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, ~~2024~~2025


☐			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. ý

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 $56,~~525~~314,~~716~~108,~~222~~780 based upon the closing market price as of the close of business June 30, ~~2024~~2025, 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 February 611, ~~2025~~2026: ~~330~~302.2 million shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Mattel, Inc. ~~2025~~2026 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	10
Item 1B.	Unresolved Staff Comments	25
Item 1C.	Cybersecurity	25
Item 2.	Properties	26
Item 3.	Legal Proceedings	2627
Item 4.	Mine Safety Disclosures	2627
	PART II
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2728
Item 6.	Reserved	2930
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2930
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 8.	Financial Statements and Supplementary Data	47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	9496
Item 9A.	Controls and Procedures	9496
Item 9B.	Other Information	9596
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	9596
	PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	9697
Item 11.	Executive Compensation	9697
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	9697
Item 13.	Certain Relationships and Related Transactions, and Director Independence	9697
Item 14.	Principal Accountant Fees and Services	9697
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	9798
Item 16.	Form 10-K Summary	~~102~~103
	Signature	~~103~~104

~~(Cautionary Note Regarding~~ Forward-Looking Statements)

~~Mattel~~This ~~cautions investors that this~~ Annual Report on Form 10-K ~~includes~~contains a number of forward-looking statements, ~~which~~within ~~are~~the ~~statements~~meaning ~~that~~of ~~relate to~~ the ~~future~~Private ~~and~~Securities ~~are,~~Litigation byReform ~~their~~Act ~~nature,~~of ~~uncertain~~1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts or by their nature are uncertain, and include statements regarding Mattel's plans for future periods and other future events. 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 or combination of factors, many of which are beyond Mattel's control, may cause actual ~~future~~ results or outcomes, or the timing of those results or outcomes, to differ materially from those contained in any 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 in a timely and cost-effective manner; (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,; (xiv) the ability to secure, maintain, and renew popular licenses from licensors of entertainment properties; (xv) the ability to successfully develop, publish and commercialize digital games; (xvi) the ability to attract and retain talented employees and adapt to evolving workplace models; (~~xiv~~xvii) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvxviii) tariffs, trade restrictions, or trade barriers, which depending on the effective date and duration of such measures, changes in the amount, scope, and nature of such measures in the future, any countermeasures that the target countries may take, and any mitigating actions that may become available, could increase Mattel's product costs and other costs of doing business, and other 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, trade policies, product safety, or sustainability, which may also increase Mattel's product costs and other costs of doing business, and in each case reduce Mattel's earnings and liquidity; (~~xvi~~xix) business disruptions or other unforeseen impacts due to economic instability, political instability, civil unrest, armed hostilities, ~~(including the impact of the Russia-Ukraine war and geopolitical developments in the Middle East) or~~ terrorist activities, natural and man-made disasters, pandemics or other public health crises, or other catastrophic events; (~~xvii~~xx) failure to realize the planned benefits from any investments or acquisitions made by Mattel; (~~xviii~~xxi) 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~~xxii) changes in financing markets or the inability of Mattel to obtain financing on attractive terms; (xxxxiii) the impact of litigation, arbitration, or regulatory decisions or settlement actions; (~~xxi~~xxiv) 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~~(xxv) ~~tokens~~the potential impact of the development, use, and ~~cryptocurrency~~integration of artificial intelligence and machine learning technologies in Mattel's business and products; (~~xxii~~xxvi) anthe ~~inability~~sufficiency of additional controls and procedures that Mattel has implemented 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~~xxvii) 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~~play and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel's ~~creates~~mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play., ~~Mattel~~and isits ~~focused~~purpose onis ~~the~~to ~~following~~empower ~~strategy~~generations to ~~grow~~explore ~~its~~the ~~intellectual~~wonder ~~property~~of ~~("IP")~~childhood ~~driven toy business~~ and ~~expand~~reach ~~its~~their ~~entertainment~~full ~~offering:~~ potential.

~~•Grow~~Mattel ~~toy~~is ~~business~~focused ~~profitably~~on ~~through~~the ~~scaling~~following ~~Mattel's~~new ~~portfolio,~~brand-centric ~~optimizing~~strategy ~~operations,~~to ~~evolving~~grow ~~demand~~its ~~creation,~~intellectual ~~and~~property ~~growing~~("IP") ~~franchise~~driven ~~brands;~~play and family entertainment business:

•~~Expand~~Grow ~~entertainment~~its ~~offering to capture the full value of Mattel's IP outside the~~ toy ~~aisle~~brands inwith ~~highly~~more ~~accretive~~breakthrough ~~business~~innovation ~~verticals,~~and byadult ~~growing~~fans ~~franchise brands~~ and ~~accelerating content~~collectors, ~~consumer~~as ~~products,~~well ~~and~~as ~~digital~~evolved ~~and~~demand ~~live~~creation; ~~experiences.~~

•Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels;

•Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models;

•Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and

•Optimize operations and leverage artificial intelligence ("AI") across its systems and supply chain.

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, Disney Frozen, Monster High, ~~and~~ Polly Pocket, and KPop Demon Hunters. 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 ofin every girl, bysparking ~~showing~~imaginations ~~them~~and ~~that~~shaping ~~they~~futures ~~can~~through ~~be anything~~play. Monster High, a character-driven franchise, engages fans of all ages, encouraging them to be their authentic selves and celebrate what makes them unique. 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 characters from past and present.

~~Infant, Toddler, and Preschool~~Vehicles—including brands such as ~~Fisher-Price~~Hot Wheels (including ~~Little~~Hot ~~People~~Wheels Monster Trucks and ~~Fisher-Price~~Hot ~~Wood~~Wheels RC), ~~Imaginext~~Matchbox, and ~~Thomas~~Cars &(Disney ~~Friends~~Pixar). AsHot aWheels ~~leader~~has incontinued ~~play~~to ~~and~~push ~~child~~the ~~development,~~limits ~~Fisher-Price~~of isperformance ~~dedicated~~and todesign ~~giving~~since ~~families~~1968, ~~the~~and ~~best~~ignites ~~possible~~and ~~start~~nurtures ~~to life by making~~ the ~~most~~challenger ~~fun,~~spirit ~~enriching~~in ~~products for infants~~kids, ~~toddlers~~adults, and ~~preschoolers~~collectors. ~~Thomas~~From ~~& Friends is an award~~die-~~winning~~cast ~~preschool~~vehicles ~~train brand franchise that lays the tracks~~ to ~~inspire~~tracks, ~~entertain~~playsets, and ~~develop~~accessories, ~~young~~the ~~train~~Mattel ~~fans~~Vehicles ~~through~~portfolio ~~toys,~~has ~~content,~~broad ~~live~~appeal ~~events,~~that engages and ~~other~~excites ~~consumer~~fans ~~products~~of all ages.

InInfant, ~~the~~Toddler, ~~first~~and ~~quarter~~Preschool—including ofbrands ~~2024~~such as Fisher-Price (including Little People) and Thomas & Friends, ~~Mattel~~is ~~further~~organized ~~divided~~into ~~its~~three ~~Infant~~subcategories: Fisher-Price, ~~Toddler~~Preschool Entertainment, and ~~Preschool~~Baby ~~category~~Gear ~~into~~and ~~three~~Power ~~subcategories~~Wheels. The first subcategory is Fisher-Price, the power brand, which includes ~~the~~ core Infant, ~~Little People,~~ and ~~Newborn~~Toddler product lines,. asAs ~~well~~a asleader ~~the~~in ~~recently~~play ~~launched~~and child development, Fisher-Price ~~Wood~~is ~~product~~dedicated ~~line~~to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and ~~Barney~~partner entertainment brands. Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, ~~Mattel's~~entertain, ~~character~~and ~~based~~develop ~~Imaginext~~young ~~line~~train fans through toys, content, live events, and ~~partner~~other ~~entertainment~~consumer ~~brands~~products. The third subcategory is Baby Gear and Power Wheels, in which Mattel ishas strategically out-~~licensing~~licensed or ~~exiting~~exited certain product lines.

~~Vehicles~~Action Figures, Building Sets, Games, and Other—including brands such as ~~Hot~~Masters ~~Wheels~~of ~~(including~~the ~~Hot~~Universe, ~~Wheels~~Mattel ~~Monster~~Brick ~~Trucks~~Shop, ~~and~~MEGA, ~~Hot~~UNO, ~~Wheels~~Jurassic RCWorld (NBCUniversal), ~~Matchbox~~Minecraft (Microsoft), ~~and~~WWE, ~~Cars~~Toy Story (Disney Pixar), and Star Wars (Disney's Lucasfilm). InMattel's ~~production~~Action ~~for~~Figures ~~over~~portfolio 50is ~~years,~~comprised ~~Hot~~of ~~Wheels~~product ~~continues~~lines toassociated ~~push~~with ~~the~~licensed ~~limits~~entertainment offranchises, ~~performance~~such as Jurassic World and ~~design~~WWE, ~~and~~as ~~ignites~~well ~~and~~as ~~nurtures~~product lines from Mattel-owned IP, such as Masters of the Universe. Introduced in 2025 as a new challenger ~~spirit~~brand ofin ~~kids,~~Building ~~adults~~Sets, ~~and~~Mattel ~~collectors.~~Brick ~~From~~Shop ~~die-cast~~is ~~vehicles~~designed to ~~tracks~~introduce differentiated building experiences through innovative features, ~~playsets~~materials, and ~~accessories~~techniques intended to expand traditional building play. Within Games, ~~the~~UNO ~~Mattel~~is ~~Vehicles~~the ~~portfolio~~classic ~~has~~matching ~~broad~~card ~~appeal~~game that ~~engages~~is easy to learn and ~~excites~~fast ~~fans~~fun for everyone, while the rest of ~~all~~the ~~ages~~portfolio includes beloved heritage games such as Pictionary, Skip-Bo, Phase 10, and Blokus. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises such as Minecraft, as well as Mattel-owned IP.

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

In the first quarter of 2024, Mattel implemented an organizational change integrating the American Girl business into Mattel's North America commercial organization, which resulted in a change to Mattel's operating and reportable segments. Mattel's new reportable segments are: (i) North America and (ii) International. The prior period amounts have been reclassified to conform to the current period presentation. The North America and International segments sell products across Mattel's categories, although some products are developed and adapted for particular international markets, and American Girl products are sold only in North America.

Business Segments

Mattel's reportable segments are: (i) North America and (ii) International. The North America and International segments sell products across Mattel's categories, although some products are developed or 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~~innovate, creating purpose-driven marketing campaigns, and engaging toys connected to a strong system of play. Barbie has a broad range of 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 ~~2025~~2026, Barbie will continue to inspire multi-generational fans bythrough ~~delivering~~ new products and captivating experiences ~~through the year-long Limitless Possibilities marketing campaign, which Mattel expects will further amplify the franchise's impact globally~~.

Mattel iscontinues ~~also excited~~ to build upon its strong licensed doll partnerships with Disney for the Disney Princess and Disney Frozen product lines and expects to launch its KPop Demon Hunters dolls line for Netflix in Spring of 2026. Monster High will look to build upon the success of its global ~~re-launch~~relaunch, including ~~planned~~ new ~~content~~product offerings, partnerships, and ~~product~~marketing ~~offerings~~campaigns.

American Girl is a direct marketer, retailer, and children's book publisher dedicated to its mission to help girls grow up with courage, confidence, and strength of character. In ~~2025~~2026, American Girl looks to ~~build~~continue on its momentum from ~~2024~~2025 with quality product drops, multiplatform content launches, immersive omnichannel experiences, and ~~new~~ promotional campaigns geared towards kids, shoppers, and adult fans.

Infant, Toddler, and Preschool

In 2025, Fisher-Price will continue its focus on engaging consumers as a trusted partner for families with infants, toddlers and preschoolers, and remain dedicated to giving families the best possible start to life. Consumer-centric innovation will continue to drive new product offerings across the portfolio. Fisher-Price Wood will continue to expand globally, leveraging popular themes and trend-based aesthetics, while Little People will look to build on its strong momentum with the expansion of the Little People Core line and Little People Collector line. Thomas & Friends will be celebrating its 80th anniversary with numerous activations throughout the year and also launch exciting new products with classic characters and train play.

Vehicles

In ~~2025~~2026, industry leader Hot Wheels expects 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 the animated children's series on Netflix, Hot Wheels Let's Race, and the ~~new~~expansion ~~exciting~~of the partnership with Formula 1, bringing fans of the sport a full range of Hot Wheels products. 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, including new ~~sustainable~~ die-cast ~~products~~offerings and toys tied to ~~the~~Apple ~~theatrical~~Original ~~release~~Films ofMatchbox ~~NBCUniversal's~~The ~~Jurassic~~Movie ~~World:~~premiering ~~Rebirth~~in Fall 2026.

Mattel will continue to partner with Disney Pixar for Cars to drive innovation and celebrate the franchise's 20th anniversary in 2026, including fresh new product offerings to support key promotional events ~~in 2025~~.

Infant, Toddler, and Preschool

In 2026, Fisher-Price will continue to engage consumers as a trusted partner for families with infants, toddlers, and preschoolers, and remain dedicated to giving families the best possible start to life. Consumer-centric innovation is expected to drive differentiation through new product offerings across the portfolio. Little People will look to continue leveraging its distinctive form factor and style to unlock multi-category growth, including the launch of a new partnership with Nintendo. In Fall 2026, Thomas & Friends plans for a full-franchise relaunch supported by a new brand foundation, refreshed character styling, expanded storytelling across core content platforms, and the introduction of a new toy line.

Action Figures, Building Sets, Games, and Other

Mattel Action Figures will continue to collaborate with key licensor partners, such as Disney Pixar, Microsoft, NBCUniversal, Warner Bros., and WWE to bring innovative products to the global marketplace. In 2026, the Action Figures portfolio will be supported by theatrical releases such as Disney Pixar's Toy Story 5 and Mattel's ~~2025~~own ~~Action~~worldwide ~~Figures~~theatrical release of Masters of the Universe with Amazon MGM Studios scheduled for Summer 2026, which are expected to drive new and refreshed product lines. In addition, Mattel will ~~include~~continue ~~toys~~product ~~tied~~development, toinnovation, ~~theatrical~~and ~~releases~~line ~~for~~extensions related to NBCUniversal's Jurassic World: ~~Rebirth~~ and Microsoft's Minecraft, ~~(Minecraft~~and ~~the~~launch ~~Movie),~~a asnew ~~well~~product asline ~~new~~for ~~releases~~Warner ~~within~~Bros. ~~Masters~~DC ofUniverse in the ~~Universe~~second ~~and~~half ~~WWE~~of 2026.

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, 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's ~~Games~~Masters ~~consists~~ of ~~some of~~ the ~~most~~Universe ~~beloved~~theatrical ~~Games~~release IPwill inbe ~~the~~supported ~~world~~by ~~including~~a ~~UNO,~~new ~~Pictionary,~~product ~~Skip-Bo,~~line ~~Phase-10,~~intended ~~Blokus,~~to reinvigorate and ~~many~~modernize ~~others~~the franchise. Mattel ~~will~~anticipates ~~focus~~expanding onthe ~~its~~franchise ~~expansion~~beyond ofits ~~Games~~historical ~~into~~collector ~~its~~base ~~direct-~~to~~-consumer~~ ~~business~~a broader, ~~collectability~~multi-audience model, ~~and~~including ~~innovation~~children. ~~Additionally~~Integrated marketing, ~~Mattel~~content, ~~expects~~and distribution initiatives are expected to ~~introduce~~support ~~new~~consumer ~~game~~awareness, ~~extensions~~engagement, and ~~partnerships~~expanded ~~that~~brand ~~celebrate~~reach, ~~pop~~including ~~culture~~in international markets.

Within Building Sets, Mattel plans to further develop and extend its Mattel Brick Shop portfolio with additional scales and new product introductions utilizing both owned and licensed IP. In addition, 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, Phase-10, Blokus, and many others. Mattel plans to expand its Games portfolio through product innovation, brand extensions, digital games, and enhanced global distribution. UNO is expected to remain an important focus of the portfolio with plans to further fuel fandom through elevated events such as the launch of the UNO Championship Series and UNO Social Club. Mattel also plans to refresh heritage Games brands, continue investment in adult-focused party and strategy games, and explore opportunities to expand Games across direct-to-consumer and digital platforms.

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 products 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 7% of worldwide consolidated net sales during ~~2024~~2025.

Competition and Industry Background

Mattel is a worldwide leader in the design, manufacture, marketing, and sale of toys, games, and other products related to play, entertainment, learning, and development. Competition in the toy industry is based primarily on product quality, play value, ~~brands~~brand recognition, innovation, and price. Mattel offers a wide range of products ~~for~~across ~~children,~~multiple ~~fans~~age ofgroups ~~all ages,~~ and ~~families~~consumer segments that include, among others, toys for infants, toddlers, ~~and~~ preschoolers, ~~toys~~and ~~for~~ school-aged children, as well as products targeted towards adult fans and collectors. These offerings include dolls, vehicles, action figures, building sets, games, (including digital), puzzles, plush, educational ~~toys,~~and technology-~~related~~enabled products, media-driven products, and fashion-related items. The North America segment competes with several large toy companies, including Hasbro, ~~Jazwares,~~ LEGO, ~~the~~The Pokémon Company, and Spin Master, as well as many smaller toy companies, and ~~manufacturers of~~ digital games, interactive entertainment, and consumer ~~electronics~~electronic companies, which increasingly compete for children's, families', and adults' discretionary spending and time. The North America segment also includes American Girl products ~~which~~that compete with companies that manufacture dolls and accessories, and with children's book publishers, ~~and~~specialty retailers, and experiential and lifestyle brands. The International segment competes with global toy companies, including Hasbro, ~~Jazwares,~~ LEGO, ~~the~~The Pokémon Company, Spin Master, other national and regional toy companies, and ~~manufacturers of~~ digital games, interactive entertainment, and consumer ~~electronics~~electronic companies. ~~Foreign~~In ~~regions~~certain ~~may~~foreign ~~include~~markets, competitors ~~that~~may ~~are~~be particularly strong in aspecific ~~particular~~product ~~toy~~categories, ~~line~~price tiers, or ~~geographical~~geographies, ~~area~~even ~~but~~if they do not compete with Mattel or other international toy companies ~~worldwide~~on a global basis.

There is increasing competition among the above companies due to trends towards shorter product life cycles ~~for individual toy products~~, ~~the phenomenon of~~ children outgrowing traditional toys at younger ages, ancontinued ~~increasing~~growth ~~use~~ of ~~more~~the ~~sophisticated~~adult ~~technology~~toy ~~in toys, including machine learning~~ and ~~artificial~~collectibles ~~intelligence ("AI")~~market, ~~and~~greater andemand ~~evolving path to purchase~~ for ~~consumers.~~continuous ~~In addition~~innovation, ~~Mattel~~and ~~competes~~increasing ~~with~~incorporation ~~companies~~of ~~that~~advanced ~~sell~~technologies, ~~non-toy~~including ~~products~~AI, ~~such~~into ~~as electronic consumer products~~toys, ~~digital~~ games, ~~as well as content~~ and ~~other~~digital ~~entertainment companies~~experiences. ~~Competition~~AI ~~continues~~is toincreasingly beused ~~heavily~~to ~~influenced~~enhance byproduct ~~the~~functionality, ~~fact that a small number of retailers account for a large portion of all toy sales~~personalization, ~~allocate~~content ~~the shelf space from which toys are viewed~~creation, and ~~have~~digital ~~direct~~play ~~contact~~experiences, ~~with~~further ~~parents~~raising ~~and~~consumer ~~children~~expectations ~~through in-store~~ and ~~online purchases~~competition. ~~Such~~AI ~~retailers~~is ~~can~~also ~~and~~influencing doconsumer ~~promote~~purchasing ~~their~~behavior, ~~own~~including ~~private-label~~product ~~toys~~discovery, ~~facilitate the sale of competitors' toys~~recommendations, ~~showcase~~pricing ~~toys online based on proprietary algorithms~~visibility, and ~~allocate~~purchase ~~shelf~~decisions ~~space~~across todigital ~~one~~and ~~type~~omnichannel ofplatforms. ~~toy~~In ~~over~~addition, ~~another.~~consumer ~~Online~~purchasing ~~distributors~~behavior ~~are~~continues ~~able~~ to ~~promote~~evolve, awith ~~wide~~greater ~~variety~~reliance ofon ~~toys~~digital ~~and~~discovery, ~~represent~~social amedia ~~wide~~platforms, ~~variety~~and ofomnichannel ~~toy manufacturers~~retail.

Mattel also competes with companies that sell non-toy products, as well as content and other entertainment companies. Competition is further influenced by the fact that a limited number of large retailers account for a significant portion of global toy sales. These retailers influence demand through control of shelf space, pricing, merchandising, and digital visibility, including the use of proprietary algorithms to determine online placement. Retailers can and do promote their own private-label, retailer-owned, and exclusive-branded toys, facilitate the sale of competitors' toys, allocate physical and digital shelf space to one type of toy over another, and showcase toys online based on proprietary algorithms. Online marketplaces also expand consumer access to a broad assortment of products from many manufacturers, furthering competition across categories.

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 the 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 the year. Additionally, seasonal shipping patterns generally result in significant increases in accounts receivable during the third and fourth quarters of the year. The elevated accounts receivable and inventory levels may result in seasonal working capital financing requirements.

Sales

Mattel's products are sold throughout the world. Products within the North America segment include products sold directly to retailers, including omnichannel retailers, discount and ~~free-standing~~freestanding 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. The North America segment also includes American Girl products and ~~its children's~~ publications, which are sold directly to consumers and select retailers in the United States and Canada. Mattel has retail space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American Girl stores, and in four other cities across the United States for its American Girl boutique stores. 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.~~ Additionally, Mattel sells certain of its products directly to consumers through its e-commerce platform and various third-party e-commerce channels.

During ~~2024~~2025, Mattel's three largest customers (Walmart at $1.1708 billion, Target at $0.6863 billion, and Amazon at $0.5152 billion) accounted for approximately 4442% of worldwide consolidated net sales. During ~~2023~~2024, Mattel's three largest customers (Walmart at $1.1317 billion, Target at $0.6768 billion, and Amazon at $0.6051 billion) accounted for approximately 44% 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, Wicked, and Fast and Furious), Warner Bros. (including DC Universe and Harry Potter), Microsoft (including Minecraft and Halo), WWE, ~~Pokémon~~Formula 1, Nintendo, and Paramount (relating to its Nickelodeon properties, including Teenage Mutant Ninja Turtles beginning in 2027).

