Ladies and gentlemen, thank you for standing by, and welcome to Mattel's Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded [Operator Instructions] I would now like to hand the conference over to your host, VP of Investor Relations David Zbojniewicz. Sir, please go ahead.

Thank you, operator, and good afternoon everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer; Richard Dickson, Mattel's President and Chief Operating Officer; and Joe Euteneuer, Mattel's Chief Financial Officer. As you know, this afternoon, we reported Mattel's 2019 full year and fourth-quarter financial results. We will begin today's call with Ynon and Joe providing commentary on our results and then we will provide time for Ynon, Richard and Joe to take your questions. To help guide our discussion today, we have provided you with slide presentation. Our discussion, slide presentation and earnings release referenced non-GAAP financial measures, including gross sales, adjusted gross profit and adjusted gross margin, adjusted other selling and administrative expenses, adjusted operating income and loss, adjusted earnings and loss per share, earnings before interest, depreciation and amortization or EBITDA, adjusted EBITDA, free cash flow and constant currency. Please note that the sales figures reference on this call will be stated in constant currency. The information required by regulation G regarding non-GAAP financial measures is included in our earnings release and slide presentation, and both documents are available in the Investor Section of our corporate website corporate.mattel.com. Before we begin, I like to remind you that certain statements made during the call, may include forward-looking statements related to the future performance of our business, brands and product lines. These statements are based on currently available information and they're subject to a number of significant risks and uncertainties that could cause our actual results to differ materially from those projected in the forward-looking statements. We described some of these uncertainties in the Risk Factor section of our amended 2018 annual report on Form 10-K. Our 2019 quarterly reports on Form 10-Q, our earnings release and the presentation accompanying this call and other filings we make with the SEC from time to time, as well as in our other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so except as required by law. Now, I'd like to turn the call over to Ynon.

Thank you everyone for joining Mattel's fourth quarter and full year 2019 earnings call. Our results reflect significant improvement across the business as we continued to make consistent meaningful progress on our strategy to transform Mattel into an IP-driven high-performing toy company. We remain focused on execution and are well on our way to achieve our goals, to restore profitability and regain top line growth in the short-to-mid term and are on track to capture the full value of our IP in the mid-to-long term. Mattel exceeded its 2019 guidance significantly improving profitability and stabilizing the top line, a major accomplishment after five years of revenue decline. Key highlights of the 2019 full-year financial performance compared to last year include the following. Gross sales were flat as reported, including a negative $92 million foreign exchange impact, and up 2% in constant currency. Adjusted gross margin was 44.9% a 480 basis points improvement. Adjusted SG&A was reduced by $86 million. Adjusted EBITDA was $453 million, an increase of $253 million, or 126%. Adjusted EPS improved by $0.85. Operating cash flow was a $181 million, an improvement of $208 million, and we achieved positive free cash flow for the first time in three years, an improvement of $244 million. In addition to the strong financial performance, we made significant progress in reshaping our operations and strengthening the balance sheet. We successfully completed the structural simplification program and reached $875 million of run rate savings exiting the year, exceeding our savings target by $225 million. As part of the capital light program, in 2019, we closed three owned plants in Mexico, China and Indonesia; and we recently announced the closure of our manufacturing operations in Canada by the end of 2020. In addition, we refinanced our next two debt maturities, improving our near…

Thank you, Ynon, and good afternoon everyone. I would like to provide more detail on the fourth quarter results and summarize the full year performance before moving on to our 2020 full year guidance. As Ynon said we did very well in 2019 and exceeded our guidance significantly improving profitability and stabilizing the top line. We performed well in the fourth quarter and grew market share in this highly competitive period. For the year gross sales were flat as reported and up 2% in constant currency and as expected gross sales for the quarter were down 3% as reported and down 2% in constant currency. Turning to POS, excluding TRU for both the quarter and full year, total Mattel worldwide POS was flat. To give you a little more color on POS for our power brands, I'd like to share the following highlights. Barbie POS was up high single digits in the quarter and double digits for the year. In North America, Barbie POS was up low single digits in the quarter and up high single digits for the year. Meanwhile, internationally Barbie POS was up double digits in the quarter and up double digits for the year. This marked the 15th consecutive quarter of international POS growth for Barbie. Hot Wheels global POS was up double digits in the quarter and up high single digits in the year. In North America, Hot Wheels POS was up double digits in the quarter and up mid single digits for the year. Internationally, Hot Wheels POS was up double digits in the quarter and up double digits for the year. This marked more than 15 consecutive quarters of international POS growth for Hot Wheels. Fisher-Price core global POS was flat in the quarter and down high single digits for the year. In…

