213.5 million at December 31, 2022, primarily due to a decrease in derivative receivables of $13.3 million.

Accounts payable and accrued liabilities increased $158.4 million to $1.31 billion at December 31, 2023, as compared to

$1.15 billion at December 31, 2022, primarily due to higher accrued incentive compensation of $137.8 million.

A summary of Mattel's capitalization is as follows:

December 31, 2023 December 31, 2022

(In millions, except percentage information)

Cash and equivalents

$ 1,261.4 $ 761.2

2010 Senior Notes due October 2040

250.0 250.0

2011 Senior Notes due November 2041

300.0 300.0

2019 Senior Notes due December 2027

600.0 600.0

2021 Senior Notes due April 2026

600.0 600.0

2021 Senior Notes due April 2029

600.0 600.0

Debt issuance costs and debt discount

(20.0) (24.4)

Total debt

2,330.0 52 % 2,325.6 53 %

Stockholders' equity

2,149.2 48 2,056.3 47

Total capitalization (debt plus equity)

$ 4,479.2 100 % $ 4,381.9 100 %

On December 30, 2022, Mattel used cash on hand to redeem and retire the $250 million aggregate principal amount of

the 2013 Senior Notes due 2023.

Total debt was $2.33 billion at December 31, 2023, flat as compared to $2.33 billion at December 31, 2022.

Stockholders' equity increased $92.9 million to $2.15 billion at December 31, 2023, as compared to $2.06 billion at

December 31, 2022, primarily due to net income in 2023 of $214.4 million and the impact of share-based compensation on

additional paid-in capital of $83.3 million, partially offset by share repurchases of $203.0 million.

Off-Balance Sheet Arrangements

Mattel is required to provide standby letters of credit to support certain obligations that arise in the ordinary course of

business and may choose to provide letters of credit in place of posting cash collateral. Although the letters of credit are off-

balance sheet, the majority of the obligations to which they relate are reflected as liabilities in the consolidated balance sheets.

Outstanding letters of credit totaled approximately $9 million and $8 million as of December 31, 2023 and 2022, respectively.

Commitments

In the normal course of business, Mattel enters into contractual arrangements to obtain and protect Mattel's right to create

and market certain products, and for future purchases of goods and services, including for the purchase of future inventory to

ensure availability of materials. These arrangements include commitments for royalty payments pursuant to licensing

agreements, which routinely contain provisions for guarantees or minimum expenditures during the terms of the contracts.

Mattel also enters into long-term debt arrangements that include periodic interest and principal payments. Mattel also has

defined benefit and postretirement benefit plans, which require future cash contributions and benefit payments. Additionally,

Mattel routinely enters into noncancelable lease agreements for premises and equipment used, which contain minimum rental

payments.

The following table summarizes Mattel's contractual commitments and obligations:

Total 2024 2025 2026 2027 2028 Thereafter

(In millions)

Long-term debt

$ 2,350.0 $ — $ — $ 600.0 $ 600.0 $ — $ 1,150.0

Interest on long-term debt

854.4 109.9 109.9 94.7 88.1 54.4 397.4

Leases

414.1 93.2 84.2 69.7 39.4 27.5 100.1

Minimum guarantees under

licensing and similar agreements

234.5 90.0 93.7 25.5 24.9 0.4 —

Defined benefit and

postretirement benefit plans

351.9 37.3 36.3 35.5 34.5 34.9 173.4

Purchases of inventory, services,

and other

395.5 283.9 49.9 30.3 25.3 6.1 —

Total

$ 4,600.4 $ 614.3 $ 374.0 $ 855.7 $ 812.2 $ 123.3 $ 1,820.9

Liabilities for uncertain tax positions for which a cash tax payment is not expected to be made in the next twelve months

are classified as other noncurrent liabilities. Due to the uncertainty regarding the periods in which examinations will be

completed and limited information related to current audits, Mattel is not able to make reasonably reliable estimates of the

periods in which cash settlements will occur with taxing authorities for the noncurrent liabilities.

Litigation

The content of Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements

—Commitments and Contingencies—Litigation" is hereby incorporated by reference in this Item 7.

Application of Critical Accounting Policies and Estimates

Mattel makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported

amounts of revenues and expenses. The accounting policies and estimates described below are those Mattel considers most

critical in preparing its consolidated financial statements. These accounting policies and estimates include significant judgments

made by management using information available at the time the estimates are made. As described below, however, these

estimates could change materially if different information or assumptions were used instead.

Accounts Receivable—Allowance for Credit Losses

The allowance for credit losses is based on collection history and management's assessment of the current economic

trends, business environment, customers' financial condition, accounts receivable aging, and customer disputes that may impact

the level of future credit losses. Management believes the accounting estimate related to the allowance for credit losses is a

"critical accounting estimate" because significant judgment is required to evaluate the creditworthiness of its customers when

estimating the collectability of its accounts receivable. In addition, the allowance requires a high degree of judgment since it

involves estimation of the impact of both current and future economic factors in relation to its customers' ability to pay amounts

owed to Mattel. Significant changes in the assumptions used to develop the estimate could materially affect key financial

measures, including other selling and administrative expenses, net income, and accounts receivable.

Mattel's products are sold throughout the world. Products within the North America segment are sold directly to retailers,

including discount and freestanding toy stores, chain stores, department stores, other retail outlets and, to a limited extent,

wholesalers, and directly to consumers through Mattel's e-commerce platforms. Products within the International segment are

sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, and in Australia and New

Zealand, and through agents and distributors in those countries where Mattel has no direct presence.

In recent years, the mass-market retail channel has experienced significant shifts in market share among competitors,

causing some large retailers to experience liquidity problems. Mattel's sales to customers are typically made on credit without

collateral and are highly concentrated in the third and fourth quarters due to the seasonal nature of toy sales, which results in a

substantial portion of trade receivables being collected during the latter half of the year and the first quarter of the following

year. There is a risk that customers will not pay, or that payment may be delayed, because of bankruptcy, financial difficulty, or

other factors beyond the control of Mattel. This could increase Mattel's exposure to losses from bad debts.

A small number of customers account for a large share of Mattel's net sales and accounts receivable. In 2023, Mattel's

three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 44% of net sales, and its

ten largest customers, in the aggregate, accounted for approximately 50% of net sales. As of December 31, 2023, Mattel's three

largest customers accounted for approximately 41% of net accounts receivable, and its ten largest customers accounted for

approximately 49% of net accounts receivable. Should one or more of Mattel's large customers experience bankruptcy or

financial difficulty, the allowance for credit losses may not be sufficient to cover such losses.

Mattel has procedures to mitigate its risk of exposure to losses from bad debts. Credit limits and payment terms are

established based on the underlying criteria that collectability must be reasonably assured at the levels set for each customer.

Extensive evaluations are performed on an ongoing basis throughout the fiscal year of each customer's financial performance,

cash generation, financing availability, and liquidity status. Customers are reviewed at least annually, with more frequent

reviews being performed, if necessary, based on the customers' financial condition and the level of credit being extended. For

customers who are experiencing financial difficulty, management performs additional financial analyses prior to shipping to

those customers on credit. Customers' terms and credit limits are adjusted or revoked, if necessary, to reflect the results of the

review. Mattel uses a variety of financial arrangements to ensure collectability of accounts receivable of customers, including

requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance

of shipment.

The following table summarizes Mattel's allowance for credit losses:

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Allowance for credit losses

$ 8.8 $ 27.6

As a percentage of total accounts receivable

0.8 % 3.1 %

Changes in the allowance for credit losses reflect management's assessment of the factors noted above, including changes

in current economic trends, business environment, past due accounts, disputed balances with customers, and the financial

condition of customers. The allowance for credit losses is also affected by the time at which uncollectable accounts receivable

balances are actually written off.

For the year ended December 31, 2023, Mattel recorded a benefit related to its allowance for credit losses of

approximately $2 million, which was recognized as other selling and administrative income. For the year ended December 31,

2022, Mattel recorded a charge related to its allowance for credit losses of approximately $18 million, which was recognized as

other selling and administrative expenses. In general, Mattel's allowance for credit loss estimates has historically been within its

expectations and in line with the reserves established, and although possible, significant variation is not expected in the future.

If significant changes in the assumptions used to develop the estimates occur, they could materially affect key financial

measures, including other selling and administrative expenses and accounts receivable. A hypothetical 1% increase or decrease

to the allowance for credit losses as a percentage of accounts receivable would have impacted 2023 and 2022 other selling and

administrative expenses by approximately $11 million and $9 million, respectively.

Inventories—Obsolescence Reserve

Inventories are stated at the lower of cost or net realizable value. Inventory obsolescence reserves are recorded for

damaged, obsolete, excess, and slow-moving inventory. Inventory obsolescence expense is charged to cost of sales and

establishes a lower cost basis for the inventory. Management believes that the accounting estimate related to the obsolescence

reserve is a "critical accounting estimate" because significant judgment is required to evaluate the level of future demand for

inventories held by Mattel as well as the prices at which customers are willing to pay for Mattel's inventories. As more fully

described below, obsolescence reserves required for Mattel's inventory could be impacted by changes in public and consumer

preferences, demand for product, or changes in the buying patterns of both retailers and consumers and inventory management

of customers. Significant changes in the assumptions used to develop the estimate could materially affect key financial

measures, including gross profit, net income, and inventories.

In the toy industry, orders are typically subject to cancellation or change at any time prior to shipment. Actual shipments

of products ordered and order cancellation rates are affected by consumer acceptance of product lines, strength of competing

products, marketing strategies of retailers, changes in buying patterns of both retailers and consumers, and overall economic

conditions. Unexpected changes in these factors could result in excess inventory in a particular product line, which would

require management to record a valuation adjustment on such inventory.

Mattel bases its production schedules for toy products on customer orders and forecasts, taking into account historical

trends, results of market research, and current market information. Mattel ships products in accordance with delivery schedules

specified by its customers, who usually request delivery within three months. In anticipation of retail sales in the traditional

holiday season, Mattel significantly increases its production in advance of the peak selling period, resulting in a corresponding

build-up of inventory levels in the first three quarters of its fiscal year. These seasonal purchasing patterns and requisite

production lead times create risk to Mattel's business associated with the underproduction of popular toys and the

overproduction of toys that do not match consumer demand. Retailers are also attempting to manage their inventories more

tightly, requiring Mattel to ship products closer to the time the retailers expect to sell the products to consumers. These factors

increase inventory valuation risk because Mattel's inventory levels may be adversely impacted by the need to prebuild products

before orders are placed.

When conditions in the domestic and global economies become uncertain, it is difficult to estimate the level of growth or

contraction for the economy as a whole. It is even more difficult to estimate growth or contraction in various parts of the

economy, including the economies in which Mattel participates. Because all components of Mattel's budgeting and forecasting

are dependent upon estimates of growth or contraction in the markets it serves and demand for its products, economic

uncertainty makes estimates of future demand for products more difficult. Such economic changes may affect the sales of

Mattel's products and its corresponding inventory levels, which could potentially impact the valuation of its inventory.

At the end of each quarter, management within each business segment, North America, International, and American Girl,

performs a detailed review of its inventory on an item-by-item basis. Management assesses the need for, and the amount of, an

obsolescence reserve based on the following factors:

• Customer and/or consumer demand for the item;

• Overall inventory positions of Mattel's customers;

• Strength of competing products in the market;

• Quantity on hand of the item;

• Sales price of the item;

• Mattel's cost for the item; and

• Length of time the item has been in inventory.

The timeframe between when an estimate is made and the time of disposal depends on the above factors and may vary

significantly. Generally, slow-moving inventory is liquidated during the next annual selling cycle.

The following table summarizes Mattel's obsolescence reserve:

December 31,

2023

December 31,

2022

(In millions, except percentage information)

Obsolescence reserve

$ 46.7 $ 41.8

As a percentage of gross inventory

7.5 % 4.5 %

For the years ended December 31, 2023 and 2022, Mattel recorded a charge related to its inventory obsolescence reserve

of approximately $64 million and $65 million, respectively, which was recognized as cost of sales. In general, Mattel's

inventory obsolescence estimates have historically been within expectations and in line with the reserves established, and

although possible, significant variation is not expected in the future. If significant changes in the assumptions used to develop

the estimate occur, they could materially affect key financial measures, including cost of sales and inventories. A hypothetical

1% increase or decrease to inventory reserves as a percentage of gross inventory at December 31, 2023 and 2022 would have

impacted 2023 and 2022 cost of sales by approximately $6 million and $9 million, respectively.

Goodwill

Mattel tests goodwill for impairment annually or more often if an event or circumstance indicates that an impairment may

have occurred. Management believes that the accounting estimates related to the fair value estimates of its goodwill are "critical

accounting estimates" because assessing goodwill for impairment involves a high degree of judgment due to the prospective

assumptions that underlie the fair value assessments, such as projecting future cash flows for Mattel's reporting units and

estimating the weighted-average cost of capital that a market participant would use as a discount rate. Significant changes in the

assumptions used in the goodwill impairment tests could materially affect key financial measures, including net income and

goodwill.

For purposes of evaluating whether goodwill is impaired, goodwill is allocated to various reporting units, which are at the

operating segment level. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl. Mattel then

assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its

carrying amount. This qualitative assessment is used as a basis for determining whether it is necessary to perform the

quantitative goodwill impairment test.

When the quantitative goodwill impairment test is necessary, impairment is determined by estimating the fair value of a

reporting unit and comparing that value to the reporting unit's carrying amount. If the carrying amount of the reporting unit

exceeds its fair value, an impairment charge is recognized in an amount equal to the excess, limited by the amount of goodwill

in that reporting unit.

When performing the quantitative goodwill impairment test, Mattel determines the fair value of its reporting units based

upon one or more acceptable valuation approaches. Mattel utilizes the income approach for each of its reporting units and the

market approach is also utilized for the North America and International reporting units. The income approach determines the

fair value based upon the discounted cash flows that the business can be expected to generate in the future. The market

approach determines fair value utilizing earnings multiples of comparable public companies, which are reflective of the market

in which each respective reporting unit operates, and recent comparable market transactions. The income approach requires

Mattel to make projections of revenue, gross margin, operating costs, and working capital investment for the reporting unit over

a multi-year period. Additionally, management must make an estimate of a weighted-average cost of capital that a market

participant would use as a discount rate. Changes in these projections or estimates would impact the estimated fair value, which

could significantly change the amount of any impairment ultimately recorded.

Mattel performed a quantitative goodwill impairment assessment as of August 1, 2023, and the resulting calculations

indicated that the fair values exceeded the carrying amounts of Mattel's reporting units by 4.3 times, 1.7 times, and 1.8 times for

the North America, International, and American Girl reporting units, respectively. There were no events or changes in

circumstances subsequent to the third quarter assessment that indicate that the carrying amount of a reporting unit may exceed

its fair value as of December 31, 2023.

Sales Adjustments

Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions,

and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases,

customer performance of specified promotional activities, and other specified factors such as sales to consumers. Management

believes that the accounting estimates related to sales adjustments are "critical accounting estimates" because significant

judgment is required to estimate related accruals, such as estimating future customer sales volume to support volume-based

sales incentives, estimating volumes of defective products to support reserves for defective merchandise, and estimating future

customer performance and consumer preferences that could impact the discretionary sales promotions. Significant changes in

the assumptions used to develop the estimates could impact Mattel's results of operations or financial condition.

The above-described programs primarily involve fixed amounts or percentages of sales to customers. The accruals for

such programs, which can either be contractual or discretionary in nature, are based on an assessment of customer purchases,

customer performance of specified promotional activities, and other specified factors such as customer sales volume. While

certain sales adjustment amounts are readily determinable at year-end and do not require estimates, other sales adjustments,

such as discretionary sales adjustments, require significant judgment by management to make these estimates. In making these

estimates, management considers all available information, including the overall business environment, historical trends, and

information from customers.

Accruals for these programs are recorded as sales adjustments that reduce gross billings in the period the related sale is

recognized. Sales adjustments for such programs totaled $660.6 million or 12.1% as a percentage of net sales in 2023 and

$613.6 million or 11.3% as a percentage of net sales in 2022. If significant changes in the assumptions used to develop the

estimates occur, they could impact Mattel's results of operations or financial condition. A hypothetical 1% increase or decrease

in Mattel's sales adjustments as a percentage of net sales during the years ended December 31, 2023 and 2022 would have

impacted 2023 and 2022 net sales by approximately $54 million.

Income Taxes

Mattel's income tax provision and related income tax assets and liabilities are based on actual and expected future

income, U.S. federal and foreign statutory income tax rates, and tax regulations and planning opportunities in the various

jurisdictions in which Mattel operates. Management believes that the accounting estimates related to income taxes are "critical

accounting estimates" because significant judgment is required in interpreting tax regulations in the United States and in foreign

jurisdictions, evaluating Mattel's worldwide uncertain tax positions, and assessing the likelihood of realizing certain tax

benefits. Actual results could differ materially from those judgments, and changes in judgments could materially affect Mattel's

consolidated financial statements.

Certain income and expense items are accounted for differently for financial reporting and income tax purposes. As a

result, the income tax expense reflected in Mattel's consolidated statements of operations is different than that reported in

Mattel's tax returns filed with the taxing authorities. Some of these differences are permanent, such as expenses that are not

deductible in Mattel's tax return, and some are temporary differences that reverse over time, such as depreciation expense.

These timing differences create deferred income tax assets and liabilities. Deferred income tax assets generally represent items

that can be used as a tax deduction or credit in Mattel's tax returns in future years for which Mattel has already recorded a tax

benefit in its consolidated statements of operations. Mattel records a valuation allowance to reduce its deferred income tax

assets if, based on the weight of available evidence, management believes expected future taxable income is not likely to

support the use of a deduction or credit in that jurisdiction. Management evaluates the level of Mattel's valuation allowances at

least annually, and more frequently if actual operating results differ significantly from forecasted results.

Changes in the valuation allowances in 2022 primarily related to utilization and expiration of tax attributes and currency

fluctuations. As of December 31, 2022, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and

foreign deferred tax assets were approximately $16 million and $74 million, respectively. Changes in the valuation allowances

in 2023 primarily related to changes in assessment of the future realizability of certain deferred tax assets, utilization and

expiration of tax attributes, and currency fluctuations. As of December 31, 2023, Mattel's valuation allowances on its U.S.

federal and state deferred tax assets and foreign deferred tax assets were approximately $14 million and $71 million,

respectively. As of December 31, 2023 and 2022, Mattel had recorded net deferred tax assets of $243.1 million and $416.5

million, respectively.

Mattel records unrecognized tax benefits for U.S. federal, state, local, and foreign tax positions related primarily to

transfer pricing, tax credits claimed, tax nexus, and apportionment. For each reporting period, management applies a consistent

methodology to measure unrecognized tax benefits, and all unrecognized tax benefits are reviewed periodically and adjusted as

circumstances warrant. Mattel's measurement of its unrecognized tax benefits is based on management's assessment of all

relevant information, including prior audit experience, the status of audits, conclusions of tax audits, lapsing of applicable

statutes of limitations, identification of new issues, and any administrative guidance or developments. Mattel recognizes

unrecognized tax benefits in the first financial reporting period in which information becomes available indicating that such

benefits will more likely than not (a greater than 50 percent likelihood) be realized. As of December 31, 2023 and 2022, the

unrecognized tax benefit balance, inclusive of interest and penalties and net of federal tax benefit, was $144.9 million and

$127.7 million, respectively.

In the normal course of business, Mattel is regularly audited by U.S. federal, state, local, and foreign tax authorities.

Many of the judgments made in adjusting uncertain tax positions involve assumptions and estimates regarding audit outcomes

and the timing of audit settlements, which are often uncertain and subject to change. The ultimate settlement of any particular

issue with the applicable taxing authority could have a material impact on Mattel's consolidated financial statements.

New Accounting Pronouncements

See Item 8 "Financial Statements and Supplementary Data—Note 1 to the Consolidated Financial Statements—Summary

of Significant Accounting Policies."

Non-GAAP Financial Measure

To supplement the financial results presented in accordance with GAAP, Mattel presents a non-GAAP financial measure

within the meaning of Regulation G promulgated by the SEC. The non-GAAP financial measure that Mattel presents is

currency exchange rate impact. Mattel uses this measure to analyze its continuing operations and to monitor, assess, and

identify meaningful trends in its operating and financial performance. Mattel believes that the disclosure of this non-GAAP

financial measure provides useful supplemental information to investors to be able to better evaluate ongoing business

performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for

GAAP financial measures and may not be comparable to similarly-titled measures used by other companies.