Royalty expense for ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 was $~~244~~264.16 million, $~~249~~244.81 million, and $~~230~~249.8 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 owned or third-party plants located in China, Vietnam, Indonesia, Malaysia, Mexico, and Thailand. In conjunction with Mattel's cost savings programs, Mattel discontinued production at atwo ~~plant~~plants located in China, one in 2024 and ~~intends~~the toother ~~discontinue production at another plant located~~ in ~~China in~~ 2025. 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, including tariffs, trade restrictions, or trade barriers, 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 Promotion

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~~digital ~~commercials,~~and social media, ~~catalogs~~television commercials, and ~~internet~~catalogs, ~~advertisements~~among others. Promotions include in-store displays, merchandising materials, major events focusing on products, and tie-ins with various consumer products companies.

During ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, Mattel incurred advertising and promotion expenses of $~~507~~522.30 million (9.48% of net sales), $~~524~~507.83 million (9.64% of net sales), and $~~534~~524.38 million (9.86% 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 currency 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 promotion 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~~data protection-related regulations, including the EU's General Data Protection Regulation and related national regulations, the EU Artificial Intelligence Act, the EU Data Act, China's Personal Information Protection Law, the U.S. Children's Online Privacy Protection Act of 1998, and ~~the~~Executive EUOrder ~~General~~14117. ~~Data~~Privacy ~~Protection Regulation~~ and ~~related~~data ~~national regulations. Privacy~~protection-related laws also exist in ~~some~~many U.S. states, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and other state laws that are in effect, 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, ~~2024~~2025, Mattel had approximately 3431,000 employees (including temporary and seasonal employees) working in ~~over~~34 37 countries worldwide to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play. Approximately 2926,~~600~~000 employees (8685% of the total workforce) are located outside the United States, with a significant global manufacturing labor workforce of approximately 2522,~~100~~000 employees. The remaining workforce focuses on 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, equal employment opportunity, 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 2024 World's Best Employers;~~ named toone of Fast Company's ~~Most Innovative Companies of 2024 and~~ Best Workplaces for Innovators in ~~2024~~2025; recognized by Newsweek as one of the World's Most Trustworthy Companies of ~~2024~~2025; ~~honored~~ranked by ~~TIME~~Forbes as one of America's Best ~~Mid-Size~~Employer's ~~Companies~~for ofCompany ~~2024~~Culture; named to Computerworld's ~~2024~~2025 Best Places to Work in IT; and certified as a Great Place to Work in multiple countries.

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.

Employee Development and Well-Being

Mattel believes ~~continuously~~continually developing skills and capabilities for the future is essential to operating as an IP-driven, high-performing ~~toy~~play and family entertainment ~~company~~business. Additionally, offering the opportunity for employees to ~~continuously~~continually learn and grow their careers at Mattel is a key driver of its employee engagement strategy. Around the globe, employees at all levels participate in a variety of online classes and instructor-led training, including 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 paid time off, health and welfare insurance options, retirement plans, and basic and supplemental employee life insurance for eligible individuals.

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 or outcomes, or the timing of those results or outcomes, 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 or outcomes. 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. The risk factors below ~~describe~~reflect Mattel's beliefs and opinions as to factors, events, or contingencies that could have an adverse effect on Mattel and are not intended as an exhaustive discussion of whether any such factors, events, or contingencies have or have not occurred. Mattel expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise, except as required by law.

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 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 wide range of products ~~for~~across ~~children,~~multiple ~~fans~~age ofgroups ~~all ages,~~ and ~~families~~consumer segments that ~~includes~~include, among others, toys for infants, toddlers, ~~and~~ preschoolers, ~~toys~~and ~~for~~ school-aged children, as well as products targeted towards adult fans and collectors, dolls, vehicles, action figures, building sets, games, including digital, puzzles, plush, educational ~~toys~~, and technology-~~related~~enabled products, media-driven products, and fashion-related items. Mattel competes domestically and internationally with a wide range of large and small manufacturers, marketers, and sellers of such products, 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 or increase its current 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~~incorporation of more ~~sophisticated~~ technology in toys, including machine learning and AI, and an evolving path to purchase.

Mattel is the owner of a portfolio of iconic brands that are recognized worldwide. The success of a brand can be negatively impacted if marketing plans or product initiatives do not have the desired impact on a brand's image or its ability to attract consumers. Brand value could diminish significantly due to a number of factors, including changing consumer attitudes and consumer perception of Mattel or its practices. The growing use of social and digital media by consumers increases the speed and extent that information and opinions can be shared. Negative or inaccurate postings or comments on social media or networking websites about Mattel, its practices, or one of Mattel's brands could generate adverse publicity that could damage the reputation of Mattel's brands.

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, ~~industry~~entertainment, and ~~entertainment~~digital ~~industry~~games industries are low and the increasing prevalence of digital media has further increased the ability for new participants to enter Mattel's markets, and broadened the array of companies Mattel competes with. New market participants with a popular product idea or entertainment property can become a significant source of competition for Mattel and its products in a very short period of time. 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~~business, financial condition, and results of operations.

Successful movies, television programs, digital games, and characters in children's literature affect play preferences, and many products depend on media-based IP licenses including trademarks, trade names, copyrights, patents, trade secrets, and rights under IP 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.

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 digital games, consumer electronics, and social and digital media, at increasingly younger ages. As Mattel introduces more ~~sophisticated~~products ~~technology~~incorporating ~~products~~technology, 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~~products incorporating 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.

The entertainment industry continues to experience frequent change driven by technological development and audience viewing preferences, including developments with respect to the formats through which films, television programming, and other episodic content are delivered to consumers, and the scale and scope of these changes have accelerated in recent years, with consumers continuing to increase their access to television, film, and other episodic content on streaming and digital content networks.

These changes, as well as other trends in the industry, have caused significant disruption to the retail distribution of entertainment offerings and have caused, and could in the future cause, a negative impact on sales of Mattel's products and other forms of monetization of content, especially those that are reliant on box office success. Mattel may lose opportunities to capitalize on changing market dynamics, technological innovations, or consumer tastes if it does not adapt to such changes in a timely manner. The overall effect that technological development and new digital distribution platforms have on the revenue and profits Mattel derives from its entertainment content, including from product sales associated with such content, and the additional costs associated with changing markets, media platforms, and technologies, is unpredictable. If Mattel fails to accurately assess and effectively respond to changes in technology and consumer behavior in the entertainment industry, Mattel's business, financial condition, and results of operations could be adversely affected.

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~~business, 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 wide 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~~and ina ~~turn~~number ~~results~~of retailers have moved a portion of their ordering from direct import to domestic shipping, which has further shifted orders to later in ~~shorter~~the ~~lead~~year, ~~times~~especially ~~for~~the ~~production~~fourth quarter. ~~Management~~These ~~believes~~actions ~~that~~have resulted, and may result in the future, in supply chain disruption and more build-up of inventories. 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 other events, such as strikes, disruptions in transportation, port delays, regional ~~conflict~~conflicts, tariffs, trade restrictions, or trade barriers, and geopolitical and macro-economic factors, including high inflation and high interest rates, 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 ~~2024~~2025, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 4442% of worldwide consolidated net sales (Walmart at $1.1708 billion, Target at $0.6863 billion, and Amazon at $0.5152 billion) and its ten largest customers, in the aggregate, accounted for approximately 5149% of worldwide consolidated 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, alter the manner in which they promote Mattel's products or the resources they devote to promoting and selling Mattel's products, 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.

To the extent Mattel incorporates AI into its business and products, challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability and adversely affect Mattel's business, financial condition, and results of operations.

The legal, regulatory, and ethical landscape around the use of AI and machine learning is rapidly evolving. Mattel's ability to timely adopt and adapt this emerging technology in an effective and ethical manner may impact its reputation and ability to compete, affecting its business, financial condition, and results of operations. The use of AI and machine learning technology in the development and operation of consumer products and experiences could produce results that are, among other things, false, biased, or inconsistent with Mattel's values and strategies. Further, the use of generative AI tools may compromise confidential or sensitive information, put Mattel's intellectual property at risk, or subject Mattel to claims of intellectual property infringement, all of which could damage Mattel's reputation. The rapid evolution of AI, including the regulation of AI by government or other regulatory agencies, will require significant resources to implement AI responsibly and minimize any unintended harmful impacts. There can be no assurance that any usage of AI will be beneficial to Mattel's business or enhance Mattel's products.

Failure to successfully develop, publish, and commercialize digital games could adversely affect Mattel's business, financial condition, and results of operations.

Mattel's strategy includes the development, publication, and commercialization of digital games. The digital games industry is highly competitive, and Mattel's revenue from its digital games may not be sufficient to recover the costs of developing and marketing such games. There is no guarantee that a game will be successful, and Mattel may cease development or publications of a game after significant investment.

In addition, the design, development, and production of digital games often involve third parties, including third-party platform owners and backend service providers. If Mattel has disputes with external developers or external parties cannot meet product development schedules or are otherwise unable or unwilling to meet their obligations to Mattel, Mattel may delay or cancel the design, development, production, or publication of its games, alter launch schedules, or experience increased costs and expenses, which 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~~could 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.

13Mattel'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 such 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.

~~increases~~As ina ~~the~~part ~~planned~~of ~~cost~~its ofefforts ~~development~~to ~~for~~cut ~~new~~costs, ~~Mattel~~achieve ~~products~~better ~~may~~efficiencies, ~~cause~~and ~~the~~increase ~~introduction~~productivity ~~date~~and ~~for~~service ~~products~~quality, toMattel berelies ~~later~~significantly ~~than~~on ~~anticipated~~vendor ~~or,~~and inoutsourcing ~~some~~relationships ~~situations,~~with ~~may~~third ~~cause~~parties afor ~~product~~services orand ~~new~~systems ~~product~~including ~~introduction~~manufacturing, totransportation, belogistics, ~~discontinued~~and information technology. ~~Failure~~Any toshortcoming ~~successfully~~of ~~implement~~a ~~any~~Mattel ofvendor ~~these~~or ~~initiatives~~outsourcer, particularly an issue related to compliance or ~~launches~~reputation, or affecting the ~~failure~~quality of ~~any of~~ these ~~initiatives~~services or ~~launches~~systems, torisks ~~produce~~damage ~~the~~to ~~results~~Mattel's ~~anticipated~~reputation byand ~~management~~brand value, ~~could~~and ~~have~~potentially an adverse ~~effect~~effects onto 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 could cause delays in product sales and reduce the efficiency of Mattel's operations, and significant capital investments could be required to remediate the problem.

~~Mattel's~~The ~~business~~production ~~depends~~and insale ~~large part on the success~~ of ~~its~~private-label, ~~vendors and outsourcers~~retailer-owned, and ~~Mattel's~~exclusive-branded ~~brands~~toys ~~and reputation are subject to harm from actions taken~~ by ~~third parties that are outside~~ Mattel's ~~control.~~retail Incustomers ~~addition,~~may ~~any~~result ~~significant~~in ~~failure,~~lower ~~inadequacy,~~purchases orof ~~interruption from such vendors or outsourcers could harm~~ Mattel's-branded ~~ability~~products toby ~~effectively~~those ~~operate~~retail ~~its business~~customers.

AsThe aproduction ~~part~~and sale of ~~its efforts to cut costs~~private-label, ~~achieve better efficiencies~~retailer-owned, and ~~increase~~exclusive-branded ~~productivity~~toys ~~and~~by ~~service quality,~~ Mattel's ~~relies~~retail ~~significantly~~customers onmay ~~vendor~~increase ~~and~~competitive ~~outsourcing~~pressure ~~relationships with third parties for services~~ and ~~systems~~result ~~including~~in ~~manufacturing,~~lower ~~transportation,~~purchases ~~logistics, and information technology. Any shortcoming~~ of a Mattel-branded ~~vendor~~products orby ~~outsourcer,~~those ~~particularly~~customers. anIn ~~issue~~recent ~~related to compliance or reputation~~years, orretailers ~~affecting~~across the ~~quality~~consumer ofgoods ~~these services or systems~~industry, ~~risks~~including ~~damage~~the totoy ~~Mattel's reputation and brand value~~category, ~~and~~have ~~potentially~~expanded ~~adverse~~their ~~effects~~development toof ~~Mattel's business~~private-label, ~~financial condition~~retailer-owned, and ~~results~~exclusive ofbrands ~~operations.~~that Incompete ~~addition,~~directly ~~problems~~ with ~~transitioning~~products ~~these~~offered ~~services~~by ~~and~~traditional 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 problemmanufacturers.

~~The~~Certain ~~production~~retail chains and ~~sale~~online retailers that are customers of ~~private~~Mattel, including large mass, specialty, and e-~~label~~commerce retailers, sell toys bythat ~~Mattel's~~are ~~retail~~designed, ~~customers~~sourced, ~~may~~marketed, ~~result~~and inbranded ~~lower~~by ~~purchases~~the ofretailers ~~Mattel~~themselves, including through private-~~branded~~label, ~~products~~retailer-owned byor ~~those~~exclusive brands. Some of Mattel's largest retail customers., including Walmart, Target, and Amazon,

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.14

offer such products. These private-label, retailer-owned, or exclusive-branded toys may be priced below comparable Mattel-branded products, benefit from preferential placement or promotion, or receive enhanced digital visibility, which may reduce retailer purchases of Mattel products and negatively impact consumer demand for Mattel brands.

In addition, certain retailers that offer private-label, retailer-owned, or exclusive-branded toy products have significant scale, data, advantages, and financial resources, and may leverage direct access to consumer purchasing data, proprietary algorithms, and control over merchandising and pricing to favor their own offerings. These dynamics may further intensify competition and adversely affect Mattel's sales, margins, and market position in certain channels or markets.

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 or regional economic conditions could adversely affect Mattel's business, financial condition, and results of operations.

Mattel designs, manufactures, and markets a wide variety of 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, entertainment, and ~~entertainment~~digital game 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, tariffs, 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 or regional economic conditions ~~have~~has at times adversely affected Mattel's business, financial condition, and results of operations. Unfavorable economic conditions can also impair the ability of those with whom Mattel does business to satisfy their obligations to usit. Future deterioration of global or regional 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.

14In 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 purchases of its products. Those steps may increase costs and/or decrease profit margins and are not always successful. During periods of increased inflation, 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.

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 purchases 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, including tariffs, trade restrictions, or trade barriers, 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, including the imposition of tariffs, trade restrictions, or trade barriers, an outbreak of disease or 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 2024, 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. Significant inflation in 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 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~~suppliers and ~~products~~internal ~~from~~manufacturing ~~one~~capacity. ~~country~~Mattel tohas ~~another~~experienced shortages in the past, including ~~port~~shortages ~~congestion,~~of ~~strikes~~raw materials and ~~other~~components. ~~transportation~~Additionally, ~~delays~~as ~~and~~Mattel ~~interruptions;~~cannot ~~potential~~guarantee ~~challenges~~the tostability of its major suppliers, major suppliers may stop manufacturing components at any time with little or no notice. If Mattel's ~~transfer~~is ~~pricing~~required ~~determinations~~to ~~and~~use ~~other~~alternative sources, it may be required to redesign some aspects of ~~its~~the ~~cross~~affected ~~border~~products, ~~transactions;~~which may involve delays and additional expense. Reductions or interruptions in supplies or in the ~~impact~~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, including the imposition of tariffs, trade restrictions, or trade barriers, ~~quotas~~an outbreak of disease or a severe public health crisis, natural disasters, including severe weather due to climate change or otherwise, the occurrence or threat of wars or other ~~protectionist~~conflicts, ~~measures~~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.

~~Failure~~Significant changes in currency exchange rates or the ability to ~~properly~~transfer ~~manage~~capital ~~these~~across ~~risks~~borders could ~~adversely~~have ~~affect~~an adverse effect on Mattel's business, financial condition, and results of operations.

~~Disruptions~~Mattel ~~due~~operates tofacilities ~~political~~and ~~instability,~~sells ~~civil~~products ~~unrest,~~in numerous countries outside the ~~threat~~United orStates. ~~occurrence~~During 2025, Mattel's International segment net sales were 44% of ~~war~~Mattel's ortotal ~~terrorist~~consolidated ~~activities~~net sales. Furthermore, ~~pandemics~~Mattel's ornet ~~other~~investment ~~public~~in ~~health~~its ~~crises~~foreign subsidiaries and its results of operations and cash flows are subject to changes in currency exchange rates and regulations. Significant inflation in economies of certain foreign countries can result in foreign currency devaluation, orwhich ~~earthquakes~~negatively orimpacts ~~other~~Mattel's ~~natural~~profitability. ~~disasters~~Mattel's ~~out~~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 currency control regulations in China, and ~~actions~~may ~~taken~~also byimpact ~~governments~~the fluctuation of currencies in the countries where Mattel conducts business or has invested capital. Significant changes in currency exchange rates, ~~businesses~~reductions in Mattel's ability to transfer its capital across borders, and ~~individuals~~changes in ~~response~~government-fixed tocurrency ~~such~~exchange ~~events~~rates, including the Chinese yuan, could ~~adversely~~have ~~affect~~an adverse effect on Mattel's business, financial condition, and results of operations.

~~Mattel's~~An ~~business~~increasing ~~and~~portion ~~operations could be materially and adversely affected by political instability, civil unrest, the threat or occurrence~~ of war or terrorist activities, 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 condition, and results of operations and~~ may ~~vary~~come ~~based~~from onnew ~~the~~or ~~length~~emerging ~~and severity of the disruption. For example~~markets, ~~the COVID-19 pandemic~~ and ~~the~~growing ~~actions~~business ~~taken by governments, businesses, and individuals~~ in ~~response~~these ~~thereto~~markets ~~affected~~presents ~~how~~additional ~~Mattel and its suppliers and partners operated their businesses, caused supply chain disruption and retail store closures, and adversely affected Mattel's operating results~~challenges.

An increasing portion of Mattel's ~~owns,~~net ~~operates,~~revenues ~~and~~may ~~manages~~come ~~manufacturing~~from ~~facilities~~new ~~and~~or ~~utilizes~~emerging ~~third-party~~markets, ~~manufacturers~~including China and ~~suppliers~~India. ~~throughout~~Operating ~~Asia,~~in ~~primarily~~new inor ~~China,~~emerging ~~Indonesia~~markets, ~~Malaysia,~~each ~~Vietnam~~with its own unique consumer preferences and ~~Thailand~~business climates, ~~and~~presents inadditional ~~Mexico.~~challenges ~~Risks~~that ~~from~~Mattel ~~political~~must ~~instability,~~meet. ~~civil~~In ~~unrest~~addition, ~~the~~sales ~~threat~~and oroperations ~~occurrence~~in ofnew ~~war~~ or ~~terrorist~~emerging ~~activities,~~markets ~~and~~are subject to other ~~geopolitical~~risks orassociated ~~macro-economic~~with ~~conditions~~international ~~exist~~operations. Such risks include complications in ~~certain~~complying ofwith ~~these~~different ~~countries,~~laws ~~which~~in ~~could~~varying ~~temporarily~~jurisdictions; ordealing ~~permanently~~with ~~damage~~changes ~~the~~in ~~manufacturing~~governmental ~~operations~~policies and the evolution of ~~Mattel~~laws orand ~~its~~regulations ~~third-party~~that ~~manufacturers~~impact ~~located~~Mattel's ~~there.~~product Inofferings ~~addition,~~and ~~Mattel~~related ~~has~~enforcement; ~~significant~~difficulties ~~operations~~understanding ~~near~~the ~~major~~retail ~~earthquake~~climate, ~~faults~~consumer trends, ~~including~~local ~~its~~customs ~~corporate~~and ~~headquarters~~competitive conditions in Elforeign ~~Segundo~~markets, ~~California.~~which Aare ~~catastrophic~~often ~~event~~quite ~~where~~different ~~Mattel~~from ~~has~~those ~~important~~in ~~operations,~~the ~~such~~United asStates; andifficulties ~~earthquake,~~in ~~tsunami,~~moving ~~flood,~~materials ~~typhoon,~~and ~~fire~~products orfrom ~~wildfire,~~one ~~power~~country ~~outage~~to another, orincluding ~~other~~port ~~natural or manmade disaster~~congestion, ~~including~~strikes asand aother ~~result~~transportation ofdelays ~~climate~~and ~~change,~~interruptions; ~~could~~potential ~~disrupt~~challenges to Mattel's ~~operations~~transfer orpricing ~~those~~determinations and other aspects of its ~~business~~cross ~~partners~~border transactions; and ~~impair~~the ~~production~~impact ~~or distribution~~ of ~~its products~~tariffs, ~~damage~~trade ~~inventory~~restrictions, ~~interrupt~~trade ~~critical~~barriers, ~~functions~~quotas, or ~~otherwise~~other trade measures. Failure to properly manage these risks could adversely affect ~~its~~Mattel's business, ~~negatively~~financial condition, and results of operations.

~~Any~~Disruptions ~~one~~due ofto ~~these~~political ~~factors~~instability, orcivil ~~a combination thereof~~unrest, ~~could~~the ~~impact~~threat ~~Mattel's ability to meet demand for its products~~ or ~~could~~occurrence ~~increase the costs~~ of ~~its~~war ~~products.~~or Toterrorist ~~the~~activities, ~~extent~~pandemics ~~any of these disruptions become prolonged~~ or ~~recur,~~other ~~particularly~~public ~~during~~health ~~seasonally high periods of production or distribution~~crises, ~~Mattel's~~climate ~~ability to meet demand may be materially impacted. Insurance for certain disruptions may not be available~~change, ~~affordable,~~ or ~~adequate.~~earthquakes ~~Such~~or ~~disruptions~~other innatural ~~the~~disasters ~~markets~~out inof ~~which~~ Mattel,'s ~~its~~control ~~employees,~~and ~~consumers,~~actions ~~customers,~~taken ~~business~~by ~~partners~~governments, ~~licensees~~businesses, ~~licensors, suppliers,~~ and ~~manufacturers~~individuals ~~operate, can have, and at times~~ in ~~the~~response ~~past~~to ~~have~~such ~~had,~~events acould ~~significant~~adversely ~~negative~~affect ~~impact on~~ Mattel's business, ~~liquidity,~~ financial ~~position~~condition, ~~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.

