Restructuring Charges

During the third quarter of 2017, Mattel initiated its Structural Simplification Cost Savings program, with plans to target at least $650 million in cost savings by 2020.

The major initiatives of the Structural Simplification Cost Savings program include:


•	Reducing manufacturing complexity, including SKU reduction, implementing process improvement initiatives at owned and co-manufacturing facilities, exploring strategic alternatives for Mattel’s manufacturing footprint, and optimizing the supply chain;


•	Streamlining the organizational structure and reducing headcount expense to better align with the revenue base; and


•	Optimizing advertising spend.

The following table summarizes Mattel's severance and other restructuring costs activity for the nine months ended September 30, 2018:



	Liability at December 31, 2017		Charges		Payments/Utilization			Liability at September 30, 2018
	(In thousands)
Severance	$	29,794	$	61,735	$	(48,611	)	$	42,918
Other restructuring costs (a)	5,394		42,189		(37,164		)	10,419
	$	35,188	$	103,924	$	(85,775	)	$	53,337

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(a)	Consists primarily of consulting fees.

To date, Mattel has recorded cumulative severance and other restructuring charges of $149.1 million and expects to incur total charges of approximately $200 million related to the Structural Simplification Cost Savings program.

In connection with the Structural Simplification Cost Savings program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within the consolidated statements of operations:



	For the Three Months Ended				For the Nine Months Ended
	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
	(In thousands)
Cost of sales(a)	$	5,741	$	—	$	5,741	$	—
Other selling and administrative(b)	25,472		—		98,183		—
	$	31,213	$	—	$	103,924	$	—

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(a)	Severance and other restructuring costs recorded within cost of sales include plant restructuring charges.


(b)	Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in corporate and other expense in "Note 23 to the Consolidated Financial Statements—Segment Information."