Currency Exchange Rate Impact

The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results

that are attributable to fluctuations in currency exchange rates.

For entities reporting in currencies other than the U.S. dollar, Mattel calculates the percentage change of period-over-

period results at constant currency exchange rates (established as described below) by translating current period and prior

period results using these rates and then determines the currency exchange rate impact percentage by calculating the difference

between the percentage change at such constant currency exchange rates and the percentage change at actual exchange rates.

The constant currency exchange rates are determined by Mattel at the beginning of each year and are applied consistently

during the year. They are generally different from the actual exchange rates in effect during the current or prior period due to

volatility in actual foreign exchange rates. Mattel considers whether any changes to the constant currency rates are appropriate

at the beginning of each year. The exchange rates used for these constant currency calculations are generally based on prior year

actual exchange rates.

Mattel believes that the disclosure of the percentage impact of foreign currency changes is useful supplemental

information for investors to be able to gauge Mattel's current business performance and the longer-term strength of its overall

business since foreign currency changes could potentially mask underlying sales trends. The disclosure of the percentage

impact of foreign exchange allows investors to calculate the impact on a constant currency basis and also enhances their ability

to compare financial results from one period to another.

Key Performance Indicator

Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade

discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical,

brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed

because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales

adjustments are generally recorded by customer and not associated with categories, brands, or individual products.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Rate Risk

Currency exchange rate fluctuations impact Mattel's results of operations and cash flows. Unhedged transactions

denominated in the Chinese yuan and Euro were the primary transactions that caused foreign currency transaction exposure for

Mattel in 2023. Mattel seeks to mitigate its exposure to market risk by monitoring its foreign currency transaction exposure for

the year and partially hedging such exposure using foreign currency forward exchange contracts primarily to hedge its purchase

and sale of inventory and other intercompany transactions denominated in foreign currencies. These contracts generally have

maturity dates of up to 24 months. For those intercompany receivables and payables that are not hedged, the transaction gains

or losses are recorded in the consolidated statements of operations in the period in which the exchange rate changes as part of

operating income or other non-operating (income) expense, net based on the nature of the underlying transaction. Transaction

gains or losses on hedged intercompany inventory transactions are recorded in the consolidated statements of operations in the

period in which the inventory is sold to customers. In addition, Mattel manages its exposure to currency exchange rate

fluctuations through the selection of currencies used for international borrowings. Mattel does not trade in financial instruments

for speculative purposes.

Mattel's financial position is also impacted by currency exchange rate fluctuations on translation of its net investments in

subsidiaries with non-U.S. dollar functional currencies. Assets and liabilities of subsidiaries with non-U.S. dollar functional

currencies are translated into U.S. dollars at fiscal year-end exchange rates. Income, expense, and cash flow items are translated

at weighted-average exchange rates prevailing during the fiscal year. The resulting currency translation adjustments are

recorded as a component of accumulated other comprehensive loss within stockholders' equity. Mattel's primary currency

translation adjustments in 2023 were related to its net investments in entities having functional currencies denominated in the

Mexican peso, Russian ruble, and British pound sterling.

There are numerous factors impacting the amount by which Mattel's financial results are affected by foreign currency

translation and transaction gains and losses resulting from changes in currency exchange rates, including, but not limited to, the

level of foreign currency forward exchange contracts in place at a given time and the volume of foreign currency-denominated

transactions in a given period. However, assuming that such factors were held constant, Mattel estimates that a one percent

change in the U.S. dollar would have impacted Mattel's 2023 net sales by approximately 0.4% and would have less than a $0.01

impact to Mattel's net income per share.

Mattel's foreign currency forward exchange contracts that were used to hedge firm commitments and anticipated

transactions as of December 31, 2023 are shown below. All contracts in the following table are against the U.S. dollar and are

maintained by reporting units with a U.S. dollar functional currency.

Buy Sell

Contract

Amount

Weighted-

Average

Contract

Rate

Fair

Value

Contract

Amount

Weighted-

Average

Contract

Rate

Fair

Value

(In thousands of U.S. dollars, except for rates)

Australian dollar (a)

$ — — $ — $ 75,109 0.67 $ (1,096)

British pound sterling (a)

— — — 9,085 1.27 15

Canadian dollar (a)

12,002 0.75 107 24,548 0.75 (180)

Czech koruna

2,740 22.36 6 — — —

Euro (a)

30,880 1.10 158 312,151 1.10 (3,524)

Hungarian forint

5,916 350.50 62 — — —

Japanese yen

— — — 7,909 143.54 (142)

Mexican peso

— — — 52,399 17.86 (1,773)

Polish zloty

17,869 3.95 99 — — —

South African rand

— — — 2,919 18.39 15

Swiss franc

4,418 0.86 111 — — —

$ 73,825 $ 543 $ 484,120 $ (6,685)

(a) The weighted-average contract rate for these contracts is quoted in U.S. dollar per local currency.

For the purchase of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel would pay at

maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered into as of

December 31, 2023. For the sale of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel would

receive at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered

into as of December 31, 2023. The differences between the market forward amounts and the contract amounts are expected to

be fully offset by currency transaction gains and losses on the underlying hedged transactions.

In addition to the contracts involving the U.S. dollar detailed in the above table, Mattel also had contracts to sell British

pound sterling for the purchase of Euro. As of December 31, 2023, these contracts had a contract amount of $45.6 million and a

fair value asset of less than $0.1 million.

Had Mattel not entered into hedges to limit the effect of currency exchange rate fluctuations on its results of operations

and cash flows, its earnings before income taxes would have decreased by approximately $30 million in 2023 and decreased by

approximately $19 million in 2022.

Turkey Operations

Effective April 1, 2022, Mattel has accounted for Turkey as a highly inflationary economy, as the projected three-year

cumulative inflation rate exceeded 100%. As such, beginning April 1, 2022, Mattel's Turkey subsidiary has designated the U.S.

dollar as its functional currency. Mattel's Turkey subsidiary represented approximately 1% of Mattel's consolidated net sales for

the year ended December 31, 2023.

Argentina Operations

During the third quarter of 2021, Mattel began a process to liquidate its subsidiary in Argentina. The liquidation was

substantially completed during the fourth quarter of 2022. Prior to the substantial completion of the liquidation, Mattel had

recorded $45.4 million of currency translation adjustments in accumulated other comprehensive loss within its consolidated

balance sheet. As a result of the substantially complete liquidation, the cumulative currency translation adjustments were

removed from accumulated other comprehensive loss and recognized as a loss in other non-operating expense within the

consolidated statement of operations in the fourth quarter of 2022.

Item 8. Financial Statements and Supplementary Data.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined

in Exchange Act Rules 13a-15(f) and 15d-15(f)). Mattel's management, including Ynon Kreiz, its principal executive officer,

and Anthony DiSilvestro, its principal financial officer, evaluated the effectiveness of Mattel's internal control over financial

reporting using the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that Mattel's internal

control over financial reporting is not effective as of December 31, 2023, due to a material weakness in Mattel's internal control

over financial reporting, as further described below. The effectiveness of Mattel's internal control over financial reporting as of

December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as

stated in their report that appears herein.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such

that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will

not be prevented or detected on a timely basis.

Mattel identified a material weakness in its internal control over financial reporting related to certain of its information

technology general controls within certain of the Company's information technology systems. Specifically, Mattel did not

design and maintain effective user access and provisioning review controls to prevent or detect inappropriate user and

privileged access to, or ensure the appropriate segregation of duties within, those systems. Additionally, Mattel's software

program change monitoring controls are not effectively designed to detect inappropriate changes to those systems.

The control deficiencies described did not result in a material misstatement to Mattel’s consolidated financial statements;

however, those deficiencies raise a reasonable possibility that a material misstatement to the consolidated financial statements

would not be prevented or detected on a timely basis. Therefore, management concluded that the deficiencies represent a

material weakness.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Mattel, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Mattel, Inc. and its subsidiaries (the "Company") as of

December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income (loss), of

stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related

notes and schedule of valuation and qualifying accounts and allowances for each of the three years in the period ended

December 31, 2023 appearing after Item 16 and the signature and power of attorney pages (collectively referred to as the

"consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of

December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial

position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the

three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United

States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over

financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013)

issued by the COSO because a material weakness in internal control over financial reporting existed as of that date related to

certain of its information technology general controls within certain of the Company’s information technology systems, as the

Company did not design and maintain effective user access and provisioning review controls to prevent or detect inappropriate

user and privileged access to, or ensure the appropriate segregation of duties within, those systems. Additionally, the

Company’s software program change monitoring controls are not effectively designed to detect inappropriate changes to those

systems.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented

or detected on a timely basis. The material weakness referred to above is described in the accompanying Management’s Report

on Internal Control Over Financial Reporting. We considered this material weakness in determining the nature, timing, and

extent of audit tests applied in our audit of the 2023 consolidated financial statements, and our opinion regarding the

effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated

financial statements.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal

control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included

in management's report referred to above. Our responsibility is to express opinions on the Company's consolidated financial

statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm

registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent

with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,

whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material

respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement

of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated

financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal

control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the

risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the

circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures

that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the

company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or

disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial

statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or

disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or

complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate

opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sales Adjustments Accrual – Discretionary Component

As described in Note 1 to the consolidated financial statements, the Company routinely enters into arrangements with its

customers to provide sales incentives, support customer promotions, and allowances for returns or defective merchandise.

Accruals for these programs are recorded in net sales as sales adjustments that reduce gross billings in the period the related sale

is recognized. As disclosed by management, sales adjustments for such programs totaled $660.6 million for the year ended

December 31, 2023. The accrual for such programs, which can either be contractual or discretionary in nature, is based on an

assessment of customer purchases, customer performance of specified promotional activities, and other specified factors such as

customer sales volume. While certain sales adjustment amounts are readily determinable at year end and do not require

estimates, other sales adjustments, such as discretionary sales adjustments, require significant judgment by management to

make these estimates. In making these estimates, management considers all available information, including the overall

business environment, historical trends, and information from customers.

The principal considerations for our determination that performing procedures relating to the discretionary component of the

sales adjustments accrual is a critical audit matter are the significant judgment by management in estimating the discretionary

component of the sales adjustments accrual, which in turn led to a high degree of auditor judgment, subjectivity, and audit

effort in performing procedures and evaluating audit evidence relating to management's estimate.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall

opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the

estimate of the discretionary component of the sales adjustments accrual. These procedures also included, among others (i)

testing management's process for developing the estimate of the discretionary component of the sales adjustments accrual, (ii)

evaluating the reasonableness of available information considered by management in developing the estimate, (iii) testing the

completeness and accuracy of underlying data used in the estimate, (iv) evaluating, on a sample basis, the results of a

retrospective comparison of sales adjustments accrued in the prior year to settlements in the current year, and (v) testing, on a

sample basis, settlements subsequent to year-end.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

March 15, 2024

We have served as the Company's auditor since 1974.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2023

December 31,

2022

(In thousands, except share data)

ASSETS

Current Assets

Cash and equivalents

$ 1,261,363 $ 761,235

Accounts receivable, net of allowances for credit losses of $8.8 million and

$27.6 million in 2023 and 2022, respectively

1,081,827 860,221

Inventories

571,609 894,064

Prepaid expenses and other current assets

207,548 213,515

Total current assets

3,122,347 2,729,035

Noncurrent Assets

Property, plant, and equipment, net

465,523 469,132

Right-of-use assets, net

313,191 318,680

Goodwill

1,384,512 1,378,551

Deferred income tax assets

299,157 471,672

Identifiable intangible assets, net

393,039 425,100

Other noncurrent assets

458,053 385,491

Total Assets

$ 6,435,822 $ 6,177,661

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable

$ 442,286 $ 471,475

Accrued liabilities

866,283 678,689

Income taxes payable

33,911 37,584

Total current liabilities

1,342,480 1,187,748

Noncurrent Liabilities

Long-term debt

2,329,986 2,325,644

Noncurrent lease liabilities

259,548 271,418

Other noncurrent liabilities

354,595 336,582

Total noncurrent liabilities

2,944,129 2,933,644

Commitments and Contingencies (See Note 13)

Stockholders' Equity

Common stock $1.00 par value, 1.00 billion shares authorized; 441.4 million shares

issued

441,369 441,369

Additional paid-in capital

1,774,911 1,808,308

Treasury stock at cost: 92.9 million shares and 87.0 million shares in 2023 and 2022,

respectively

(2,224,160) (2,129,639)

Retained earnings

3,062,061 2,847,709

Accumulated other comprehensive loss

(904,968) (911,478)

Total stockholders' equity

2,149,213 2,056,269

Total Liabilities and Stockholders' Equity

$ 6,435,822 $ 6,177,661

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands, except per share amounts)

Net Sales

$ 5,441,219 $ 5,434,687 $ 5,457,741

Cost of sales

2,857,503 2,953,335 2,831,079

Gross Profit

2,583,716 2,481,352 2,626,662

Advertising and promotion expenses

524,786 534,255 545,674

Other selling and administrative expenses

1,497,271 1,271,582 1,351,426

Operating Income

561,659 675,515 729,562

Interest expense

123,786 132,818 253,937

Interest (income)

(25,238) (9,398) (3,503)

Other non-operating (income) expense, net

(2,293) 47,760 8,364

Income Before Income Taxes

465,404 504,335 470,764

Provision (benefit) for income taxes

269,475 135,851 (420,381)

(Income) from equity method investments

(18,423) (25,429) (11,842)

Net Income

$ 214,352 $ 393,913 $ 902,987

Net Income Per Common Share - Basic

$ 0.61 $ 1.11 $ 2.58

Weighted-average number of common shares

353,588 353,792 350,007

Net Income Per Common Share - Diluted

$ 0.60 $ 1.10 $ 2.53

Weighted-average number of common and potential common shares

357,112 359,612 357,253

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Net Income

$ 214,352 $ 393,913 $ 902,987

Other Comprehensive Income, Net of Tax

Currency translation adjustments

37,123 (6,191) (54,690)

Employee benefit plan adjustments

(4,418) 15,601 32,755

Available-for-sale security adjustments

— 3,646 1,075

Net unrealized (losses) gains on derivative instruments:

Unrealized holding (losses) gains

(15,903) 40,449 23,253

Reclassification adjustments included in net income

(10,292) (26,513) 912

(26,195) 13,936 24,165

Other Comprehensive Income, Net of Tax

6,510 26,992 3,305

Comprehensive Income

$ 220,862 $ 420,905 $ 906,292

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Cash Flows From Operating Activities:

Net Income

$ 214,352 $ 393,913 $ 902,987

Adjustments to reconcile net income to net cash flows provided by operating

activities:

Depreciation

139,451 144,577 146,274

Amortization of intangibles

37,893 37,602 38,039

Share-based compensation

83,334 69,072 60,081

Bad debt expense

(1,502) 18,279 1,202

Inventory obsolescence

63,748 64,916 40,881

Deferred income taxes

176,385 69,510 56,658

Income from equity method investments

(18,423) (25,429) (11,842)

Loss on extinguishment of long-term borrowings

— — 101,695

Loss (gain) on sale of assets, net

1,016 (26,905) (23,823)

Release of valuation allowance on deferred tax assets

— — (540,803)

Content asset amortization

51,837 56,037 47,369

Loss on liquidation of subsidiary

— 45,366 —

Changes in assets and liabilities:

Accounts receivable, net

(198,322) 197,902 (85,603)

Inventories

261,309 (203,522) (330,899)

Prepaid expenses and other current assets

8,182 (11,960) (26,533)

Accounts payable, accrued liabilities, and income taxes payable

135,767 (341,605) 208,722

Content asset spend

(58,062) (60,259) (44,313)

Other, net

(27,174) 15,348 (54,629)

Net cash flows provided by operating activities

869,791 442,842 485,463

Cash Flows From Investing Activities:

Purchases of tools, dies, and molds

(74,480) (80,175) (74,222)

Purchases of other property, plant, and equipment

(85,820) (106,328) (77,131)

Proceeds from (payments for) foreign currency forward exchange contracts, net

14,948 (520) 1,585

Proceeds from sale of assets

6,847 38,148 43,649

Other, net

(3,913) 4,650 1,022

Net cash flows used for investing activities

(142,418) (144,225) (105,097)

Cash Flows From Financing Activities:

Payments of short-term borrowings, net

— — (969)

Payments of long-term borrowings, net

— (250,000) (1,575,997)

Proceeds from long-term borrowings, net

— — 1,184,913

Share repurchases

(203,016) — —

Tax withholdings for share-based compensation

(35,108) (30,440) (19,987)

Proceeds from stock option exercises

26,742 27,750 12,131

Other, net

(15,185) (7,949) (2,165)

Net cash flows used for financing activities

(226,567) (260,639) (402,074)

Effect of Currency Exchange Rate Changes on Cash and Equivalents

(678) (8,105) (9,111)

Change in Cash and Equivalents

500,128 29,873 (30,819)

Cash and Equivalents at Beginning of Period

761,235 731,362 762,181

Cash and Equivalents at End of Period

$ 1,261,363 $ 761,235 $ 731,362

Supplemental Cash Flow Information:

Cash paid during the year for:

Income taxes, gross

$ 93,641 $ 89,617 $ 93,129

Interest

117,701 129,217 210,140

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common

Stock

Additional

Paid-In

Capital

Treasury

Stock

Retained

Earnings

Accumulated

Other

Comprehensive

Loss

Total

Stockholders'

Equity

(In thousands)

Balance, December 31, 2020 $ 441,369 $ 1,842,680 $ (2,282,939) $ 1,553,610 $ (944,576) $ 610,144

Net income

— — — 902,987 — 902,987

Other comprehensive income, net of tax

— — — — 3,305 3,305

Issuance of treasury stock for stock

option exercises

— (4,806) 16,937 — — 12,131

Issuance of treasury stock for restricted

stock units vesting

— (65,774) 45,787 — — (19,987)

Deferred compensation

— (37) 225 — — 188

Share-based compensation

— 60,081 — — — 60,081

Balance, December 31, 2021 441,369 1,832,144 (2,219,990) 2,456,597 (941,271) 1,568,849

Net income

— — — 393,913 — 393,913

Other comprehensive income, net of tax

— — — — 26,992 26,992

Issuance of treasury stock for stock

option exercises

— (7,049) 34,800 — — 27,751

Issuance of treasury stock for restricted

stock units vesting

— (85,847) 55,408 — — (30,439)

Deferred compensation

— (12) 143 — — 131

Share-based compensation

— 69,072 — — — 69,072

Adjustment of accumulated other

comprehensive loss to retained earnings

for available-for-sale securities

— — — (2,801) 2,801 —

Balance, December 31, 2022

441,369 1,808,308 (2,129,639) 2,847,709 (911,478) 2,056,269

Net income

— — — 214,352 — 214,352

Other comprehensive income, net of tax

— — — — 6,510 6,510

Share repurchases

— — (203,016) — — (203,016)

Issuance of treasury stock for stock

option exercises

— (16,059) 42,801 — — 26,742

Issuance of treasury stock for restricted

stock units vesting

— (100,636) 65,528 — — (35,108)

Deferred compensation

— (36) 166 — — 130

Share-based compensation

— 83,334 — — — 83,334

Balance, December 31, 2023

$ 441,369 $ 1,774,911 $ (2,224,160) $ 3,062,061 $ (904,968) $ 2,149,213

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Preparation

The consolidated financial statements include the accounts of Mattel, Inc. ("Mattel") and its subsidiaries. All wholly and

majority-owned subsidiaries are consolidated and included in Mattel's consolidated financial statements. Mattel does not have

any minority stock ownership interests in which it has a controlling financial interest that would require consolidation. All

significant intercompany accounts and transactions have been eliminated upon consolidation.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

Preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the

United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the

consolidated financial statements and accompanying notes. Actual results could ultimately differ from those estimates.

Cash and Equivalents

Cash and equivalents include short-term investments, which are highly liquid investments with maturities of three months

or less when purchased. Such investments are stated at cost, which approximates market value.

Accounts Receivable and Allowance for Credit Losses

Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive

evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing

availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews

performed as necessary, based on the customers' financial condition and the level of credit being extended. For customers who

are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers

on credit. Mattel uses a variety of financial arrangements to ensure collectability of accounts receivable of customers, including

requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance

of shipment.