~~The~~Mattel's ~~occurrence~~business ofand ~~war~~operations orcould ~~hostilities~~be ~~between~~materially ~~countries~~and oradversely ~~threat~~affected ofby ~~terrorist~~political ~~activities~~instability, ~~and~~civil unrest, the ~~responses~~threat toor ~~and~~occurrence ~~results~~ of ~~these~~war or terrorist activities, ~~could~~pandemics ~~adversely~~or ~~impact~~other ~~Mattel,~~public ~~its~~health ~~personnel~~crises, ~~and facilities~~earthquakes, ~~its~~natural ~~customers~~disasters, and ~~suppliers,~~other ~~retail~~natural ~~and~~or ~~financial~~man-made ~~markets~~economic, ~~and~~political, ~~general~~or ~~economic~~environmental ~~conditions~~disruptions. ~~For example~~Disruptions, ~~the~~and ~~global~~government ~~economy~~responses ~~has~~to ~~been~~any ~~negatively~~disruption, ~~impacted~~could asadversely aaffect ~~result of the Russia-Ukraine war as well as the conflict in the Middle East, and~~ Mattel's ~~operations~~business, infinancial ~~Russia~~condition, ~~have~~and ~~experienced~~results ~~significant~~of ~~disruption.~~operations ~~Mattel~~and ~~has~~may ~~paused~~vary ~~all~~based ~~shipments~~on ~~into~~the ~~Russia~~length and ~~expects,~~severity ~~for~~of the ~~foreseeable future, decreased revenues compared with those prior to the war from Russia and Ukraine~~disruption.

~~Political~~Mattel ~~developments~~owns, ~~including~~operates, ~~trade~~and ~~relations,~~manages manufacturing facilities and~~/or~~ ~~trade~~utilizes ~~actions~~third-party ~~could~~manufacturers ~~adversely~~and ~~impact~~suppliers ~~Mattel~~throughout Asia, ~~its~~primarily ~~personnel~~in ~~and~~China, ~~facilities~~Vietnam, ~~its~~Indonesia, ~~customers~~Malaysia, and ~~suppliers~~Thailand, ~~retail~~ and ~~financial~~in ~~markets~~Mexico. Risks from political instability, civil unrest, and ~~general~~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, the threat or occurrence of war or hostilities between countries or threat of terrorist activities, including in these

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, or trade actions by or directed toward other countries, such as Mexico or Canada, could result in diverting more production to, or sourcing from, countries other than China or Mexico, could raise the cost of Mattel products in those markets, and could cause customers in those markets to seek domestic or non-U.S. sources for products that Mattel sells,

orcountries, toand bethe ~~pressured~~responses ~~or incentivized by foreign governments not~~ to ~~purchase~~and ~~goods~~results of ~~U.S.~~these ~~companies~~activities, ~~all of which~~ could ~~harm~~adversely impact Mattel's, ~~future~~its ~~sales~~personnel inand ~~these those markets~~facilities, ~~adversely~~its ~~affecting~~customers ~~Mattel's~~and ~~business~~suppliers, retail and financial ~~condition~~markets, and ~~results~~general ofeconomic ~~operations~~conditions.

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 and Belarus 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, whether toward China, Russia, or other countries, 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.

Evolving stakeholder expectations, regulatory requirements, and increasing scrutiny relating to sustainability matters including with respect to climate change, could expose Mattel to potential liabilities, increase costs, cause reputational harm, and cause other adverse impacts to Mattel's business.

Mattel's business is susceptible to financial, operational, and reputational risks associated with the effects of global 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, storms, floods, and droughts. The effects of climate change may cause disruptions to Mattel's operations, including by disrupting its supply chain and the productivity of its third-party manufacturers, increasing Mattel's production costs, imposing capacity restraints, and impacting 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 also be subject to decreased availability or less favorable pricing for certain commodities that are necessary for Mattel's products.

In addition, Mattel ~~expects~~has tosignificant ~~incur~~operations ~~capital~~near ~~expenditures,~~major ~~compliance~~earthquake ~~costs~~faults, ~~and~~including ~~other~~its ~~costs~~corporate toheadquarters ~~comply~~in ~~with~~El ~~increasingly stringent sustainability laws~~Segundo, ~~compliance reporting, and enforcement policies, including those related to the environment~~California. ~~Foreign,~~A ~~federal,~~catastrophic ~~state,~~event ~~and~~where ~~local~~Mattel ~~governments~~has ~~have~~important ~~and may in the future focus on enacting laws and regulations regarding the management of~~operations, ~~or disclosure regarding, sustainability matters,~~ such as, ~~among~~an ~~other~~earthquake, ~~topics~~tsunami, ~~climate change and the regulation of greenhouse gas (“GHG”) emissions~~flood, ~~energy use~~typhoon, ~~sustainability~~fire ~~claims~~or ~~and labeling requirements~~wildfire, ~~responsible~~power ~~sourcing~~outage, ~~and~~or ~~the~~other ~~recyclability~~natural or ~~recoverability~~manmade ~~of packaging and products. For example~~disaster, inincluding ~~October~~as ~~2023,~~a ~~California~~result ~~enacted legislation addressing the disclosure~~ of ~~GHG emissions,~~ climate~~-related~~ ~~risks~~change, ~~certain~~could ~~environmental~~disrupt ~~claims,~~Mattel's ~~and~~operations ~~the use~~ or ~~sale~~those of ~~voluntary~~its ~~carbon~~business ~~offsets.~~partners ~~Federal agencies, such as the Securities~~ and ~~Exchange~~impair ~~Commission~~production ~~and other U.S. agencies, have at times in the past increased their focus on climate, human capital,~~ or ~~other~~distribution ~~sustainability-related disclosures, claims, and practices. 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 sustainability issues. Further, the EU has passed a variety of sustainability-related directives and regulations in recent years as part of its ~~Green Deal~~products, ~~such~~damage ~~as the Corporate Sustainability Reporting Directive~~inventory, ~~which~~interrupt ~~will~~critical ~~require sustainability reporting across a broad range of sustainability topics for both EU and non-EU companies~~functions, ~~and~~or ~~the~~otherwise ~~Corporation~~affect ~~Sustainability~~its ~~Due~~business ~~Diligence Directive, which will require both EU and non-EU companies to take certain steps to address human rights- and climate-related risks and impacts~~negatively. Compliance with this evolving legislative and regulatory landscape will require management’s time and resources, impose increased costs, and could result in operational disruptions. Further, Mattel’s failure to comply with sustainability-related laws and regulations could lead to government enforcement actions, penalties, litigation, and/or reputational harm.

AAny ~~variety~~one of ~~Mattel's~~these ~~stakeholders~~factors, ~~including regulators, investors, advisory firms, rating agencies, and customers, are establishing laws, regulations, expectations, and/~~or ~~assessments~~a ~~reflecting~~combination ~~their varied and evolving expectations on corporate practices~~thereof, ~~including~~could ~~transparency,~~impact ~~due~~Mattel's ~~diligence,~~ability ~~and reporting related~~ to ~~sustainability~~meet ~~matters,~~demand ~~such~~for asits ~~climate~~products ~~change, plastic use, human rights and/~~or ~~labor~~could ~~standards,~~increase ~~responsible sourcing,~~ the ~~recyclability~~costs ~~or recoverability~~ of ~~packaging~~its ~~and~~ products,. ~~human~~To ~~capital~~the ~~management,~~extent ~~product~~any ~~safety~~of ~~and~~these ~~quality,~~disruptions ~~and~~become ~~other~~prolonged ~~sustainability~~or ~~matters. In particular~~recur, ~~customers~~particularly ~~and~~during ~~consumers~~seasonally ~~may~~high ~~continue~~periods toof ~~put~~production aor ~~premium on purchasing products that are sustainably manufactured and packaged~~distribution, ~~and~~ Mattel's ~~may~~ability ~~need~~ to ~~incur~~meet ~~additional~~demand ~~costs~~may inbe ~~order~~materially toimpacted. ~~effectively~~Insurance ~~source~~for ~~materials~~certain ~~that~~disruptions ~~are~~may ~~more~~not ~~sustainable.~~be ~~As Mattel's sustainability practices~~available, ~~stakeholder expectations~~affordable, ~~and~~or ~~voluntary~~adequate. ~~and~~Such ~~regulatory~~disruptions ~~sustainability~~in ~~disclosure~~the ~~standards~~markets ~~and~~in ~~policies~~which ~~continue~~Mattel, toits ~~evolve~~employees, ~~Mattel~~consumers, ~~has developed~~customers, ~~and~~business ~~may~~partners, ~~further~~licensees, ~~develop~~licensors, ~~sustainability-related~~suppliers, ~~goals~~ and ~~disclosures~~manufacturers ~~in these areas. Current sustainability goals are based on Mattel management's current assumptions related to scientific or technological developments~~operate, ~~carbon~~can ~~markets~~have, and ~~other~~at ~~matters~~times ~~that are subject to change~~ in the ~~future~~past ~~and~~have ~~which may be outside of Mattel's control~~had, ~~as well as standards for measuring progress that are still developing and subject to~~ a ~~number of~~ significant ~~risks~~negative ~~and~~impact ~~uncertainties.~~on Mattel's ~~efforts to be responsive to climate change~~business, ~~including to reduce its carbon footprint~~liquidity, ~~and~~financial ~~other sustainability matters~~position, ~~cannot provide assurance that Mattel will successfully achieve its sustainability goals~~sales, ~~that~~and ~~related~~results ~~costs~~of ~~may~~operations. ~~not~~In ~~be higher than expected~~addition, ~~that~~the ~~proposed~~contingency ~~regulation~~plans orMattel ~~deregulation~~has ~~related~~developed to ~~climate~~help ~~change~~mitigate ~~and~~the ~~other~~impact ~~sustainability~~of ~~matters~~disruptions ~~will~~in ~~not~~its bemanufacturing ~~more~~operations ~~aggressive than Mattel's measures~~ and ~~result~~supply inchain ~~higher~~may ~~costs~~not ~~(or~~prevent ~~require~~its ~~additional resources)~~business, orfinancial ~~that~~position, ~~any~~sales, ~~investments~~and ~~Mattel~~results ~~makes in furtherance~~ of ~~achieving~~operations ~~such~~from ~~goals~~being ~~will~~adversely ~~meet~~affected ~~expectations~~by ~~for~~a ~~all~~significant ~~stakeholders~~disruption orto ~~any~~its ~~applicable~~manufacturing ~~binding~~operations or ~~non-~~suppliers.

Political developments, including in trade relations, and/or trade actions could adversely impact Mattel, its customers or suppliers, and general economic conditions.

Mattel's business is worldwide in scope, and political instability, civil unrest, or the deterioration of the political, economic, or social situation or changes to trade policy or the breakdown of trade relations with the United States in a country in which Mattel has significant manufacturing, operations, or sales, or from which Mattel sources raw materials, components, or finished products could adversely affect Mattel's business, financial condition, and results of operations.

Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on Mattel's business. These and future changes in tariffs, trade policies, trade actions, or retaliatory trade measures in response, have resulted and may continue to result in additional costs and pricing pressures, supply chain disruptions, volatile or unpredictable customer spending patterns, and increased economic or geopolitical risks, which could adversely impact Mattel's future sales, business, financial condition, and results of operations, materially or in ways that Mattel cannot predict. For example, diverting production or sourcing away from a country such as China could raise the cost of Mattel products in China (as well as other countries) and could cause customers in China to seek domestic or non-U.S. sources for products that Mattel sells, or to be pressured or incentivized to not purchase goods of Mattel or U.S. companies, generally, which could adversely impact Mattel's future sales.

In addition, the United States, United Kingdom, and EU, 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 and Belarus 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 other countries in response, could further adversely affect Mattel's business, financial condition, and results of operations.

~~binding~~Evolving ~~standards,~~and ~~any~~sometimes ~~one~~conflicting ofstakeholder ~~which could have an adverse effect on Mattel's financial condition~~expectations, ~~results~~regulatory ~~of operations~~requirements, ~~reputation,~~and orscrutiny ~~stock~~relating ~~price.~~to Insustainability ~~addition~~matters, ~~Mattel's~~could ~~efforts~~expose onMattel ~~these topics may harm its reputation or competitive position and negatively impact its ability~~ to ~~retain~~potential ~~existing~~liabilities, orincrease ~~attract~~costs, ~~new~~cause ~~employees,~~reputational ~~customers~~harm, and ~~business~~cause ~~relationships. Further, being associated with activities by business partners or~~ other ~~affiliates that have or are perceived to have individual or cumulative~~ adverse impacts onto ~~the climate, human rights, or other sustainability matters could negatively affect~~ Mattel's ~~reputation and impose additional costs~~business.

~~Climate~~Mattel expects to incur capital expenditures, compliance costs, and other ~~sustainability-related~~costs ~~litigation~~to ~~has~~comply ~~increased~~with inevolving ~~recent~~(and ~~years,~~at ~~such~~times asinconsistent) ~~claims~~sustainability ~~involving~~laws, ~~the~~regulations, ~~failure~~compliance ofreporting, ~~organizations~~and toenforcement ~~mitigate~~policies ~~their~~by ~~negative~~foreign, ~~impacts~~federal, onstate, ~~climate~~and ~~change~~local governments, including those related to the ~~failure~~environment, ofwhich ~~organizations~~may toexpose ~~adapt~~Mattel to ~~climate~~additional ~~change~~legal, ~~the~~financial, ~~insufficiency~~ or ~~inaccuracy~~reputational ofrisks ~~disclosure~~and ~~around~~unpredictable ~~climate~~reporting obligations or ~~other~~business ~~sustainability-related~~requirements. ~~risks~~Foreign, ~~the~~federal, ~~failure~~state, toand ~~meet~~local ~~stated~~governments ~~sustainability-related~~have ~~goals~~enacted, orand ~~the~~may ~~failure~~in tothe ~~adequately~~future ~~meet~~focus ~~standards~~on ~~regarding~~enacting, ~~human~~laws ~~rights~~ and~~/or~~ ~~labor~~regulations ~~conditions.~~regarding Ifthe ~~Mattel's~~management ~~sustainability~~of, ~~practices~~or dodisclosure ~~not~~regarding, orsustainability ~~are~~matters, ~~perceived~~such toas, ~~not~~among ~~meet~~other ortopics, ~~align~~climate ~~with~~change ~~investor~~and orthe ~~other~~regulation ~~stakeholder~~of ~~expectations~~greenhouse ~~and~~gas ~~standards~~ (~~which~~"GHG") ~~are~~emissions, ~~continually~~energy ~~evolving~~use, ~~and~~sustainability ~~may~~claims ~~disagree~~and ~~with~~labeling orrequirements, ~~emphasize~~responsible ~~different~~sourcing, ~~priorities~~and ~~than~~ the ~~ones~~recyclability ~~Mattel~~or ~~chooses~~recoverability toof ~~focus~~packaging ~~on),~~and orproducts. ifCompliance ~~Mattel~~with ~~fails~~this toevolving ~~achieve,~~and issometimes ~~perceived~~conflicting tolegislative ~~have~~and ~~failed~~regulatory tolandscape ~~achieve~~will orrequire ~~been~~management's ~~delayed~~time inand ~~achieving~~resources, ~~its~~impose ~~sustainability~~increased ~~goals~~costs, itand could ~~negatively~~result ~~affect~~in ~~consumer~~operational ordisruptions. ~~customer preference for~~ Mattel's ~~products,~~failure asto ~~well~~comply aswith ~~expose~~sustainability-related ~~Mattel~~laws and regulations could lead to ~~reputational~~government ~~harm~~enforcement oractions, penalties, litigation, and/or reputational harm.

A variety of Mattel's stakeholders, including regulators, investors, advisory firms, rating agencies, and customers, are establishing laws, regulations, expectations, and/or assessments reflecting their varied and evolving, and sometimes conflicting, expectations on corporate practices, including transparency, due diligence, and reporting related to sustainability matters. In particular, customers and consumers may continue to put a premium on purchasing products that are sustainably manufactured and packaged, and Mattel may need to incur additional costs in order to effectively source materials that are more sustainable. As Mattel's sustainability practices, stakeholder expectations, and voluntary and regulatory sustainability disclosure standards and policies continue to evolve, Mattel has developed, and may further develop, sustainability-related goals and disclosures in these areas. Statements regarding Mattel's current sustainability goals or targets are based on management's current assumptions related to matters that are subject to change in the future and are subject to a number of significant risks and uncertainties, some of which are outside of Mattel's control. Mattel cannot provide assurance that it will successfully achieve or maintain its sustainability goals or 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 standards, any one of which could have an adverse effect on Mattel's financial condition, results of operations, reputation, or stock price. Further, being associated with activities by business partners or other affiliates that have or are perceived to have individual or cumulative adverse impacts on the climate, human rights, or other sustainability matters could negatively affect Mattel's reputation and impose additional costs.

Climate and other sustainability-related litigation has increased in recent years, such as claims involving the failure of organizations to mitigate their negative impacts on climate change, the failure of organizations to adapt to climate change, the insufficiency or inaccuracy of disclosure around climate or other sustainability-related risks, the failure to meet stated sustainability-related goals, or the failure to adequately meet standards regarding human rights and/or labor conditions. If Mattel's sustainability practices do not, or are perceived to not, meet or align with investor or other stakeholder expectations and standards (which are continually evolving and sometimes conflicting), or if Mattel fails to achieve, or is perceived to have failed to achieve, its sustainability goals or targets, it could negatively affect consumer or customer preference for Mattel's products and Mattel's ability to retain existing or attract new employees, customers, and business relationships, as well as expose Mattel to business or reputational harm, government enforcement actions, or litigation.

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.

Mattel has in the past engaged, and may in the future engage, in mergers, acquisitions, dispositions, investments, 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 mergers, acquisitions, dispositions, investments, or other strategic transactions that could affect the revenues, profit, 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 merger partners, acquisition targets, or investments or that, if identified, it will be able to complete these transactions on terms acceptable to Mattel and to potential acquisition or investment targets or merger partners. There can also be no assurance that Mattel will be successful in realizing the planned benefits from any such investments, mergers, or acquisitions, or 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. 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 Identifiable 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 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, 2024. While Mattel is in the process of implementing its remediation plan 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

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 been party to certain class actions and certain derivative actions.

Any material weakness in Mattel's internal control over financial reporting, 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 previously determined that there was a material weakness in its internal control over financial reporting, which has been remediated as of December 31, 2025. If the additional controls and procedures that Mattel has implemented to remediate the material weakness prove to be ineffective or if Mattel identifies other control deficiencies that individually or together constitute a material weakness, 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 results of operations. A 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 IP 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~~cyberattack 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~~compromises, including ~~breaches~~compromises 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~~compromises, ~~cyber-attacks~~cyberattacks, 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~~There 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~~such 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. Remote or hybrid 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, the prevalence and increasing sophistication of 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.

IfThe systems and processes that Mattel ~~fails~~has developed to ~~comply~~protect ~~with~~personal ~~applicable~~information ~~U.S.~~and prevent data loss and ~~foreign~~other ~~laws~~security ~~related~~compromises, including systems and processes designed to ~~privacy~~prevent, ~~data~~detect, and minimize the impact of a security compromise at a third-party provider, AIdo not provide absolute security, and ~~data~~any ~~protection,~~failure itor inadequacy of such systems or processes could ~~adversely~~have ~~affect~~an adverse effect on Mattel's ~~operating~~business, financial condition, and results of operations. While Mattel carries cyber and ~~financial~~business ~~condition~~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. Remote or hybrid 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, the prevalence and increasing sophistication of AI may increase the frequency or efficacy of cyberattacks against Mattel, and any use of AI by Mattel or the third parties on which it depends to operate its business may create new cybersecurity vulnerabilities, including those which may not be recognized at this time.

~~As a global company,~~ Mattel's isinformation ~~subject~~systems torequire aan ~~variety~~ongoing commitment of ~~continuously~~significant ~~evolving~~resources ~~and~~to ~~developing~~maintain, ~~laws~~upgrade and ~~regulations~~enhance inexisting ~~the~~systems ~~United States~~ and ~~abroad~~develop ~~regarding~~or ~~privacy,~~contract ~~data~~for ~~protection,~~new ~~AI,~~systems ~~and~~in ~~data~~order ~~security, including those related~~ to ~~the~~keep ~~collection,~~pace ~~storage,~~with ~~handling,~~continuing ~~use,~~changes ~~disclosure,~~in ~~transfer,~~information ~~and~~processing ~~security of personal data. For example~~technology, ~~Mattel~~emerging iscybersecurity orrisks ~~may become subject to a variety of laws~~ and ~~regulations~~threats, ~~such~~evolving ~~as the European Union's General Data Protection Regulation ("GDPR")~~industry, EUlegal ~~Artificial~~and ~~Intelligence~~regulatory ~~Act~~standards ~~("EU~~and ~~AI Act")~~requirements, ~~China's~~and ~~Personal~~other ~~Information~~changes ~~Protection~~in ~~Law ("PIPL"), California~~Mattel's ~~Consumer Privacy Act ("CCPA")~~business, oramong ~~the~~other Uthings.S. ~~Children's~~Mattel ~~Online~~has ~~Privacy~~made ~~Protection~~and ~~Act~~expects ofto ~~1998~~continue ~~("COPPA")~~to ~~regarding~~make ~~privacy,~~significant ~~data~~investments ~~protection,~~in AIupdating ~~(including automated decision-making)~~ and ~~data~~integrating ~~security.~~IT ~~These~~systems; ~~laws~~however, ~~and~~those ~~regulations~~investments ~~are~~could ~~continuously~~turn ~~evolving~~out ~~and~~to ~~developing,~~be ~~creating~~insufficient ~~significant~~or ~~uncertainty~~fail asto ~~privacy~~yield ~~and~~the ~~data~~expected ~~protection~~results. ~~laws~~If ~~may~~Mattel's beor ~~interpreted~~its ~~and~~third-party ~~applied~~service ~~differently~~providers' ~~from~~systems ~~country~~fail to ~~country~~operate ~~and~~effectively ~~may create inconsistent~~ or ~~conflicting~~are ~~requirements. For example~~damaged, ~~the GDPR~~destroyed, ~~which~~or ~~greatly~~shut ~~increases~~down, ~~the~~or ~~jurisdictional~~there ~~reach~~are ofproblems EUwith ~~law~~transitioning ~~and~~to ~~became~~upgraded ~~effective~~or inreplacement ~~May 2018~~systems, ~~added~~or athere ~~broad~~are ~~array~~future ofsecurity ~~requirements~~compromises ~~for~~in ~~handling~~these ~~personal data~~systems, ~~including~~any ~~the public disclosure~~ of ~~significant~~which ~~data~~could ~~breaches,~~occur ~~and~~as ~~imposes~~a ~~substantial~~result ~~penalties~~of ~~for~~natural ~~non-compliance.~~disasters, ~~The~~software EUor AIequipment ~~Act~~failures, ~~which~~telecommunications ~~was~~failures, ~~adopted~~loss inor ~~2024~~theft ~~and~~of ~~will~~equipment, beacts ~~implemented~~of ~~in phases beginning 2025 through 2030~~terrorism, ~~imposes~~circumvention ~~certain requirements and limitations on developers and deployers~~ of AIsecurity systems, ~~designated~~or asother ~~"high risk~~cyber-attacks," including indenial-of-service ~~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~~attacks, ~~and~~Mattel ~~will~~could ~~carry~~experience ~~the~~delays ~~potential~~or ~~for~~decreases ~~substantial~~in ~~penalties~~product ~~for~~sales ~~non-compliance. China's PIPL imposes additional operational requirements relating to processing personal information~~ and ~~provides~~reduced ~~for~~efficiency ~~penalties~~of ~~and~~its ~~enforcement mechanisms~~operations. ~~China~~Additionally, ~~has~~any ~~recently~~of ~~enacted~~these ~~complex~~types ~~and~~of ~~highly~~events ~~restrictive~~could ~~cybersecurity,~~lead ~~data~~to ~~localization,~~violations ~~and~~of ~~cross~~privacy ~~border~~or data ~~transfer~~protection laws., ~~The~~breach ~~CCPA~~of ~~requires~~contract ~~covered~~allegations, ~~companies~~loss toof ~~provide~~customers, ~~additional~~or ~~disclosures~~loss, ~~and~~misappropriation ~~data~~or ~~rights~~corruption toof ~~data~~confidential ~~subjects.~~information, ~~The~~trade ~~California~~secrets, ~~Privacy~~or ~~Rights Act ("CPRA")~~data, which ~~became~~could ~~operative~~expose onMattel ~~January~~to 1,potential ~~2023~~litigation, ~~established~~regulatory ~~the~~actions, ~~California Privacy Protection Agency to enforce Californians' privacy rights under the CCPA. Since the CCPA was enacted~~sanctions, ~~several~~or other ~~states~~statutory ~~have~~penalties, ~~enacted~~any or ~~are~~all inof ~~the~~which ~~process~~could ofadversely ~~enacting~~affect ~~privacy,~~its ~~data~~business ~~protection,~~ and ~~AI-related~~cause ~~laws,~~it ~~which~~to ~~may~~incur ~~also~~significant ~~impose~~losses ~~obligations on companies developing~~ and ~~using~~remediation ~~AI or automated decision-making technologies~~costs.

