Mattel 2009 Annual Report Download - page 80

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• A coordinated efficiency strategic plan that includes structural changes designed to lower costs and
improve efficiencies; for example, offshoring and outsourcing certain back office functions, and more
clustering of management in international markets.
• Additional procurement initiatives designed to fully leverage Mattel’s global scale in areas such as
creative agency partnerships, legal services, and distribution, including ocean carriers and over-the-road
freight vendors.
In connection with the Global Cost Leadership program, during 2008 and 2009, Mattel recorded severance
and other termination-related charges of $34.4 million and $31.5 million, respectively, which are included in
other selling and administrative expenses. The following table summarizes Mattel’s severance and other
termination costs activity for 2008 and 2009 (in thousands):
Severance
Other
termination
costs Total
Charges ........................................................ $32,771 $1,656 $ 34,427
Payments ....................................................... (15,656) (775) (16,431)
Balance at December 31, 2008 ................................. 17,115 881 17,996
Charges ........................................................ 31,176 324 31,500
Payments ....................................................... (29,508) (980) (30,488)
Balance at December 31, 2009 ................................. $18,783 $ 225 $ 19,008
Note 6— Earnings Per Share
Effective January 1, 2009, Mattel adopted ASC 260-10 (formerly FASB Staff Position (“FSP”) Emerging
Issues Task Force No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions
Are Participating Securities). Under ASC 260-10, unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities
and shall be included in the computation of earnings per share pursuant to the two-class method. Certain of
Mattel’s RSUs are considered participating securities because they contain nonforfeitable rights to dividend
equivalents. The retrospective application of this standard reduced previously reported basic and diluted earnings
per share by $0.01 for 2008 and 2007.
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