Mattel records an allowance for credit losses based on collection history and management's assessment of the current

economic trends, business environment, customers' financial condition, accounts receivable aging, and customer disputes that

may impact the level of future credit losses.

Inventories

Inventories are stated at the lower of cost or net realizable value. Expense associated with inventory obsolescence is

recognized in cost of sales and establishes a lower cost basis for the inventory. Cost is determined by the first-in, first-out

method.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the

straight-line method over estimated useful lives of 10 to 30 years for buildings and building improvements, 3 to 15 years for

machinery and equipment, 3 to 10 years for software, and 10 to 20 years, not to exceed the lease term, for leasehold

improvements. Tools, dies, and molds are depreciated using the straight-line method over 3 years. Estimated useful lives are

periodically reviewed and, where appropriate, changes are made prospectively. The carrying amount of property, plant, and

equipment is reviewed when events or changes in circumstances indicate that the carrying amount of an asset may not be

recoverable. Any potential impairment identified is initially assessed by evaluating the operating performance and future

undiscounted cash flows of the underlying asset groups. When property, plant and equipment are sold or retired, the cost of the

property and the related accumulated depreciation are removed from the consolidated balance sheets, and any resulting gain or

loss is included in the consolidated statements of operations.

Leases

Mattel routinely enters into noncancelable lease agreements primarily for premises and equipment used in the normal

course of business. Mattel excludes right-of-use assets and lease liabilities for leases with an initial term of 12 months or less

from the balance sheet, and combines lease and non-lease components for property leases, which primarily relate to ancillary

expenses such as common area maintenance charges and management fees.

Mattel determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of

an identified asset for a period of time in exchange for consideration. Mattel's leases may include one or more options to renew

for additional terms of up to 10 years. Renewal and termination options are included in the lease term when it is reasonably

certain that Mattel will exercise the option. Certain of these leases include escalation clauses that adjust rental expense to reflect

changes in price indices, as well as renewal and termination options. A portion of Mattel's lease agreements include contingent

rental payments based on a percentage of sales.

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of

lease payments over the lease term. As substantially all of Mattel's leases do not provide an implicit rate, Mattel uses its

incremental borrowing rate, based on the information available at the lease commencement date, to determine the present value

of lease payments. Operating lease costs are recognized on a straight-line basis over the lease term.

Goodwill and Intangible Assets

Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating

whether goodwill is impaired. Mattel's reporting units are: (i) North America, which consists of the United States and Canada,

(ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting

unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the

products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel

tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the

carrying amount of a reporting unit may exceed its fair value.

Mattel also tests its amortizable intangible assets, which are primarily comprised of trademarks and trade names, for

impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable.

Amortization is computed primarily using the straight-line method over the estimated useful lives of the amortizable intangible

assets.

Content Assets

Mattel incurs and capitalizes direct costs associated with the production of episodic series, feature films, and other similar

forms of content. Content assets are recorded within other noncurrent assets in the consolidated balance sheets. Mattel's content

assets are predominately monetized individually and amortized based upon the ratio of the current period’s revenues to the

estimated remaining total revenues ("Ultimate Revenues"). Ultimate Revenues include revenues forecasted to be earned within

ten years from the date of initial release of the content asset. Ultimate Revenues are reassessed each reporting period. If Mattel's

estimate of Ultimate Revenues decreases, amortization of costs may be accelerated or result in an impairment. To the extent

Mattel's estimate of Ultimate Revenues increases, cost amortization may be slowed. Content asset amortization is recorded

within cost of sales in the consolidated statements of operations. Unamortized content assets shall be tested for impairment at

the individual content asset level when events or changes in circumstances indicate that the fair value of an asset may be less

than its unamortized costs.

Foreign Currency Translation Exposure

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 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 year-end exchange rates. Net income and cash flow items are translated at weighted-average exchange rates

prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other

comprehensive loss within stockholders' equity.

Foreign Currency Transaction Exposure

Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows. Mattel's currency

transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and

payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on

unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of

operating income in the consolidated statements of operations. Transaction gains or losses on hedged intercompany inventory

transactions are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers.

Gains and losses on unhedged intercompany loans and advances are recorded as a component of other non-operating (income)

expense, net in the consolidated statements of operations in the period in which the currency exchange rate changes.

Derivative Instruments

Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales

of inventory denominated in foreign currencies. At the inception of the contracts, Mattel designates these derivatives as cash

flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at

inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value

associated with hedge ineffectiveness, if any, are recorded in the consolidated statements of operations. Changes in fair value of

cash flow hedge derivatives are deferred and recorded as part of accumulated other comprehensive loss in stockholders' equity

until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, Mattel

recognizes the change in fair value of the derivative in its consolidated statements of operations in the period the determination

is made.

Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in

foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge accounting for these

contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations.

Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not material.

Revenue Recognition and Sales Adjustments

Revenue is recognized when control of the goods is transferred to the customer, which is either upon shipment or upon

receipt of finished goods by the customer, depending on the contract terms, with payment due typically within 60 days from the

invoice date. Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer

promotions, and allowances for returns or defective merchandise. Such programs are based primarily on customer purchases,

customer performance of specified promotional activities, and other specified factors such as sales to consumers. Accruals for

these programs are recorded in net sales as sales adjustments that reduce gross billings in the period the related sale is

recognized.

The accrual for such programs, which can either be contractual or discretionary in nature, is based on an assessment of

customer purchases, customer performance of specified promotional activities, and other specified factors such as customer

sales volume. In making these estimates, management considers all available information, including the overall business

environment, historical trends, and information from customers.

Mattel also enters into symbolic and functional licensing arrangements, whereby the licensee pays Mattel royalties based

on sales of licensed product, and in certain cases are subject to minimum guaranteed amounts. The timing of revenue

recognition for certain of these licensing arrangements with minimum guarantees is based on the determination of whether the

license of intellectual property ("IP") is symbolic, which includes the license of Mattel's brands, or functional, which includes

the license of Mattel's completed television or streaming content.

Revenues from symbolic licenses of IP are recognized based on actual sales when Mattel expects royalties to exceed the

minimum guarantee. For symbolic licensing arrangements in which Mattel does not expect royalties to exceed the minimum

guarantee, an estimate of the royalties expected to be recouped is recognized on a straight-line basis over the license term.

Revenues from functional licenses of IP are recognized once the license period has commenced and the licensee has the

ability to use the delivered content.

Mattel does not evaluate contracts of one year or less for the existence of a significant financing component. Multi-year

contracts were not material.

Advertising and Promotion Costs

Advertising production costs are expensed in the period the underlying advertisement is first aired. The costs of other

advertising and promotional programs are expensed in the period incurred.

Product Recalls and Withdrawals

Mattel establishes a reserve for product recalls and withdrawals on a product-specific basis when circumstances giving

rise to the recall or withdrawal become known. Facts and circumstances related to the recall or withdrawal, including where the

product affected by the recall or withdrawal is located (e.g., with consumers, in customers' inventory, or in Mattel's inventory),

cost estimates for shipping and handling for returns, cost estimates for communicating the recall or withdrawal to consumers

and customers, and cost estimates for parts and labor if the recalled or withdrawn product is deemed to be repairable, are

considered when establishing a product recall or withdrawal reserve. These factors are updated and reevaluated each period, and

the related reserves are adjusted when these factors indicate that the recall or withdrawal reserve is either not sufficient to cover

or exceeds the estimated product recall or withdrawal expenses.

Design and Development Costs

Product design and development costs primarily include employee compensation and outside services and are expensed

in the period incurred.

Employee Benefit Plans

Mattel and certain of its subsidiaries have retirement and other postretirement benefit plans covering substantially all

employees of these entities. Actuarial valuations are used in determining amounts recognized in the financial statements for

certain retirement and other postretirement benefit plans (see "Note 4 to the Consolidated Financial Statements—Employee

Benefit Plans").

Share-Based Payments

Mattel recognizes the cost of service-based employee share-based payment awards on a straight-line attribution basis over

the requisite employee service period, net of estimated forfeitures.

Determining the fair value of share-based awards at the measurement date requires judgment, including estimating the

expected term that stock options will be outstanding prior to exercise, the associated volatility, and the expected dividends.

Mattel estimates the fair value of options granted using the Black-Scholes valuation model. The expected life of stock options

used in this calculation is the period of time the options are expected to be outstanding and has been determined based on

historical exercise experience. Expected stock price volatility is based on the historical volatility of Mattel's stock for a period

approximating the expected life. Expected dividend yield is based on the annual rate of dividends expected to be paid over the

expected life. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues

approximating the expected life. Mattel estimates and adjusts forfeiture rates based on a periodic review of recent forfeiture

activity and expected future employee turnover.

Mattel determines the fair value of restricted stock units ("RSUs"), excluding performance RSUs, based on the closing

market price of Mattel's common stock on the date of grant, adjusted by the present value of the expected dividends for RSUs

that are not entitled to a dividend during the vest period.

Mattel determines the fair value of the performance-related components of its performance RSUs based on the closing

market price of Mattel's common stock on the date of grant. It determines the fair value of the market-related components of its

performance RSUs based on the Monte Carlo valuation methodology.

Income Taxes

Certain income and expense items are accounted for differently for financial reporting and income tax purposes. Deferred

income tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets

and liabilities, applying enacted statutory income tax rates in effect for the year in which the differences are expected to reverse.

Mattel evaluates the realization of its deferred tax assets based on all available evidence and establishes a valuation allowance

to reduce deferred tax assets when it is more likely than not that they will not be realized.

Mattel recognizes the financial statement effects of a tax position when it is more likely than not that, based on technical

merits, the position will be sustained upon examination. The tax benefits of the position recognized in the financial statements

are then measured based on the largest amount of benefit that is greater than 50% likely to be realized upon settlement with a

taxing authority. In addition, Mattel recognizes interest and penalties related to unrecognized tax benefits as a component of the

income tax provision.

In the normal course of business, Mattel is regularly audited by U.S. federal, state, local, and foreign tax authorities. The

ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel's

consolidated financial statements.

Equity Method Investments

Mattel utilizes the equity method when accounting for investments in which Mattel is able to exercise significant

influence, but does not hold a controlling interest. Significant influence is generally presumed to exist when Mattel owns

between 20% to 50% of the investee. Under the equity method of accounting, the initial equity investment is recorded at cost.

The carrying amount of the investment is subsequently adjusted for Mattel's share of net income (loss) and distributions from

the investee.

Mattel owns a 50% equity interest in Mattel163 Limited, a joint venture with a third party that develops and operates

online games. Mattel's portion of the joint venture's earnings and losses is recognized on a three-month lag as the joint venture's

financial information is not available in a sufficiently timely manner. The joint venture was not significant for the periods

presented.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")

2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.

ASU 2022-04 requires that buyers in a supplier finance program disclose sufficient information about the program to allow a

user of the financial statements to understand the program's nature, potential magnitude, obligations outstanding at the end of

each period, and an annual rollforward of such obligations. The guidance in ASU 2022-04 was effective for interim and fiscal

years beginning after December 15, 2022. The annual rollforward disclosure is not required to be made until the fiscal year

beginning after December 15, 2023, and is to be applied prospectively. Refer to "Note 5 to the Consolidated Financial

Statements—Supplier Finance Program" for additional information regarding Mattel's supplier finance program. The adoption

of this new accounting standard did not have a material impact on Mattel's consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable

Segment Disclosures. ASU 2023-07 requires incremental disclosure of significant segment expenses on an annual and interim

basis to enable investors to develop more decision-useful financial analyses. The guidance in ASU 2023-07 is effective for

fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Mattel is currently evaluating the impact of the adoption of ASU 2023-07 on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax

Disclosures. ASU 2023-09 requires enhanced income tax disclosures on an annual basis for specific categories in the rate

reconciliation and disclosure of income taxes paid by jurisdiction. The guidance in ASU 2023-09 is effective for fiscal years

beginning after December 15, 2024. Mattel is currently evaluating the impact of the adoption of ASU 2023-09 on its

consolidated financial statements.

Note 2—Property, Plant, and Equipment, Net

Property, plant, and equipment, net included the following:

December 31,

2023

December 31,

2022

(In thousands)

Land

$ 19,838 $ 18,045

Buildings

313,750 303,827

Machinery and equipment

628,089 654,437

Software

233,224 336,716

Tools, dies, and molds

488,170 510,398

Leasehold improvements

121,571 104,135

Construction in progress

48,483 79,742

1,853,125 2,007,300

Less: accumulated depreciation

(1,387,602) (1,538,168)

$ 465,523 $ 469,132

During the second quarter of 2022, Mattel completed the sale of the American Girl corporate office and a distribution

center located in Middleton, Wisconsin, which included land and buildings. Mattel received net proceeds from the sale of

$23.8 million, which resulted in a pre-tax gain of $15.2 million, recorded in other selling and administrative expenses in the

consolidated statement of operations.

Note 3—Goodwill and Intangible Assets, Net

Goodwill

Mattel's reporting units are at the same level as its operating segments. The change in the carrying amount of goodwill by

reporting unit for 2023 and 2022 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North

America reporting unit selling those brands, thereby causing a foreign currency translation impact.

December 31,

2021

Currency

Exchange Rate

Impact

December 31,

2022

Currency

Exchange Rate

Impact

December 31,

2023

(In thousands)

North America

$ 731,789 $ 204 $ 731,993 $ 1,494 $ 733,487

International

450,847 (11,860) 438,987 4,467 443,454

American Girl

207,571 — 207,571 — 207,571

$ 1,390,207 $ (11,656) $ 1,378,551 $ 5,961 $ 1,384,512

In the third quarter of 2023, Mattel performed its annual impairment test and determined each reporting unit's fair value

exceeded its carrying amount and that goodwill was not impaired. There were no events or changes in circumstances

subsequent to the third quarter assessment that indicate that the carrying amount of a reporting unit may exceed its fair value as

of December 31, 2023.

Intangible Assets, Net

Identifiable intangibles were $393.0 million, net of accumulated amortization of $408.5 million, and $425.1 million, net

of accumulated amortization of $364.9 million, as of December 31, 2023 and 2022, respectively. The estimated future

amortization expense for the next five years is as follows:

Amortization

Expense

(In thousands)

2024 $ 31,110

2025 30,843

2026 30,816

2027 30,337

2028 28,750

Mattel tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that

the carrying amount of the asset may not be recoverable. Mattel's amortizable intangible assets primarily consist of trademarks

and trade names. During 2023 and 2022, Mattel's amortizable intangible assets were not impaired. During 2021, Mattel

discontinued the use of an intangible asset, which resulted in an asset impairment charge of $2.0 million.

Note 4—Employee Benefit Plans

Mattel and certain of its subsidiaries have qualified and nonqualified retirement plans covering substantially all

employees of these companies. These plans include defined benefit pension plans, defined contribution retirement plans,

postretirement benefit plans, and deferred compensation and excess benefit plans. In addition, Mattel makes contributions to

government-mandated retirement plans in countries outside the United States where its employees work.

A summary of retirement plan expense, net is as follows:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Defined contribution retirement plans

$ 37,784 $ 36,900 $ 34,821

Defined benefit pension plans

9,949 5,693 14,858

Deferred compensation and excess benefit plans

8,227 (7,113) 6,857

Postretirement benefit plans

(2,084) (2,047) (1,968)

$ 53,876 $ 33,433 $ 54,568

Defined Benefit Pension and Postretirement Benefit Plans

Mattel provides defined benefit pension plans for eligible domestic employees, which are intended to comply with the

requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). Some of Mattel's foreign subsidiaries have

defined benefit pension plans covering substantially all of their eligible employees. Mattel funds these plans in accordance with

the terms of the plans and local statutory requirements, which differ for each of the countries in which the subsidiaries are

located. Mattel also has unfunded postretirement health insurance plans covering certain eligible domestic employees.

A summary of the components of Mattel's net periodic benefit cost (credit) and other changes in plan assets and benefit

obligations recognized in other comprehensive income for the years ended December 31 is as follows:

Defined Benefit Pension Plans Postretirement Benefit Plans

2023 2022 2021 2023 2022 2021

(In thousands)

Net Periodic Benefit Cost (Credit):

Service cost

$ 3,371 $ 4,010 $ 4,925 $ 1 $ 2 $ 2

Interest cost

20,966 12,081 10,094 179 89 78

Expected return on plan assets

(20,372) (19,242) (18,531) — — —

Amortization of prior service cost (credit)

150 155 163 (2,038) (2,038) (2,038)

Recognized actuarial loss (gain)

5,893 8,996 11,177 (226) (100) (10)

Settlement (gain) loss

(59) 19 6,982 — — —

Curtailment (gain) loss

— (326) 48 — — —

Net periodic benefit cost (credit)

$ 9,949 $ 5,693 $ 14,858 $ (2,084) $ (2,047) $ (1,968)

Other Changes in Plan Assets and Benefit Obligations

Recognized in Other Comprehensive Income:

Net actuarial loss (gain) $ 904 $ (23,501) $ (42,671) $ 311 $ (922) $ (605)

Prior service cost 1,169 1,022 204 — — —

Amortization of prior service (cost) credit (150) (155) (163) 2,038 2,038 2,038

Total recognized in other comprehensive loss (income) (a) $ 1,923 $ (22,634) $ (42,630) $ 2,349 $ 1,116 $ 1,433

Total recognized in net periodic benefit cost (credit) and

other comprehensive income $ 11,872 $ (16,941) $ (27,772) $ 265 $ (931) $ (535)

(a) Amounts exclude related tax (benefit) expense of approximately $(2) million, $6 million, and $9 million, during 2023,

2022, and 2021, respectively, which are also included in other comprehensive income.

Net periodic benefit cost (credit) for Mattel's domestic defined benefit pension and postretirement benefit plans was

calculated on January 1 of each year using the following assumptions:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

Defined benefit pension plans:

Discount rate 4.9 % 2.5 % 2.2 %

Weighted-average rate of future compensation increases N/A N/A N/A

Long-term rate of return on plan assets 5.0 % 5.0 % 5.0 %

Postretirement benefit plans:

Discount rate 4.9 % 2.5 % 2.2 %

Annual increase in Medicare Part B premium 6.0 % 6.0 % 6.0 %

Health care cost trend rate:

Pre-65 7.0 % 7.0 % 7.0 %

Post-65 7.0 % 7.0 % 6.8 %

Ultimate cost trend rate:

Pre-65 4.5 % 4.5 % 4.5 %

Post-65 4.5 % 4.5 % 4.5 %

Year that the rate reaches the ultimate cost trend rate:

Pre-65 2029 2028 2027

Post-65 2029 2028 2027

Discount rates, weighted-average rates of future compensation increases, and long-term rates of return on plan assets for

Mattel's foreign defined benefit pension plans differ from the assumptions used for Mattel's domestic defined benefit pension

plans due to differences in local economic conditions in the locations where the non-U.S. plans are based. The rates shown in

the preceding table are indicative of the weighted-average rates of all of Mattel's defined benefit pension plans given the

relative insignificance of the foreign plans to the consolidated total.

Mattel used a measurement date of December 31, 2023 for its defined benefit pension and postretirement benefit plans. A

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

Defined Benefit

Pension Plans

Postretirement

Benefit Plans

December 31,

2023

December 31,

2022

December 31,

2023

December 31,

2022

(In thousands)

Change in Benefit Obligation:

Benefit obligation, beginning of year $ 452,524 $ 613,266 $ 3,994 $ 5,176

Service cost 3,371 4,010 1 2

Interest cost 20,966 12,081 179 89

Impact of currency exchange rate changes 4,921 (14,874) — —

Actuarial loss (gain) 13,879 (124,229) 85 (1,022)

Benefits paid (35,634) (36,943) (174) (251)

Plan amendments 895 — — —

Curtailments 167 (326) — —

Settlements (338) (359) — —

Other (75) (102) — —

Benefit obligation, end of year $ 460,676 $ 452,524 $ 4,085 $ 3,994

Change in Plan Assets:

Plan assets at fair value, beginning of year $ 322,175 $ 457,132 $ — $ —

Actual return (loss) on plan assets 24,184 (91,470) — —

Employer contributions 13,354 5,029 174 251

Impact of currency exchange rate changes 3,670 (11,105) — —

Benefits paid (35,634) (36,943) (174) (251)

Settlements (338) (359) — —

Other (75) (109) — —

Plan assets at fair value, end of year $ 327,336 $ 322,175 $ — $ —

Net Amount Recognized in Consolidated Balance

Sheets:

Funded status, end of year $ (133,340) $ (130,349) $ (4,085) $ (3,994)

Current accrued benefit liability $ (5,960) $ (5,109) $ (530) $ (630)

Noncurrent accrued benefit liability, net (127,380) (125,240) (3,555) (3,364)

Net amount recognized $ (133,340) $ (130,349) $ (4,085) $ (3,994)

Amounts Recognized in Accumulated Other

Comprehensive Loss (a):

Net actuarial loss (gain) $ 214,070 $ 213,166 $ (1,566) $ (1,877)

Prior service cost (credit) 2,075 1,056 (4,035) (6,073)

$ 216,145 $ 214,222 $ (5,601) $ (7,950)

(a) Amounts exclude related tax benefits of approximately $69 million and $68 million for December 31, 2023 and 2022,

respectively, which are also included in accumulated other comprehensive loss.