If Mattel's ~~ongoing~~fails ~~efforts~~ to comply with ~~the~~applicable ~~GDPR~~U.S. and ~~other~~foreign ~~privacy and data protection~~ laws, ~~such~~related ~~as the PIPL, CCPA, CPRA, and COPPA, as well as initiatives~~ to ~~comply with new legal regimes relating to~~ privacy, data ~~protection~~security, ~~and~~ AI, ~~impose significant costs~~ and ~~challenges~~data ~~that are likely to increase over time~~protection, 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 iscould ~~possible~~adversely ~~that~~affect ~~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~~business, orfinancial ~~perceived~~condition ~~failure,~~and ~~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~~operations.

As a global company, Mattel is subject to a variety of continuously evolving and developing laws, regulations, and Executive Orders 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 EU's General Data Protection Regulation ("GDPR"), EU Artificial Intelligence Act, the EU Data Act, China's Personal Information Protection Law ("PIPL"), California's Consumer Privacy Act ("CCPA"), California Privacy Rights Act ("CPRA"), U.S. Children's Online Privacy Protection Act of 1998 ("COPPA"), or Executive Order 14117 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.

Mattel's ongoing efforts to comply 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, impose significant costs and challenges that are likely to increase over time, including as Mattel introduces 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 business, financial condition, and results of operations.

Mattel faces risks related to protecting its proprietary IP and information and is subject to third-party claims that Mattel is infringing on their IP 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 IP and information, including its trademarks, trade names, copyrights, patents, trade secrets, and rights under IP 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 IP 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 IP 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 IP rights, and the availability of certain AI tools has facilitated the creation of infringing works based on the unauthorized use of Mattel's IP. 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 IP, particularly in foreign countries where the laws may not protect its IP as fully as in the United States. Mattel at times resorts to litigation to protect its IP rights, which could result in substantial costs and diversion of resources. Mattel's failure to protect its proprietary IP and information, including with respect to any successful challenge to Mattel's

~~ownership~~management ofand ~~its~~key IPpersonnel orfrom ~~significant~~business ~~infringements~~operations. Findings of ~~its~~infringement on the IP, ~~could~~rights ~~have~~of anany ~~adverse~~third ~~effect~~party onby Mattel's, ~~business~~its distributors, ~~financial~~its ~~condition~~licensors, ~~and~~or ~~results~~its ofmanufacturers ~~operations~~may require obtaining a license to use those rights, which may not be obtainable on reasonable terms, if at all.

Mattel has acquired, and may in the future acquire, certain IP 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, duties and tariffs (including international trade laws and regulations, export controls, and economic sanctions), trade restrictions, trade barriers, regulations regarding currency and financial matters, anticorruption standards (such as the U.S. Foreign Corrupt Practices Act), labor and employment, environmental matters, advertising directed toward children, product content, AI, 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 also lead to negative media attention, reputational damage, 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.

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.

22Mattel 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 or other 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 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, ~~2024~~2025, Mattel had $2.33 billion of indebtedness on a consolidated basis. 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~~Mattel's 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 over time. 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, and 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.

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.

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 ~~$1.00 billion~~ stock repurchase program, under which it is currently authorized to repurchase up to $~~600~~1.50 ~~million~~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, identity and access management, 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~~To issupport ~~subject~~incident toresponse ~~cybersecurity~~preparedness, ~~threats~~Mattel ~~that~~has ~~could~~developed ~~have~~ a ~~material~~cybersecurity ~~adverse~~incident ~~impact~~response onplan ~~its~~and ~~results~~conducts ofan ~~operations,~~annual ~~financial~~simulated ~~condition,~~incident ~~and~~exercise. ~~liquidity,~~The ascybersecurity ~~further~~incident ~~discussed~~response inplan ~~Item~~addresses 1Acybersecurity ~~"Risk~~incidents ~~Factors"~~that ~~under~~directly ~~the~~impact ~~headings~~Mattel ofor ~~Legal~~arise ~~and~~from ~~Regulatory.~~ Mattel's isuse ~~not aware~~ of ~~having~~third-party ~~experienced~~technology, ~~any~~information ~~cybersecurity~~systems, ~~threats~~and orservice ~~incidents~~providers. toMattel ~~date~~also ~~that~~utilizes ~~have~~business ~~materially~~continuity ~~affected~~and ordisaster ~~are~~recovery ~~reasonably~~plans ~~likely~~ to ~~materially~~prepare ~~affect~~for ~~Mattel,~~potential ~~its~~disruptions ~~business~~in ~~strategy,~~technology ~~results~~that ofMattel ~~operation~~relies ~~or financial condition~~upon. ~~However~~Further, ~~there can be no assurance that~~ Mattel ~~will~~monitors benovel ~~able~~and toadvanced ~~mitigate~~cybersecurity ~~negative~~threats ~~impacts~~and inprovides ~~the~~ongoing ~~event~~employee ofsecurity ~~future~~awareness ~~attacks or other cyber incidents~~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 cybersecurity experts that are responsible for the development and maintenance of Mattel's information security programs and regularly reports to Mattel's Chief Technology Officer ("CTO"). Mattel's Head of Cybersecurity leads the steering committee with respect to cybersecurity risk management matters and works closely with designated privacy leadership to protect personal information.

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 heading 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 event of future attacks or other cyber incidents.

Governance

Mattel's ~~CISO~~Head ~~has~~of Cybersecurity and the other members of the Cybersecurity Leadership Team have collectively more than ~~twenty~~thirty years of cybersecurity industry experience at Mattel and elsewhere and isare 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~~Head of Cybersecurity 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~~Head of Cybersecurity and supported by the Cybersecurity Leadership Team implements and maintains systems designed to detect and prevent cybersecurity threats, monitors important developments that may present risk to Mattel and third-party systems, and oversees the results of internal and third-party security reviews. The ~~CISO~~Head of Cybersecurity provides regular updates to Mattel's CTO regarding critical and major severity security incidents involving Mattel 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 Mattel'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. In 2024, Mattel purchased another building in El Segundo that will serve as its Global Design Center, consisting of approximately 168,000 square feet. Mattel also leases buildings in El Segundo consisting of approximately ~~387~~323,000 square feet. All segments use these facilities. Mattel also owns facilities in East Aurora, New York, consisting of approximately 607,000 square feet, used by the North America segment and for brand and corporate support functions and a distribution facility in DeForest, Wisconsin, consisting of approximately 350,000 square feet, which is used by the North America segment. 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, ~~a leased warehouse in Wisconsin,~~ distribution facilities in California, Pennsylvania, Texas, and in Mississauga, Canada, and retail and related office space in Chicago, Illinois; Los Angeles, California; and New York, New York for its flagship American Girl stores, and in four other cities across the United States for its American Girl boutique stores, all of which are used by the North America segment. 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, France, Mexico, and the United Kingdom. Mattel also leases office space and principal manufacturing facilities in China, which support the North America and International 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.26

For all 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.

2627

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 February 611, ~~2025~~2026, Mattel had approximately 1412,000 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 Equity Securities

During the fourth quarter of ~~2024~~2025, Mattel did not sell any unregistered equity securities.

Issuer Purchases of Equity Securities

During ~~2024~~2025, Mattel repurchased 2131.04 million shares of its common stock at a cost of $~~400~~600.0 million. During ~~2023~~2024, Mattel repurchased 1021.4 0 million shares of its common stock at a cost of $~~203~~400.0 million. During ~~2022~~2023, Mattel ~~did~~repurchased ~~not~~10.4 million ~~repurchase any~~ shares of its common stock at a cost of $203.0 million.

The following table provides certain information with respect to Mattel's purchases of its common stock during the fourth quarter of ~~2024~~2025:

Total Number of Shares Purchased (a)

Average Price Paid per Share

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)(In millions)

Period:

October 1 - 31

12,~~122~~802,~~377~~060

1918.6693

12,~~119~~800,~~197~~285

~~709~~134.75

November 1 - 30

57,~~784~~023,~~466~~231

1819.9826

56,~~780~~982,~~765~~015

~~600.0~~—

December 1 - 31

12,~~940~~468

1719.7993

—

~~600.0~~—

Total

69,~~908~~827,~~783~~759

19.0917

69,~~899~~782,~~962~~300

~~600.0~~—

(a)The total number of shares purchased includes 845,~~821~~459 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)On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program. As of December 31, ~~2024~~2025, ~~Mattel~~such ~~had~~authorization was exhausted. On February 9, 2026, the Board of Directors authorized a ~~remaining~~new ~~authorization~~$1.50 billion share repurchase program. As of February 20, 2026, Mattel has repurchased 5.9 million shares of its common stock at a cost of $~~600~~101.0 million under the new $1.50 billion share repurchase program. Repurchases under the ~~share repurchase~~ 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, 2019 and reinvestment of dividends.

	December 31,
	2019		2020		2021		2022		2023		2024
Cumulative Total Return:
Mattel, Inc.	$	100.00	$	128.78	$	159.11	$	131.66	$	139.34	$	130.85
S&P 500	$	100.00	$	118.39	$	152.34	$	124.73	$	157.48	$	196.85
S&P 500 Consumer Discretionary	$	100.00	$	133.30	$	165.87	$	104.45	$	148.63	$	193.43

Performance Graph


	December 31,
	2020		2021		2022		2023		2024		2025
Cumulative Total Return:
Mattel, Inc.	$	100.00	$	123.55	$	102.23	$	108.19	$	101.60	$	113.70
S&P 500	$	100.00	$	128.68	$	105.36	$	133.03	$	166.28	$	195.98
S&P 500 Consumer Discretionary	$	100.00	$	124.43	$	78.35	$	111.50	$	145.11	$	153.88

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." Amounts shown in millions or billions within this Item 7 may not sum due to rounding.

Mattel has omitted discussion of ~~2022~~2023 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, ~~2023~~2024.

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~~play and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel's ~~creates~~mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play., ~~Mattel~~and isits ~~focused~~purpose onis ~~the~~to ~~following~~empower ~~strategy~~generations to ~~grow~~explore ~~its~~the ~~IP-driven~~wonder ~~toy~~of ~~business~~childhood and ~~expand~~reach ~~its~~their ~~entertainment~~full ~~offering:~~ potential.

~~•Grow~~Mattel ~~toy~~is ~~business~~focused ~~profitably~~on ~~through~~the ~~scaling~~following ~~Mattel's~~new ~~portfolio,~~brand-centric ~~optimizing~~strategy ~~operations,~~to ~~evolving~~grow ~~demand~~its ~~creation,~~IP ~~and~~driven ~~growing~~play ~~franchise~~and ~~brands;~~family ~~and~~entertainment business:

•Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels;

•Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models;

•Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and

•Optimize operations and leverage AI across its systems and supply chain.

Recent Developments

~~During~~2025 ~~2024,~~was ~~Mattel~~marked ~~continued~~by touncertainty ~~execute~~in ~~its~~U.S. ~~multi-~~trade dynamics that affected retailer ordering patterns for much of the year. ~~strategy~~Although toU.S. ~~grow~~retailers ~~its~~had ~~IP-driven~~delayed ~~toy~~orders ~~business~~during the second and ~~expand~~third ~~its~~quarters ~~entertainment~~of ~~offering~~2025, ~~growing~~there ~~profitability~~was a significant acceleration in orders in the fourth quarter. Despite overall growth in the fourth quarter, ~~expanding~~growth ~~gross~~was less than anticipated in the United States and Mattel's full year results were below expectations. Full year net sales decreased 1%, as compared to the prior year. Gross margin was 48.7% in 2025, as compared to 50.8% in 2024, and ~~generating~~net ~~strong~~income ~~cash~~per ~~flow~~diluted common share was $1.24 in 2025, as compared to $1.58 in 2024.

Mattel's full year net sales declined 1%, which reflects a comparison with the benefits of the Barbie movie in the prior year. Gross margin expanded to 50.8% in 2024 compared to 47.5% in 2023, with benefits from favorable supply chain and other efficiencies, the Optimizing for Profitable Growth program ("OPG program"), lower inventory management costs, cost deflation, and favorable foreign currency exchange and other factors, which more than offset the prior year benefit associated with the Barbie movie. Operating income grew to $694.3 million, an improvement of $132.6 million, and earnings per share in 2024 increased to $1.58, compared to $0.60 in 2023.30

~~Mattel~~Global ~~ended~~trade policy continues to evolve and the ~~year~~ultimate impact of recent developments with respect to U.S. tariffs is unclear. On February 20, 2026, the United States Supreme Court issued a ~~cash~~ruling ~~balance~~striking ofdown $1certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA").~~39 billion~~ The ultimate availability, ~~compared~~timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to $1further legal, regulatory, and administrative developments.~~26 billion~~ inFollowing the ~~prior~~Supreme ~~year~~Court’s decision, the U.S. ~~Cash~~presidential ~~increased~~administration ~~primarily~~announced ~~due~~its intention to ~~Mattel's~~invoke ~~cash~~other ~~flows~~laws to collect tariffs and announced new tariffs on imports from ~~operations~~all countries, ~~which~~in ~~were~~addition ~~$800~~to any existing non-IEEPA tariffs.~~6 million~~ ~~during~~There remains substantial uncertainty regarding the ~~year.~~duration ~~Cash~~of ~~flows~~existing ~~from~~and ~~operations~~newly ~~were~~announced ~~partially~~tariffs, ~~offset~~potential bychanges ~~$400.0 million~~or ofpauses ~~cash~~to ~~used~~such ~~for~~tariffs, ~~share~~tariff ~~repurchases~~levels, and ~~capital~~whether ~~expenditures,~~further ~~including~~additional ~~$58.8 million~~tariffs ~~for~~or ~~the~~other ~~acquisition~~retaliatory ofactions amay ~~property~~be ~~that~~imposed, ~~will~~modified, ~~serve~~or assuspended, and the impacts of such actions on Mattel's ~~new~~business. ~~global~~Mattel ~~design~~continues ~~center,~~to ~~which~~monitor ~~will~~and ~~replace~~evaluate athese ~~facility~~developments ~~that~~and isassess ~~currently~~their ~~leased.~~potential impact on Mattel’s business, financial condition, and results of operations.

~~During~~Mattel ~~2024~~is tracking ahead of its multi-year savings target related to the Optimizing for Profitable Growth program ("OPG program"), and in the fourth quarter of 2025 Mattel ~~executed~~increased its targeted annual gross cost savings from $~~400~~200 million to $225 million. Mattel ended the year with cash and equivalents of $1.24 billion, as compared to $1.39 billion at the end of 2024, after $600.0 million of share repurchases ~~and~~during ~~has~~the ayear, which exhausted the remaining share repurchase authorization under the program announced on February 5, 2024. On February 9, 2026, the Board of Directors authorized a new $1.50 billion share repurchase program. Additionally, in November 2025, Mattel issued $600.0 million asof senior notes and used the proceeds of ~~December~~the ~~31,~~offering ~~2024~~plus cash on hand to repay $600.0 million of senior notes that were scheduled to mature in April 2026.

29On February 10, 2026, Mattel announced it had entered into a definitive agreement to acquire the remaining 50% ownership interest in Mattel163 Limited ("Mattel163"), a mobile games studio, for approximately $159 million, subject to customary closing adjustments. The completion of the transaction is subject to the satisfaction of customary closing conditions. Upon closing, Mattel will own 100% of Mattel163 and will begin consolidating its future financial results in Mattel's consolidated financial statements.

Additionally, in February 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program ("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 has targeted annual gross cost savings of $200.0 million between 2024 and 2026. During 2024, Mattel generated approximately $83 million of cost savings under the OPG program.

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 ~~2024~~2025 and ~~2023~~2024:

	For the Year Ended								Year/Year Change
	December 31, 2024				December 31, 2023
	December 31, 2025				December 31, 2024
	Amount		% of NetSales		Amount		% of NetSales		%		Basis Pointsof Net Sales
	(In millions, except percentage and basis point information)
Net sales	$	5,~~379~~347.56			$	5,~~441~~379.25			-1	%
Cost of sales	2,~~645~~742.50		4951.23	%	2,~~857~~645.5		5249.52	%	-74	%	~~(330)~~210
Gross profit	2,~~734~~605.17		5048.87	%	2,~~583~~734.71		4750.58	%	6-5	%	~~330~~(210)
Advertising and promotion expenses	~~507~~522.30		9.48	%	~~524~~507.83		9.64	%	-3	%	~~(20)~~40
Other selling and administrative expenses	1,~~532~~537.52		28.57	%	1,~~497~~532.35		2728.5	%	2—	%	~~100~~20
Operating income	~~694~~546.34		1210.92	%	~~561~~694.73		1012.39	%	24-21	%	~~260~~(270)
Interest expense	118.87		2.2	%	~~123~~118.8		2.32	%	-4—	%	~~(10)~~—
Interest (income)	(5145.50)		-1.0.8	%	(2551.25)		-01.50	%	~~104~~-13	%	~~(50)~~20
Other non-operating expense (income), net	4.5				(2.3)
Other non-operating expense, net	13.3				4.5
Income before income taxes	~~622~~459.5		118.6	%	~~465~~622.45		811.6	%	34-26	%	(300)
Provision for income taxes	~~105~~89.68				~~269~~105.56
(Income) from equity method investments	(2427.9)				(1824.49)
Net income	$	~~541~~397.86	107.14	%	$	~~214~~541.48	310.91	%	~~153~~-27	%	~~620~~(270)

Sales

Net sales in 2024 were $5.38 billion, a decrease of $61.7 million, or 1%, as compared to $5.44 billion in 2023. The decrease in net sales was primarily due to a decrease in gross billings of $68.6 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 2024 and 2023:

	For the Year Ended				% Change asReported		CurrencyExchange RateImpact
	December 31, 2024		December 31, 2023
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	2,200.5	$	2,394.2	-8	%	-1	%
Infant, Toddler, and Preschool	951.3		1,000.8		-5	%	-1	%
Vehicles	1,791.2		1,641.0		9	%	-1	%
Action Figures, Building Sets, Games, and Other	1,090.4		1,065.8		2	%	-1	%
Gross Billings	$	6,033.3	$	6,101.8	-1	%	-1	%
Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	1,350.1	$	1,537.8	-12	%	-1	%
Hot Wheels	1,575.0		1,432.4		10	%	-1	%
Fisher-Price (a)	700.8		681.5		3	%	-1	%
Other	2,407.4		2,450.2		-2	%	—	%
Gross Billings	$	6,033.3	$	6,101.8	-1	%	-1	%

(a) Beginning in the first quarter of 2024, the Fisher-Price power brand was revised to exclude Baby Gear and Imaginext products. Prior period amounts have been reclassified to conform to the current presentation.

Gross billings were $6.03 billion in 2024, a decrease of $68.6 million, or 1%, as compared to $6.10 billion in 2023, with an unfavorable impact from changes in currency exchange rates of one percentage point. The decrease in gross billings was due to lower billings of Dolls and Infant, Toddler, and Preschool products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products.

Dolls gross billings decreased 8%, due to lower billings of Barbie, which benefited from the Barbie movie in the prior year.

Infant, Toddler, and Preschool gross billings decreased 5%, primarily due to lower billings of Baby Gear and Power Wheels products of 5%, due to the continued strategic exit from certain product lines in Power Wheels and Baby Gear.

Vehicles gross billings increased 9%, due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 2%, of which 6% was due to higher billings of Games products and 1% was due to higher billings of Action Figures products, partially offset by lower billings of Building Sets products of 2% and lower billings of Other products of 3%.

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 decreased to $653.7 million in 2024, as compared to $660.6 million in 2023. Sales adjustments as a percentage of net sales were relatively consistent at 12.2% in 2024, as compared to 12.1% in 2023.

Cost of Sales

Cost of sales decreased by $212.0 million, or 7%, to $2.65 billion in 2024 from $2.86 billion in 2023. Within cost of sales, product and other costs decreased by $203.4 million, or 9%, to $2.08 billion in 2024 from $2.28 billion in 2023. Royalty expense decreased by $5.7 million, or 2%, to $244.1 million in 2024 from $249.8 million in 2023. Freight and logistics expenses decreased by $2.9 million, or 1%, to $324.1 million in 2024 from $327.0 million in 2023.

