Mattel 2007 Annual Report Download - page 91

Note 5—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 US where its
employees work.
A summary of retirement plan expense is as follows:
For the Year
2007 2006 2005
(In millions)
Defined benefit pension plans ............................................... $22.2 $21.7 $22.2
Defined contribution retirement plans ......................................... 34.5 30.3 29.9
Postretirement benefit plans ................................................. 3.8 3.7 4.9
Deferred compensation and excess benefit plans ................................. 3.6 4.5 3.2
$64.1 $60.2 $60.2
Defined Benefit Pension and Postretirement Benefit Plans
Mattel provides defined benefit pension plans for eligible domestic employees, which satisfy 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.
Adoption of SFAS No. 158
In 2006, Mattel adopted SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R), which resulted in an
increase to noncurrent assets of $26.7 million, an increase to noncurrent liabilities of $80.8 million, and a
reduction to stockholders’ equity of $54.1 million at December 31, 2006. SFAS No. 158 requires an entity to
(i) recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded
status or a liability for a plan’s underfunded status, (ii) measure a defined benefit postretirement plan’s assets and
obligations that determine its funded status as of the end of the employer’s fiscal year, and (iii) recognize
changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in
which the changes occur. SFAS No. 158 does not change the amount of net periodic benefit cost included in net
income or address the various measurement requirements associated with postretirement benefit plan accounting.
The requirement to measure plan assets and benefit obligations as of the date of the fiscal year-end statement of
financial position is consistent with Mattel’s current accounting treatment. Retrospective application of
SFAS No. 158 was not permitted and accordingly, results for the prior periods were not restated.
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