The accumulated benefit obligation differs from the projected benefit obligation in that it assumes future compensation

levels will remain unchanged. Mattel's accumulated benefit obligation for its defined benefit pension plans as of 2023 and 2022

totaled $445.2 million and $437.8 million, respectively.

The actuarial loss recognized in 2023 for the defined benefit pension plan was driven primarily by the decrease in the

discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2023.

The actuarial gain recognized in 2022 for the defined benefit pension plan was driven primarily by the increase in the

discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2022.

As of December 31, 2023 and 2022, information for defined benefit pension plans that had aggregate accumulated benefit

obligations and projected benefit obligations in excess of plan assets is as follows:

December 31,

2023

December 31,

2022

(In thousands)

Projected benefit obligation

$ 395,104 $ 391,459

Accumulated benefit obligation

379,659 376,769

Fair value of plan assets

252,959 251,487

The assumptions used in determining the projected and accumulated benefit obligations of Mattel's domestic defined

benefit pension and postretirement benefit plans are as follows:

December 31,

2023

December 31,

2022

Defined benefit pension plans:

Discount rate

4.7 % 4.9 %

Cash balance interest crediting rate

4.0 % 4.0 %

Weighted-average rate of future compensation increases

N/A N/A

Postretirement benefit plans:

Discount rate

4.7 % 4.9 %

Annual increase in Medicare Part B premium

6.0 % 6.0 %

Health care cost trend rate:

Pre-65

7.9 % 7.0 %

Post-65

8.1 % 7.0 %

Ultimate cost trend rate:

Pre-65

4.5 % 4.5 %

Post-65

4.5 % 4.5 %

Year that the rate reaches the ultimate cost trend rate:

Pre-65

2031 2029

Post-65

2031 2029

Discount rates, weighted-average rates of future compensation increases, and long-term rates of return on plan assets for

Mattel's foreign defined benefit pension plans differ from the assumptions used for Mattel's domestic defined benefit pension

plans due to differences in local economic conditions in the locations where the non-U.S. plans are based. The rates shown in

the preceding table are indicative of the weighted-average rates of all of Mattel's defined benefit pension plans given the

relative insignificance of the foreign plans to the consolidated total.

At the end of each fiscal year, Mattel determines the weighted-average discount rate used to calculate the projected

benefit obligation. The discount rate is an estimate of the current interest rate at which the benefit plan liabilities could be

effectively settled at the end of the year. The discount rate also impacts the interest cost component of plan income or expense.

As of December 31, 2023, Mattel determined the discount rate for its domestic defined benefit pension and postretirement

benefit plans used in determining the projected and accumulated benefit obligations to be 4.7%, as compared to 4.9% as of

December 31, 2022. In estimating this rate, Mattel reviews rates of return on high-quality corporate bond indices, which

approximate the timing and amount of benefit payments.

The estimated future benefit payments for Mattel's defined benefit pension and postretirement benefit plans are as

follows:

Defined Benefit

Pension Plans

Postretirement

Benefit Plans

(In thousands)

2024

$ 36,773 $ 530

2025

35,749 530

2026

35,063 430

2027

34,043 420

2028

34,534 320

2029 - 2033

172,194 1,210

Mattel expects to make cash contributions totaling approximately $14 million to its defined benefit pension and

postretirement benefit plans in 2024, substantially all of which will be for benefit payments for its under funded plans.

Mattel periodically commissions a study of the plans' assets and liabilities to determine an asset allocation that would best

match expected cash flows from the plans' assets to expected benefit payments. Mattel monitors the returns earned by the plans'

assets and reallocates investments as needed. Mattel's overall investment strategy is to achieve an adequately diversified asset

allocation mix of investments that provides for both near-term benefit payments as well as long-term growth. The assets are

invested in a combination of indexed and actively managed funds. The target allocations for Mattel's domestic plan assets,

which comprise 78% of Mattel's total plan assets, are 42% in U.S. equities, 28% in non-U.S. equities, 20% in fixed income

securities, and 10% in real estate securities. The U.S. equities are benchmarked against the S&P 500, and the non-U.S. equities

are benchmarked against a combination of developed and emerging markets indices. Fixed income securities are long-duration

bonds intended to closely match the duration of the liabilities and include U.S. government treasuries and agencies, corporate

bonds from various industries, and mortgage-backed and asset-backed securities.

Mattel's defined benefit pension plan assets are measured and reported in the consolidated financial statements at fair

value using inputs, which are more fully described in "Note 11 to the Consolidated Financial Statements—Fair Value

Measurements," as follows:

December 31, 2023

Level 1 Level 2 Level 3 Total

(In thousands)

U.S. government and U.S. government agency securities $ — $ 9,636 $ — $ 9,636

U.S. corporate debt instruments — 63,707 — 63,707

International corporate debt instruments — 3,291 — 3,291

Mutual funds (a) 126,637

Money market funds 13,092 — — 13,092

Other investments

— 4,180 —

4,180

Insurance "buy-in" policy — — 60,727 60,727

Collective trust funds (a):

U.S. equity securities 562

International equity securities 2,874

Global fixed income 25,048

Real Estate 17,582

Total $ 13,092 $ 80,814 $ 60,727 $ 327,336

December 31, 2022

Level 1 Level 2 Level 3 Total

(In thousands)

U.S. government and U.S. government agency securities $ — $ 11,699 $ — $ 11,699

U.S. corporate debt instruments — 47,637 — 47,637

International corporate debt instruments — 17,338 — 17,338

Mutual funds (a) 86,637

Money market funds 8,043 — — 8,043

Other investments — 7,563 — 7,563

Insurance "buy-in" policy — — 57,310 57,310

Collective trust funds (a):

U.S. equity securities 37,915

International equity securities 2,694

Global fixed income 24,355

Diversified funds —

Real Estate 20,984

Total $ 8,043 $ 84,237 $ 57,310 $ 322,175

(a) These investments primarily consist of privately placed funds that are valued based on net asset value per share. The fair

value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts

presented in the consolidated balance sheets and its related disclosures.

The fair value of collective trust funds is determined based on the net asset value per share held at year-end. The fair

value of U.S. government securities, U.S. government agency securities, corporate debt instruments, mutual funds, and money

market funds are determined based on quoted market prices or are estimated using pricing models with observable inputs or

quoted prices of securities with similar characteristics.

In December 2017, Mattel entered into an insurance buy-in policy contract with a private limited life insurance company

to insure a portion of the U.K. pension plan, which initially covered approximately 40% of the total membership in the plan. In

2022, Mattel entered into an additional insurance buy-in policy contract to insure the remainder of the membership in the plan.

The assets and liabilities with respect to insured pensioners are assumed to match for the purposes of Accounting Standards

Codification 715, Pension — Retirement Benefits (i.e. the full benefits have been insured). The initial value of the asset

associated with this policy was equal to the premium paid to secure the policy, and is adjusted each reporting period for changes

in interest rates, discount rates, and benefits paid. As the valuation of this asset is judgmental, and there are no observable

inputs associated with the valuation, the buy-in contract is classified as Level 3 on the fair value hierarchy.

The following table provides a reconciliation of the beginning and ending balances of assets measured at fair value on a

recurring basis using significant unobservable inputs (Level 3):

Level 3

(in thousands)

Balance at December 31, 2021 $ 30,731

Purchases, sales, and settlements 41,347

Changes in fair value (14,768)

Balance at December 31, 2022 57,310

Purchases, sales, and settlements (2,860)

Changes in fair value 6,277

Balance at December 31, 2023 $ 60,727

Mattel's defined benefit pension plan assets are not directly invested in Mattel common stock. Mattel believes that the

long-term rate of return on plan assets of 5.0% as of December 31, 2023 is reasonable based on historical returns.

Defined Contribution Retirement Plans

Domestic employees are eligible to participate in a 401(k) savings plan, the Mattel, Inc. Personal Investment Plan (the

"Plan"), sponsored by Mattel, which is a funded defined contribution plan intended to comply with ERISA's requirements.

Contributions to the Plan include voluntary contributions by eligible employees and employer automatic and matching

contributions by Mattel. The Plan allows employees to allocate both their voluntary contributions and their employer automatic

and matching contributions to a variety of investment funds, including a fund that is invested in Mattel common stock (the

"Mattel Stock Fund"). Employees are not required to allocate any of their Plan account balance to the Mattel Stock Fund,

allowing employees to limit or eliminate their exposure to market changes in Mattel's stock price. Furthermore, the Plan limits

the percentage of the employee's total account balance that may be allocated to the Mattel Stock Fund to 25%. Employees may

generally reallocate their account balances on a daily basis. However, pursuant to Mattel's insider trading policy, employees

classified as insiders under Mattel's insider trading policy are limited to certain periods in which they may make allocations into

or out of the Mattel Stock Fund.

Certain non-U.S. employees participate in other defined contribution retirement plans with varying vesting and

contribution provisions.

Deferred Compensation and Excess Benefit Plans

Mattel maintains a deferred compensation and 401(k) excess plan (the "DCP") that permits certain officers and key

employees to elect to defer portions of their compensation. The participant DCP deferrals, together with certain contributions

made by Mattel, earn various rates of return. The liability for these plans as of December 31, 2023 and 2022 was $53.3 million

and $49.7 million, respectively, and is primarily included in other noncurrent liabilities in the consolidated balance sheets.

Changes in the market value of the participant-selected investment options are recorded as retirement plan expense within other

selling and administrative expenses in the consolidated statements of operations. Separately, Mattel has purchased group trust-

owned life insurance contracts designed to assist in funding these benefits under the DCP. The cash surrender value of these

policies, valued at $87.1 million and $79.6 million as of December 31, 2023 and 2022, respectively, are held in an irrevocable

grantor trust, the assets of which are subject to the claims of Mattel's creditors and are included in other noncurrent assets in the

consolidated balance sheets.

Annual Incentive Compensation

Mattel has an annual incentive compensation plan under which officers and key employees may earn cash incentive

compensation based on Mattel's and individual performance, subject to certain approvals of the Compensation Committee of

the Board of Directors. Incentive compensation for 2023, 2022, and 2021 were $137.8 million, $0 million, and $137.1 million,

respectively, for awards under the plan and were included in other selling and administrative expenses. During 2022, Mattel did

not achieve threshold performance under the plan, and therefore, no cash payout was earned.

Note 5—Supplier Finance Program

Mattel has an agreement with a third-party financial institution that allows certain participating suppliers the opportunity

to voluntarily finance payment obligations of Mattel under a supplier finance program. Under this program, participating

suppliers may accelerate the timing of collection of their receivables due from Mattel, prior to their scheduled due dates, by

selling one or more of their receivables at a discounted price to the third-party financial institution. The range of payment terms

Mattel negotiates with suppliers are consistent, regardless of whether the suppliers participate in the supplier finance program

and Mattel does not have any economic interest in any suppliers' decision to participate in the supplier finance program.

Suppliers participating in the program are able to select which individual Mattel invoices they sell to the third-party financial

institution. However, all Mattel payments of the full amounts due to participating suppliers are paid on the invoice due date

based on the terms originally negotiated with the supplier, regardless of whether the individual invoice due to the supplier is

sold to the third-party financial institution. Included in Mattel's accounts payable in the consolidated balance sheets as of

December 31, 2023 and 2022 were $54.3 million and $86.0 million of outstanding payment obligations due to suppliers,

respectively, under the supplier finance program. All payment activities related to the supplier finance program were presented

within operating activities in the consolidated statements of cash flows.

Note 6—Seasonal Financing and Debt

Seasonal Financing

On September 15, 2022, Mattel entered into a revolving credit agreement (the "Credit Agreement") as the borrower with

Bank of America, N.A., as administrative agent, and the other lenders and financial institutions party thereto, providing for a

senior secured revolving credit facility in an aggregate principal amount of $1.40 billion (the "Revolving Credit Facility"). The

Revolving Credit Facility will mature on September 15, 2025. In connection with the entry into the Credit Agreement, Mattel

terminated the commitments and satisfied all outstanding obligations under the previous credit agreement, dated December 20,

2017 (as amended).

Borrowings under the Revolving Credit Facility bear interest at a floating rate, which can be either, at Mattel's option, (i)

adjusted Term Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 1.125% to 2.000% per

annum or (ii) an alternate base rate plus an applicable margin ranging from 0.125% to 1.000% per annum, in each case, such

applicable margins to be determined based on Mattel's credit ratings.

In addition to paying interest on the outstanding principal under the Revolving Credit Facility, Mattel is required to pay

(i) an unused line fee per annum of the average daily unused portion of the Revolving Credit Facility; (ii) a letter of credit

fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit; and (iii) certain other customary

fees and expenses of the lenders and agents.

In November 2022, Moody's upgraded Mattel's credit rating from Ba1 to Baa3, and in April 2023, S&P upgraded Mattel's

credit rating from BB+ to BBB- and maintained a positive outlook. On April 27, 2023 (the "Fall-Away Date"), Mattel provided

a certification of the foregoing to the administrative agent under the Credit Agreement, which resulted in certain subsidiary

guarantees, liens, covenants, and other restrictions falling away under the Credit Agreement.

The obligations of Mattel under the Revolving Credit Facility were previously guaranteed by each domestic subsidiary of

Mattel that guaranteed any of Mattel's senior unsecured notes (collectively, the "Guarantors"). On the Fall-Away Date, the

foregoing guarantees were released and the obligations of Mattel under the Revolving Credit Facility are instead required to be

guaranteed by each existing and future direct and indirect domestic subsidiary of Mattel only to the extent such subsidiary

guarantees other indebtedness of Mattel in an aggregate principal or committed amount in excess of $50 million.

The Revolving Credit Facility was previously secured by liens on substantially all of Mattel's and the Guarantors' present

and after-acquired assets (subject to certain exceptions), including domestic accounts receivable, inventory, certain trademarks

and patents, and certain equity interests in direct material subsidiaries of Mattel and the Guarantors, but all such liens were

permanently released on the Fall-Away Date.

The Credit Agreement contains customary covenants (subject to customary exceptions), including, but not limited to,

restrictions on Mattel's and its subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant

liens or security interests on assets, sell or otherwise dispose of assets, or amend organizational documents.

The Credit Agreement requires the maintenance of (a) an interest coverage ratio of not less than 2.75 to 1.00 as of the end

of each fiscal quarter and (b) a total leverage ratio not to exceed 3.75 to 1.00 as of the end of each fiscal quarter.

As of December 31, 2023 and 2022, Mattel had no borrowings outstanding under the Revolving Credit Facility.

Outstanding letters of credit under the Revolving Credit Facility totaled approximately $9 million and $8 million as of

December 31, 2023 and 2022, respectively.

To finance seasonal working capital requirements of certain foreign subsidiaries, Mattel avails itself of individual short-

term credit lines. As of December 31, 2023, foreign credit lines totaled approximately $20 million. Mattel expects to extend the

majority of these credit lines throughout 2024.

As of December 31, 2023, Mattel was in compliance with all covenants contained in the Credit Agreement. The Credit

Agreement is a material agreement, and failure to comply with its covenants may result in an event of default under the terms of

the Revolving Credit Facility. If Mattel were to default under the terms of the Revolving Credit Facility, its ability to meet its

seasonal financing requirements could be adversely affected.

Short-Term Borrowings

As of December 31, 2023 and 2022, Mattel had no short-term borrowings outstanding.

During 2023, Mattel had no borrowings under the Revolving Credit Facility and no other short-term borrowings. During

2022, Mattel had average borrowings under the new and previous senior secured revolving credit facilities and other short-term

borrowings of $2.9 million, to help finance its seasonal working capital requirements, and the weighted-average interest rate on

borrowings under the senior secured revolving credit facilities and other short-term borrowings during 2022 was 3.6%. Mattel's

average foreign short-term borrowings were not material during 2023 and 2022.

Long-Term Debt

On March 19, 2021, Mattel issued (i) $600 million aggregate principal amount of 3.375% Senior Notes due 2026 (the

"2026 Notes") and (ii) $600 million aggregate principal amount of 3.750% Senior Notes due 2029 (the "2029 Notes" and,

together with the 2026 Notes, the "Notes" and each a "series" of the Notes). The 2026 Notes were issued pursuant to an

indenture dated March 19, 2021 (the "2026 Notes Indenture"), among Mattel, the guarantors named therein and U.S. Bank

National Association, as trustee (the "Trustee"). The 2029 Notes were issued pursuant to an indenture dated March 19, 2021

(the "2029 Notes Indenture" and, together with the 2026 Notes Indenture, the "Indentures" and each, an "Indenture"), among

Mattel, the guarantors named therein and the Trustee. The Notes of each series pay interest semi-annually in arrears on April 1

and October 1 of each year, beginning on October 1, 2021. Mattel may redeem all or part of the 2026 Notes any time or from

time to time at its option, at a redemption price including a call premium that varies (from 0% to 1.688%) depending on the

year of redemption, plus accrued and unpaid interest to, but excluding, the redemption date. Mattel may redeem all or part of

the 2029 Notes at any time or from time to time prior to April 1, 2024, at its option, at a redemption price equal to 100% of the

principal amount, plus a "make whole" premium, plus accrued and unpaid interest on applicable 2029 Notes being redeemed to,

but excluding, the redemption date. Any time or from time to time following April 1, 2024, Mattel may redeem all or part of the

2029 Notes, at its option, at a redemption price including a call premium that varies (from 0% to 1.875%) depending on the

year of redemption, plus accrued and unpaid interest to, but excluding, the redemption date. Mattel may also redeem up to 40%

of the principal amount of the 2029 Notes at any time or from time to time prior to April 1, 2024, at its option, at a redemption

price equal to 103.750%, of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the redemption

date, with the net cash proceeds of sales of one or more equity offerings by Mattel or any direct or indirect parent of Mattel.

The Notes of each series are Mattel's and the guarantors' senior unsecured obligations. The Notes of each series are

guaranteed by Mattel's existing, and subject to certain exceptions, future wholly-owned domestic restricted subsidiaries that

guarantee Mattel's senior secured revolving credit facilities or certain other indebtedness. Under the terms of the applicable

Indenture, the Notes of each series rank equally in right of payment with all of Mattel's existing and future senior debt,

including Mattel's Existing Notes (as defined in the Indenture) and borrowings under the senior secured revolving credit

facilities, and rank senior in right of payment to Mattel's existing and future debt and other obligations that expressly provide

for their subordination to the Notes. The Notes of each series are structurally subordinated to all of the existing and future

liabilities, including trade payables, of Mattel's subsidiaries that do not guarantee the Notes of each series and are effectively

subordinated to Mattel's and the guarantors' existing and future senior secured debt to the extent of the value of the collateral

securing such debt (including borrowings under the senior secured revolving credit facilities). The guarantees are, with respect

to the assets of the guarantors of the Notes of each series, structurally senior to all of Mattel's existing indebtedness, future

indebtedness or other liabilities that are not guaranteed by such guarantors, including Mattel's obligations under the Existing

Non-Guaranteed Notes (as defined in the Indentures).

The Indentures contain covenants that limit Mattel's (and some of its subsidiaries') ability to, among other things: (i) incur

additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of their capital

stock or make other restricted payments; (iii) make investments in unrestricted subsidiaries; (iv) create liens; (v) enter into

certain sale/leaseback transactions; (vi) merge or consolidate, or sell, transfer or otherwise dispose of substantially all of their

assets; and (vii) designate subsidiaries as unrestricted.