Net sales in 2025 were $5.35 billion, a decrease of $31.9 million, or 1%, as compared to $5.38 billion in 2024. The decrease in net sales was primarily due to an increase in sales adjustments of $77.7 million, partially offset by an increase in gross billings of $45.8 million.


	For the Year Ended				% Change as Reported		Currency Exchange Rate Impact
	December 31, 2025		December 31, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	2,056.1	$	2,200.5	-7	%	1	%
Infant, Toddler, and Preschool	786.3		951.3		-17	%	1	%
Vehicles	1,994.6		1,791.2		11	%	1	%
Action Figures, Building Sets, Games, and Other	1,242.1		1,090.4		14	%	1	%
Gross Billings	$	6,079.1	$	6,033.3	1	%	1	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	1,204.1	$	1,350.1	-11	%	1	%
Hot Wheels	1,749.7		1,575.0		11	%	1	%
Fisher-Price	622.3		700.8		-11	%	1	%
Other	2,503.0		2,407.4		4	%	1	%
Gross Billings	$	6,079.1	$	6,033.3	1	%	1	%

Gross billings were $6.08 billion in 2025, an increase of $45.8 million, or 1%, as compared to $6.03 billion in 2024, 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 Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Infant, Toddler, and Preschool and Dolls products.

Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 17%, of which 8% was due to lower billings of Fisher-Price products, 5% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels, and 4% was due to lower billings of Preschool Entertainment products.

Vehicles gross billings increased 11%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 14%, of which 18% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 4%.

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 $731.4 million in 2025, as compared to $653.7 million in 2024. Sales adjustments as a percentage of net sales increased to 13.7% in 2025 from 12.2% in 2024, primarily due to increased promotional activities and a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.

Cost of Sales

Cost of sales increased by $96.5 million, or 4%, to $2.74 billion in 2025 from $2.65 billion in 2024. Within cost of sales, product and other costs increased by $63.7 million, or 3%, to $2.14 billion in 2025 from $2.08 billion in 2024. Royalty expense increased by $20.5 million, or 8%, to $264.6 million in 2025 from $244.1 million in 2024. Freight and logistics expenses increased by $12.3 million, or 4%, to $336.4 million in 2025 from $324.1 million in 2024.

Gross Margin

Gross margin ~~increased~~decreased to 5048.87% in ~~2024~~2025 from 4750.58% in ~~2023~~2024. The ~~increase~~decrease in gross margin was primarily due to ~~favorable~~the ~~supply~~impact ~~chain~~of ~~and~~cost ~~other~~inflation ~~efficiencies~~ of ~~130~~100 basis points, ~~incremental~~unfavorable ~~realized~~foreign ~~savings~~currency ~~from~~exchange ~~the OPG program~~ of 9060 basis points, ~~lower~~and ~~inventory~~higher ~~management~~discounts ~~costs~~and other factors of 60160 basis points, ~~including~~partially ~~lower~~offset ~~close-out~~by ~~sales~~incremental ~~and~~realized ~~inventory~~savings ~~obsolescence,~~from ~~cost~~the ~~deflation~~OPG program of 5090 basis points, and ~~favorable~~the ~~foreign~~net ~~currency~~impact ~~exchange~~of ~~and~~tariff ~~other~~costs, ~~factors~~which ofwere 90more ~~basis~~than ~~points, partially~~ offset by ~~unfavorable~~the ~~mix~~timing of 90mitigating ~~basis~~actions ~~points~~of ~~primarily~~30 ~~related~~basis ~~to the prior year benefit from the Barbie movie~~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~~digital 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) general advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales were relatively flat at 9.48% in ~~2024~~2025, as compared to 9.64% in ~~2023~~2024.

Other Selling and Administrative Expenses

Other selling and administrative expenses were $1.5354 billion, or 28.57% of net sales, in ~~2024~~2025, an increase of $354.28 million, as compared to $1.5053 billion, or 2728.5% of net sales, in ~~2023~~2024. The increase in other selling and administrative expenses was primarily due to ~~employee~~higher ~~compensation~~expenses ~~increases~~related to inclined sleeper product recalls and related litigation of $30.8 million and higher ~~incentive~~outside ~~compensation~~services and other expenses of $6569.65 million, partially offset by lower employee compensation related expenses, including lower incentive compensation, of $50.2 million, and realized savings from ~~cost~~the ~~savings~~OPG ~~programs~~program of $3040.86 million.

Interest Expense

Interest expense was $118.87 million in ~~2024~~2025, arelatively ~~decrease~~flat ~~of $5.0 million~~ as compared to $~~123~~118.8 million in ~~2023~~2024.

Interest Income

Interest income ~~increased~~decreased by $266.25 million to $5145.50 million in ~~2024~~2025 from $2551.25 million in ~~2023, primarily due to higher average invested cash balances in~~ 2024.

Provision for Income Taxes

Mattel's provision for income taxes was $~~105~~89.6 8 million in ~~2024~~2025, as compared to ~~a provision for income taxes of~~ $~~269~~105.5 6 million in ~~2023~~2024. The decrease in provision for income taxes was ~~the~~due ~~result~~to oflower ~~the~~income ~~intra-group~~before ~~transfer~~income oftaxes ~~certain~~in IP2025, ~~rights~~partially offset by a decrease in ~~the~~non-recurring ~~prior~~discrete ~~year~~income tax benefits. In 2025, ~~resulting~~Mattel inrecognized a net income tax ~~expense~~benefit of $~~161~~26.4 8 million, primarily related to ~~the~~a ~~write-down~~change of its indefinite reinvestment assertion with respect to certain foreign ~~deferred~~subsidiary ~~tax~~earnings ~~assets~~ and ~~establishment~~release of ~~certain~~previously ~~U.S.~~unrecognized ~~deferred~~ tax ~~assets~~benefits. ~~Additionally,~~In in 2024, Mattel recognized a net income tax benefit of $34.8 million related to tax elections filed to amortize certain intangible assets transferred as part of Mattel’s intra-group IP rights transfer and establishment of certain U.S. deferred tax assets~~, which was offset by higher income tax expense as a result of an increase in income before income taxes~~.

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 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,~~2025 ~~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~~2024, ~~respectively. Changes in~~ the valuation ~~allowances~~allowance inwas ~~2024~~ primarily related to ~~changes~~foreign innet ~~assessment~~operating ofloss ~~the~~carryforwards ~~future realizability of certain deferred tax assets, utilization~~ and ~~expiration~~foreign of tax ~~attributes.~~credits Asthat ~~of December 31, 2024,~~ Mattel's ~~valuation~~does ~~allowances~~not onexpect ~~its~~to ~~U.S.~~realize, ~~federal~~ and ~~state~~there ~~deferred tax assets and foreign deferred tax assets~~ were ~~approximately~~no ~~$12 million~~material ~~and $85 million, respectively~~changes. ~~As of December 31, 2024 and 2023, Mattel has recorded net deferred tax assets of $252.5 million and $243.1 million, respectively.~~

32On July 4, 2025, H.R.1- the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA contains significant provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective for the tax year beginning after December 31, 2024, and others effective for tax years beginning after December 31, 2025. Mattel has evaluated the OBBBA provisions that have been enacted and has included the related impact in the provision for income taxes for the year ended

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. Mattel does not expect the provisions that went into effect in 2024 to have a materially adverse impact on its results of operations, financial position, or cash flows.33

December 31, 2025, which was not material. Mattel will continue to assess the potential future tax implications of this legislation and monitor future developments, including regulatory guidance and interpretations as they become available.

Segment Results

North America Segment

~~Beginning~~The infollowing ~~the~~tables ~~first~~provide ~~quarter~~a summary of ~~2024,~~ Mattel's ~~American~~net ~~Girl~~sales, ~~business~~segment ~~was~~income, ~~integrated~~and ~~into~~gross ~~its~~billings ~~North~~by ~~America~~categories, ~~commercial~~along ~~organization~~with ~~and~~supplemental isinformation ~~reported~~by ~~within~~brand, for the North America ~~operating~~ segment. ~~Prior~~for to2025 ~~the~~and ~~first quarter of~~ 2024~~, Mattel's American Girl business was a separate reportable operating segment. Prior period amounts have been reclassified to conform to the current period presentation.~~:

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 2024 and 2023:


	For the Year Ended				% Change as Reported		Currency Exchange Rate Impact
	December 31, 2025		December 31, 2024
	(In millions, except percentage information)
Net Sales	$	3,001.1	$	3,168.1	-5	%	—	%
Segment Income	704.7		840.0		-16	%

	For the Year Ended				% Change asReported		CurrencyExchange RateImpact
	December 31, 2024		December 31, 2023
	(In millions, except percentage information)
Net Sales	$	3,168.1	$	3,210.4	-1	%	—	%
Segment Operating Income	840.0		787.7		7	%

Net sales for the North America segment in 2025 were $3.00 billion, a decrease of $167.0 million, or 5%, as compared to $3.17 billion in 2024. The decrease in net sales was primarily due to a decrease in gross billings of $132.4 million and an increase in sales adjustments of $34.6 million.

Net sales for the North America segment in 2024 were $3.17 billion, a decrease of $42.4 million, or 1%, as compared to $3.21 billion in 2023. The decrease in net sales was primarily due to a decrease in gross billings of $37.9 million.


	For the Year Ended				% Change as Reported		Currency Exchange Rate Impact
	December 31, 2025		December 31, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	1,201.4	$	1,280.1	-6	%	—	%
Infant, Toddler, and Preschool	463.2		583.3		-21	%	—	%
Vehicles	894.4		860.6		4	%	—	%
Action Figures, Building Sets, Games, and Other	703.2		670.6		5	%	—	%
Gross Billings	$	3,262.2	$	3,394.6	-4	%	—	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	650.8	$	734.9	-11	%	—	%
Hot Wheels	760.6		741.3		3	%	—	%
Fisher-Price	369.8		421.3		-12	%	—	%
Other	1,481.0		1,497.0		-1	%	—	%
Gross Billings	$	3,262.2	$	3,394.6	-4	%	—	%

	For the Year Ended				% Change asReported		CurrencyExchange RateImpact
	December 31, 2024		December 31, 2023
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	1,280.1	$	1,368.0	-6	%	—	%
Infant, Toddler, and Preschool	583.3		618.6		-6	%	—	%
Vehicles	860.6		812.4		6	%	—	%
Action Figures, Building Sets, Games, and Other	670.6		633.5		6	%	—	%
Gross Billings	$	3,394.6	$	3,432.5	-1	%	—	%
Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	734.9	$	840.4	-13	%	—	%
Hot Wheels	741.3		690.8		7	%	—	%
Fisher-Price (a)	421.3		404.9		4	%	—	%
Other	1,497.0		1,496.3		—	%	—	%
Gross Billings	$	3,394.6	$	3,432.5	-1	%	—	%

Gross billings for the North America segment were $3.26 billion in 2025, a decrease of $132.4 million, or 4%, as compared to $3.39 billion in 2024. The decrease in the North America segment gross billings was primarily due to lower billings of Infant, Toddler, and Preschool and Dolls products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products.

~~(a)~~Dolls ~~Beginning~~gross inbillings ~~the~~decreased ~~first quarter of 2024~~6%, ~~the~~primarily ~~Fisher-Price~~due ~~power brand was revised~~ to ~~exclude~~lower ~~Baby~~billings ~~Gear~~of ~~and~~Barbie ~~Imaginext~~ products. ~~Prior period amounts have been reclassified to conform to the current presentation.~~

~~Gross~~Infant, ~~billings~~Toddler, ~~for~~and ~~the~~Preschool ~~North~~gross ~~America~~billings ~~segment~~decreased ~~were~~21%, ~~$3.39~~of ~~billion~~which in9% ~~2024,~~was adue ~~decrease~~to lower billings of ~~$37.9 million~~Fisher-Price products, ~~or 1~~7%, aswas ~~compared~~due to ~~$3.43~~lower ~~billion~~billings inof ~~2023.~~Baby ~~The~~Gear ~~decrease~~and inPower ~~the~~Wheels ~~North~~products, ~~America~~due ~~segment~~to ~~gross~~the ~~billings~~continued ~~was~~strategic ~~primarily~~exit ~~due~~from tocertain ~~lower~~product ~~billings~~lines ofin ~~Dolls~~Baby Gear and ~~Infant,~~Power ~~Toddler~~Wheels, and ~~Preschool~~5% ~~products,~~was ~~partially~~due ~~offset~~to bylower ~~higher~~ billings of ~~Vehicles~~Preschool ~~and~~Entertainment ~~Action Figures, Building Sets, Games, and Other~~ products.

33Vehicles gross billings increased 4%, of which 2% was due to higher billings of Hot Wheels products and 1% was due to higher billings of Cars products.

~~Dolls~~Action Figures, Building Sets, Games, and Other gross billings ~~decreased~~increased 65%, of which 15% was due to ~~lower~~higher billings of ~~Barbie~~Action Figures products, ~~which~~primarily ~~benefited~~due ~~from~~to ~~the~~higher ~~Barbie~~billings ~~movie~~of Jurassic World and Minecraft products in ~~the~~connection ~~prior~~with ~~year~~their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 5% and lower billings of Games products of 3%.

Infant, Toddler, and Preschool gross billings decreased 6%, due to lower billings of Baby Gear and Power Wheels products.

Vehicles gross billings increased 6%, due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 6%, of which 6% was due to higher billings of Action Figures products and 5% was due to higher billings of Games products, partially offset by lower billings of Building Sets products of 2% and lower billings of Other products of 2%.

Sales adjustments increased to $226.5 million in 2024, as compared to $222.1 million in 2023. Sales adjustments as a percentage of net sales were relatively consistent at 7.1% in 2024 as compared to 6.9% in 2023.

Cost of sales decreased by $121.1 million, or 7%, to $1.60 billion in 2024 from $1.72 billion in 2023, primarily due to a decrease in product and other costs of $115.8 million.

Gross margin increased to 49.4% in 2024 from 46.3% in 2023, primarily due to supply chain and other efficiencies of 210 basis points, incremental realized savings from the OPG program of 90 basis points, lower inventory management costs of 60 basis points, including lower inventory obsolescence and close-out sales, and favorable other factors of 40 basis points, partially offset by unfavorable mix of 90 basis points primarily related to the prior year benefit from the Barbie movie.

North America segment operating income was $840.0 million in 2024, as compared to $787.7 million in 2023, due to higher gross profit of $78.7 million, partially offset by higher other selling and administrative expenses of $33.2 million.

International Segment

	For the Year Ended				% Change asReported		CurrencyExchange RateImpact
	December 31, 2024		December 31, 2023
	(In millions, except percentage information)
Net Sales	$	2,211.5	$	2,230.8	-1	%	-1	%
Segment Operating Income	389.0		299.1		30	%

Net sales for the International segment in 2024 were $2.21 billion, a decrease of $19.3 million, or 1%, as compared to $2.23 billion in 2023. The decrease in net sales was due to a decrease in gross billings of $30.6 million, partially offset by a decrease in sales adjustments of $11.3 million.

	For the Year Ended				% Change asReported		CurrencyExchange RateImpact
	December 31, 2024		December 31, 2023
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	920.4	$	1,026.2	-10	%	-1	%
Infant, Toddler, and Preschool	368.0		382.2		-4	%	-2	%
Vehicles	930.5		828.6		12	%	-2	%
Action Figures, Building Sets, Games, and Other	419.8		432.3		-3	%	-1	%
Gross Billings	$	2,638.7	$	2,669.4	-1	%	-1	%
Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	615.2	$	697.4	-12	%	-1	%
Hot Wheels	833.7		741.6		12	%	-2	%
Fisher-Price (a)	279.5		276.5		1	%	-2	%
Other	910.3		953.8		-5	%	-1	%
Gross Billings	$	2,638.7	$	2,669.4	-1	%	-1	%

Sales adjustments increased to $261.2 million in 2025, as compared to $226.5 million in 2024. Sales adjustments as a percentage of net sales increased to 8.7% in 2025 as compared to 7.1% in 2024, primarily due to a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates and increased promotional activities.

~~(a)~~Cost ~~Beginning~~of insales ~~the~~decreased ~~first~~by ~~quarter~~$31.0 million, ofor ~~2024~~2%, ~~the Fisher-Price power brand was revised~~ to ~~exclude~~$1.57 billion ~~Baby~~in ~~Gear~~2025 ~~and~~from ~~Imaginext products~~$1.60 billion ~~Prior~~in ~~period~~2024, ~~amounts~~primarily ~~have~~due ~~been~~to ~~reclassified~~a todecrease ~~conform~~in toproduct ~~the~~and ~~current~~other ~~presentation~~costs of $34.8 million.

~~Gross~~North ~~billings~~America ~~for~~segment ~~the~~income ~~International~~decreased ~~segment~~by ~~were~~ $2135.643 million ~~billion~~to ~~in 2024, a decrease of~~ $30704.67 million, orin 1%2025, as compared to $2840.670 million ~~billion~~ in ~~2023, with an unfavorable impact from changes in currency exchange rates of one percentage point~~2024. The decrease ~~in the International segment gross billings~~ was primarily due to lower ~~billings~~net sales of ~~Dolls~~$167.0 million, ~~Infant, Toddler, and Preschool, and Action Figures, Building Sets, Games, and Other products,~~ partially offset by ~~higher~~lower ~~billings~~cost of ~~Vehicles~~sales ~~products.~~of $31.0 million.

~~Dolls~~International ~~gross billings decreased 10%, of which 8% was due to lower billings of Barbie primarily due to the benefit of the Barbie movie in the prior year.~~ Segment

~~Infant~~The following tables provide a summary of Mattel's net sales, ~~Toddler~~segment income, and ~~Preschool~~ gross billings ~~decreased~~by 4%categories, ofalong ~~which~~with 3%supplemental ~~was~~information ~~due~~by tobrand, ~~lower~~for ~~billings~~the ofInternational ~~Baby~~segment ~~Gear~~for 2025 and ~~Power Wheels products.~~2024:

Vehicles gross billings increased 12%, of which 11% was due to higher billings of Hot Wheels products.


	For the Year Ended				% Change as Reported		Currency Exchange Rate Impact
	December 31, 2025		December 31, 2024
	(In millions, except percentage information)
Net Sales	$	2,346.6	$	2,211.5	6	%	2	%
Segment Income	445.0		389.0		14	%

~~Action~~Net ~~Figures,~~sales ~~Building~~for ~~Sets,~~the ~~Games,~~International ~~and~~segment ~~Other~~in ~~gross~~2025 ~~billings~~were ~~decreased~~$2.35 3%billion, an increase of ~~which~~$135.1 million, 5or 6%, ~~was~~as ~~due~~compared to ~~lower~~$2.21 ~~billings~~billion ofin ~~Action~~2024. ~~Figures~~The ~~products~~increase ~~and~~in 3%net sales was due to ~~lower~~an increase in gross billings of ~~Other products~~$178.1 million, partially offset by ~~higher~~an ~~billings~~increase ofin ~~Games~~sales ~~products~~adjustments of 6%$43.0 million.

Sales adjustments decreased to $427.2 million in 2024, as compared to $438.6 million in 2023. Sales adjustments as a percentage of net sales were relatively consistent at 19.3% in 2024 as compared to 19.7% in 2023.


	For the Year Ended				% Change as Reported		Currency Exchange Rate Impact
	December 31, 2025		December 31, 2024
	(In millions, except percentage information)
Gross Billings by Categories
Dolls	$	854.7	$	920.4	-7	%	2	%
Infant, Toddler, and Preschool	323.1		368.0		-12	%	1	%
Vehicles	1,100.2		930.5		18	%	2	%
Action Figures, Building Sets, Games, and Other	538.8		419.8		28	%	3	%
Gross Billings	$	2,816.8	$	2,638.7	7	%	2	%

Supplemental Gross Billings Disclosure
Gross Billings by Top 3 Power Brands
Barbie	$	553.3	$	615.2	-10	%	2	%
Hot Wheels	989.0		833.7		19	%	2	%
Fisher-Price	252.5		279.5		-10	%	1	%
Other	1,022.0		910.3		12	%	3	%
Gross Billings	$	2,816.8	$	2,638.7	7	%	2	%

~~Cost~~Gross ofbillings ~~sales~~for ~~decreased~~the byInternational segment were $~~95.~~2.82 billion in 2025, an increase of $178.1 million, or 87%, as compared to $12.14 64 billion in 2024, with a favorable impact from $1changes in currency exchange rates of two percentage points.~~23 billion~~ The increase in ~~2023,~~the ~~primarily~~International segment gross billings was due to ahigher ~~decrease~~billings of ~~product~~Vehicles and ~~other~~Action ~~costs~~Figures, Building Sets, Games, and Other products, partially offset by lower billings of ~~$92~~Dolls and Infant, Toddler, and Preschool products.~~4 million.~~

~~Gross~~Dolls ~~margin~~gross inbillings ~~2024~~decreased ~~increased to 48.5% from 44.~~7% ~~in 2023~~, primarily due to ~~incremental realized savings from the OPG program of 100 basis points, cost deflation of 100 basis points,~~ lower ~~inventory~~billings ~~management costs~~ of 70 basis points, including lower close-out sales and inventory obsolescence, favorable supply chain and other efficiencies of 60 basis points, and favorable foreign currency exchange and other factors of 160 basis points, partially offset by unfavorable mix of 110 basis points, primarily related to the prior year benefit from the Barbie ~~movie~~products.

~~International~~Infant, ~~segment~~Toddler, ~~operating~~and ~~income~~Preschool ~~was~~gross ~~$389.0 million~~billings indecreased ~~2024~~12%, asof ~~compared~~which 7% was due to ~~$299.1 million~~lower inbillings ~~2023~~of Fisher-Price products, ~~primarily~~3% was due to ~~higher~~lower ~~gross~~billings ~~profit~~ of ~~$75.9 million~~Preschool Entertainment products, and 2% was due to lower ~~advertising~~billings of Baby Gear and ~~promotion~~Power ~~expenses~~Wheels ofproducts, ~~$10~~due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.~~8 million.~~

Vehicles gross billings increased 18%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 28%, of which 24% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, and 7% was due to higher billings of Games products.

Sales adjustments increased to $470.3 million in 2025, as compared to $427.2 million in 2024. Sales adjustments as a percentage of net sales increased to 20.0% in 2025 from 19.3% in 2024, primarily due to increased promotional activities.