Thank you, Joe. In conclusion, 2019 was an important inflection point in our turnaround. We stabilized our top line after five consecutive years of revenue decline, continue to significantly improve profitability and achieved positive free cash flow for the first time in three years. We are very encouraged by the consistent progress the Company is making and expect to continue to build on this momentum. We remained focused on the execution of our multi-year turnaround strategy to transform Mattel into an IP driven, high-performing toy company and create long term shareholder value. I look forward to seeing many of you next week at New York Toy Fair and sharing additional details on our strategic roadmap going forward.

[Operator Instructions] The first question comes from the line of Michael Ng of Goldman Sachs. Your question please.

Thank you very much for the question. I just have two. The first is on the $15 million of capital light savings for 2020. Does that just account for the factories that you guys have closed this year including the Canadian factory or do you expect more to come? And then second, just as a bigger picture question, where do you see your mid-to-long term EBIT margins going over the next few years? Thank you.

Sure. In regards to your first question on the factories, the $50 million includes the three factories we've already shut down. There's partial savings from Canada, but the full savings won't happen until 2021 when it's fully shut down. And then on the next one in regards to margins, you see the improvement we made in 2019 getting to basically 45% and talking to you about another 150 basis points to 200 basis points improvement going into 2020, we are on that trend to try to get it up to the high 40's as much as we can. So we've said that consistently, and I think you've seen the progress to date.

Thank you, Joe.

And Michael, I would add that we said before that we're looking to restore historical performance levels for the Company. We haven't put a timeline on it, but this is the direction that we're heading towards.

Your next question comes from Drew Crum of Stifel. Your line is open.

Just your commentary on retail inventory, any brands or regions you can speak to where you're seeing elevated levels? And then separately, you're making progress with operating cash flow and projecting further improvement for 2020. Can you remind us or discuss what the priorities for use of cash are going forward?

Yes, sure. In regards to retail inventories, we're very comfortable with our retail inventory position given our POS. There's really not any -- we've been -- we have such great partnerships with our retailers that we have all good inventory out there so not really any one pocket. In regards to -- your second question was in regards to investments?

Uses of cash.

Yes, uses of cash. I mean, look, the big things is we have continued to invest back into the business, full automation. Ynon has mentioned what we've done in supply chain, we've talked to you about what we've done for our designers, global procure to pay things like that. In addition, second thing is we want to continue to try to de-lever the Company and try to get back to investment grade. So, I think, those would be our two primary uses of cash in the short-term.

The next question comes from Tami Zakaria of JPMorgan. Your line is open.

Hi, thanks for taking my question. So my first question is more bigger picture. Could you share your thoughts on the outlook of the U.S. toy industry? And do you think the toy industry can grow in 2020 following a couple of years of this line? And then my second question relates to POS. Could you provide some color on POS trends that you're seeing quarter-to-date maybe for some of your major brands like Barbie and Hot Wheels?

