Mattel 2007 Annual Report Download - page 93

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 which the non-US
plans are based. The rates shown in the preceding table are indicative of the weighted average rates of all
Mattel’s defined benefit pension plans given the relative insignificance of the foreign plans to the consolidated
total.
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized
from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $9.8
million. The estimated net loss for the other defined benefit postretirement plans that will be amortized from
accumulated other comprehensive loss into net period benefit cost over the next fiscal year is $0.8 million.
Mattel used a measurement date of December 31, 2007 to determine pension and other postretirement
benefit measurements for the pension plans and other postretirement benefit plans. A summary of the changes in
benefit obligation and plans assets is as follows:
Defined Benefit
Pension Plans
Postretirement
Benefit Plans
2007 2006 2007 2006
(In thousands)
Change in Benefit Obligation
Benefit obligation, beginning of year .................. $462,386 $ 466,453 $ 50,046 $ 59,938
Service cost ...................................... 12,305 12,110 99 106
Interest cost ...................................... 25,327 24,234 2,832 2,690
Participant contributions ............................ 61 56 — —
Plan amendments .................................. — 423 — —
Impact of currency exchange rate changes .............. 3,114 12,093 — —
Actuarial gain ..................................... (37,205) (28,743) (1,857) (9,625)
Benefits paid ..................................... (24,003) (24,240) (2,953) (3,063)
Benefit obligation, end of year ....................... $441,985 $ 462,386 $ 48,167 $ 50,046
Change in Plan Assets
Plan assets at fair value, beginning of year .............. $325,763 $ 296,564 $ — $ —
Actual return on plan assets .......................... 16,787 31,979 — —
Employer contributions ............................. 10,975 14,212 2,953 3,063
Participant contributions ............................ 61 56 — —
Impact of currency exchange rate changes .............. 780 7,192 — —
Benefits paid ..................................... (24,003) (24,240) (2,953) (3,063)
Plan assets at fair value, end of year ................... $330,363 $ 325,763 $ — $ —
Net Amount Recognized in Consolidated Balance Sheets
Funded status, end of year ........................... $(111,622) $(136,623) $(48,167) $(50,046)
Current accrued benefit liability ...................... (6,844) (6,454) (3,900) (3,631)
Noncurrent accrued benefit liability ................... (104,778) (130,169) (44,267) (46,415)
Total accrued benefit liability ........................ $(111,622) $(136,623) $(48,167) $(50,046)
Amounts recognized in Accumulated Other
Comprehensive Loss (a)
Net loss .......................................... $ 97,590 $ 137,864 $ 10,723 $ 13,427
Prior service cost .................................. 8,412 10,455 — —
$ 106,002 $ 148,319 $ 10,723 $ 13,427
(a) Amounts exclude related tax benefits of $43.7 million and $60.4 million for December 31, 2007 and 2006,
respectively, which are also included in accumulated other comprehensive loss.
83