Cost of sales increased by $42.3 million, or 4%, to $1.18 billion in 2025 from $1.14 billion in 2024, primarily due to an increase in royalty expense of $17.1 million and an increase in product and other costs of $13.3 million.

International segment income increased by $56.0 million to $445.0 million in 2025, as compared to $389.0 million in 2024, primarily due to higher net sales of $135.1 million, partially offset by higher cost of sales of $42.3 million, higher other selling and administrative expenses of $22.0 million, and higher advertising and promotion expenses of $14.7 million.

Cost Savings Programs

Optimizing for Profitable Growth

On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023. The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel's global supply chain, including its manufacturing footprint. 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, as well as savings from other previous actions taken in 2023 that were not recognized in the OFG program. Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by the end of 2026, ~~are~~were increased from $200 million to $225 million in the fourth quarter of 2025. Of the $~~200~~225 million in targeted annual gross costs savings, approximately 7055% is expected to benefit cost of sales and 3045% is expected to benefit other selling and administrative expenses. Total ~~expected~~ cash expenditures under the OPG program are expected to be between $~~130~~115 and $~~165~~ 140 million and total non-cash charges are expected to be up to $5 million.

The costs associated with the OPG program are expected to include the following:

Optimizing for Profitable Growth – Actions			Estimate of Cost
Employee severance			$90105 to $~~105~~120 million
Other restructuring costs			$105 to $2010 million
Non-cash charges			up to $5 million
Total estimated severance and other restructuring costs			$~~100~~110 to $~~130~~135 million
Investments			$305 to $4010 million
Total estimated actions			$~~130~~115 to $~~170~~145 million

In connection with the OPG 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 31,2024		December 31,2023
	December 31,2025		December 31,2024
	(In millions)
Cost of sales (a)	$	47.38	$	—4.3
Other selling and administrative expenses (b)	4433.95		2544.39
	$	4941.23	$	2549.32

(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 unallocated corporate and other ~~expense~~operating expenses in "Note 14 to the Consolidated Financial Statements—Segment Information."

As of December 31, 2024, Mattel had recorded cumulative severance and other restructuring charges related to the OPG program of approximately $74 million, which included approximately $2 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $83 million, which represents approximately 60% benefit to cost of sales, and 40% benefit to other selling and administrative expenses, as of December 31, 2024, in connection with the OPG Program.

Other Cost Savings Actions

As of December 31, 2023, Mattel concluded the OFG program, a multi-year cost savings program that had integrated and expanded upon the previous Capital Light program. During 2023 and 2022, Mattel recorded severance and other restructuring charges of $32.3 million and $23.6 million, respectively, within other selling and administrative expenses and $(1.3) million and $10.7 million, respectively, within cost of sales in the consolidated statement of operations in connection with the OFG program.

During 2023, Mattel executed actions to further streamline its organizational structure that were not included in the OFG program. In connection with these actions, Mattel recorded severance charges of $3.4 million within other selling and administrative expenses in the consolidated statement of operations.

As of December 31, 2025, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $116 million, which included approximately $5 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $172 million, which represents approximately 60% benefit to cost of sales, and approximately 40% benefit to other selling and administrative expenses as of December 31, 2025.

Other Cost Savings Actions

Mattel periodically executes additional actions to simplify and streamline its organizational structure that are not included in its cost savings programs. In connection with these actions, Mattel recorded severance charges of $5.6 million within other selling and administrative expenses during 2025. Mattel did not record any such charges in 2024.

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, driven by cash flows from operating activities, short-term borrowing facilities, including its $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "Credit Facility"), ~~which on July 15, 2024 replaced the $1.40 billion prior 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 $1.3924 billion in cash and equivalents at December 31, ~~2024~~2025, $~~728~~686.1 million was held by foreign subsidiaries, including $4874.94 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. In early 2022, Mattel paused all shipments into Russia.

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, such as tariffs, 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 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 Credit Facility, and access to capital markets, will be sufficient to meet working capital, operating expenditure, and ~~operating~~other ~~expenditure~~contractual requirements for the next twelve months and in the long-term.

~~The~~Mattel ~~Tax~~has ~~Cuts and Jobs Act, enacted on December 22, 2017 (~~the ~~"U.S.~~ability ~~Tax Act"), provides Mattel with a reduced cost~~ to ~~access~~repatriate ~~the earnings of its~~ foreign ~~subsidiaries. With the passage of the U.S. Tax Act~~earnings, ~~repatriations~~which ~~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 $2213.18 million deferred tax liability related to approximately $~~559~~701 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.

Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At December 31, ~~2024~~2025, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the 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~~expects ~~defined~~that ~~benefit~~some ~~pension~~of ~~plans~~its customers and ~~postretirement~~vendors ~~benefit~~may ~~plans~~experience ~~for~~difficulty ~~its~~in ~~employees.~~obtaining ~~Actual~~the ~~returns~~liquidity ~~below~~required ~~the~~to ~~expected~~buy ~~rate~~inventory ofor ~~return,~~raw ~~along~~materials. ~~with~~Mattel ~~changes~~monitors inits ~~interest~~customers' ~~rates~~financial ~~that~~condition ~~affect~~and ~~the~~their ~~measurement~~liquidity ofin ~~the~~order ~~liability,~~to ~~would~~mitigate ~~impact~~accounts ~~the~~receivable ~~amount~~collectability risks, and ~~timing~~customer ofterms ~~Mattel's~~and ~~future~~credit ~~contributions~~limits toare ~~these~~adjusted, ~~plans~~if necessary. Additionally, Mattel ~~expects~~uses a variety of financial arrangements to ~~make~~support ~~cash~~the ~~contributions~~collectability ~~totaling~~of ~~approximately~~accounts ~~$21~~receivable ~~million~~of tocustomers ~~its~~deemed ~~defined~~to ~~benefit~~be ~~pension~~a ~~and~~credit ~~postretirement~~risk, ~~benefit~~including ~~plans~~requiring inletters ~~2025~~of credit, ~~substantially~~purchasing ~~all~~various forms of ~~which~~credit ~~will~~insurance bewith ~~for~~unrelated ~~benefit~~third ~~payments~~parties, ~~for~~or ~~its~~requiring ~~under-funded~~cash ~~plans~~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 2026, substantially all of which will be for benefit payments for its underfunded plans.

Cash Flow Activities

Cash flows provided by operating activities were $~~800~~593.63 million in ~~2024~~2025, as compared to $~~869~~800.86 million in ~~2023~~2024. The decrease in cash flows provided by operating activities was primarily due to ana ~~increase~~decrease in ~~cash~~net ~~used for working capital of $191.1 million~~income, ~~which~~excluding ~~included $285.8 million of unfavorable changes in inventories, reflecting~~ the ~~prior year~~ impact of ~~reduced~~non-cash ~~inventory levels~~items, and ~~$86.1~~an ~~million~~increase ~~of unfavorable changes~~ in ~~accounts~~cash ~~payable~~used ~~and~~for ~~accrued~~working ~~liabilities,~~capital ~~partially~~of ~~offset by~~ $~~219~~26.7 8 million ~~of favorable changes in accounts receivable~~. ~~The unfavorable changes to working capital were partially offset by an increase in net income, excluding the impact of non-cash items.~~

Cash flows used for investing activities were $~~189~~154.09 million in ~~2024~~2025, as compared to $~~142~~189.40 million in ~~2023~~2024. The ~~increase~~decrease in cash flows used for investing activities was primarily due to a ~~$42.3 million~~decrease ~~increase~~ in ~~capital~~purchases ~~expenditures,~~of ~~including~~other ~~the~~property, ~~July~~plant, ~~2024~~and ~~purchase~~equipment of a$24.6 million, ~~property~~which ~~that~~included ~~will~~the ~~serve~~purchase asof ~~Mattel's~~an ~~new~~office ~~global~~building ~~design center~~ for $58.8 million. in July 2024.

Cash flows used for financing activities were $~~449~~620.46 million in ~~2024~~2025, as compared to $~~226~~449.64 million in ~~2023~~2024. The increase in cash flows used for financing activities was primarily due to $~~197~~200.0 million of ~~higher~~increased share repurchases in ~~2024~~2025 compared to ~~2023~~2024.

During ~~2024~~2025, Mattel repurchased 2131.04 million shares of its common stock at a cost of $~~400~~600.0 million. During ~~2023~~2024, Mattel repurchased 1021.40 million shares of its common stock at a cost of $~~203~~400.0 million. 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, which as of December 31, 2023 was exhausted. On February 5, 2024, the Board of Directors authorized a ~~new~~ $1.00 billion share repurchase program., Aswhich as of December 31, ~~2024,~~2025 ~~Mattel~~was ~~had~~exhausted. aOn ~~remaining~~February ~~authorization~~9, 2026, the Board of Directors authorized a new $~~600~~1.050 billion ~~million~~share ~~under~~repurchase ~~the~~ 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 ~~2024~~2025 and ~~2023~~2024, 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 ~~2024~~2025, Fitch ~~changed~~maintained Mattel's credit rating ~~from~~of ~~BB+ to~~ BBB- with a stable outlook, Standard & Poor's ~~changed~~maintained Mattel's credit rating ~~from~~of BBB- ~~to BBB~~ with a stable outlook, and Moody's maintained Mattel's credit rating of Baa3 with a stable outlook.

Financial Position

Mattel's cash and equivalents ~~increased~~decreased $~~126~~145.50 million to $1.3924 billion at December 31, ~~2024~~2025, as compared to $1.2639 billion at December 31, ~~2023~~2024, primarily due to ~~cash~~share ~~flow~~repurchases ~~provided~~of by$600.0 million ~~operating~~and ~~activities~~capital expenditures of $~~800~~182.6 0 million, partially offset by ~~share~~cash ~~repurchases~~flow ofprovided ~~$400.0 million~~by ~~and~~operating ~~capital~~activities ~~expenditures~~ of $~~202~~593.63 million.

Accounts receivable ~~decreased~~increased $7894.64 million to $1.0010 billion at December 31, ~~2024~~2025, as compared to $1.0800 billion at December 31, ~~2023~~2024, primarily due to higher net sales in the ~~impact~~fourth quarter of ~~foreign~~2025 ~~currency~~of ~~translation~~$120.1 ~~and~~million, partially offset by the timing of ~~sales and~~ collections.

Inventories ~~decreased~~increased $6961.94 million to $~~501~~563.71 million at December 31, ~~2024~~2025, as compared to $~~571~~501.67 million at December 31, ~~2023~~2024, primarily due to ~~continued~~tariff ~~inventory~~related ~~management~~impacts ~~efforts~~in ~~during~~the ~~2024~~United States and the impact of foreign currency translation.

Prepaid expenses and other current assets ~~increased~~decreased $267.60 million to $~~234~~227.1 million at December 31, ~~2024~~2025, as compared to $~~207~~234.51 million at December 31, ~~2023~~2024. The changes included a decrease in derivatives receivable of $17.9 million, ~~primarily~~partially ~~due~~offset toby an increase in ~~derivative~~prepaid ~~receivables~~royalties of $1617.58 million.

Accounts payable and accrued liabilities decreased $30.9 million to $1.28 billion at December 31, 2024, as compared to $1.31 billion at December 31, 2023, primarily due to a decrease of $43.2 million in accounts payable, partially offset by an increase in accrued advertising expense of $18.1 million.

Accounts payable and accrued liabilities increased $150.6 million to $1.43 billion at December 31, 2025, as compared to $1.28 billion at December 31, 2024, primarily due to an increase of $156.4 million in accounts payable, an increase in derivative liabilities of $12.8 million, and an increase in accrued royalties of $10.1 million, partially offset by a decrease in accrued incentive compensation expense of $67.0 million and a decrease in accrued advertising of $29.9 million.

A summary of Mattel's capitalization is as follows:

	December 31, 2024				December 31, 2023
	December 31, 2025				December 31, 2024
	(In millions, except percentage information)
Cash and equivalents	$	1,~~387~~242.9			$	1,~~261~~387.49
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	(15.6)				(20.0)
2025 Senior Notes due November 2030	600.0				—
Total debt	2,334.4		51	%	2,330.0		52	%
Debt issuance costs and debt discount	(18.3)				(15.6)
Stockholders' equity	2,264.1		49		2,149.2		48
Total debt	2,331.7		51	%	2,334.4		51	%
Total capitalization (debt plus equity)	$	4,598.5	100	%	$	4,479.2	100	%
Stockholders' equity	2,233.0		49		2,264.1		49
Total capitalization (debt plus equity)	$	4,564.7	100	%	$	4,598.5	100	%

Total debt was $2.33 billion at December 31, ~~2024~~2025, flat as compared to $2.33 billion at December 31, ~~2023~~2024. During 2025, Mattel issued $600.0 million of 2025 Senior Notes due November 2030 and used the proceeds plus cash on hand to repay $600.0 million of 2021 Senior Notes due April 2026.

Stockholders' equity ~~increased~~decreased $~~114~~31.91 million to $2.2623 billion at December 31, ~~2024~~2025, as compared to $2.1526 billion at December 31, ~~2023~~2024, primarily due to share repurchases of $600.0 million, partially offset by net income in ~~2024~~2025 of $~~541~~397.86 million, other comprehensive income of $103.9 million, and the impact of share-based compensation on additional paid-in capital of $79.47 million~~, partially offset by share repurchases of $400~~.~~0 million and other comprehensive loss of $89.5 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 as of December 31, ~~2024~~2025 and ~~2023~~2024.

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. These obligations represent those for which Mattel is contractually obligated and do not represent all future expected purchases. For obligations subject to variable price and/or quantity provisions, a best estimate of such variables is made. Actual cash payments may vary due to the variable pricing components of certain purchase obligations.

The following table summarizes Mattel's contractual commitments and obligations:

	Total		~~2025~~2026		~~2026~~2027		~~2027~~2028		~~2028~~2029		~~2029~~2030		Thereafter
	(In millions)
Long-term debt	$	2,350.0	$	—	$	600.0	$	~~600.0~~—	$	—600.0	$	600.0	$	550.0
Interest on long-term debt	~~744~~775.69		~~109~~119.96		94118.71		8884.14		5467.45		3758.51		~~360~~328.02
Leases	~~438~~442.5		93105.36		8376.58		5257.52		3945.90		3542.68		~~133~~115.71
Minimum guarantees under licensing and similar agreements	~~153~~336.98		94100.60		3094.73		2670.48		159.72		012.5		—
Defined benefit and postretirement benefit plans	~~351~~347.52		38.92		3634.35		35.01		3534.54		35.29		~~170~~169.61
Purchases of inventory, services, and other	~~489~~455.5		~~298~~329.73		9586.82		4226.26		~~16.~~5.9		62.75		295.60
Total	$	4,~~528~~707.09	$	~~635~~692.47	$	~~941~~1,009.09	$	~~844~~274.21	$	~~148~~812.0	$	~~715~~751.58	$	1,~~243~~167.94

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.

Subsequent Events

See Part II, Item 8 "Financial Statements and Supplementary Data—Note 18 to the Consolidated Financial Statements—Subsequent Events."

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 statement line items, including other selling and administrative expenses, and accounts receivable.

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

AThe ~~small~~mass-market ~~number~~retail ofchannel ~~customers~~periodically ~~account~~experiences ~~for~~shifts ain ~~large~~market share ofamong ~~Mattel's~~competitors, ~~net~~causing ~~sales~~some ~~and~~large ~~accounts~~retailers ~~receivable.~~to Inexperience ~~2024,~~liquidity problems. Mattel's ~~three~~sales ~~largest~~to customers, ~~Walmart,~~are ~~Target,~~typically ~~and~~made ~~Amazon,~~on incredit ~~the~~without ~~aggregate,~~collateral ~~accounted~~and ~~for~~are ~~approximately~~highly ~~44%~~concentrated ofin ~~net~~the ~~sales,~~third and ~~its~~fourth ~~ten~~quarters ~~largest~~due ~~customers,~~to in the ~~aggregate,~~seasonal ~~accounted~~nature ~~for~~of ~~approximately~~toy ~~51%~~sales, ofwhich ~~net~~results ~~sales.~~in Asa ofsubstantial ~~December 31,~~portion ~~2024,~~of ~~Mattel's~~trade ~~three~~receivables ~~largest~~being ~~customers~~collected ~~accounted~~during ~~for~~the ~~approximately~~latter ~~41%~~half of ~~net~~the ~~accounts~~year ~~receivable,~~ and ~~its~~the ~~ten~~first ~~largest~~quarter ~~customers~~of ~~accounted~~the ~~for~~following ~~approximately~~year. ~~51%~~There ofis ~~net~~a ~~accounts~~risk ~~receivable.~~that ~~Should~~customers ~~one~~will not pay, or ~~more~~that ofpayment ~~Mattel's~~may ~~large~~be ~~customers~~delayed, ~~experience~~because of bankruptcy, or financial difficulty, or other factors beyond the ~~allowance~~control ~~for~~of ~~credit~~Mattel. ~~losses~~This ~~may~~could ~~not~~increase beMattel's ~~sufficient~~exposure to ~~cover~~losses ~~such~~from ~~losses.~~bad debts.

A small number of customers account for a large share of Mattel's net sales and accounts receivable. In 2025, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 42% of worldwide consolidated net sales, and its ten largest customers, in the aggregate, accounted for approximately 49% of net sales. As of December 31, 2025, Mattel's three largest customers accounted for approximately 31% of net accounts receivable, and its ten largest customers accounted for approximately 43% 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 31,2024			December 31,2023
	December 31,2025			December 31,2024
	(In millions, except percentage information)
Allowance for credit losses	$	817.24		$	8.82
As a percentage of total accounts receivable	01.86		%	0.8		%

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, ~~2024~~2025, Mattel recorded a ~~charge~~net expense related to its allowance for credit losses of approximately $3 million, which was recognized aswithin other selling and administrative ~~expense~~expenses. For the year ended December 31, ~~2023~~2024, Mattel recorded a ~~benefit~~net expense related to its allowance for credit losses of approximately $23 million, which was recognized aswithin other selling and administrative ~~income~~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 statement line items, including other selling and administrative expenses and accounts receivable. A hypothetical 1% increase or decrease toof the allowance for credit losses as a percentage of accounts receivable would have impacted ~~2024~~2025 and ~~2023~~2024 other selling and administrative expenses by approximately $1011 million and $1110 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~~recognized toin 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 statement line items, including cost of sales 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 the 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 commercial business segment, North America and International, as well as Mattel's owned and operated manufacturing plants, 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 31,2024			December 31,2023
	December 31,2025			December 31,2024
	(In millions, except percentage information)
Obsolescence reserve	$	3332.01		$	4633.70
As a percentage of gross inventory	65.24		%	76.52		%

For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, Mattel recorded aan ~~charge~~expense related to its inventory obsolescence reserve of approximately $4638 million and $6446 million, respectively, which was recognized aswithin 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 statement line items, including cost of sales and inventories. A hypothetical 1% increase or decrease to ~~inventory~~obsolescence reserves as a percentage of gross inventory at December 31, ~~2024~~2025 and ~~2023~~2024 would have impacted ~~2024~~2025 and ~~2023~~2024 cost of sales by approximately $56 million and $65 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 statement line items, including other selling and administrative expenses and goodwill.

Goodwill is allocated to reporting units for purposes of evaluating whether goodwill is impaired. 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 also utilizes the market approach 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, ~~2024~~2025, and the resulting calculations indicated that the fair values exceeded the carrying amounts of Mattel's reporting units by 43.27 times, 2.25 times, and 1.84 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, ~~2024~~2025.

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 materially affect key financial statement line items, including net sales and accounts receivable.

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 $653.7 million or 12.2% as a percentage of net sales in 2024 and $660.6 million or 12.1% as a percentage of net sales in 2023. 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, 2024 and 2023 would have impacted 2024 and 2023 net sales and accounts receivable by approximately $54 million.

Accruals for these programs are recorded as sales adjustments that reduce net sales in the period the related sale is recognized. Sales adjustments for such programs totaled $731.4 million or 13.7% as a percentage of net sales in 2025 and $653.7 million or 12.2% as a percentage of net sales in 2024. 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, 2025 and 2024 would have impacted 2025 and 2024 net sales and accounts receivable by approximately $53 million and $54 million, respectively.

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 ~~2023~~2025 primarily related to changes in assessment of the future realizability of certain deferred tax assets, and utilization and expiration of tax attributes~~, and currency fluctuations~~. As of December 31, ~~2023~~2025, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $1413 million and $7187 million, respectively. Changes in the valuation allowances in 2024 primarily related to changes in assessment of the future realizability of certain deferred tax assets, and utilization and expiration of tax attributes. As of December 31, 2024, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $12 million and $85 million, respectively. As of December 31, ~~2024~~2025 and ~~2023~~2024, Mattel has recorded net deferred tax assets of $~~252~~272.59 million and $~~243~~252.15 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, ~~2024~~2025 and ~~2023~~2024, the unrecognized tax benefit balance, inclusive of interest and penalties, and net of U.S. federal tax benefit was $~~151~~168.79 million and $~~144~~151.97 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.

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 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 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 currency 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 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 currency changes could potentially mask underlying sales trends. The disclosure of the percentage impact of currency 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. The Hong Kong dollar, Euro, and Chinese yuan were the primary currencies that caused foreign currency transaction exposure for Mattel in ~~2024~~2025. Mattel seeks to mitigate its exposure to foreign currency 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 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 expense (income), 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 period-end exchange rates. Income, expense, and cash flow items are translated at weighted-average exchange rates prevailing during the period. 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 2024 were related to its net investments in entities having functional currencies denominated in the Mexican peso, Russian ruble, and Brazilian real.

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 2024 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~~financial ~~currency~~position ~~forward~~is ~~exchange~~also ~~contracts~~impacted ~~that~~by ~~were~~currency ~~used~~exchange torate ~~hedge~~fluctuations ~~firm~~on ~~commitments~~translation ~~and~~of ~~anticipated~~its ~~transactions~~net asinvestments ofin ~~December 31,~~subsidiaries ~~2024~~with ~~are~~non-U.S. ~~shown~~dollar ~~below~~functional currencies. ~~All~~Assets ~~contracts~~and inliabilities ~~the~~of ~~following~~subsidiaries ~~table~~with non-U.S. dollar functional currencies are ~~against~~translated ~~the~~into U.S. ~~dollar~~dollars at fiscal period-end exchange rates. Income, expense, and cash flow items are ~~maintained~~translated byat ~~reporting~~weighted-average ~~units~~exchange ~~with~~rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a Ucomponent of accumulated other comprehensive loss within stockholders' equity.S. ~~dollar~~Mattel's ~~functional~~primary currency translation adjustments in 2025 were related to its net investments in entities having functional currencies denominated in the Russian ruble, Mexican peso, and British pound sterling.