Yes. Hi, Tami, this is your first call. So welcome. So, our view on the industry is that the fundamentals going forward remain very solid. The industry was down in 2019. There were a few specific factors that impacted the year. The first one happened in the first half where we comp the 2018 Toys "R" Us liquidation that drove the first half of '19 down 6%. The third quarter was up, driven primarily by Toy Story, our own toy story and some other hot properties. Fourth quarter was down -was down 3%. And the reason for that, we believe, was driven primarily by the shorter holiday season as well as a smaller number of new big launches. So, this is really what's impacted 2019. If you look at some of the research out there and to be fair, it's not -- it's as of June or July of last year, so it's not completely current, but [indiscernible] put out a pretty comprehensive study that we refer to. They looked at 32 countries that make about 80% of the global industry. They've done in storage checks, in region analysis, they talk to retailers, to consumers. They look at micro economic data. They have insights for various constituencies and they say, they think that the industry will continue to grow at 4.6% CAGR for the next five years. They did not obviously factor the coronavirus. So, you got to put an asterisk on that, but fundamentally, we believe the industry is in a solid position and we expect it to continue to grow.

Tami, this is Richard. Again, welcome to the call. I'll pick up the POS question that you had. You know, overall we outperformed the industry and increased global market share in the fourth quarter. We really were very pleased overall in our portfolio with POS. There were some real stars of course Barbie really had a fantastic year in POS as well as Hot Wheels. These are two of our key brands that have had consistent momentum. But across the board we're feeling consumer takeaway, very strong, very confident in our lineup of 2020, and certainly our performance in '19. So, we look forward to sharing a lot more detail with you strategically and in the gallery where you’ll really see the products coming out for 2020 and we can answer more questions there specifically.

Next question comes from Arpine Kocharyan of UBS. Your line is open.

I have two very quick ones. Could you help me understand, why is inventory at retail up, if shipments were down in Q4 versus POS that was flat? Then I have quick follow-up.

Sure. So look, first and foremost, our sales were in Q4 as expected as we talked to you about it on the third quarter call. And if you go back Ynon's remark, he discussed the fact that we've made tremendous amount of investments in our supply chain, which leads to better forecasting that better forecasting accuracy has led to our inventory declines. And given the partnerships that we have with our retailers on joint business plans, we believe the inventory levels at retail are at the right levels given the POS that we have to-date.

Okay. That actually takes me to my follow up which I think was asked, but I'm going to try to ask it again. Any additional color you could provide on a POS so far into the quarter? And I'm also particularly interested in sort of how you're going to potentially navigate what could be a supply chain disruption in terms of Easter volumes, whether that product is already at your warehouses, or how are you going to navigate that going into -- looking into sort of early April and prior to that obviously cause you need to ship the product prior to that?

Right. So look, we haven't really given any guidance in regards to how January is doing etcetera. You know at Toy Fair we'll talk to you about strategically. But look, we've had great performance exiting 2019 and we believe 2020 is going to be a good year. In regards to the disruption with the coronavirus, I mean, look, it's still -- it's a wait and see. The 17th is the beginning of next week. We can see a production starts. If it doesn't, then we have - looking for alternative plans. So we just have to give you an update that once we have more information.

Okay. And then I have a very, very quick follow-up. I just wanted to look a little bit closer at the top line guidance. I think Toy Story is obviously tougher comps by my calculation, at least about two points of headwind year-over-year. And then you're obviously guiding Fisher-Price will continue to decline, but decline less for the year. Doesn't that mean that you need better than 2% to 3% increase in dolls and vehicles combined to get to around 1% or 2% growth for the year? I guess could you dissect a little bit that math?

Well, look, I think you're trying to get to the unbundling of it, but remember the own brands that we have, we gave you the guidance that they'd be up mid-single digits. And what that means is what you pointed out, which is on the licensed properties those are the ones that are creating the negative impact. A great example would be Fisher-Price Friends. We've said that we've been exiting some of those non-performing licenses. So if things like that, that's creates a negative drag. But when you look at the own brands, they're delivering solid mid-single digit growth.

And this is a really important point that our own brands are expected to perform well, mid-single digit growth of our own brand is a very good foundation and we're very happy with that to get started. And I would refer you onto Slide 28 in the deck, we broke out in pretty good detail the various components of the gross sales drivers and we are set well to achieve this in 2020.

Thank you. Our next question comes from Tim Condor of Wells Fargo Securities. Your question please.