In 2021, Mattel used the net proceeds from the issuance of the $600 million of 2026 Notes and $600 million of 2029

Notes, plus cash on hand, to redeem and retire $1.50 billion in aggregate principal amount of the 2017/2018 Senior Notes due

2025 and pay related prepayment premiums and transaction fees and expenses. As a result of the redemptions, Mattel incurred

losses on extinguishment of debt of $101.7 million, comprised of $76.0 million of prepayment premiums and a $25.7 million

write-off of the unamortized debt issuance costs, which was recorded within interest expense in the consolidated statements of

operations.

On December 30, 2022, Mattel used cash on hand to redeem and retire the $250 million aggregate principal amount of

the 2013 Senior Notes due 2023.

In April 2023, S&P upgraded Mattel’s credit rating from BB+ to BBB- and maintained a positive outlook, and in

November 2022, Moody’s upgraded Mattel’s credit rating from Ba1 to Baa3. As a result of the upgraded credit ratings and no

events of default, the covenants limiting Mattel’s ability to incur additional debt or issue certain preferred shares, pay dividends

on or make other distributions in respect of their capital stock or make other restricted payments, and make investments in

unrestricted subsidiaries, and certain provisions of the covenant limiting Mattel’s ability to merge or consolidate, or sell,

transfer or otherwise dispose of substantially all of their assets, are suspended. If Mattel ceases to have credit ratings of BBB-,

Baa3, and/or BBB- (or higher) from any two of S&P, Moody's, and Fitch, respectively, Mattel will thereafter be subject to the

suspended covenants with respect to future events. Following the Fall-Away Date under the Revolving Credit Facility, all

guarantee obligations of the Guarantors under the 2019 Senior Notes due 2027, 2021 Senior Notes due 2026, and 2021 Senior

Notes due 2029 were released, and the obligations of Mattel under the 2019 Senior Notes due 2027, 2021 Senior Notes due

2026, and 2021 Senior Notes due 2029 will be required to be guaranteed by each existing and future direct and indirect

domestic subsidiary of Mattel only to the extent such subsidiary guarantees other indebtedness of Mattel in an aggregate

principal or committed amount in excess of $50 million.

Mattel's long-term debt consists of the following:

Interest Rate

December 31,

2023

December 31,

2022

(In thousands)

2010 Senior Notes due October 2040 6.20 %

$ 250,000 $ 250,000

2011 Senior Notes due November 2041 5.45 %

300,000 300,000

2019 Senior Notes due December 2027 5.875 %

600,000 600,000

2021 Senior Notes due April 2026 3.375 %

600,000 600,000

2021 Senior Notes due April 2029 3.75 %

600,000 600,000

Debt issuance costs and debt discount

(20,014) (24,356)

2,329,986 2,325,644

Less: current portion

— —

Total long-term debt

$ 2,329,986 $ 2,325,644

The aggregate principal amount of long-term debt maturing in the next five years and thereafter is as follows:

2010

Senior

Notes

2011

Senior

Notes

2019

Senior

Notes

2021

Senior

Notes Total

(In thousands)

2024

$ — $ — $ — $ — $ —

2025

— — — — —

2026

— — — 600,000 600,000

2027

— — 600,000 — 600,000

2028

— — — — —

Thereafter

250,000 300,000 — 600,000 1,150,000

$ 250,000 $ 300,000 $ 600,000 $ 1,200,000 $ 2,350,000

Note 7—Stockholders' Equity

Preference Stock

Mattel is authorized to issue up to 20.0 million shares of $0.01 par value preference stock, of which none is currently

outstanding.

Preferred Stock

Mattel is authorized to issue up to 3.0 million shares of $1.00 par value preferred stock, of which none is currently

outstanding.

Common Stock Repurchase Program

During 2023, Mattel repurchased 10.4 million shares of its common stock at a cost of $203.0 million. During 2022 and

2021, Mattel did not repurchase any shares of its common stock. Mattel's share repurchase program was first announced on

July 21, 2003. On July 17, 2013, the Board of Directors approved a $500.0 million increase to Mattel's share repurchase

authorization, and as of December 31, 2023, such authorization was exhausted. On February 5, 2024, the Board of Directors

authorized a new $1.00 billion share repurchase program. During February 2024, Mattel executed $100.0 million of share

repurchases under the new program. Repurchases will take place from time to time, depending on market conditions. Mattel's

share repurchase program has no expiration date.

Dividends

During 2023, 2022, and 2021, Mattel did not pay any dividends to holders of its common stock. The payment of

dividends on common stock is at the discretion of the Board of Directors and is subject to customary limitations.

Accumulated Other Comprehensive Income (Loss)

The following tables present changes in the accumulated balances for each component of other comprehensive income

(loss), including current period other comprehensive income and reclassifications out of accumulated other comprehensive

income (loss):

For the Year Ended December 31, 2023

Derivative

Instruments

Available-for-

Sale Security

Employee

Benefit Plans

Currency

Translation

Adjustments Total

(In thousands)

Accumulated Other Comprehensive Income

(Loss), Net of Tax, as of December 31, 2022

$ 22,732 $ — $ (138,498) $ (795,712) $ (911,478)

Other comprehensive income (loss) before

reclassifications

(15,903) — (6,558) 37,123 14,662

Amounts reclassified from accumulated other

comprehensive income (loss)

(10,292) — 2,140 — (8,152)

Net (decrease) increase in other comprehensive

income

(26,195) — (4,418) 37,123 6,510

Accumulated Other Comprehensive Loss, Net of

Tax, as of December 31, 2023

$ (3,463) $ — $ (142,916) $ (758,589) $ (904,968)

For the Year Ended December 31, 2022

Derivative

Instruments

Available-for-

Sale Security

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

40,449 — 14,988 (51,557) 3,880

Amounts reclassified from accumulated other

comprehensive income (loss)

(26,513) 3,646 613 45,366 23,112

Net increase (decrease) in other comprehensive

income

13,936 3,646 15,601 (6,191) 26,992

Adjustment of accumulated other comprehensive

loss to retained earnings

— 2,801 — — 2,801

Accumulated Other Comprehensive Income

(Loss), Net of Tax, as of December 31, 2022

$ 22,732 $ — $ (138,498) $ (795,712) $ (911,478)

For the Year Ended December 31, 2021

Derivative

Instruments

Available-for-

Sale Security

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

23,253 1,075 19,961 (54,690) (10,401)

Amounts reclassified from accumulated other

comprehensive loss

912 — 12,794 — 13,706

Net increase (decrease) in other comprehensive

income

24,165 1,075 32,755 (54,690) 3,305

Accumulated Other Comprehensive Income

(Loss), Net of Tax, as of December 31, 2021

$ 8,796 $ (6,447) $ (154,099) $ (789,521) $ (941,271)

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 Year Ended

Consolidated Statements of

Operations

Classification

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Derivative Instruments

Gain (loss) on foreign currency

forward exchange and other contracts $ 9,880 $ 26,500 $ (512) Cost of sales

Tax effect 412 13 (400)

Provision/benefit for

income taxes

$ 10,292 $ 26,513 $ (912) Net Income

Employee Benefit Plans

Amortization of prior service credit (a) $ 1,888 $ 1,883 $ 1,875

Other non-operating

income/expense, net

Recognized actuarial (loss) (a) (5,667) (8,896) (11,167)

Other non-operating

income/expense, net

Curtailment gain (loss) (a) — 326 (48)

Other non-operating

income/expense, net

Settlement gain (loss) (a) 59 (19) (6,982)

Other non-operating

income/expense, net

(3,720) (6,706) (16,322)

Tax effect 1,580 6,093 3,528

Provision/benefit for

income taxes

$ (2,140) $ (613) $ (12,794) Net Income

Currency Translation Adjustments

(Loss) on liquidation of subsidiary $ — $ (45,366) $ —

Other non-operating

income/expense, net

Tax effect (b) — — —

Provision/benefit for

income taxes

$ — $ (45,366) $ —

(a) The amortization of prior service credit, recognized actuarial (loss), curtailment gain (loss) and settlement gain (loss) are

included in the computation of net periodic benefit cost. Refer to "Note 4 to the Consolidated Financial Statements—

Employee Benefit Plans" for additional information regarding Mattel's net periodic benefit cost.

(b) There is no tax effect associated with the loss on the liquidation of Mattel's subsidiary in Argentina.

During 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

Accounting Standards Codification 321, Investments—Equity Securities. The adjustment included $3.6 million of accumulated

other comprehensive loss reclassified to other non-operating expense (income), net in the consolidated statement of operations

and $2.8 million reclassified to retained earnings in the consolidated statement of stockholders' equity. The adjustment,

including tax effect, was immaterial to the financial statements.

Currency Translation Adjustments

During 2023, currency translation adjustments resulted in a net other comprehensive gain of $37.1 million, primarily due

to the strengthening of the Mexican peso and British pound sterling against the U.S. dollar, partially offset by the weakening of

the Russian ruble against the U.S. dollar.

During 2022, currency translation adjustments resulted in a net other comprehensive loss of $51.6 million, primarily due

to the weakening of the British pound sterling, Euro, and Hong Kong dollar against the U.S. dollar, partially offset by the

strengthening of the Mexican peso and Brazilian real against the U.S. dollar. Upon sale or upon complete or substantially

complete liquidation of an investment in a foreign entity, the accumulated currency translation adjustment related to the foreign

entity is reclassified from accumulated other comprehensive loss to earnings. During the fourth quarter of 2022, the liquidation

of Mattel's subsidiary in Argentina was substantially complete and as a result, $45.4 million of accumulated currency

translation losses were recognized in other non-operating expense, net within the consolidated statement of operations.

During 2021, currency translation adjustments resulted in a net other comprehensive loss of $54.7 million, primarily due

to the weakening of the Turkish lira, Chilean peso, Mexican peso, Euro, and Brazilian real against the U.S. dollar.

Note 8—Leases

The following table summarizes Mattel's right-of-use assets and liabilities and other information about its leases:

December 31,

2023

December 31,

2022

(In thousands, except years and

percentage information)

Right-of-use assets, net

$ 313,191 $ 318,680

Accrued liabilities

77,254 75,297

Noncurrent lease liabilities

259,548 271,418

Total lease liabilities

$ 336,802 $ 346,715

Weighted-average remaining lease term

5.7 years 5.6 years

Weighted-average discount rate

6.5 % 6.5 %

Lease costs for the years ended December 31, 2023, 2022, and 2021 were as follows:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Lease costs (a) (b)

$ 127,850 $ 140,188 $ 134,272

(a) Includes short-term and variable lease costs of approximately $36 million, $47 million, and $39 million for 2023, 2022,

and 2021 respectively. Variable lease costs primarily relate to variable components of third-party logistics rental charges,

common area maintenance charges, management fees, and taxes.

(b) Contingent rental expense is recorded in the period in which the contingent event becomes probable. During 2023, 2022,

and 2021, contingent rental expense was not material.

Supplemental information related to leases were as follows:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Cash payments for leases

$ 98,453 $ 93,465 $ 100,286

Right-of-use assets obtained in exchange for new and modified lease

liabilities

71,375 74,199 105,898

The following table shows the future maturities of lease liabilities for leases in effect as of December 31, 2023:

Years Ending December 31, Lease Liabilities

(In thousands)

2024

$ 93,172

2025

84,210

2026

69,664

2027

39,407

2028

27,534

Thereafter

100,103

414,090

Less: imputed interest (77,288)

$ 336,802

Mattel has entered into noncancelable lease agreements for premises and equipment to be used in the normal course of

business which had not yet commenced as of December 31, 2023. The future minimum obligations related to these agreements

is approximately $34.7 million.

Note 9—Share-Based Payments

Mattel Stock Plans

The 2010 Equity and Long-Term Compensation Plan was approved by Mattel's stockholders in May 2010. In May 2015,

Mattel's stockholders approved the Amended and Restated 2010 Equity and Long-Term Compensation Plan (the "Amended

2010 Plan").

Under the Amended 2010 Plan, Mattel has the ability to grant nonqualified stock options, incentive stock options, stock

appreciation rights, restricted stock, RSUs, performance RSUs ("performance awards"), dividend equivalent rights, and shares

of common stock to officers, employees, non-employee directors, and consultants providing services to Mattel. The Amended

2010 Plan also contains provisions regarding grants of equity compensation to the non-employee members of the Board of

Directors. The Amended 2010 Plan expires on March 26, 2025, except as to any grants then outstanding.

Nonqualified stock options are granted with an exercise price not less than 100% of the fair market value of Mattel's

common stock on the date of grant, expire no later than 10 years from the date of grant, and vest on a schedule determined by

the Compensation Committee of the Board of Directors, generally over a period of three years from the date of grant.

Nonqualified stock options generally vest and become exercisable contingent upon the grantees' continued employment or

service with Mattel. In the event of a retirement, or an involuntary termination, of an employee that meets retirement provisions

under the Amended 2010 Plan, or the death or disability of an employee, that occurs in each case at least six months after the

grant-date, nonqualified stock options become fully vested. In the event of an involuntary termination, an employee has 90 days

to exercise vested options.

RSUs granted under the Amended 2010 Plan vest on a schedule determined by the Compensation Committee of the

Board of Directors, generally over a period of three years from the date of grant. In the event of the involuntary termination of

an employee that meets retirement provisions under the Amended 2010 Plan, or the death or disability of an employee, that

occurs at least six months after the grant-date, RSUs become fully vested.

Performance awards granted under the Amended 2010 Plan vest upon achievement of performance conditions at a

settlement date determined by the Compensation Committee of the Board of Directors, which occurs in the first quarter

subsequent the performance cycle. In the event of a retirement of an employee that meets retirement provisions under the

Amended 2010 Plan, or the death or disability of an employee, that occurs in each case at least six months after the start date of

the performance period, performance awards vest at the settlement date. In each case, vested performance awards are

determined upon the achievement of performance conditions over the performance period, which is then prorated for the period

of employment as a percentage of the performance period.

An employee qualifies for retirement provisions under the Amended 2010 Plan if; aged 55 years or older with 5 or more

years of service for grants prior to April 28, 2023, or aged 55 years or older with 10 or more years of service for grants on or

after April 28, 2023, which includes Mattel's 2023 annual employee grant.

The number of shares of common stock available for grant under the Amended 2010 Plan is subject to an aggregate limit

as defined therein. At December 31, 2023, there were approximately 32 million shares available for grant under the Amended

2010 Plan if target performance goals are achieved under Mattel's long-term incentive programs ("LTIPs"), and approximately

30 million shares available if maximum performance goals are achieved under the LTIPs.

Mattel recognized total share-based compensation expense related to stock options, RSUs, and performance awards of

$83.3 million, $69.1 million, and $60.1 million during 2023, 2022, and 2021, respectively, which is included in other selling

and administrative expenses in the consolidated statements of operations. The income tax benefit related to stock options,

RSUs, and performance awards during 2023, 2022, and 2021 was approximately $10 million, $9 million and $7 million,

respectively.

As of December 31, 2023, total unrecognized compensation cost related to unvested share-based payments totaled

$102.8 million and is expected to be recognized over a weighted-average period of 1.9 years.

Stock Options

Mattel recognized compensation expense of $6.7 million, $13.2 million, and $10.1 million for stock options during 2023,

2022, and 2021, respectively, which is included within other selling and administrative expenses in the consolidated statements

of operations.

The fair values of options granted have been estimated using the Black-Scholes valuation model. The expected life of

stock options used in this calculation is the period of time the options are expected to be outstanding and has been determined

based on historical exercise experience. Expected stock price volatility is based on the historical volatility of Mattel's stock for a

period approximating the expected life. Expected dividend yield is based on the annual rate of dividends expected to be paid

over the expected life. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues

approximating the expected life.

The weighted-average grant-date fair value of options granted during 2023, 2022, and 2021 was $8.91, $11.18, and $9.31

respectively.

The following weighted-average valuation assumptions were used in determining the fair value of options granted:

2023 2022 2021

Expected life (in years)

6.6 6.4 6.2

Risk-free interest rate

3.5 % 3.1 % 0.8 %

Volatility factor

44.4 % 43.8 % 43.6 %

Dividend yield

— % — % — %

The following is a summary of stock option information and weighted-average exercise prices for Mattel's stock options:

2023 2022 2021

Weighted

Average

Exercise

Price Shares

Weighted

Average

Exercise

Price Shares

Weighted

Average

Exercise

Price

(In thousands, except weighted-average exercise prices)

Outstanding at January 1

17,563 $ 21.73 19,678 $ 22.38 21,635 $ 22.10

Granted

579 18.00 721 23.41 1,054 21.71

Exercised

(1,751) 15.27 (1,412) 19.65 (687) 17.65

Forfeited

(146) 18.59 (104) 18.13 (72) 14.00

Canceled

(4,503) 27.57 (1,320) 34.94 (2,252) 21.10

Outstanding at December 31

11,742 $ 20.30 17,563 $ 21.73 19,678 $ 22.38

Exercisable at December 31

10,544 $ 20.25 15,531 $ 22.10 16,634 $ 23.68

The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the

exercise price of the option. The total intrinsic value of options exercised was approximately $9 million, $8 million and

$3 million, during 2023, 2022, and 2021, respectively. At December 31, 2023, options outstanding had an intrinsic value of

approximately $26 million with a weighted-average remaining life of 4.4 years. At December 31, 2023, options exercisable had

an intrinsic value of approximately $25 million, with a weighted-average remaining life of 3.9 years. Mattel uses treasury shares

purchased under its share repurchase program to satisfy stock option exercises. Cash received from stock options exercised, net

of taxes during 2023 was approximately $27 million.

At December 31, 2023, stock options vested and expected to vest totaled approximately 12 million shares, with an

intrinsic value of approximately $26 million, weighted-average exercise price of $20.31, and weighted-average remaining life

of 4.4 years. During 2023, approximately 1 million stock options vested. The total grant-date fair value of stock options vested

during 2023, 2022, and 2021 was approximately $9 million, $9 million, and $15 million, respectively.

Restricted Stock Units

Compensation expense recognized related to grants of RSUs was $48.5 million, $37.7 million, and $27.3 million in 2023,

2022, and 2021, respectively, and was included within other selling and administrative expenses in the consolidated statements

of operations.

RSUs are valued at the market value on the date of grant, adjusted by the present value of the expected dividends for

RSUs that are not entitled to a dividend during the vesting period. The expense for RSUs is evenly attributed to the periods in

which the restrictions lapse, which is generally three years from the date of grant.

The following is a summary of RSU information and weighted-average grant-date fair values for Mattel's RSUs:

2023 2022 2021

Weighted

Average

Grant-Date

Fair Value Shares

Weighted

Average

Grant-Date

Fair Value Shares

Weighted

Average

Grant-Date

Fair Value

(In thousands, except weighted-average grant-date fair values)

Unvested at January 1

4,503 $ 21.00 3,855 $ 17.03 3,986 $ 12.52

Granted

3,479 18.24 2,728 23.20 2,167 21.77

Vested

(2,186) 19.18 (1,790) 16.01 (1,954) 13.66

Forfeited

(622) 19.91 (290) 19.77 (344) 13.72

Unvested at December 31

5,174 $ 20.04 4,503 $ 21.00 3,855 $ 17.03

At December 31, 2023, RSUs expected to vest totaled approximately 5 million shares, with a weighted-average grant-

date fair value of $20.10. The total grant-date fair value of RSUs vested during 2023, 2022, and 2021 was approximately

$42 million, $29 million, and $27 million, respectively.

Performance Awards

Compensation expense recognized related to grants of performance awards was $28.1 million, $18.2 million, and

$22.7 million during 2023, 2022, and 2021, respectively.

Mattel had four LTIP performance cycles in place during 2023, which were established by the Compensation Committee

of the Board of Directors: (i) a January 1, 2020—December 31, 2022 ("2020 LTIP"), which was completed in the first quarter

of 2023 (ii) a January 1, 2021—December 31, 2023 performance cycle ("2021 LTIP"), (ii) a January 1, 2022—December 31,

2024 performance cycle ("2022 LTIP"), and (iii) a January 1, 2023—December 31, 2025 performance cycle ("2023 LTIP").

Under the LTIP performance cycles in place in 2023, officers and key employees may earn shares of Mattel's common stock

based on attaining certain cumulative three-year performance targets, which are subject to approvals of the Compensation

Committee of the Board of Directors. The ultimate amount of shares earned for these LTIP awards may vary from 0% to 200%

of the target number of shares, depending on the cumulative results achieved.