	Buy					Sell
	ContractAmount		Weighted-AverageContractRate	FairValue		ContractAmount		Weighted-AverageContractRate	FairValue
	(In thousands of U.S. dollars, except for rates)
Australian dollar (a)	$	—	—	$	—	$	81,286	0.65	$	3,876
British pound sterling (a)	20,939		1.27	(307)		—		—	—
Canadian dollar (a)	—		—	—		54,643		0.73	2,179
Czech koruna	4,559		23.87	(83)		—		—	—
Euro (a)	—		—	—		276,626		1.10	14,397
Hungarian forint	5,553		390.29	(97)		—		—	—
Indonesia rupiah	56,496		16,409.72	501		—		—	—
Japanese yen	—		—	—		7,747		153.06	205
Mexican peso	—		—	—		21,074		20.12	751
Polish zloty	24,439		4.07	(356)		—		—	—
South African rand	—		—	—		1,497		18.18	61
Swiss franc	3,543		0.89	(58)		—		—	—
	$	115,529		$	(400)	$	442,873		$	21,469

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 2025 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, 2025 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)	$	—	—	$	—	$	95,816	0.66	$	(1,523)
British pound sterling (a)	28,137		1.34	134		—		—	—
Canadian dollar (a)	—		—	—		53,008		0.73	(281)
Czech koruna	5,301		20.61	21		—		—	—
Euro (a)	—		—	—		307,963		1.14	(12,016)
Hungarian forint	6,881		327.67	18		—		—	—
Indonesia rupiah	42,098		16,695.10	(73)		—		—	—
Japanese yen	—		—	—		10,567		154.14	168
Mexican peso	—		—	—		56,918		18.71	(1,657)
Polish zloty	33,714		3.58	(20)		—		—	—
South African rand	—		—	—		1,103		16.77	(12)
Swiss franc	3,452		0.79	4		—		—	—
	$	119,583		$	84	$	525,375		$	(15,321)

(a) The weighted-average contract rate for these contracts is quoted in U.S. dollar per local currency.

For ~~the purchase of~~ foreign ~~currencies,~~currency ~~fair~~buy ~~value~~and ~~reflects~~sell ~~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, 2024. For the sale of foreign currencies,~~ fair value reflects the amount, based on dealer quotes, that Mattel would pay or receive at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they had been entered into as of December 31, ~~2024~~2025. 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, ~~2024~~2025, these contracts had a contract amount of $6910.03 million and a fair value ~~liability~~ of $10.42 million.

~~Had~~If Mattel had 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~~increased by approximately $30 10 million in ~~each~~2025 ofand ~~2024~~decreased ~~and~~by ~~2023~~approximately $30 million in 2024.

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, 2024.

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~~Paul ~~DiSilvestro~~Ruh, 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 iswas ~~not~~ effective as of December 31, ~~2024, due to a material weakness in Mattel's internal control over financial reporting, as further described below~~2025. The effectiveness of Mattel's internal control over financial reporting as of December 31, ~~2024~~2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report that appears herein.

Material Weakness

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.

The control deficiencies described above 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, ~~2024~~2025 and ~~2023~~2024, 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, ~~2024~~2025, 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, ~~2024~~2025 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, ~~2024~~2025, 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, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company ~~did not maintain~~maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2024~~2025, 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.

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 2024 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~~the accompanying Management's ~~report~~Report ~~referred~~on toInternal ~~above~~Control Over Financial Reporting. 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. 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. As disclosed by management, sales adjustments for such programs totaled $~~653~~731.74 million for the year ended December 31, ~~2024~~2025, a portion of which is discretionary in nature. 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 (i) the significant judgment by management when developing the estimate of the discretionary component of the sales adjustments accrual and (ii) a high degree of auditor judgment, subjectivity, and 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

February 2523, ~~2025~~2026

We have served as the Company's auditor since 1974.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,2024		December 31,2023
	December 31,2025		December 31,2024
	(In thousands, except share data)
ASSETS
Current Assets
Cash and equivalents	$	1,~~387~~242,~~908~~927	$	1,~~261~~387,~~363~~908
Accounts receivable, net of allowances for credit losses of $8.2 million and $8.8 million in 2024 and 2023, respectively	1,003,178		1,081,827
Accounts receivable, net of allowances for credit losses of $17.4 million and $8.2 million in 2025 and 2024, respectively	1,097,604		1,003,178
Inventories	~~501~~563,~~732~~142		~~571~~501,~~609~~732
Prepaid expenses and other current assets	~~234~~227,~~099~~116		~~207~~234,~~548~~099
Total current assets	3,~~126~~130,~~917~~789		3,~~122~~126,~~347~~917
Noncurrent Assets
Property, plant, and equipment, net	~~516~~590,~~049~~015		~~465~~516,~~523~~049
Right-of-use assets, net	~~326~~319,~~394~~548		~~313~~326,~~191~~394
Goodwill	1,~~381~~390,~~721~~169		1,~~384~~381,~~512~~721
Deferred income tax assets	~~296~~312,~~862~~913		~~299~~296,~~157~~862
Identifiable intangible assets, net	~~360~~337,~~563~~105		~~393~~360,~~039~~563
Other noncurrent assets	~~535~~559,~~578~~843		~~458~~535,~~053~~578
Total Assets	$	6,~~544~~640,~~084~~382	$	6,~~435~~544,~~822~~084
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	~~398~~555,~~983~~403	$	~~442~~398,~~286~~983
Accrued liabilities	~~878~~872,~~710~~928		~~866~~878,~~283~~710
Income taxes payable	3829,~~030~~851		3338,~~911~~030
Total current liabilities	1,~~315~~458,~~723~~182		1,~~342~~315,~~480~~723
Noncurrent Liabilities
Long-term debt	2,~~334~~331,~~351~~675		2,~~329~~334,~~986~~351
Noncurrent lease liabilities	~~278~~268,~~174~~351		~~259~~278,~~548~~174
Other noncurrent liabilities	~~351~~349,~~711~~126		~~354~~351,~~595~~711
Total noncurrent liabilities	2,~~964~~949,~~236~~152		2,~~944~~964,~~129~~236
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,~~780~~787,~~259~~790		1,~~774~~780,~~911~~259
Treasury stock at cost: 111.4 million shares and 92.9 million shares in 2024 and 2023, respectively	(2,566,929)		(2,224,160)
Treasury stock at cost: 140.0 million shares and 111.4 million shares in 2025 and 2024, respectively	(3,107,007)		(2,566,929)
Retained earnings	34,~~603~~001,~~878~~462		3,~~062~~603,~~061~~878
Accumulated other comprehensive loss	(~~994~~890,~~452~~566)		(~~904~~994,~~968~~452)
Total stockholders' equity	2,~~264~~233,~~125~~048		2,~~149~~264,~~213~~125
Total Liabilities and Stockholders' Equity	$	6,~~544~~640,~~084~~382	$	6,~~435~~544,~~822~~084

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 31,2024

December 31,2023

December 31,2022

December 31,2025

December 31,2024

December 31,2023

(In thousands, except per share amounts)

Net Sales

5,~~379~~347,~~546~~623

5,~~441~~379,~~219~~546

5,~~434~~441,~~687~~219

Cost of sales

2,~~645~~741,~~478~~966

2,~~857~~645,~~503~~478

2,~~953~~857,~~335~~503

Gross Profit

2,~~734~~605,~~068~~657

2,~~583~~734,~~716~~068

2,~~481~~583,~~352~~716

Advertising and promotion expenses

~~507~~522,~~321~~000

~~524~~507,~~786~~321

~~534~~524,~~255~~786

Other selling and administrative expenses

1,~~532~~537,~~465~~233

1,~~497~~532,~~271~~465

1,~~271~~497,~~582~~271

Operating Income

~~694~~546,~~282~~424

~~561~~694,~~659~~282

~~675~~561,~~515~~659

Interest expense

118,~~774~~681

~~123~~118,~~786~~774

~~132~~123,~~818~~786

Interest (income)

(5145,~~478~~021)

(2551,~~238~~478)

(925,~~398~~238)

Other non-operating expense (income), net

413,~~481~~275

(24,~~293)~~481

47(2,~~760~~293)

Income Before Income Taxes

~~622~~459,~~505~~489

~~465~~622,~~404~~505

~~504~~465,~~335~~404

Provision for income taxes

~~105~~89,~~626~~774

~~269~~105,~~475~~626

~~135~~269,~~851~~475

(Income) from equity method investments

(2427,~~938~~869)

(1824,~~423~~938)

(2518,~~429~~423)

Net Income

~~541~~397,~~817~~584

~~214~~541,~~352~~817

~~393~~214,~~913~~352

Net Income Per Common Share - Basic

1.5925

01.6159

10.1161

Weighted-average number of common shares

~~340~~318,~~435~~159

~~353~~340,~~588~~435

353,~~792~~588

Net Income Per Common Share - Diluted

1.5824

01.6058

10.1060

Weighted-average number of common and potential common shares

~~343~~321,~~336~~792

~~357~~343,~~112~~336

~~359~~357,~~612~~112

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 31,2024		December 31,2023		December 31,2022
	December 31,2025		December 31,2024		December 31,2023
	(In thousands)
Net Income	$	~~541~~397,~~817~~584	$	~~214~~541,~~352~~817	$	~~393~~214,~~913~~352
Other Comprehensive (Loss) Income, Net of Tax
Other Comprehensive Income (Loss), Net of Tax
Currency translation adjustments	~~(110~~121,~~507)~~458		37(110,~~123~~507)		(637,~~191)~~123
Employee benefit plan adjustments	313,~~253~~451		(43,~~418)~~253		15(4,~~601~~418)
Available-for-sale security adjustments	—		—		3,646
Net unrealized (losses) gains on derivative instruments:
Net unrealized gains (losses) on derivative instruments:
Unrealized holding (losses) gains	(49,196)		39,409		(15,903)
Unrealized holding gains (losses)	39,409		(15,903)		40,449
Reclassification adjustments included in net income	18,173		(21,639)		(10,292)
Reclassification adjustments included in net income	(21,639)		(10,292)		(26,513)
	(31,023)		17,770		(26,195)
	17,770		(26,195)		13,936
Other Comprehensive Income (Loss), Net of Tax	103,886		(89,484)		6,510
Other Comprehensive (Loss) Income, Net of Tax	(89,484)		6,510		26,992
Comprehensive Income	$	501,470	$	452,333	$	220,862
Comprehensive Income	$	452,333	$	220,862	$	420,905

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 31,2024		December 31,2023		December 31,2022
	December 31,2025		December 31,2024		December 31,2023
	(In thousands)
Cash Flows From Operating Activities:
Net Income	$	~~541~~397,~~817~~584	$	~~214~~541,~~352~~817	$	~~393~~214,~~913~~352
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation	136,~~649~~473		~~139~~136,~~451~~649		~~144~~139,~~577~~451
Amortization of intangibles	31,~~314~~512		3731,~~893~~314		37,~~602~~893
Share-based compensation	79,~~429~~719		8379,~~334~~429		6983,~~072~~334
Bad debt expense	2,940		(1,502)		18,279
Inventory obsolescence	38,367		45,909		63,748
Inventory obsolescence	45,909		63,748		64,916
Deferred income taxes	(19,408)		(20,986)		176,385
Deferred income taxes	(24,186)		176,385		69,510
Income from equity method investments	(27,869)		(24,938)		(18,423)
Income from equity method investments	(24,938)		(18,423)		(25,429)
Content asset amortization	50,246		77,986		51,837
(Gain) loss on sale of assets, net	(138)		1,016		(26,905)
Valuation allowance on foreign deferred tax assets	3,200		—		—
Content asset amortization	77,986		51,837		56,037
Loss on liquidation of subsidiary	—		—		45,366
Changes in assets and liabilities:
Accounts receivable, net	21(60,~~369~~493)		~~(198~~21,~~322)~~369		~~197~~(198,~~902~~322)
Inventories	(2456,~~519~~633)		~~261~~(24,~~309~~519)		~~(203~~261,~~522)~~309
Prepaid expenses and other current assets	(115,~~168~~554)		8(11,~~182~~168)		~~(11~~8,~~960)~~182
Accounts payable, accrued liabilities, and income taxes payable	4965,~~592~~431		~~135~~49,~~767~~592		~~(341~~135,~~605)~~767
Content asset spend	(2519,~~562~~711)		(5825,~~062~~562)		(6058,~~259~~062)
Other, net	(7916,~~128~~409)		(2776,~~174~~326)		15(27,~~348~~660)
Net cash flows provided by operating activities	~~800~~593,~~566~~255		~~869~~800,~~791~~566		~~442~~869,~~842~~791
Cash Flows From Investing Activities:
Purchases of tools, dies, and molds	(6771,~~415~~374)		(7467,~~480~~415)		(8074,~~175~~480)
Purchases of other property, plant, and equipment	(~~135~~110,~~205~~618)		(85135,~~820~~205)		(~~106~~85,~~328~~820)
Proceeds from (payments for) foreign currency forward exchange contracts, net	7,344		14,948		(520)
Proceeds from foreign currency forward exchange contracts, net	8,629		7,344		14,948
Proceeds from sale of assets	2,072		6,847		38,148
Other, net	18,431		6,233		2,934
Other, net	4,161		(3,913)		4,650
Net cash flows used for investing activities	(154,932)		(189,043)		(142,418)
Net cash flows used for investing activities	(189,043)		(142,418)		(144,225)
Cash Flows From Financing Activities:
Payments of long-term borrowings, net	—		—		(250,000)
Proceeds from long-term borrowings, net	592,382		—		—
Share repurchases	(400,000)		(203,016)		—
Payments of long-term borrowings	(600,000)		—		—
Tax withholdings for share-based compensation	(19,663)		(35,108)		(30,440)
Share repurchases	(600,000)		(400,000)		(203,016)
Proceeds from stock option exercises	6,345		26,742		27,750
Tax withholdings for share-based compensation	(16,858)		(19,663)		(35,108)
Other, net	(36,034)		(15,185)		(7,949)
Proceeds from stock option exercises	9,803		6,345		26,742
Net cash flows used for financing activities	(449,352)		(226,567)		(260,639)
Other, net	(5,893)		(36,034)		(15,185)
Effect of Currency Exchange Rate Changes on Cash and Equivalents	(35,626)		(678)		(8,105)
Net cash flows used for financing activities	(620,566)		(449,352)		(226,567)
Change in Cash and Equivalents	126,545		500,128		29,873
Effect of Currency Exchange Rate Changes on Cash and Equivalents	37,262		(35,626)		(678)
Cash and Equivalents at Beginning of Period	1,261,363		761,235		731,362
Change in Cash and Equivalents	(144,981)		126,545		500,128
Cash and Equivalents at End of Period	$	1,387,908	$	1,261,363	$	761,235
Cash and Equivalents at Beginning of Period	1,387,908		1,261,363		761,235
Cash and Equivalents at End of Period	$	1,242,927	$	1,387,908	$	1,261,363
Supplemental Cash Flow Information:
Cash paid during the year for:
Cash paid during the year for interest	$	115,804	$	114,280	$	117,701
Income taxes, gross	$	100,327	$	93,641	$	89,617
Interest	114,280		117,701		129,217

The accompanying notes are an integral part of these consolidated financial statements.

MATTEL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

	CommonStock		AdditionalPaid-InCapital		TreasuryStock		RetainedEarnings		AccumulatedOtherComprehensiveLoss		TotalStockholders'Equity
	(In thousands)
Balance, December 31, 2021	$	441,369	$	1,832,144	$	(2,219,990)	$	2,456,597	$	(941,271)	$	1,568,849
Balance, December 31, 2022	$	441,369	$	1,808,308	$	(2,129,639)	$	2,847,709	$	(911,478)	$	2,056,269
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
Net income	—		—		—		541,817		—		541,817
Other comprehensive income, net of tax	—		—		—		—		(89,484)		(89,484)
Other comprehensive (loss), net of tax	—		—		—		—		(89,484)		(89,484)
Share repurchases	—		—		(403,527)		—		—		(403,527)
Issuance of treasury stock for stock option exercises	—		(4,475)		10,820		—		—		6,345
Issuance of treasury stock for restricted stock units vesting	—		(69,458)		49,790		—		—		(19,668)
Deferred compensation	—		(148)		148		—		—		—
Share-based compensation	—		79,429		—		—		—		79,429
Balance, December 31, 2024	$441,369	~~441,369~~	$1,780,259	~~1,780,259~~	$(2,566,929)	~~(2,566,929)~~	$3,603,878	~~3,603,878~~	$(994,452)	~~(994,452)~~	$2,264,125	~~2,264,125~~
Net income	—		—		—		397,584		—		397,584
Other comprehensive income, net of tax	—		—		—		—		103,886		103,886
Share repurchases	—		—		(605,488)		—		—		(605,488)
Issuance of treasury stock for stock option exercises	—		(6,684)		16,487		—		—		9,803
Issuance of treasury stock for restricted stock units vesting	—		(65,280)		48,402		—		—		(16,878)
Deferred compensation	—		(224)		521		—		—		297
Share-based compensation	—		79,719		—		—		—		79,719
Balance, December 31, 2025	$	441,369	$	1,787,790	$	(3,107,007)	$	4,001,462	$	(890,566)	$	2,233,048

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~~Intercompany ~~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~~performed 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. 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.

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 reporting units 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. In the first quarter of 2024, Mattel announced an organizational change that resulted in the American Girl business being integrated into Mattel's North America commercial organization. Such integration resulted in a change to Mattel's operating and reportable segments. Goodwill related to the American Girl reporting unit is included in the North America operating segment. Mattel's reportable segments are: (i) North America; and (ii) International. 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~~are 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 period-end exchange rates. Net income and cash flow items are translated at weighted-average exchange rates prevailing during the period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive ~~income (~~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 expense (income), 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 ~~income (~~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 periodically utilizes derivative contracts to hedge certain purchases of commodities, which ~~were~~are 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 for 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~~exceed 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. Mattel estimates and adjusts forfeiture rates based on a periodic review of recent forfeiture activity and expected future employee turnover.

~~Determining~~Mattel determines the fair value of ~~share-based~~stock ~~awards~~options atusing the ~~measurement~~Black-Scholes ~~date~~valuation model which requires judgment, ~~including~~in estimating the expected term that stock options will be outstanding prior to exercise,. ~~the~~The ~~associated~~expected volatility, of Mattel’s stock price and the expected dividends. ~~Mattel~~to ~~estimates~~be paid over the ~~fair~~period ~~value~~that ofthe ~~options~~option ~~granted~~is ~~using~~expected ~~the~~to ~~Black-Scholes~~be ~~valuation~~outstanding ~~model~~are also required to be estimated. 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~~vesting 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. ItThe ~~determines the~~ fair value of the market-related components of its performance RSUs is determined based on the Monte Carlo valuation methodology which requires judgment in estimating the expected volatility of Mattel's stock price and its correlation to an index of other public companies upon which the market-related components are measured. Expected stock price volatility is based on the historical volatility of Mattel's stock for a period approximating the expected term of the award. Correlation is based on historical share prices of other public companies which comprise the index for a period approximating the expected term. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues approximating the expected term.

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. Distributions from equity method investees are accounted for using the cumulative earnings approach whereby distributions received are considered to be returns on investment and recognized within cash flows from operating activities in Mattel's consolidated statement of cash flows, unless cumulative distributions exceed Mattel's equity share in the earnings of the investee.

Mattel owns a 50% equity interest in Mattel163 Limited, a joint venture with a third party that develops and operates ~~online~~digital 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~~December ~~2022~~2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2022~~2023-0409, ~~Liabilities—Supplier~~Income ~~Finance~~Taxes ~~Programs~~ (~~Subtopic~~Topic ~~405-50~~740): ~~Disclosure~~Improvements ofto ~~Supplier~~Income ~~Finance~~Tax ~~Program Obligations~~Disclosures. ASU ~~2022~~2023-0409 requires ~~that~~enhanced ~~buyers~~income intax adisclosures ~~supplier~~on ~~finance~~an ~~program~~annual ~~disclose~~basis ~~sufficient~~for ~~information~~specific ~~about~~categories ~~the~~in ~~program to allow a user of~~ the ~~financial~~rate ~~statements~~reconciliation toand ~~understand~~disclosure ~~the program's nature, potential magnitude, obligations outstanding at the end~~ of ~~each~~income ~~period,~~taxes ~~and~~paid anby ~~annual rollforward of such obligations~~jurisdiction. The guidance in ASU ~~2022~~2023-0409 was effective for ~~interim and~~ fiscal years beginning after December 15, ~~2022~~2024. ~~The~~Mattel ~~annual~~adopted ~~rollforward~~the ~~was~~guidance in ASU 2023-09 effective ~~for~~January ~~fiscal~~1, ~~years~~2025 ~~beginning~~and ~~after~~applied ~~December~~the ~~15,~~new ~~2023~~disclosure requirements prospectively as of the adoption date. Refer to "Note 516 to the Consolidated Financial Statements—~~Supplier~~ ~~Finance~~Income ~~Program~~Taxes" for additional information regarding Mattel's ~~supplier~~income ~~finance program, including the annual rollforward~~taxes. ~~The adoption of this new accounting standard did not have a material impact on Mattel's consolidated financial statements.~~

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 was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Mattel adopted the guidance in ASU 2023-07 effective January 1, 2024 and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements. Refer to "Note 14 to the Consolidated Financial Statements—Segment Information" for additional information regarding Mattel's Segments. 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 ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses for public business entities. ASU ~~2023~~2024-0903 requires enhanced disclosures of each expense caption in the income ~~tax~~statement ~~disclosures~~to onimprove antransparency ~~annual~~and ~~basis~~provide ~~for~~financial ~~specific~~statement ~~categories~~users inwith more detailed information about the ~~rate~~nature, ~~reconciliation~~amount and ~~disclosure~~timing of ~~income~~expenses ~~taxes~~impacting ~~paid~~financial byperformance. ~~jurisdiction~~Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The guidance in ASU ~~2023~~2024-0903 is effective for fiscal years beginning after December 15, ~~2024~~2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The ASU may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. Mattel is currently evaluating the impact of the adoption of ASU ~~2023~~2024-0903 on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses for public business entities. ASU 2024-03 requires enhanced disclosures of each expense caption in the income statement to improve transparency and provide financial statement users with more detailed information about the nature, amount and timing of expenses impacting financial performance. The guidance in ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Mattel is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 provides the option to use a practical expedient to address implementation challenges related to the estimation of expected credit losses for current accounts receivable and current assets arising from transactions accounted for under revenue recognition (Topic 606) and assets acquired through business combinations. The practical expedient allows entities to assume current conditions as of the balance sheet date remain unchanged over the life of these assets when developing forecasts. The guidance allows entities to bypass the requirement to incorporate macro-economic data into their forecast when such data is not expected to materially affect the estimate. The guidance in ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. Mattel is currently evaluating the impact of the adoption of ASU 2025-05 on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes certain aspects of the accounting for software costs to develop or obtain software for internal use under Accounting Standards Codification 350-40. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The guidance in ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2025-06 permit entities to apply the new guidance using a prospective, retrospective, or modified transition approach. Mattel is currently evaluating the impact of the adoption of ASU 2025-06 on its consolidated financial statements.