Thank you and gentleman thank you for the more detailed guidance. I think everyone appreciates that and looking forward to the 21. And then maybe a little bit more color on this three or so type of outlook if you would. From that perspective, I want to focus on the capital light. I know again there are sensitivities and negotiating things within governments and a lot of -- a lot of things from that perspective, political things and considerations. But, how should we look or think about where your end game is? In the press release with MEGA, you talked about that some areas, and you've alluded to this before, maybe in die-cast that it makes sense to keep it. Can you kind of maybe buck it a little bit more what you're maybe thinking about keeping and maybe the potential where you see additional EBITDA savings, what that a range or something on that number could be from capital light? And then I have one other follow-up.

As we said, we're making transformative changes in our supply chain. The concept is to be able -- is to simplify modernized and design a more progressive, more flexible, more adaptive, more mobile, infrastructure. That would allow us to optimize markets conditions and our own requirements. We do have a plan we're executing towards the plan, as you noted, we haven't disclosed a plan for different reasons, but you can see that the, we are tracking well at this point we have closed or consolidated four plants and more is coming. And with that we also said that some in some cases without being dramatic about things we think of you and in certain situations we would retain certain capabilities that are unique, such as the Hot Wheels factory as one example. We're not going to be able to share more detail, but you can rest assured that we are making progress you will see more savings, more benefits coming through $50 million already expected based on the actions we already announced in 2020 and there will be more benefits, as we will come our way and you have to bear with us and see the progress in the making.

Okay. And then maybe back to some of the previous questions on the build for 20 specifically in Dolls owned. Whoever wants to take this, maybe Richard, I don't know, Barbie, how are -- what do you planning with Barbie to go against obviously a great run that Barbie's had here and then of course frozen, I think we'll have a pretty good year in 20, given that it's only kind a came out in Q4. But just any color around that gentleman could be helpful I think for most people?

Tim, thank you for asking that question, we are incredibly proud of the work that we've done on Barbie. As you know, this is now going to be our ninth consecutive quarter of year-over-year growth and in fact it's the highest sales number that we've had in six years. So we are confident in the foundational programs that we built for Barbie and are continuing to grow upon strength. This year was a terrific year for Barbie and as you all know, it was one of the most competitive doll years out there. Certainly entertainment driven and as usual, highly competitive with new doll entries and certainly the customers voted on Barbie. Most our segments performed exceptionally well obviously the diversity and inclusivity from fashion Easter's continues to be an incredibly important pop culture conversation. It's not only generating a lot of purpose but profit, we're incredibly proud of the career segment aspiring girls to be anything they want to be. And the innovation that we've proven that we can do with Barbie, not only from a marketing perspective but from a product perspective is really being highlighted now. We introduced a new blockbuster item called Color Reveal and it's continuing to generate incredible excitement. So we've got great buzz and great momentum going into 2020 the right way. I'm really excited to show everybody what we're doing in Toy Fair. I hope you'll all be there because we'll expose all of our exciting products and strategic narratives.

And then just as a little derivative, I apologize, BTS. Any comment on how that did in 2019 for the Company?

Yes, BTS was an exciting launch for us. It actually performed well in the context of our expectations if anything, It also proved the speed and nimble reaction that we could have as an organization going after the right pop culture narratives, speed to market with incredibly, exciting looking dolls. We are continuing with BTS as lots of other news that will come down the pike, but we were pleased with BGS and our overall portfolio performance. As we move away from some of the year-over-year comp issues, 2020 is poised for meaningful growth and a great new innovative product pipeline that you'll see in Toy Fair.

Thank you. Our next question comes from Gerrick Johnson of BMO Capital Markets. Your line is open.

Thank you. Good afternoon, everyone. Couple of product questions, I guess, for Richard here. First, a couple, I call them where riskier launches were Hot Wheels ID and Creatable World, maybe you can comment on how those performed? And then Baby Yoda, you're very quick to have push available for presale in Disney, shopdisney.com. And I wasn't aware you had a Star Wars plush license. Can you talk about how you executed on that product line?

