Mattel 2013 Annual Report Download - page 99
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Licensing and similar agreements in effect at December 31, 2013 contain provisions for future minimum
payments as shown in the following table:
Licensing and
Similar
Agreements
(In thousands)
2014 ......................................................................... $ 67,391
2015 ......................................................................... 78,621
2016 ......................................................................... 42,310
2017 ......................................................................... 18,928
2018 ......................................................................... 1,002
Thereafter ..................................................................... 550
$ 208,802
Royalty expense for 2013, 2012, and 2011 was $246.9 million, $240.2 million, and $262.4 million,
respectively.
The following table shows the future minimum obligations for purchases of inventory, other assets, and
services at December 31, 2013:
Other
Purchase
Obligations
(In thousands)
2014 ......................................................................... $ 361,915
2015 ......................................................................... 15,838
2016 ......................................................................... 4,483
2017 ......................................................................... 1,038
2018 ......................................................................... —
$ 383,274
Insurance
Mattel has a wholly-owned subsidiary, Far West Insurance Company, Ltd. (“Far West”), that was
established to insure Mattel’s workers’ compensation, general, automobile, product liability, and foreign property
risks. Far West insures the first $1.0 million per occurrence for workers’ compensation risks, the first $0.5
million for general and automobile liability risks, the first $2.0 million per occurrence and $2.0 million per year
for product liability risks, and $0.5 million per occurrence for foreign property risks. Various insurance
companies, that have an “A” or better AM Best rating at the time the policies are purchased, reinsure Mattel’s
risk in excess of the amounts insured by Far West. Mattel’s liability for reported and incurred but not reported
claims at December 31, 2013 and 2012 totaled $15.8 million and $17.0 million, respectively, and is included in
other noncurrent liabilities in the consolidated balance sheets. Loss reserves are accrued based on Mattel’s
estimate of the aggregate liability for claims incurred.
Litigation
Litigation Related to Carter Bryant and MGA Entertainment, Inc.
In April 2004, Mattel filed a lawsuit in Los Angeles County Superior Court against Carter Bryant
(“Bryant”), a former Mattel design employee. The suit alleges that Bryant aided and assisted a Mattel competitor,
MGA Entertainment, Inc. (“MGA”), during the time he was employed by Mattel, in violation of his contractual
and other duties to Mattel. In September 2004, Bryant asserted counterclaims against Mattel, including
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