Note 2—Property, Plant, and Equipment, Net

Property, plant, and equipment, net included the following:

	December 31,2024		December 31,2023
	December 31,2025		December 31,2024
	(In thousands)
Land	$	4248,~~584~~729	$	1942,~~838~~584
Buildings	~~350~~372,~~920~~966		~~313~~350,~~750~~920
Machinery and equipment	~~605~~615,~~311~~125		~~628~~605,~~089~~311
Software	~~234~~229,~~699~~408		~~233~~234,~~224~~699
Tools, dies, and molds	~~476~~471,~~551~~651		~~488~~476,~~170~~551
Leasehold improvements	~~107~~109,~~139~~261		~~121~~107,~~571~~139
Construction in progress	6293,~~130~~337		4862,~~483~~130
	1,879,334		1,853,125
	1,940,477		1,879,334
Less: accumulated depreciation	(1,~~363~~350,~~285~~462)		(1,~~387~~363,~~602~~285)
	$	~~516~~590,~~049~~015	$	~~465~~516,~~523~~049

In ~~July~~Purchases ~~2024~~of property, ~~Mattel~~plant, ~~completed~~and ~~the~~equipment ~~purchase~~within ofMattel's anconsolidated ~~office~~statement ~~building~~of ~~located~~cash inflows Elwere ~~Segundo,~~adjusted ~~California~~ for ~~cash~~unpaid ~~consideration~~balances of $5850.8 2 million., ~~The building totals approximately 168~~$18.7 million,~~000~~ ~~square feet~~ and, ~~upon~~$20.5 million ~~completion~~as of anDecember ~~interior~~31, ~~build-out~~2025, ~~will~~2024, ~~replace a currently leased facility that supports Mattel's global design~~ and ~~development~~2023, ~~and other activities~~respectively. ~~The building will support the North America and International segments.~~

Note 3—Goodwill and Intangible Assets, Net

Goodwill

Mattel's reporting units are (i) North America, which consists of the United States and Canada, (ii) International, and (iii) American Girl. In the first quarter of 2024, Mattel implemented an organizational change integrating the American Girl business into Mattel's North America commercial organization. Such integration resulted in a change to Mattel's operating and reportable segments. Goodwill related to the American Girl reporting unit is included in the North America operating segment. Mattel's reportable segments are: (i) North America and (ii) International. The change in the carrying amount of goodwill by reporting unit for 2024 and 2023 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 31,2022		Currency Exchange Rate Impact		December 31,2023		CurrencyExchange RateImpact		December 31,2024
	(In thousands)
North America	$	731,993	$	1,494	$	733,487	$	(492)	$	732,995
International	438,987		4,467		443,454		(2,299)		441,155
American Girl	207,571		—		207,571		—		207,571
	$	1,378,551	$	5,961	$	1,384,512	$	(2,791)	$	1,381,721

In the third quarter of 2024, Mattel performed its annual goodwill impairment test and determined that goodwill was not impaired. The quantitative goodwill impairment assessment includes the use of certain assumptions and estimates to calculate the estimated fair value of Mattel's reporting units. To the extent assumptions, estimations, or market factors, including seasonality, differ from Mattel's current estimates, the estimated fair value of Mattel's reporting units may be susceptible to significant changes. The reporting unit that is most susceptible to changes in assumptions and estimates, given its smaller size, is American Girl, as excess fair value over carrying value is a lesser dollar and percentage value than the other reporting units. 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, 2024.

Note 3—Goodwill and Identifiable Intangible Assets, Net

Goodwill

Mattel's reporting units are: (i) North America, which consists of the United States and Canada, (ii) International, and (iii) American Girl. Goodwill related to the American Girl reporting unit is included in the North America operating segment. Mattel's reportable segments are: (i) North America and (ii) International. The change in the carrying amount of goodwill by reporting unit for 2025 and 2024 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, 2023		Currency Exchange Rate Impact		December 31, 2024		Currency Exchange Rate Impact		December 31, 2025
	(In thousands)
North America	$	733,487	$	(492)	$	732,995	$	2,212	$	735,207
International	443,454		(2,299)		441,155		6,236		447,391
American Girl	207,571		—		207,571		—		207,571
	$	1,384,512	$	(2,791)	$	1,381,721	$	8,448	$	1,390,169

In the third quarter of 2025, Mattel performed its annual goodwill impairment assessment and determined that goodwill was not impaired. The quantitative goodwill impairment assessment includes the use of certain assumptions and estimates to calculate the estimated fair value of Mattel's reporting units. To the extent assumptions, estimates, or market factors, including seasonality, differ from Mattel's current estimates, the estimated fair value of Mattel's reporting units may be susceptible to significant changes. The reporting unit that is most susceptible to changes in assumptions and estimates, given its smaller size, is American Girl, as excess fair value over carrying value is a lesser dollar and percentage value than the other reporting units. 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, 2025.

Identifiable Intangible Assets, Net

Mattel's identifiable intangible assets, net consisted of the following:

	December 31,2024		December 31,2023
	December 31,2025		December 31,2024
	(In thousands)
Identifiable intangibles	$	798,655	$	801,506
Identifiable intangible assets	$	808,830	$	798,655
Less: accumulated amortization	(~~438~~471,~~092~~725)		(~~408~~438,~~467~~092)
	$	~~360~~337,~~563~~105	$	~~393~~360,~~039~~563

The estimated future amortization expense for the next five years is as follows:

	Amortization Expense
	(In thousands)
2025	$	31,192
2026	$	31,717
2026	31,165
2027	31,139
2027	30,685
2028	29,430
2028	29,046
2029	27,690
2029	27,438
2030	27,690

Mattel tests its amortizable identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Mattel's amortizable identifiable intangible assets primarily consist of trademarks and trade names. During ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, Mattel's amortizable identifiable intangible assets were not impaired.

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 31,2024

December 31,2023

December 31,2022

December 31,2025

December 31,2024

December 31,2023

(In thousands)

Defined contribution retirement plans

4042,~~227~~953

3740,~~784~~227

3637,~~900~~784

Defined benefit pension plans

1215,~~806~~042

912,~~949~~806

59,~~693~~949

Deferred compensation and excess benefit plans

(15,~~537)~~463

8(1,~~227~~537)

(78,~~113)~~227

Postretirement benefit plans

(2,~~046~~144)

(2,~~084~~046)

(2,~~047~~084)

4961,~~450~~314

5349,~~876~~450

3353,~~433~~876

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.

61A 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 (loss) for the years ended December 31 is as follows:

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 (loss) income for the years ended December 31 is as follows:


	Defined Benefit Pension Plans						Postretirement Benefit Plans
	2025		2024		2023		2025		2024		2023
	(In thousands)
Net Periodic Benefit Cost (Credit):
Service cost	$	3,400	$	3,388	$	3,371	$	1	$	2	$	1
Interest cost	20,523		20,181		20,966		144		180		179
Expected return on plan assets	(17,575)		(18,738)		(20,372)		—		—		—
Amortization of prior service cost (credit)	200		194		150		(1,997)		(2,038)		(2,038)
Recognized actuarial loss (gain)	8,683		7,781		5,893		(292)		(190)		(226)
Settlement (gain)	(68)		—		(59)		—		—		—
Curtailment (gain)	(121)		—		—		—		—		—
Net periodic benefit cost (credit)	$	15,042	$	12,806	$	9,949	$	(2,144)	$	(2,046)	$	(2,084)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):
Net actuarial (gain) loss	$	(19,309)	$	(5,086)	$	904	$	32	$	(433)	$	311
Prior service cost	—		131		1,169		—		—		—
Amortization of prior service (cost) credit	(200)		(194)		(150)		1,997		2,038		2,038
Total recognized in other comprehensive (income) loss (a)	$	(19,509)	$	(5,149)	$	1,923	$	2,029	$	1,605	$	2,349
Total recognized in net periodic benefit cost (credit) and other comprehensive income (loss)	$	(4,467)	$	7,657	$	11,872	$	(115)	$	(441)	$	265

	Defined Benefit Pension Plans						Postretirement Benefit Plans
	2024		2023		2022		2024		2023		2022
	(In thousands)
Net Periodic Benefit Cost (Credit):
Service cost	$	3,388	$	3,371	$	4,010	$	2	$	1	$	2
Interest cost	20,181		20,966		12,081		180		179		89
Expected return on plan assets	(18,738)		(20,372)		(19,242)		—		—		—
Amortization of prior service cost (credit)	194		150		155		(2,038)		(2,038)		(2,038)
Recognized actuarial loss (gain)	7,781		5,893		8,996		(190)		(226)		(100)
Settlement (gain) loss	—		(59)		19		—		—		—
Curtailment gain	—		—		(326)		—		—		—
Net periodic benefit cost (credit)	$	12,806	$	9,949	$	5,693	$	(2,046)	$	(2,084)	$	(2,047)
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income:
Net actuarial (gain) loss	$	(5,086)	$	904	$	(23,501)	$	(433)	$	311	$	(922)
Prior service cost	131		1,169		1,022		—		—		—
Amortization of prior service (cost) credit	(194)		(150)		(155)		2,038		2,038		2,038
Total recognized in other comprehensive (income) loss (a)	$	(5,149)	$	1,923	$	(22,634)	$	1,605	$	2,349	$	1,116
Total recognized in net periodic benefit cost (credit) and other comprehensive (loss) income	$	7,657	$	11,872	$	(16,941)	$	(441)	$	265	$	(931)

(a)Amounts exclude related tax expense (benefit) of approximately $5 million, $1 million, and $(2) million, during 2025, 2024, and 2023, respectively, which are also included in other comprehensive income (loss).

(a)Amounts exclude related tax expense (benefit) of approximately $1 million, $(2) million, and $6 million, during 2024, 2023, and 2022, respectively, which are also included in other comprehensive (loss) 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 31,2024		December 31,2023		December 31,2022
Defined benefit pension plans:
Discount rate	4.7	%	4.9	%	2.5	%
Weighted-average rate of future compensation increases	N/A		N/A		N/A
Long-term rate of return on plan assets	6.2	%	5.0	%	5.0	%
Postretirement benefit plans:
Discount rate	4.7	%	4.9	%	2.5	%
Annual increase in Medicare Part B premium	6.0	%	6.0	%	6.0	%
Health care cost trend rate:
Pre-65	7.9	%	7.0	%	7.0	%
Post-65	8.1	%	7.0	%	7.0	%
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	2031		2029		2028
Post-65	2031		2029		2028

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, 2025		December 31, 2024		December 31, 2023
Defined benefit pension plans:
Discount rate	5.3	%	4.7	%	4.9	%
Weighted-average rate of future compensation increases	N/A		N/A		N/A
Long-term rate of return on plan assets	6.2	%	6.2	%	5.0	%
Postretirement benefit plans:
Discount rate	5.3	%	4.7	%	4.9	%
Annual increase in Medicare Part B premium	6.0	%	6.0	%	6.0	%
Health care cost trend rate:
Pre-65	7.6	%	7.9	%	7.0	%
Post-65	7.8	%	8.1	%	7.0	%
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	2031		2031		2029
Post-65	2031		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.

Mattel used a measurement date of December 31, 2024 for its defined benefit pension and postretirement benefit plans. A summary of the changes in benefit obligation and plan assets is as follows:

	Defined BenefitPension Plans				PostretirementBenefit Plans
	December 31,2024		December 31,2023		December 31,2024		December 31,2023
	(In thousands)
Change in Benefit Obligation:
Benefit obligation, beginning of year	$	460,676	$	452,524	$	4,085	$	3,994
Service cost	3,388		3,371		2		1
Interest cost	20,181		20,966		180		179
Impact of currency exchange rate changes	(5,085)		4,921		—		—
Actuarial (gain) loss	(20,525)		13,879		(623)		85
Benefits paid	(34,294)		(35,634)		(562)		(174)
Plan amendments	61		895		—		—
Curtailments	(372)		167		—		—
Settlements	—		(338)		—		—
Other	(153)		(75)		—		—
Benefit obligation, end of year	$	423,877	$	460,676	$	3,082	$	4,085
Change in Plan Assets:
Plan assets at fair value, beginning of year	$	327,336	$	322,175	$	—	$	—
Actual return (loss) on plan assets	(3,336)		24,184		—		—
Employer contributions	17,786		13,354		562		174
Impact of currency exchange rate changes	(1,102)		3,670		—		—
Benefits paid	(34,294)		(35,634)		(562)		(174)
Settlements	—		(338)		—		—
Other	(111)		(75)		—		—
Plan assets at fair value, end of year	$	306,279	$	327,336	$	—	$	—
Net Amount Recognized in Consolidated Balance Sheets:
Funded status, end of year	$	(117,598)	$	(133,340)	$	(3,082)	$	(4,085)
Current accrued benefit liability	$	(6,383)	$	(5,960)	$	(530)	$	(530)
Noncurrent accrued benefit liability, net	(111,215)		(127,380)		(2,552)		(3,555)
Net amount recognized	$	(117,598)	$	(133,340)	$	(3,082)	$	(4,085)
Amounts Recognized in Accumulated Other Comprehensive Loss (a):
Net actuarial loss (gain)	$	208,985	$	214,070	$	(1,999)	$	(1,566)
Prior service cost (credit)	2,012		2,075		(1,997)		(4,035)
	$	210,997	$	216,145	$	(3,996)	$	(5,601)

(a)Amounts exclude related tax benefits of approximately $68 million and $69 million for December 31, 2024 and 2023, 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 2024 and 2023 totaled $409.6 million and $445.2 million, respectively.

~~The~~Mattel ~~actuarial~~used ~~gain~~a ~~recognized~~measurement indate ~~2024~~of December 31, 2025 for ~~the~~its defined benefit pension ~~plan~~and ~~was~~postretirement ~~driven~~benefit ~~primarily~~plans. byA ~~the~~summary ~~decrease~~of in the ~~discount~~changes ~~rate~~in ~~from the prior year that was used to determine the projected~~ benefit obligation atand ~~December~~plan ~~31,~~assets ~~2024.~~is as follows:

The actuarial loss recognized in 2023 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, 2023.


	Defined Benefit Pension Plans				Postretirement Benefit Plans
	December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
	(In thousands)
Change in Benefit Obligation:
Benefit obligation, beginning of year	$	423,877	$	460,676	$	3,082	$	4,085
Service cost	3,400		3,388		1		2
Interest cost	20,523		20,181		144		180
Impact of currency exchange rate changes	8,259		(5,085)		—		—
Actuarial loss (gain)	2,857		(20,525)		(260)		(623)
Benefits paid	(34,644)		(34,294)		(475)		(562)
Plan amendments	—		61		—		—
Curtailments	(177)		(372)		—		—
Settlements	(305)		—		—		—
Other	—		(153)		—		—
Benefit obligation, end of year	$	423,790	$	423,877	$	2,492	$	3,082
Change in Plan Assets:
Plan assets at fair value, beginning of year	$	306,279	$	327,336	$	—	$	—
Actual return (loss) on plan assets	31,552		(3,336)		—		—
Employer contributions	21,565		17,786		475		562
Impact of currency exchange rate changes	4,812		(1,102)		—		—
Benefits paid	(34,644)		(34,294)		(475)		(562)
Settlements	(305)		—		—		—
Other	—		(111)		—		—
Plan assets at fair value, end of year	$	329,259	$	306,279	$	—	$	—
Net Amount Recognized in Consolidated Balance Sheets:
Funded status, end of year	$	(94,531)	$	(117,598)	$	(2,492)	$	(3,082)

Current accrued benefit liabilities	$	(7,030)	$	(6,383)	$	(430)	$	(530)
Noncurrent accrued benefit liabilities, net	(87,501)		(111,215)		(2,062)		(2,552)
Net amount recognized	$	(94,531)	$	(117,598)	$	(2,492)	$	(3,082)
Amounts Recognized in Accumulated Other Comprehensive Loss (a):
Net actuarial loss (gain)	$	181,917	$	208,985	$	(1,967)	$	(1,999)
Prior service cost (credit)	2,167		2,012		—		(1,997)
	$	184,084	$	210,997	$	(1,967)	$	(3,996)

As(a)Amounts ofexclude ~~December~~related ~~31,~~tax ~~2024~~benefits ~~and~~of ~~2023,~~approximately ~~information~~$56 ~~for~~million ~~defined~~and ~~benefit~~$68 ~~pension~~million ~~plans~~for ~~that~~December 31, ~~had~~2025 ~~aggregate~~and ~~accumulated~~2024, ~~benefit~~respectively, ~~obligations~~which ~~and~~are ~~projected~~also ~~benefit~~included ~~obligations~~ in ~~excess~~accumulated ofother ~~plan~~comprehensive ~~assets is as follows:~~ loss.

	December 31,2024		December 31,2023
	(In thousands)
Projected benefit obligation	$	366,692	$	395,104
Accumulated benefit obligation	352,415		379,659
Fair value of plan assets	240,863		252,959

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 2025 and 2024 totaled $408.8 million and $409.6 million, respectively.

The actuarial loss recognized in 2025 for the defined benefit pension plan was primarily due to the increase in the discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2025.

The actuarial gain recognized in 2024 for the defined benefit pension plan was primarily due to the decrease in the discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2024.

As of December 31, 2025 and 2024, 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, 2025		December 31, 2024
	(In thousands)
Projected benefit obligation	$	363,669	$	366,692
Accumulated benefit obligation	348,663		352,415
Fair value of plan assets	261,871		240,863

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 31,2024		December 31,2023
	December 31,2025		December 31,2024
Defined benefit pension plans:
Discount rate	5.30	%	45.73	%
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	5.31	%	45.73	%
Annual increase in Medicare Part B premium	6.0	%	6.0	%
Health care cost trend rate:
Pre-65	7.61	%	7.96	%
Post-65	7.83	%	87.18	%
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		2031
Post-65	2031		2031

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, ~~2024~~2025, 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 5.30%, as compared to 45.73% as of December 31, ~~2023~~2024. 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 BenefitPension Plans		PostretirementBenefit Plans
	(In thousands)
2025	$	38,386	$	530
2026	35,776		540
2027	34,578		420
2028	35,154		320
2029	34,886		320
2030 - 2034	169,647		980

Mattel expects to make cash contributions totaling approximately $21 million to its defined benefit pension and postretirement benefit plans in 2025, substantially all of which will be for benefit payments for its underfunded 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 79% 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.

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)
2026	$	37,786	$	430
2027	34,026		440
2028	34,784		320
2029	34,117		320
2030	35,709		220
2031 - 2035	168,248		880

Mattel expects to make cash contributions totaling approximately $14 million to its defined benefit pension and postretirement benefit plans in 2026, substantially all of which will be for benefit payments for its underfunded 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 and expected long-term pension liabilities. The assets are invested in a combination of indexed and actively managed funds, as well as government and corporate debt instruments. 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, 2025
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. government and U.S. government agency securities	$	—	$	42,459	$	—	$	42,459
U.S. corporate debt instruments	—		67,035		—		67,035
International corporate debt instruments	—		9,897		—		9,897
Mutual funds (a)							135,853
Money market funds	6,563		—		—		6,563
Other investments	—		6,770		—		6,770
Insurance "buy-in" policy	—		—		55,489		55,489
Collective trust funds (a):
U.S. equity securities							592
International equity securities							2,822
Global fixed income							—
Real Estate							1,779
Total	$	6,563	$	126,161	$	55,489	$	329,259


	December 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
U.S. government and U.S. government agency securities	$	—	$	62	$	—	$	62
U.S. corporate debt instruments	—		60,751		—		60,751
International corporate debt instruments	—		4,388		—		4,388
Mutual funds (a)							126,518
Money market funds	12,365		—		—		12,365
Other investments	—		7,303		—		7,303
Insurance "buy-in" policy	—		—		52,785		52,785
Collective trust funds (a):
U.S. equity securities							577
International equity securities							2,588
Global fixed income							25,738
Real Estate							13,204
Total	$	12,365	$	72,504	$	52,785	$	306,279

	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

(a) These investments primarily consist of privately placed funds that are valued based on net asset value per share. The fair value of these investments are included in the table above to permit reconciliation of the total defined benefit pension plan assets classified by level within the fair value hierarchy.

(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.

66Mattel entered into an insurance buy-in policy contract with a private limited life insurance company to insure the U.K. pension 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.

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.67

The following table provides a reconciliation of the beginning and ending balances of insurance buy-in policy contract assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Level 3
	(in thousands)
Balance at December 31, 2022	$	57,310
Balance at December 31, 2023	$	60,727
Purchases, sales, and settlements	(2,860)
Changes in fair value	6,277
Balance at December 31, 2023	60,727
Purchases, sales, and settlements	(3,119)
Changes in fair value	(4,823)
Balance at December 31, 2024	$52,785	~~52,785~~
Purchases, sales, and settlements	(3,039)
Changes in fair value	5,743
Balance at December 31, 2025	$	55,489

Mattel's domestic 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 6.2% as of December 31, ~~2024~~2025 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, ~~2024~~2025 and ~~2023~~2024 was $5660.9 million and $5356.39 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 $97109.17 million and $8797.1 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively, are held in an irrevocable guarantor 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 2025, 2024 and 2023 ~~were~~was $83.4 million, $150.9 million, and $137.8 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. 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. Outstanding payment obligations due to suppliers under the supplier finance program were included in Mattel's accounts payable in the consolidated balance sheets. All payment activities related to the supplier finance program were presented within operating activities in the consolidated statements of cash flows.

The following is a ~~rollforward~~roll-forward of outstanding payment obligations due under the supplier finance program:

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