Mattel determines the fair value of the performance-related components of its performance awards based on the closing

market price of Mattel's common stock on the date of grant and determines the fair value of the market-related components of

its performance awards based on the Monte Carlo valuation methodology. Performance awards cliff-vest at the end of the

requisite service period, which typically occurs in the first quarter subsequent to the end of the performance period. Mattel

recognizes compensation expense on a straight-line basis over the requisite service period, provided that certain cumulative

three-year performance targets and other vesting criteria are met. The weighted-average grant-date fair value of performance

awards granted during 2023, 2022, and 2021 was $19.44, $28.39, and $22.91 respectively.

The following weighted-average valuation assumptions were used in determining the fair value of the market-related

components of performance awards granted:

2023 2022 2021

Risk-free interest rate

3.8 % 2.8 % 0.3 %

Volatility factor

35.6 % 43.4 % 50.1 %

Dividend yield

— % — % — %

The following is a summary of performance award information and weighted-average grant-date fair values for Mattel's

performance awards:

2023 2022 2021

Weighted

Average

Grant-Date

Fair Value Shares

Weighted

Average

Grant-Date

Fair Value Shares

Weighted

Average

Grant-Date

Fair Value

(In thousands, except weighted-average grant-date fair values)

Unvested at January 1

2,894 $ 18.77 3,347 $ 15.52 3,405 $ 13.79

Granted (a)(b)

1,954 16.42 1,440 21.35 906 22.04

Vested

(2,189) 11.93 (1,823) 14.89 (884) 15.63

Forfeited

(219) 18.96 (70) 17.26 (80) 14.70

Unvested at December 31

2,440 $ 23.01 2,894 $ 18.77 3,347 $ 15.52

(a) During 2023, Mattel granted 1.2 million shares as part of its 2023 LTIP and issued 0.8 million incremental shares under

the 2020 LTIP based on the final earnout of the 2020 performance cycle, which are included in the weighted average

grant-date fair value. During 2022, Mattel granted 0.7 million shares as part of its 2022 LTIP and issued 0.8 million

incremental shares under the 2019 LTIP based on the final earnout of the 2019 performance cycle, which are included in

the weighted average grant-date fair value. During 2021, Mattel granted 0.8 million shares under the 2021 LTIP and

issued 0.1 million incremental shares under the 2018 LTIP based on the final earnout of the 2018 performance cycle,

which are included in the weighted average grant-date fair value.

(b) The number of shares granted for the 2023 LTIP, the 2022 LTIP, and the 2021 LTIP, represents the aggregate target

numbers of shares that may be issued pursuant to the award over its full term. The aggregate number of shares subject to

performance awards that would be issued if performance goals are achieved at the maximum number of shares are

approximately 2 million, 1 million, and 2 million for 2023, 2022, and 2021, respectively.

At December 31, 2023, performance awards expected to vest totaled approximately 2 million shares, with a weighted-

average grant-date fair value of $21.65. The total grant-date fair value of performance awards vested during 2023, 2022, and

2021 was approximately $26 million, $27 million, and $14 million, respectively.

Note 10—Earnings Per Share

The following table reconciles basic and diluted earnings per common share:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands, except per share amounts)

Basic:

Net income $ 214,352 $ 393,913 $ 902,987

Weighted-average number of common shares

353,588 353,792 350,007

Basic net income per common share

$ 0.61 $ 1.11 $ 2.58

Diluted:

Net income

$ 214,352 $ 393,913 $ 902,987

Weighted-average number of common shares

353,588 353,792 350,007

Dilutive share-based awards (a)

3,524 5,820 7,246

Weighted-average number of common and potential common shares

357,112 359,612 357,253

Diluted net income per common share

$ 0.60 $ 1.10 $ 2.53

(a) Share-based awards totaling 10.4 million, 10.6 million and 12.1 million were excluded from the calculation of diluted net

income per common share for the years ended December 31, 2023, 2022, and 2021 respectively, because their effect would

be antidilutive.

Note 11—Fair Value Measurements

The following tables present information about Mattel's assets and liabilities measured and reported in the financial

statements at fair value on a recurring basis as of December 31, 2023 and 2022 and indicates the fair value hierarchy of the

valuation techniques utilized to determine such fair value. The three levels of the fair value hierarchy are as follows:

• 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.

December 31, 2023

Level 1 Level 2 Level 3 Total

(In thousands)

Assets:

Foreign currency forward exchange and other contracts (a)

$ — $ 2,828 $ — $ 2,828

Liabilities:

Foreign currency forward exchange and other contracts (a)

$ — $ 9,564 $ — $ 9,564

December 31, 2022

Level 1 Level 2 Level 3 Total

(In thousands)

Assets:

Foreign currency forward exchange and other contracts (a)

$ — $ 17,563 $ — $ 17,563

Liabilities:

Foreign currency forward exchange and other contracts (a)

$ — $ 10,754 $ — $ 10,754

(a) The fair value of the foreign currency forward exchange and other 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.

Other Financial Instruments

Mattel's financial instruments included cash and equivalents, accounts receivable and payable, accrued liabilities, short-

term borrowings, and long-term debt. The fair values of these instruments, excluding long-term debt, approximate their carrying

amounts because of their short-term nature. Cash and equivalents were classified as Level 1 and all other financial instruments

were classified as Level 2 within the fair value hierarchy.

The estimated fair value of Mattel's long-term debt was $2.23 billion (compared to a carrying amount of $2.35 billion) as

of December 31, 2023 and $2.13 billion (compared to a carrying amount of $2.35 billion) as of December 31, 2022. The

estimated fair values have been calculated based on broker quotes or rates for the same or similar instruments and are classified

as Level 2 within the fair value hierarchy.

Note 12—Derivative Instruments

Mattel seeks to mitigate its exposure to foreign currency transaction risk by monitoring its foreign currency transaction

exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts. Mattel uses

foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory

denominated in foreign currencies. These contracts have maturity dates of up to 24 months. These derivative instruments have

been designated as effective cash flow hedges, whereby the unsettled hedges are reported in Mattel's consolidated balance

sheets at fair value, with changes in the fair value of the hedges reflected in other comprehensive income ("OCI"). Realized

gains and losses for these contracts are recorded in the consolidated statements of operations in the period in which the

inventory is sold to customers. Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and

advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel does not use hedge

accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated

statements of operations. Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not

material. As of December 31, 2023 and 2022, Mattel held foreign currency forward exchange contracts and other commodity

derivative instruments, with notional amounts of approximately $609 million and $674 million, respectively.

The following tables present Mattel's derivative assets and liabilities:

Derivative Assets

Balance Sheet Classification Fair Value

December 31,

2023

December 31,

2022

(In thousands)

Derivatives Designated as Hedging Instruments:

Foreign currency forward exchange and other contracts

Prepaid expenses and other

current assets $ 2,198 $ 14,899

Foreign currency forward exchange and other contracts Other noncurrent assets 52 1,501

Total Derivatives Designated as Hedging Instruments

$ 2,250 $ 16,400

Derivatives Not Designated as Hedging Instruments:

Foreign currency forward exchange and other contracts

Prepaid expenses and other

current assets $ 578 $ 1,163

Total Derivatives Not Designated as Hedging

Instruments

$ 578 $ 1,163

$ 2,828 $ 17,563

Derivative Liabilities

Balance Sheet Classification Fair Value

December 31,

2023

December 31,

2022

(In thousands)

Derivatives Designated as Hedging Instruments:

Foreign currency forward exchange and other contracts Accrued liabilities $ 7,520 $ 3,647

Foreign currency forward exchange and other contracts Other noncurrent liabilities 1,575 807

Total Derivatives Designated as Hedging Instruments

$ 9,095 $ 4,454

Derivatives Not Designated as Hedging Instruments:

Foreign currency forward exchange and other contracts

Accrued liabilities $ 449 $ 6,261

Foreign currency forward exchange and other contracts

Other noncurrent liabilities

20 39

Total Derivatives Not Designated as Hedging

Instruments

$ 469 $ 6,300

$ 9,564 $ 10,754

The following tables present the classification and amount of gains and losses, net of tax, from derivatives reported in the

consolidated statements of operations:

Derivatives Designated As Hedging Instruments

For the Year Ended

Statements of

Operations Classification

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Foreign currency forward exchange

contracts:

Amount of (losses) gains recognized in

OCI $ (15,903) $ 40,449 $ 23,253

Amount of gains (losses) reclassified from

accumulated OCI to the consolidated

statements of operations 10,292 26,513 (912) Cost of sales

The net gains (losses) reclassified from accumulated other comprehensive loss to the consolidated statements of

operations during 2023, 2022, and 2021, respectively, were offset by changes in cash flows associated with the underlying

hedged transactions.

Derivatives Not Designated As Hedging Instruments

For the Year Ended

Statements of

Operations Classification

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Amount of net gains (losses)

recognized in the Statements of

Operations:

Foreign currency forward exchange and

other contracts $ 19,939 $ (7,833) $ 2,872

Other non-operating

(income) expense, net

Foreign currency forward exchange and

other contracts

— — 639

Cost of sales

$ 19,939 $ (7,833) $ 3,511

The net gains (losses) recognized in the consolidated statements of operations during 2023, 2022, and 2021, respectively,

were offset by foreign currency transaction gains and losses on the related derivative balances.

Note 13—Commitments and Contingencies

Licensing and Similar Agreements and Other Purchasing Obligations

In the normal course of business, Mattel enters into contractual arrangements to obtain and protect Mattel's right to create

and market certain products. These arrangements include royalty payments pursuant to licensing agreements that routinely

contain provisions for guarantees or minimum expenditures during the term of the contract. Mattel also enters into contractual

arrangements for commitments of future purchases of goods and services to ensure availability and timely delivery. Current and

future commitments for guaranteed payments reflect Mattel's focus on expanding its product lines through alliances with

businesses in other industries.

Licensing and similar agreements in effect at December 31, 2023 contain provisions for future minimum payments as

shown in the following table:

Licensing and

Similar

Agreements

(In thousands)

2024

$ 90,005

2025

93,713

2026

25,526

2027

24,906

2028

400

Thereafter

—

$ 234,550

Royalty expense for 2023, 2022, and 2021 was $249.8 million, $230.8 million, and $184.3 million, respectively.

The following table shows the future minimum obligations for purchases of inventory, services, and other items as of

December 31, 2023:

Other

Purchase

Obligations

(In thousands)

2024

$ 283,927

2025

49,949

2026

30,269

2027

25,301

2028

6,062

Thereafter

—

$ 395,508

Insurance

Mattel has a wholly-owned subsidiary, Far West Insurance Company, Ltd. ("Far West"), that was established to insure

Mattel's workers' compensation, general, automobile, product liability, and property risks. For the year ended December 31,

2023, Far West insured the first $1.0 million per occurrence for workers' compensation risks, the first $0.5 million per

occurrence for general and automobile liability risks, the first $2.0 million per occurrence for product liability losses occurring

prior to February 1, 2020, and the first $5.0 million per occurrence for product liability risks thereafter, and up to $1.0 million

per occurrence for property risks. Various insurance companies that have an "A" or better AM Best rating at the time the

policies are purchased reinsured Mattel's risk in excess of the amounts insured by Far West. Mattel's liability for workers'

compensation, general, automobile, product liability, and property claims at December 31, 2023 and 2022 totaled $12.2 million

and $14.2 million, respectively, and is primarily included in other noncurrent liabilities in the consolidated balance sheets. Loss

reserves are accrued based on Mattel's estimate of the aggregate liability for claims incurred.

Litigation

Litigation Related to Yellowstone do Brasil Ltda.

In April 1999, Yellowstone do Brasil Ltda. (formerly known as Trebbor Informática Ltda.) filed a lawsuit against Mattel

do Brasil before the 15th Civil Court of Curitiba, State of Parana, requesting the annulment of its security bonds and promissory

notes given to Mattel do Brasil as well as damages due to an alleged breach of an oral exclusive distribution agreement between

the parties relating to the supply and sale of toys in Brazil. Yellowstone's complaints sought alleged loss of profits plus an

unspecified amount of damages.

Mattel do Brasil filed its defenses to these claims and simultaneously presented a counterclaim for unpaid accounts

receivable for goods supplied to Yellowstone.

In April 2018, Mattel do Brasil entered into a settlement agreement to resolve this matter, but the settlement was later

rejected by the courts, subject to a pending appeal by Mattel.

In October 2018, the Superior Court of Justice issued a final ruling in favor of Yellowstone on the merits of

Yellowstone's claims. Previously, the courts had ruled in Mattel's favor on its counterclaim.

In October 2019, Mattel reached an agreement with Yellowstone's former counsel regarding payment of the attorney's

fees portion of the judgment. In November 2019, Yellowstone initiated an action to enforce its judgment against Mattel, but did

not account for an offset for Mattel's counterclaim. In January 2020, Mattel obtained an injunction, staying Yellowstone's

enforcement action pending resolution of Mattel's appeal to enforce the parties' April 2018 settlement. As of December 31,

2023, Mattel assessed its probable loss related to this matter and has accrued a reserve, which is not material.

Litigation Related to the Fisher-Price Rock 'n Play Sleeper

A number of putative class action lawsuits filed between April 2019 and October 2019 are pending against Fisher-Price,

Inc. and/or Mattel, Inc. asserting claims for false advertising, negligent product design, breach of warranty, fraud, and other

claims in connection with the marketing and sale of the Fisher-Price Rock 'n Play Sleeper (the "Sleeper"). In general, the

lawsuits allege that the Sleeper should not have been marketed and sold as safe and fit for prolonged and overnight sleep for

infants. The putative class action lawsuits propose nationwide and over 10 statewide consumer classes comprised of those who

purchased the Sleeper as marketed as safe for prolonged and overnight sleep. The class actions have been consolidated before a

single judge in the United States District Court for the Western District of New York for pre-trial purposes pursuant to the U.S.

federal courts' Multi-District Litigation program. In June 2022, the court denied the plaintiffs' motion to certify damages and

injunctive relief classes under New York law, but granted plaintiffs' request to certify a New York issue class to resolve two

issues on a class-wide basis. In October 2022, the United States Court of Appeals for the Second Circuit denied plaintiffs'

petition to appeal the denial of certification of the damages and injunctive relief classes. On February 13, 2024, the parties filed

a notice of settlement informing the court that they have reached a settlement in principle of this litigation. The settlement in

principle is subject to preliminary and final approval by the court. As of December 31, 2023, Mattel assessed its probable loss

related to this matter and has accrued a reserve, which is not material.

Thirty-one additional lawsuits filed between April 2019 and January 2024 are pending against Fisher-Price, Inc. and

Mattel, Inc. alleging that a product defect in the Sleeper caused the fatalities of or injuries to thirty-four children. Several

lawsuits have been settled and/or dismissed. Additionally, Fisher-Price, Inc. and/or Mattel, Inc. have also received letters from

lawyers purporting to represent additional plaintiffs who have threatened to assert similar claims.

In addition, a stockholder has filed a derivative action in the Court of Chancery for the State of Delaware (Kumar v.

Bradley, et al., filed July 7, 2020) alleging breach of fiduciary duty and unjust enrichment related to the development,

marketing, and sale of the Sleeper. The defendants in the derivative action are certain of Mattel's current and former officers

and directors. In August 2021, a second similar derivative action was filed in the Court of Chancery for the State of Delaware

(Armon v. Bradley, et al., filed August 30, 2021).

The lawsuits seek compensatory damages, punitive damages, statutory damages, restitution, disgorgement, attorneys'

fees, costs, interest, declaratory relief, and/or injunctive relief. Mattel believes that the allegations in the lawsuits are without

merit and intends to vigorously defend against them. A reasonable estimate of the amount of any possible loss or range of loss

cannot be made at this time.

Mattel has also had discussions with the U.S. Consumer Product Safety Commission ("CPSC") regarding a request from

the CPSC that Mattel increase the proportional cash refund available to consumers who participate in the recall of the Sleeper

first announced in 2019. As of December 31, 2023, Mattel assessed its probable loss related to this matter and has accrued a

reserve, which is not material. 

Note 14—Segment Information

Mattel designs, manufactures, and markets a broad variety of toy products worldwide, which are sold to its customers and

directly to consumers.

Segment Data

Mattel's reportable segments are: (i) North America, which consists of the United States and Canada; (ii) International;

and (iii) American Girl. The North America and International segments sell products across categories, although some products

are developed and adapted for particular international markets.

In February 2024, Mattel announced an organizational change that American Girl will become part of Mattel's North

America commercial organization and, as a result, American Girl will no longer be an operating segment. Beginning in the first

quarter of 2024, Mattel is expected to have two reportable segments, North America and International.

The following tables present information regarding net sales, operating income, depreciation and amortization, and assets

by segment. The corporate and other expense category includes operating costs not allocated to individual segments, including

charges related to incentive and share-based compensation, corporate headquarters functions managed on a worldwide basis, the

impact of changes in foreign currency exchange rates on intercompany transactions, and certain severance and other

restructuring costs. It is impracticable for Mattel to present net sales by categories, brands, or products, as trade discounts and

other allowances are generally recorded in the financial accounting systems by customer.

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Net Sales by Segment

North America

$ 3,003,218 $ 2,987,831 $ 2,968,278

International

2,230,783 2,220,001 2,219,189

American Girl

207,218 226,855 270,274

Net sales

$ 5,441,219 $ 5,434,687 $ 5,457,741

Operating Income (Loss) by Segment (a)

North America

$ 793,444 $ 765,867 $ 872,536

International

299,084 295,840 349,952

American Girl

(5,701) 199 5,409

1,086,827 1,061,906 1,227,897

Corporate and other expense (b)

(525,168) (386,391) (498,335)

Operating income

561,659 675,515 729,562

Interest expense

123,786 132,818 253,937

Interest (income)

(25,238) (9,398) (3,503)

Other non-operating (income) expense, net (c)

(2,293) 47,760 8,364

Income before income taxes

$ 465,404 $ 504,335 $ 470,764

(a) Segment operating income included (i) severance and other restructuring charges of approximately $(1) million,

$11 million, and $3 million for 2023, 2022, and 2021, respectively, which were allocated to the North America,

International, and American Girl segments.

(b) Corporate and other expense included (i) severance and other restructuring charges of approximately $61 million,

$26 million, and $32 million for 2023, 2022, and 2021, respectively and (ii) inclined sleeper product recall litigation

charges of approximately $18 million, $(1) million, and $15 million for 2023, 2022, and 2021, respectively.

(c) Other non-operating (income) expense, net includes $45.4 million of currency translation losses recognized as a result of

Mattel's liquidation of its subsidiary in Argentina, which was substantially completed in 2022.

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Depreciation and Amortization by Segment

North America

$ 90,563 $ 87,454 $ 86,308

International

59,876 58,683 59,610

American Girl

6,893 10,631 12,508

157,332 156,768 158,426

Corporate and other

20,012 25,411 25,887

Depreciation and amortization

$ 177,344 $ 182,179 $ 184,313

Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances.

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Assets by Segment

North America

$ 792,613 $ 778,897 $ 784,836

International

735,236 756,830 798,833

American Girl

52,500 58,833 52,168

1,580,349 1,594,560 1,635,837

Corporate and other

73,087 159,725 214,031

Accounts receivable and inventories, net

$ 1,653,436 $ 1,754,285 $ 1,849,868

Geographic Information

The tables below present information by geographic area. Net sales are attributed to countries based on location of

customer. Long-lived assets include property, plant, and equipment, net, and right-of-use assets, net.

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Net Sales by Geographic Area

North America Region (a)

$ 3,210,436 $ 3,214,686 $ 3,238,552

International Region

EMEA

1,241,483 1,324,435 1,375,463

Latin America

658,018 590,963 519,610

Asia Pacific

331,282 304,603 324,116

Total International Region

2,230,783 2,220,001 2,219,189

Net sales

$ 5,441,219 $ 5,434,687 $ 5,457,741

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Long-Lived Assets

North America Region (b)

$ 337,527 $ 327,418 $ 366,519

International Region

441,187 460,394 414,931

Consolidated total

$ 778,714 $ 787,812 $ 781,450

(a) Net sales for the North America Region include net sales attributable to the United States of $3.05 billion, $3.04 billion,

and $3.07 billion for 2023, 2022, and 2021, respectively.

(b) Long-lived assets for the North America Region include long-lived assets attributable to the United States of

$319.3 million, $309.0 million, and $343.7 million for 2023, 2022, and 2021, respectively.

