Mattel 2015 Annual Report Download - page 39

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Commitments
In the normal course of business, Mattel enters into debt agreements and contractual arrangements to obtain and protect
Mattel’s right to create and market certain products and for future purchases of goods and services to ensure availability and
timely delivery. These arrangements include commitments for future inventory and service purchases and royalty payments
pursuant to licensing agreements. Certain of these commitments routinely contain provisions for guarantees or minimum
expenditures during the terms of the contracts. 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 2016 2017 2018 2019 2020 Thereafter
(In millions)
Long-term debt $ 2,100.0 $ 300.0 $ — $ 250.0 $ 500.0 $ 250.0 $ 800.0
Interest on long-term debt 969.4 72.9 66.6 63.2 54.7 47.9 664.1
Capital leases* 1.2 0.3 0.3 0.3 0.3 — —
Operating leases 441.7 105.6 78.7 58.4 45.5 41.0 112.5
Minimum guarantees under
licensing and similar agreements 411.1 106.0 84.5 101.9 79.3 35.0 4.4
Defined benefit and
postretirement benefit plans 399.1 40.9 42.6 41.2 38.9 39.4 196.1
Purchases of inventory, services,
and other 438.5 418.0 11.6 5.7 2.1 1.1 —
Total $ 4,761.0 $ 1,043.7 $ 284.3 $ 520.7 $ 720.8 $ 414.4 $ 1,777.1
*Represents total obligation, including imputed interest of $0.2 million.
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 about 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.
Subsequent Events
In January 2016, Mattel acquired substantially all of the assets of Fuhu, Inc., a developer of high technology products for
children and families and best known for its nabi® brand of products. In addition, Mattel completed its acquisition of
Sproutling, Inc., a maker of smart technology products for parents and families, in January 2016. These acquisitions are
expected to strengthen Mattel's digital and smart technology capabilities and create opportunities to bring new technology-
enabled products to market. These acquisitions are immaterial, individually and in the aggregate, to Mattel.
On February 1, 2016, Mattel announced that its Board of Directors declared a first quarter dividend of $0.38 per common
share. The dividend is payable on March 4, 2016 to stockholders of record on February 17, 2016.
Litigation
The content of Item 8 “Financial Statements and Supplementary Data—Note 11 to the Consolidated Financial Statements
—Commitments and Contingencies—Litigation” is hereby incorporated by reference in this Item 7.
Effects of Inflation
Inflation rates in the US and in major foreign countries where Mattel does business have not had a significant impact on
its results of operations or financial position during 2015, 2014, or 2013. Mattel receives some protection from the impact of
inflation from high turnover of inventories and its ability, under certain circumstances and at certain times, to pass on higher
prices to its customers.
Employee Savings Plan
Mattel sponsors a 401(k) savings plan, the Mattel, Inc. Personal Investment Plan (the “Plan”), for its domestic employees.
Contributions to the Plan include voluntary contributions by eligible employees and employer automatic and matching