Sure. Gerrick. First let me just take a victory lap share on Hot Wheels. This brand is continuing to perform. 2019 was the biggest Hot Wheels year ever. It's the sixth consecutive year of POS growth both in the U.S. and globally. This is a story of complete innovation both from our marketing and demand creation perspective, as well as product and the digital demand creation evolution that we've had moving more of to linear and from linear to digital has proven incredibly successful. We've done experiential marketing with the Hot Wheels Legends tour introducing Monster Trucks as a new segment with a live experience will show and a variety of other really exciting narratives for Hot Wheels that has proven incredibly successful. Some of the great new product that we introduced in '19, like Hot Wheels Mario Kart toy line was the biggest new license launch, since Star Wars in 2015, we're going to continue to surprise consumers and all of you with the product that we have lined up that you'll see as we move into Toy Fair for 2020, so lots of really great momentum to build upon for Hot Wheels. Moving to a Creatable World, which as you know was a really another very big milestone moment for the Company, again, kind of proving our leadership in the doll category. We got over 2.3 billion impressions with the narrative of Creatable World and over 90% of that was positive. We felt really good about the leadership statement that we made with Creatable World and it had pockets of exceeding expectations in some cases and meeting expectations in others. We're continuing to refine and define this new and exciting play pattern and segments and you'll hear a lot more about that as well as we get to Toy Fair. Last, but certainly not least is the child, which of course we call Baby Yoda. A really thrilling moment for Mattel to be first in the marketplace with this incredibly innovative design, amazing, obviously toy, the speed of which our design development and entire team reacted to the product, working very closely with our partners, proved itself again as Mattel only can do. We're really excited about now with Baby Yoda and the child, but the entire plus category overall, not only with Star Wars, but with other partners that will reveal at toy fair we're really on a roll with it and I can't wait for you to see it when we get there.

Thank you our next question comes from Linda Weiser of D.A Davidson. Please go ahead.

Hi, sorry if I missed it, but did you guys give us specific capital spending guidance number for 2020? And also, even if you were to significantly increase your free cash flow in 2020, it still wouldn't put a very big dent in your sizeable debt load? Is there any group of maybe some smaller brands that are not growing that you would consider divesting to be able to use proceeds to accelerate debt pay down? Thanks.

So, the answer to your first part of your question, if you go to Page 31 of the deck we sent you, you see that we have capital expenditures and around the $125 million to $150 million range. In regards to properties, we are very confident in our portfolio of IP. And so, we don't think that there's anything right now that would do that. And remember, when you're thinking about our EBITDA debt load, there's two things; one, the cash that we'll be generating, so you'll start being able to do a net debt calculation; and second, the growth of EBIDTA that brings down our leverage ratio.

Another way, we talked about it before in with every day that goes by, we are improving our profitability and improving our cash position. We're ready drove very significant improvement in leverage ratio. That will continue to get better this year. And as we said before, as it stands, we don't have any debt maturities until March of 2023, and that maturity is $250 million. So, we have a lot of flexibility in the short to midterm, let's call it, and getting on stronger financial footing with every day that goes by. So, there is no reason to sell any of our assets. These are growth drivers, including the declining properties they're all growth drivers and we're turning them around. Don't forget that just a little over two years ago Barbie was in decline and it's just reached its highest year in revenue off to sit, you know, in the last six years. So we believe we're sitting on a treasure trove of our assets of Greg IP. And this will be part of our success in the mid to long term. So we executing diligently and then we'll see the results in the numbers.

Great. And can I just follow-up on the coronavirus issue. Our understanding is that when the workers traveled to the factory locations that they actually do need to be quarantined for two weeks after their arrival date. So is it really two weeks past February 17th that production is going to start? Thanks.

To the best of our knowledge in talking with us there that no production would start on the 17th and we only actually have people in the factory, you know, getting things ready, et cetera. So you, you staggered in, so yes right now we're planning on starting on the 17th unless the government puts out another guideline.