Major Customers

In 2023, net sales to Mattel's three largest customers accounted for 44% of worldwide consolidated net sales. In 2023, net

sales to Walmart, Target, and Amazon were $1.13 billion, $0.67 billion, and $0.60 billion, respectively. In 2022, net sales to

Mattel's three largest customers accounted for 43% of worldwide consolidated net sales. In 2022, net sales to Walmart, Target,

and Amazon were $0.95 billion, $0.76 billion, and $0.64 billion, respectively. In 2021, net sales to Mattel's three largest

customers accounted for 46% of worldwide consolidated net sales. In 2021, net sales to Walmart, Target, and Amazon were

$1.17 billion, $0.74 billion, and $0.62 billion, respectively.

The North America segment sells products to each of Mattel's three largest customers. The International segment sells

products to Walmart and Amazon. The American Girl segment's net sales to Mattel's three largest customers were not material.

Note 15—Restructuring Charges

Optimizing for Growth (formerly Capital Light)

Mattel's Optimizing for Growth program (the "OFG program") was a multi-year cost savings program that integrated and

expanded upon the previously announced Capital Light program. In February 2023, the OFG program was expanded to include

additional initiatives, including actions to further streamline Mattel's organizational structure.

Mattel has concluded the OFG program as of December 31, 2023. In connection with the OFG program, Mattel recorded

severance and other restructuring costs in the following cost and expense categories within operating income in the consolidated

statements of operations:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Cost of sales (a) $ (1,276) $ 10,685 $ 2,885

Other selling and administrative expenses (b) 32,302 23,592 32,266

$ 31,026 $ 34,277 $ 35,151

(a) Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are

included in segment operating income in "Note 14 to the Consolidated Financial Statements—Segment Information."

(b) Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated

statements of operations are included in corporate and other expense in "Note 14 to the Consolidated Financial Statements

—Segment Information."

The following tables summarize Mattel's severance and other restructuring charges activity within operating income

related to the OFG program:

Liability at

December 31,

2022 Charges (a)

Payments/

Utilization

Liability at

December 31,

2023

(In thousands)

Severance $ 9,355 $ 22,030 $ (27,122) $ 4,263

Other restructuring charges 3,540 8,996 (12,077) 459

$ 12,895 $ 31,026 $ (39,199) $ 4,722

Liability at

December 31,

2021 Charges (a)

Payments/

Utilization

Liability at

December 31,

2022

(In thousands)

Severance

$ 12,411 $ 14,729 $ (17,785) $ 9,355

Other restructuring charges 2,834 19,548 (18,842) 3,540

$ 15,245 $ 34,277 $ (36,627) $ 12,895

(a) Other restructuring charges consist primarily of expenses associated with the restructuring of commercial and corporate

functions and consolidation of manufacturing facilities.

As of December 31, 2023, Mattel had recorded cumulative severance and other restructuring charges related to the OFG

program, including previous actions taken under the Capital Light program, of approximately $196 million, which included

approximately $73.0 million of non-cash charges, including $45.4 million recorded in non-operating expense, net, during 2022,

related to the liquidation of Mattel's subsidiary in Argentina.

During 2021, in conjunction with the OFG program, Mattel completed the sale of a manufacturing plant based in Mexico,

which included land and buildings, resulting in a pre-tax gain of $15.8 million.

Optimizing for Profitable Growth

On February 7, 2024, Mattel announced the Optimizing for Profitable Growth program, a multi-year cost savings

program that follows the OFG program and is designed to achieve further efficiency and cost savings opportunities, primarily

within Mattel's global supply chain, including its manufacturing footprint (the "OPG program"). The OPG program includes

cost savings actions in connection with discontinuing production at a plant in China as previously announced in the third

quarter of 2023, that were not included in the OFG program.

In connection with the OPG program, as of Decemeber 31, 2023, Mattel recorded $25.3 million of severance costs within

other selling and administrative expense in the consolidated statements of operations and is included in corporate and other

expense in "Note 14 to the Consolidated Financial Statements—Segment Information."

The following table summarizes Mattel's severance charges activity related to the OPG program for the year ended

December 31, 2023:

Liability at

December 31,

2022 Charges

Payments/

Utilization

Liability at

December 31,

2023

(In thousands)

Severance

$ — $ 25,296 $ (200) $ 25,096

As of December 31, 2023, Mattel expects to incur total cash expenditures under the OPG program of approximately $130

to $165 million and non-cash charges of up to $5 million.

Other Cost Savings Actions

In 2023, Mattel executed other cost savings actions not included in the OFG program or the OPG program to streamline

its organizational structure. In connection with these actions, Mattel recorded severance expense of $3.4 million within other

selling and administrative expenses in the consolidated statement of operations.

Note 16—Income Taxes

Consolidated pre-tax income consists of the following:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

U.S. operations

$ 150,361 $ 221,149 $ 9,612

Foreign operations

315,043 283,186 461,152

Consolidated pre-tax income excluding equity method investments

$ 465,404 $ 504,335 $ 470,764

The provision (benefit) for current and deferred income taxes consists of the following:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Current

Federal

$ 8,256 $ — $ (9,819)

State

4,669 2,359 (4,060)

Foreign

79,843 62,278 81,899

92,768 64,637 68,020

Deferred

Federal

(24,711) 55,805 (229,217)

State

1,986 2,440 (27,970)

Foreign

199,432 12,969 (231,214)

176,707 71,214 (488,401)

Provision (benefit) for income taxes

$ 269,475 $ 135,851 $ (420,381)

Deferred income taxes are provided principally for tax credit carryforwards, net operating loss carryforwards, interest

expense, research and development expenses, employee compensation-related expenses, right-of-use assets, lease liabilities, and

certain other reserves that are recognized in different years for financial statement and income tax reporting purposes. Mattel's

deferred income tax assets (liabilities) consist of the following:

December 31,

2023

December 31,

2022

(In thousands)

Tax credit carryforwards

$ 41,550 $ 67,451

Research and development expenses

104,582 44,323

Net operating loss carryforwards

77,321 91,704

Interest expense

65,045 79,720

Allowances and reserves

116,148 118,168

Deferred compensation

63,458 40,716

Postretirement benefits

22,741 23,227

Intangible assets

115 212,497

Lease liabilities

81,604 81,298

Other

35,509 35,308

Gross deferred income tax assets

608,073 794,412

Intangible assets

(167,336) (175,077)

Right-of-use assets

(75,076) (73,757)

Other

(37,259) (39,260)

Gross deferred income tax liabilities

(279,671) (288,094)

Deferred income tax asset valuation allowances

(85,352) (89,841)

Net deferred income tax assets

$ 243,050 $ 416,477

Net deferred income tax assets are presented in the consolidated balance sheets as follows:

December 31,

2023

December 31,

2022

(In thousands)

Deferred income tax assets

$ 299,157 $ 471,672

Other noncurrent liabilities

(56,107) (55,195)

$ 243,050 $ 416,477

As of December 31, 2023, Mattel had U.S. federal and foreign loss carryforwards totaling $289.1 million and U.S.

federal, state, and foreign tax credit carryforwards of $44.4 million, which excludes carryforwards that do not meet the

threshold for recognition in the financial statements. Utilization of these loss and tax credit carryforwards is subject to annual

limitations. Mattel's loss and tax credit carryforwards expire in the following periods:

Loss

Carryforward

Tax Credit

Carryforward

(In thousands)

2024–2028

$ 10,085 $ 882

Thereafter

113,274 22,390

No expiration date

165,707 21,105

$ 289,066 $ 44,377

In 2023, Mattel completed an intra-group transfer of certain IP rights, resulting in a net tax expense of $161.4 million

related to the write-down of certain foreign deferred tax assets and establishment of certain U.S. deferred tax assets, resulting in

a reduction in intangible deferred tax assets and deferred tax liabilities and an increase in research and development deferred tax

assets.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant

judgment and extensive analysis of all available evidence to determine whether it is more likely than not that these assets will

be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of

sustained profitability and three years of cumulative pretax income for each tax jurisdiction. During the twelve months ended

December 31, 2021, Mattel continued to see improved and sustained profitability, which presented objective positive evidence

for the realizability of certain deferred tax assets. As such, based on the overall analysis of the positive and negative evidence in

each tax jurisdiction, during 2021, Mattel released the valuation allowances related to certain U.S. federal, state, and foreign

deferred tax assets, except for certain tax assets that are primarily expected to expire before utilization. Valuation allowance

releases for the year ended December 31, 2021, resulted in recognition of a portion of these deferred tax assets and a benefit to

Mattel's provision for income taxes of $540.8 million. Changes in the valuation allowances in 2022 primarily related to

utilization and expiration of tax attributes and currency fluctuations. As of December 31, 2022, Mattel's valuation allowances

on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $16 million and $74 million,

respectively. Changes in the valuation allowances in 2023 primarily related to changes in the assessment of the future

realizability of certain deferred tax assets, utilization and expiration of tax attributes, and currency fluctuations. As of December

31, 2023, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were

approximately $14 million and $71 million, respectively. As of December 31, 2023 and 2022, Mattel had recorded net deferred

tax assets of $243.1 million and $416.5 million, respectively.

Differences between the provision for income taxes at the U.S. federal statutory income tax rate and the provision in the

consolidated statements of operations are as follows:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Provision at U.S. federal statutory rate

$ 97,735 $ 105,910 $ 98,861

Differences resulting from:

Changes in valuation allowances

2,343 — (540,803)

Foreign earnings taxed at different rates, including foreign losses

without benefit

(12,844) 16,877 35,468

Tax related to pass-through income

3,869 5,340 2,487

Non deductible executive compensation

7,248 5,141 7,115

State and local taxes, net of U.S. federal benefit (expense)

8,480 5,027 (983)

Adjustments to previously accrued taxes

9,943 (9,471) (19,101)

Tax on undistributed earnings of foreign subsidiaries

(1,000) 10,600 7,000

Research and development tax credit

(7,248) (5,487) (5,350)

Discrete tax impact due to intra-group IP transfer

161,388 — —

Other

(439) 1,914 (5,075)

Provision (benefit) for income taxes

$ 269,475 $ 135,851 $ (420,381)

In assessing whether uncertain tax positions should be recognized in its financial statements, Mattel first determines

whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related

appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the

more likely than not recognition threshold, Mattel presumes that the position will be examined by the appropriate taxing

authority that would have full knowledge of all relevant information. For tax positions that meet the more likely than not

recognition threshold, Mattel measures the amount of benefit recognized in the financial statements at the largest amount of

benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority. Mattel

recognizes unrecognized tax benefits in the first financial reporting period in which information becomes available indicating

that such benefits will more likely than not be realized.

Mattel records a reserve for unrecognized tax benefits for U.S. federal, state, local, and foreign tax positions related

primarily to transfer pricing, tax credits claimed, tax nexus, and apportionment. For each reporting period, management applies

a consistent methodology to measure unrecognized tax benefits, and all unrecognized tax benefits are reviewed periodically and

adjusted as circumstances warrant. Mattel's measurement of its reserve for unrecognized tax benefits is based on management's

assessment of all relevant information, including prior audit experience, the status of audits, conclusions of tax audits, lapsing

of applicable statutes of limitations, identification of new issues, and any administrative guidance or developments.

A reconciliation of the reserve for unrecognized tax benefits is as follows:

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Unrecognized tax benefits at January 1

$ 114,057 $ 118,781 $ 140,309

Increases for positions taken in current year

5,855 5,034 5,113

Increases for positions taken in a prior year

18,831 8,037 3,658

Decreases for positions taken in a prior year

(4,841) (7,315) (1,324)

Decreases for settlements with taxing authorities

(273) (1,236) (2,852)

Decreases for lapses in the applicable statute of limitations

(3,659) (9,244) (26,123)

Unrecognized tax benefits at December 31

$ 129,970 $ 114,057 $ 118,781

Of the $130.0 million of unrecognized tax benefits as of December 31, 2023, $110.7 million would impact the effective

tax rate if recognized, $10.1 million would result in an increase in the valuation allowance, and $9.2 million would result in an

offset with a non-current asset account.

Mattel recognized an increase of interest and penalties of $1.5 million in 2023, a decrease of $5.3 million in 2022, and a

decrease of $1.5 million in 2021, related to unrecognized tax benefits, which are reflected in the provision (benefit) for income

taxes in the consolidated statements of operations. As of December 31, 2023, Mattel accrued $17.3 million in interest and

penalties related to unrecognized tax benefits, all of which would impact the effective tax rate if recognized. As of

December 31, 2022, Mattel accrued $15.9 million in interest and penalties related to unrecognized tax benefits, all of which

would impact the effective tax rate if recognized.

In the normal course of business, Mattel is regularly audited by U.S. federal, state, local and foreign tax authorities.

Mattel remains subject to IRS examination for the 2020 through 2023 tax years. Mattel files multiple state and local income tax

returns and remains subject to examination in various jurisdictions, including California for the 2018 through 2023 tax years,

New York for the 2020 through 2023 tax years, and Wisconsin for the 2015 through 2023 tax years. Mattel files multiple

foreign income tax returns and remains subject to examination in various foreign jurisdictions including Hong Kong for the

2017 through 2023 tax years, Mexico for the 2018 through 2023 tax years, Netherlands for the 2019 through 2023 tax years,

Cyprus for the 2020 through 2023 tax years, China for the 2010 through 2023 tax years, and United Kingdom for the 2017

through 2023 tax years. Based on the current status of U.S. federal, state, local, and foreign audits, Mattel believes it is

reasonably possible that in the next 12 months, the total unrecognized tax benefits could decrease by $16.2 million related to the

settlement of tax audits and/or the expiration of statutes of limitations. The ultimate settlement of certain issues with the

applicable taxing authority could have a material impact on Mattel's consolidated financial statements.

Mattel has recorded a deferred tax liability of $23.0 million related to undistributed earnings of certain foreign

subsidiaries of $0.56 billion as of December 31, 2023. During 2023, Mattel reported a distribution of foreign earnings to the

United States for which taxes had been previously provided. Taxes have not been provided on approximately $1.05 billion of

undistributed foreign U.S. GAAP retained earnings. The determination of any incremental tax liability associated with these

earnings is not practicable due to the complexity of local country withholding rules and interactions with tax treaties, foreign

exchange considerations, and the diversity of state income tax treatment on actual distribution. Mattel will remit reinvested

earnings of its foreign subsidiaries for which a deferred tax liability has been recorded when Mattel determines that it is

advantageous for business operations or cash management purposes.

Note 17—Supplemental Financial Information

December 31,

2023

December 31,

2022

(In thousands)

Inventories included the following:

Finished goods $ 478,707 $ 754,852

Raw materials and work in process 92,902 139,212

$ 571,609 $ 894,064

Accrued liabilities included the following:

Incentive compensation $ 143,091 $ 2,889

Advertising and promotion

102,217 115,707

Royalties

86,475 65,330

Lease liabilities 77,254 75,297

For the Year Ended

December 31,

2023

December 31,

2022

December 31,

2021

(In thousands)

Currency transaction gains (losses) included in:

Operating income $ (14,921) $ (15,544) $ (10,212)

Other non-operating income/expense, net 1,545 (11,550) (8,224)

Currency transaction losses, net $ (13,376) $ (27,094) $ (18,436)

Other selling and administrative expenses included the following:

Design and development $ 198,603 $ 195,451 $ 189,372

Identifiable intangible asset amortization 37,893 37,602 38,039

Bad debt expense, net

(1,502) 18,279 1,202

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures

Principal Executive Officer and Principal Financial Officer Certifications

Appearing as exhibits to this report are certifications of Mattel's principal executive officer and Mattel's principal

financial officer. The certifications are required to be made by Rule 13a-14 or Rule 15d-14 under the Securities Exchange Act

of 1934. This item contains the information about the evaluation that is referred to in the certifications, and the information set

forth below in this Item 9A should be read in conjunction with the certifications for a more complete understanding of the

certifications.

Evaluation of Disclosure Controls and Procedures

As of December 31, 2023, Mattel's disclosure controls and procedures were evaluated, with the participation of Mattel's

principal executive officer and principal financial officer, to assess whether they are effective in providing reasonable assurance

that information required to be disclosed by Mattel in the reports that it files or submits under the Exchange Act is accumulated

and communicated to management, including its principal executive officer and principal financial officer, as appropriate, to

allow timely decisions regarding required disclosure and to provide reasonable assurance that such information is recorded,

processed, summarized and reported within the time periods specified in SEC rules and forms. Based on this evaluation, Ynon

Kreiz, Mattel's principal executive officer, and Anthony DiSilvestro, Mattel's principal financial officer, concluded that these

disclosure controls and procedures are not effective as of December 31, 2023 due to a material weakness in Mattel's internal

control over financial reporting, as further described in Management's Report on Internal Control Over Financial Reporting,

which is included in Item 8 "Financial Statements and Supplementary Data" of this report and incorporated herein by reference.

Management's Report on Internal Control Over Financial Reporting

The report called for by Item 308(a) of Regulation S-K is incorporated by reference to Management's Report on Internal

Control Over Financial Reporting, included in Item 8 "Financial Statements and Supplementary Data" of this report.

Remediation Plan

Management is actively engaged in the planning for, and implementation of, remediation efforts to address the material

weakness. Additional time is required to complete the design and test the operating effectiveness of the applicable controls to

demonstrate the effectiveness of the remediation efforts. The material weakness cannot be considered remediated until the

applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these

controls are operating effectively.

Report of Independent Registered Public Accounting Firm

The report called for by Item 308(b) of Regulation S-K is incorporated by reference to Report of Independent Registered

Public Accounting Firm, included in Item 8 "Financial Statements and Supplementary Data" of this report.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the quarter ended December 31,

2023 that have materially affected, or are reasonably likely to materially affect, Mattel's internal control over financial

reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

The information required under this Item is incorporated herein by reference to sections entitled "Corporate Governance

at Mattel—Proposal 1—Election of Directors"; "Corporate Governance at Mattel—Board Structure—Board Committees—

Audit Committee"; "Compensation at Mattel—Executive Officers"; and, to the extent applicable, "Stock Ownership and

Reporting —Delinquent Section 16(a) Reports" in the Mattel 2024 Proxy Statement to be filed with the SEC within 120 days of

December 31, 2023 (the "Proxy Statement").

Mattel has adopted the Mattel Code of Conduct (the "Code of Conduct"), which satisfies the listing rules of the Nasdaq

Stock Market LLC ("Nasdaq") regarding "code of conduct" and satisfies the SEC rules regarding disclosure of a "code of

ethics" for the Chief Executive Officer, Chief Financial Officer, and Controller. The Code of Conduct is publicly available on

Mattel's corporate website at http://corporate.mattel.com, and the text of the Code of Conduct will be updated on the website to

reflect any amendment. A copy may also be obtained free of charge by mailing a request in writing to: Secretary, Mail Stop

M1-1516, Mattel, Inc., 333 Continental Blvd., El Segundo, California 90245-5012. If Mattel grants any waiver from a provision

of the Code of Conduct for any executive officer or director, or makes any substantive amendment to the SEC-mandated "code

of ethics" that applies to the Chief Executive Officer, Chief Financial Officer, or Controller, Mattel will make disclosures to the

extent required by applicable laws, regulations, and stock exchange listing standards on its corporate website or in a Current

Report on Form 8-K. Mattel has posted the Board of Directors' corporate governance guidelines and the charters of its Audit,

Compensation, and Governance and Social Responsibility Committees of the Board of Directors on its corporate website at

http://corporate.mattel.com. Copies of the corporate governance guidelines and committee charters may be obtained free of

charge by mailing a request to the address noted above.

Mattel has filed the Sarbanes-Oxley Act Section 302 certifications of its Chief Executive Officer and Chief Financial

Officer as Exhibit 31.0 and Exhibit 31.1 hereto, respectively.

Item 11. Executive Compensation.

The information required under this Item is incorporated herein by reference to the section entitled "Compensation at

Mattel" in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required under this Item is incorporated herein by reference to the section entitled "Stock Ownership and

Reporting" in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required under this Item is incorporated herein by reference to the sections entitled "Corporate

Governance at Mattel—Board Accountability and Effectiveness—Certain Transactions with Related Parties" and "Corporate

Governance at Mattel—Board Structure—Board Independence Determinations" in the Proxy Statement.

Item 14. Principal Accountant Fees and Services.