Next question comes from Eric Handler of MKM Partners. Your line is open.

Thank you very much. I have got two questions. First, MEGA seems to just have a really good stride last year and I want you to, you know, when you look at the action figures building sets a game segment, if you just parsed out MEGA last year, what would that growth be for that business? And what sort of drove that growth, how much of that was licensing? How much of that was just sort of the core block business. And I'll follow up with a second question after you answer this.

Thanks, Eric. It's Richard. Thank you for recognizing that momentum that we've got in MEGA. It's been a great turnaround story as we refocused and established ourselves as a true challenger, and taking that challenge, your mindset and position driving a really right product at the right place in order to regain share in the construction category. Just as a reminder, the turnaround plan really focused on setting up the right inventory to get those increases in POS and we delivered, 2019 was a good year in the construction category for us with MEGA and we will continue that momentum as we build upon strength in 2020. There is a great new campaign that we're going to be revealing for you and everybody else in Toy Fair that is going to really identify MEGA with a point of difference that we're pretty excited about. The licensing piece of MEGA while we don't break out the specifics of it continues to be an important part of the brand. Halo game launch ramp-up is really one of the key brands for us. We've got some great momentum of course in Pokemon, and then some new innovation that you're going to see in the MEGA Blocks category with something called PICA Blocks, which is a great new product that's going to have specific content and media around it. So look, we can talk a lot about MEGA, I would rather save a lot of it when I walk you through the gallery and share our strategic point of view and we get to choice there but all going in the right direction.

And just to add to that in regards to your question on growth. We did say -- I did say in my prepared remarks that each of the channels or categories grew double digits last year in 2019. And in parentheses I can say that a lot of it goes back to the core strategy of running the Company by category as a holistic portfolio. We'll talk about that more at Toy Fair, but this is driven by this new structure we're able to grow each category which with its own dedicated strategy, leadership team and brand that solidify the momentum.

Now, in contrast to MEGA, we still have a lot of issues with Thomas. And I'm wondering is there anything structurally that has changed in the play pattern? We're trained it just like consistent, very consistent patterns for kids, particularly boys. And I'm just trying to figure out what is changed there that has kept that's what was seemingly a very strong brands just on a downward path for the last several years.

Yes. Thanks Eric. Truth is, and we've shared this, the Thomas trend is a self inflicted wound. We have acknowledged a frankly a challenge with this brand, particularly in association with how we drove product. The good news is in 2019, we saw early signs of progress as we rolled out a singular core system of play, just a playback case study. One of the reasons why Thomas business to some extent fell off the track, no pun intended, was because we had variations of track play, and also moved away from the depth of characters in merchandising. We're getting back to a singular core place system we're doing great strong engagement with content that continues to resonate with kids around the world and we're strengthening our retail presence and merchandising assortment at retail. All of this has been working progress in 2019 we did see in the new single track system in the fourth quarter, some great POS lift in single digits on that segment. With that as early signs of momentum, we're going to accelerate that progress into 2020. In addition to that, we have the catalyst of Thomas his 75th birthday, which we have some great proven track record of celebrating birthdays with momentum around our brands, some terrific new product interacted engines that will bring the choice to life. And last but not least, we're excited to move the Thomas content in the U.S. to Netflix. So a great series of good strong lineups, both product and strategies for 2020 and we'll get a little bit more into detail in New York when we see you.

So just as one last follow-up. That means you're moving away from Nickelodeon toward Netflix?

Yes.

Your next question comes from Felicia Hendrix of Barclays. Your line is open.

Joe, I know you've said throughout this call that your inventory levels are fine, but in your prepared remarks, you also just mentioned that there'll be higher inventories in the first quarter. So I just wondered if you could specifically talk about what's driving that and can we extrapolate that to your sales potentially being down in the first quarter to kind of comedy for that higher inventory?

Yes I think what -- my caramel was that the fact that the inventory in the first quarter could have a on1% to 2% impact on revenue in the quarter. So yes.