The information required under this Item is incorporated herein by reference to the section entitled "Audit Matters—Fees

Incurred for Services by PricewaterhouseCoopers LLP" in the Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) The following documents are filed as part of this report:

1. Financial Statements

The following financial statements are filed as part of this report under Part II, Item 8 "Financial Statements and

Supplementary Data."

Page

Management's Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022, and 2021

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023, 2022, and

2021

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2023, 2022, and 2021

Notes to Consolidated Financial Statements

2. Financial Statement Schedule for the Years Ended December 31, 2023, 2022, and 2021

Schedule II—Valuation and Qualifying Accounts and Allowances

All other financial statement schedules are omitted because they are not applicable or the required information is shown

in the consolidated financial statements or notes thereto. See Part II, Item 8 "Financial Statements and Supplementary Data."

3. Exhibits (Listed by numbers corresponding to Item 601 of Regulation S-K)

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 15, 2023

4.0 Description of Registrant's Securities

Registered Pursuant to Section 12 of the

Securities Exchange Act of 1934

10-K 001-05647 4.0 February 25, 2020

4.1 Specimen Stock Certificate with respect to

Mattel, Inc.'s Common Stock

10-Q 001-05647 4.0 August 3, 2007

4.2 Indenture, dated as of September 23, 2010,

between Mattel, Inc. and Union Bank, N.A.

relating to Senior Debt Securities

S-3ASR 333-169539 4.1 September 23, 2010

4.3 Indenture, dated as of November 20, 2019, by

and among the Issuer, the guarantors named

therein, and MUFG Union Bank, N.A.,

National Association, as Trustee

8-K 001-05647 4.1 November 20, 2019

4.4 Indenture, dated as of March 19, 2021, by and

among the Issuer, the guarantors named

therein, and U.S. Bank National Association,

as Trustee, related to Mattel, Inc.'s 3.375%

Senior Notes due 2026

8-K 001-05647 4.1 March 19, 2021

4.5 Indenture, dated as of March 19, 2021, by and

among the Issuer, the guarantors named

therein, and U.S. Bank National Association,

as Trustee, related to Mattel, Inc.'s 3.750%

Senior Notes due 2029

8-K 001-05647 4.2 March 19, 2021

Incorporated by Reference

Exhibit No. Exhibit Description Form File No. Exhibit(s) Filing Date

4.6 Form of 6.200% Notes due 2040 8-K 001-05647 4.2 September 28, 2010

4.7 Form of 5.450% Notes due 2041 8-K 001-05647 4.2 November 8, 2011

4.8 Form of 5.875% Senior Notes due 2027 8-K 001-05647 4.2 November 20, 2019

4.9 Form of 3.375% Senior Notes due 2026 8-K 001-05647 4.3 March 19, 2021

4.10 Form of 3.750% Senior Notes due 2029 8-K 001-05647 4.4 March 19, 2021

10.0 Revolving Credit Agreement, dated as of

September 15, 2022, among Mattel, Inc., as the

borrower, Bank of America, N.A., as

Administrative Agent, BofA Securities, Inc.,

Citibank, N.A., and Wells Fargo Securities,

LLC, as Joint Lead Arrangers and

Bookrunners, Citibank, N.A. and Wells Fargo

Securities, LLC, as Co-Syndication Agents,

and the other financial institutions party

thereto.

8-K 001-05647 10.1 September 19, 2022

10.1+ Form of Indemnification Agreement 8-K 001-05647 10.1 December 21, 2020

10.2+ Letter Agreement between Mattel, Inc. and

Richard Dickson, dated May 16, 2014,

regarding an offer of employment for the

position of Chief Brands Officer

10-Q 001-05647 10.2 July 29, 2014

10.3+ Letter Agreement between Mattel, Inc. and

Amanda Thompson, dated August 23, 2017,

regarding an offer of employment for the

position of EVP and Chief People Officer

10-K 001-05647 10.20 February 22, 2019

10.4+ Letter Agreement between Mattel, Inc. and

Ynon Kreiz, dated April 19, 2018, regarding

an offer of employment for the position of

Chief Executive Officer

8-K 001-05647 10.1 April 20, 2018

10.5+

Letter Agreement between Mattel, Inc. and

Ynon Kreiz, dated June 12, 2018, regarding

change in allocation of Mr. Kreiz's long-term

incentive grant value

10-Q 001-05647 10.8 July 25, 2018

10.6+ Letter Agreement between Mattel, Inc. and

Yoon Hugh, dated April 15, 2019, regarding

an offer of employment for the position of

Senior Vice President and Corporate

Controller

8-K 001-05647 10.1 April 19, 2019

10.7+ Letter Agreement between Mattel, Inc. and

Roberto Isaias, dated February 1, 2020,

regarding relocation from Mexico to Mattel's

California headquarters

10-K 001-05647 10.22 February 25, 2021

10.8+ Letter Agreement between Mattel, Inc. and

Anthony DiSilvestro, dated June 19, 2020,

regarding an offer of employment for the

position of Executive Advisor and Chief

Financial Officer

8-K 001-05647 10.1 June 23, 2020

10.9+ Letter Agreement between Mattel, Inc. and

Jonathan Anschell, dated December 5, 2020,

regarding an offer of employment for the

position of EVP, Chief Legal Officer, and

Secretary

10-K 001-05647 10.26 February 25, 2021

10.10+ Mattel Incentive Plan DEF 14A 001-05647 Appendix A April 5, 2017

Incorporated by Reference

Exhibit No. Exhibit Description Form File No. Exhibit(s) Filing Date

10.11+ Mattel, Inc. Deferred Compensation and PIP

Excess Plan

S-8 333-89458 4.1 May 31, 2002

10.12+ Mattel, Inc. Deferred Compensation and PIP

Excess Plan (Post-2004)(the "DCPEP")

10-Q 001-05647 10.1 October 24, 2008

10.13+ Amendment No. 1 to the DCPEP 10-Q 001-05647 10.2 October 24, 2013

10.14+ Amendment No. 2 to the DCPEP 10-Q 001-05647 10.3 October 24, 2013

10.15+ Amendment No. 3 to the DCPEP 10-K 001-05647 10.19 February 25, 2016

10.16+ Amendment No. 4 to the DCPEP 10-Q 001-05647 10.5 August 10, 2020

10.17+ Amendment No. 5 to the DCPEP 10-K 001-05647 10.34 February 25, 2021

10.18+ Mattel, Inc. Deferred Compensation Plan for

Non-Employee Directors (as amended and

restated effective January 1, 2009)

10-K 001-05647 10.35 February 26, 2009

10.19+ Amendment No. 1 to the Mattel, Inc. Deferred

Compensation Plan for Non-Employee

Directors

10-Q 001-05647 10.4 October 24, 2013

10.20+ Mattel, Inc. Amended and Restated Executive

Severance Plan B (the "Executive Severance

Plan B")

8-K 001-05647 10.1 March 24, 2023

10.21+ Form of Participation Letter Agreement under

the Mattel, Inc. Amended and Restated

Executive Severance Plan B applicable to

Ynon Kreiz, Richard Dickson, and Anthony

DiSilvestro

8-K 001-05647 10.2 March 24, 2023

10.22+ Form of Participation Letter Agreement under

the Mattel, Inc. Amended and Restated

Executive Severance Plan B

8-K 001-05647 10.3 March 24, 2023

10.23+ Mattel, Inc. Amended and Restated 2010

Equity and Long-Term Compensation Plan

(the "2010 Plan")

10-Q 001-05647 10.4 May 2, 2023

10.24+ Form of Notice of Grant and Grant Agreement

for grants of NQSOs to employees under the

2010 Plan

10-Q 001-05647 10.1 October 27, 2010

10.25+

Form of Grant Agreement for grants of

NQSOs to participants in the Executive

Severance Plan B under the 2010 Plan

10-K 001-05647 10.50 February 25, 2021

10.26+ Form of Grant Agreement for grants of RSUs

to participants in the Executive Severance Plan

B under the 2010 Plan

10-K 001-05647 10.51 February 25, 2021

10.27+ Form of Grant Agreement for grants of RSUs

to employees under the 2010 Plan

10-K 001-05647 10.52 February 25, 2021

10.28+ Form of Grant Agreement for grants of

NQSOs to participants in the Executive

Severance Plan B under the 2010 Plan

10-K 001-05647 10.53 February 25, 2021

10.29+ Form of Grant Agreement for July 31, 2015

grants of NQSOs to employees under the 2010

Plan

10-Q 001-05647 10.9 October 27, 2015

Incorporated by Reference

Exhibit No. Exhibit Description Form File No. Exhibit(s) Filing Date

10.30+ Form of Grant Agreement for August 1, 2017

grants of NQSOs to employees under the 2010

Plan

10-K 001-05647 10.55 February 25, 2021

10.31+ Form of Grant Agreement for July 31, 2020

grants of NQSOs to employees under the 2010

Plan

10-K 001-05647 10.56 February 25, 2021

10.32+ Form of Grant Agreement for grants of RSUs

to Non-Employee Directors under the 2010

Plan

10-Q 001-05647 10.1 July 28, 2016

10.33+

Form of Grant Agreement for grants of Long-

Term Incentive Program performance-based

restricted stock units ("Performance Units") to

senior executives under the 2010 Plan

10-K 001-05647 10.59 February 25, 2021

10.34+

Form of Grant Agreement for grants of

Performance Units to participants in the

Mattel, Inc. Executive Severance Plan B under

the 2010 Plan

10-K 001-05647 10.60 February 25, 2021

21.0* Subsidiaries of the Registrant as of

December 31, 2023

23.0* Consent of Independent Registered Public

Accounting Firm

24.0* Power of Attorney (see signature page of this

Annual Report on Form 10-K)

31.0* Certification of Principal Executive Officer

dated March 15, 2024, pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

31.1* Certification of Principal Financial Officer

dated March 15, 2024, pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

32.0** Certification of Principal Executive Officer

and Principal Financial Officer dated

March 15, 2024, pursuant to 18 U.S.C. Section

1350, as adopted pursuant to Section 906 of

the Sarbanes-Oxley Act of 2002

97.0* Mattel, Inc. Rule 10D-1 Compensation

Recovery Policy

101.INS* Inline XBRL Instance Document

101.SCH* Inline XBRL Taxonomy Extension Schema

Document

101.CAL* Inline XBRL Taxonomy Extension Calculation

Linkbase Document

101.DEF* Inline XBRL Taxonomy Extension Definition

Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label

Linkbase Document

101.PRE* Inline XBRL Taxonomy Extension

Presentation Linkbase Document

104* The cover page from Mattel's Annual Report

on Form 10-K for the year ended

December 31, 2023, formatted in Inline XBRL

(embedded within the Inline XBRL Document)

Incorporated by Reference

Exhibit No. Exhibit Description Form File No. Exhibit(s) Filing Date

100

+ 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 Exchange Act.

Mattel has not filed certain long-term debt instruments under which the principal amount of securities authorized to be

issued does not exceed 10% of its total assets. Copies of such agreements will be provided to the SEC upon request.

(b) Exhibits Required by Item 601 of Regulation S-K

See Item (a)(3) above.

See Item (a)(2) above.

Copies of this Annual Report on Form 10-K (including Exhibit 24.0) and Exhibits 21.0, 23.0, 31.0, 31.1, and 32.0 are

available to stockholders of Mattel without charge. Written requests should be sent to: Secretary, Mail Stop M1-1516, Mattel,

Inc., 333 Continental Blvd., El Segundo, California 90245-5012.

101

Item 16. Form 10-K Summary.

None.

102

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MATTEL, INC.

Registrant

By:

/s/ ANTHONY DISILVESTRO

Anthony DiSilvestro

Chief Financial Officer

Date: March 15, 2024

103

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that we, the undersigned directors and officers of Mattel, Inc., do

hereby severally constitute and appoint Jonathan Anschell, Tiffani Magri, and Ynon Kreiz, and each of them, our true and

lawful attorneys-in-fact and agents, each with full powers of substitution, to do any and all acts and things in our name and

behalf in our capacities as directors and officers and to execute any and all instruments for us and in our names in the capacities

indicated below, which said attorneys-in-fact and agents, or any of them, may deem necessary or advisable to enable Mattel,

Inc. to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the

Securities and Exchange Commission, in connection with this Annual Report on Form 10-K, including specifically, but without

limitation, power and authority to sign for us or any of us, in our names in the capacities indicated below, any and all

amendments hereto; and we do each hereby ratify and confirm all that said attorneys-in-fact and agents or their substitutes, or

any one of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/S/ YNON KREIZ

Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

March 15, 2024

Ynon Kreiz

/S/ ANTHONY DISILVESTRO

Chief Financial Officer (Principal Financial Officer)

March 15, 2024

Anthony DiSilvestro

/S/ YOON HUGH

Senior Vice President and Corporate Controller

(Principal Accounting Officer)

March 15, 2024

Yoon Hugh

/S/ ADRIANA CISNEROS

Director March 15, 2024

Adriana Cisneros

/S/ MICHAEL DOLAN

Director

March 15, 2024

Michael Dolan

/S/ DIANA FERGUSON

Director

March 15, 2024

Diana Ferguson

/S/ JULIUS GENACHOWSKI

Director March 15, 2024

Julius Genachowski

/S/ PROF. NOREENA HERTZ

Director March 15, 2024

Prof. Noreena Hertz

/S/ SOREN LAURSEN

Director March 15, 2024

Soren Laursen

/S/ ROGER LYNCH

Director March 15, 2024

Roger Lynch

/S/ DOMINIC NG

Director March 15, 2024

Dominic Ng

/S/ DR. JUDY OLIAN

Director March 15, 2024

Dr. Judy Olian

/S/ DAWN OSTROFF

Director March 15, 2024

Dawn Ostroff

104

SCHEDULE II

MATTEL, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES

Balance at

Beginning of Year

(Reductions)

Additions

Charged to

Operations

Net Deductions

and Other

Balance at End of

Year

(In thousands)

Allowance for Credit Losses:

Year Ended December 31, 2023

$ 27,603 $ (1,502) $ (17,350) (a) $ 8,751

Year Ended December 31, 2022

10,668 18,279 (1,344) (a) 27,603

Year Ended December 31, 2021

15,930 1,202 (6,464) (a) 10,668

Income Tax Valuation Allowances:

Year Ended December 31, 2023

$ 89,841 $ 215,915 (b) $ (220,404) (c) $ 85,352

Year Ended December 31, 2022

99,233 3,412 (b) (12,804) (c) 89,841

Year Ended December 31, 2021

621,668 198,794 (b) (721,229) (c) 99,233

(a) Includes write-offs, recoveries of previous write-offs, and currency translation adjustments.

(b) For the year ended December 31, 2023, the additions primarily represent the establishment of a valuation allowance of

$212.4 million on certain foreign deferred tax assets during the third quarter of 2023 resulting from the intragroup transfer

of certain IP rights and increases related to losses and credits without benefit. For the years ended December 31, 2022 and

2021, the additions represent increases related to losses and credits without benefit. See Item 8 "Financial Statements and

Supplementary Data – Note 16 to the Consolidated Financial Statements – Income Taxes" for additional details.

(c) For the year ended December 31, 2023, the deductions primarily represent the subsequent write-off of the $212.4 million of

foreign deferred tax assets that were reserved for in the third quarter of 2023 and projected utilization of loss carryforwards.

For the year ended December 31, 2022, the deductions primarily included projected utilization of loss carryforwards and

credits. For the year ended December 31, 2021, the deductions primarily related to the reversal of the valuation allowances

on certain U.S. federal, state, and foreign deferred tax assets. See Item 8 "Financial Statements and Supplementary Data –

Note 16 to the Consolidated Financial Statements – Income Taxes" for additional details.

105

EXHIBIT 31.0

CERTIFICATION

I, Ynon Kreiz, certify that:

1. I have reviewed this report on Form 10-K of Mattel, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls

and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be

designed under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being

prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting

to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report

financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

the registrant’s internal control over financial reporting.

March 15, 2024

By:

/s/ YNON KREIZ

Ynon Kreiz

Chairman and Chief Executive Officer

(Principal Executive Officer)

EXHIBIT 31.1

CERTIFICATION

I, Anthony DiSilvestro, certify that:

1. I have reviewed this report on Form 10-K of Mattel, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls

and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be

designed under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being

prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting

to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report

financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

the registrant’s internal control over financial reporting.

March 15, 2024

By:

/s/ ANTHONY DISILVESTRO

Anthony DiSilvestro

Chief Financial Officer

(Principal Financial Officer)

Mattel, Inc.

Directors and Ofﬁcers

(1) Member, Stock Grant Committee

(2) Member, Governance and Social Responsibility Committee

Prof. Noreena Hertz, Chair

(3) Member, Audit Committee

Diana Ferguson, Chair

(4) Member, Compensation Committee

Dr. Judy Olian, Chair

(5) Member, Executive Committee

Michael Dolan, Chair

(6) Member, Finance Committee

Dominic Ng, Chair

BOARD OF DIRECTORS

Ynon Kreiz

(1)

Chairman of the Board and

Chief Executive Ofﬁcer,

Mattel, Inc.

Adriana Cisneros

(2)

Chief Executive Ofﬁcer,

Cisneros Group of Companies

Michael Dolan

(2) (5)

Chairman of the Board and

Chief Executive Ofﬁcer,

Altos Planos, Ltd.

Diana Ferguson

(3) (5)

Principal,

Scarlett Investments, LLC

Julius Genachowski

(2) (3)

Senior Advisor,

The Carlyle Group

Prof. Noreena Hertz

(2)

Visiting Professor,

University College London

Soren Laursen

(3) (6)

Operating Partner,

Credo Partners AS

Roger Lynch

(4) (6)

Chief Executive Ofﬁcer,

Condé Nast

Dominic Ng

(3) (5) (6)

Chairman of the Board and

Chief Executive Ofﬁcer,

East West Bancorp, Inc. and

East West Bank

Dr. Judy Olian

(2) (4)

President,

Quinnipiac University

Dawn Ostroff

(4)

Former Chief Content & Advertising Business Ofﬁcer,

Spotify Technology S.A.

EXECUTIVE OFFICERS

Ynon Kreiz

Chairman of the Board and

Chief Executive Ofﬁcer

Anthony DiSilvestro

Chief Financial Ofﬁcer

Steve Totzke

President and

Chief Commercial Ofﬁcer

Jonathan Anschell

Executive Vice President,

Chief Legal Ofﬁcer, and Secretary

Roberto Isaias

Executive Vice President and

Chief Supply Chain Ofﬁcer

CORPORATE OFFICE

333 Continental Boulevard

El Segundo, CA 90245-5012

310-252-2000

For more information, please visit Mattel’s corporate

website: http://corporate.mattel.com

TRANSFER AGENT AND REGISTRAR

Mattel, Inc. Common Stock

Computershare Trust Company, N.A.

STOCKHOLDER ADMINISTRATION

Inquiries relating to stockholder accounting records, stock

transfer and dividends (including dividend reinvestment) for

Mattel, Inc. Common Stock should be directed to:

Computershare Trust Company, N.A.

P.O. Box 505000

Louisville, KY 40233

888-909-9922

Website: www.computershare.com/investor

STOCK EXCHANGE LISTING

Mattel, Inc. Common Stock

The NASDAQ Global Select Market

Ticker Symbol: MAT

MEDIA RELATIONS

Financial media should contact:

Catherine Frymark, Executive Vice President,

Corporate Communications at

310-252-4247

Printed in the USA on paper containing recycled ﬁber.

INVESTOR RELATIONS

Institutional investors, analysts, brokers and other

members of the professional ﬁnancial community should

contact:

David Zbojniewicz, Vice President, Head of

Investor Relations at 310-252-2703

COMMON STOCKHOLDERS

As of April 5, 2024, there were approximately 14,484

holders of record of Mattel, Inc. Common Stock.

ANNUAL MEETING

The Annual Meeting of Stockholders will be held

May 29, 2024, 1:00 p.m. (Paciﬁc)

Please visit

www.virtualshareholdermeeting.com/MAT2024

at least 10 minutes prior to the start time.

FORM 10-K

Mattel’s Annual Report to the Securities and Exchange

Commission on Form 10-K for the year ended December

31, 2023 is available on Mattel’s corporate website:

http://corporate.mattel.com or by writing to:

Secretary

Mail Stop TWR 15-1

Mattel, Inc.

333 Continental Boulevard

El Segundo, CA 90245-5012

PRINTER: PLACE

FSC LOGO HERE

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