So what's driving that higher level? Is that just kind of building for the rest of the year or is that something else?

Well, what do you mean? As far as the mid single digit growth of all of our own brands, you know, we're talking about mid single digit growth. So yes, if I'm getting your question right.

Well you're saying there's just going be higher levels of inventory in the first quarter. I'm just trying to understand what exactly is going to be deciding that?

Yes, because we expect to be up mid single digit to our first quarter sales. So, I think that's, that's the biggest reason.

Okay. So, it'll match.

That's, that's the hope. That's what we're hoping right now. That's what we're telling you. We're going to have to update you on in regards to the virus, but that's still an unknown. We have to come back to you on that.

Okay, great. I just want to clarify that. And then just with Barbie, with your sector growth in Barbie and 2020s, just wondering how we should think about that in terms of domestic and international substance, domestic, kind of domestic was down this quarter, which was not surprising given what was going on the environment, but just if you could just kind of help us think about how to model that for 2020?

Yes. Felicia, I think we've proven now that it's not a question of if Barbie's going to grow. It's more about our philosophy is how high and how fast. We're very confident in the programs that we have in place for Barbie. We're going to share a lot more of that detail for you to give you the same type of confidence when we get to toy fair, but certainly the past nine, nine consecutive quarters, and of course this year in particular with such a competitive landscape should give people more confidence. But we'll share a lot more of that detail with you when we get to toy fair.

Okay. But it sounds like you'll see return to growth in 20 domestically for Barbie?

We will actually continue growth in Barbie, we did grow in Barbie.

I mean, your shipments were down in fourth quarter.

And for year for Barbie, we performed very well and we had expected essentially the same performance that you saw in the first half and second half in the context of the plans for Barbie. And as usual, this is our long-term proposition. We're going to be going to our 61st year. So we tend to look at Barbie with a long-term view.

Yes. Okay, great. And then just Joe, you've done an extraordinary job this year in terms of your cost savings program and kind of showing upside for that almost each quarter. In terms of just the little bit that's left in 2020, is it getting harder to show upside or do you think that, we could see some of more of the same.

You mean in regards to cost-savings or.

Yes, cost saving.

Yes, so, right now, we concluded the structural simplification programs. So we ended up at $875 million on an original $650 million program. And through 2019, we'll have $797 million of that affected EBITDA and we have another $92 million that'll affect 2020. So, the carryover into 2020 is about $92 million. And then in capital light, we did get the acceleration in the period of $15 million and then we'll have another $50 million of savings associated with capital light.

Right, I just wanted to carry over it is what it is. We shouldn't expect that to somehow kind of

Yes, we've concluded the program etcetera -- now just because we've concluded the program doesn't mean we're not calling after more savings, but the formal program that we've been pitching you on, we're now done. And listen, just to clarify the previous from remark, because I think, I thought about what you said, we are going to have a mid-single digit impact to Q1 results as a result of where the inventory is at year end going into the first quarter. So I just wanted to make that clear.

Right. And that's how I was asking it and I think is it still impacts is an offsetting. I just really, we should talk about this offline cause I'm not sure.

Thank you, Felicia. And on that note, we have time for one more question or a set of questions, but those that don't have time to get the questions put on the table now. We'll be happy to address it after the call.

Our final question comes from the line of William Reuter of Bank of America. Your line is open.

Just one question on your capital allocation, your guidance implies pretty strong free cash flow and you've talked about debt reduction, but there isn't any pre-payable debt in your capital structure at this point. So I guess, I'm curious whether you would repurchase your 2023 notes in the open market. And then related to that, you talked about investment grade, I guess, will you focus on getting to investment grade before you would do shareholder friendly stuff like share repurchases or large onetime dividends something like that?

Yes, sure. I mean, look, we will always use the most efficient use of our cash. And remember the one thing at year end, the large debt becomes callable, so that does happen in December. So yes, look, those are all the things you mentioned are things that are on the table, but we have to continue to grow the Company and then we'll evaluate the best use of our cash on a going forward basis.

Great. Thanks for sneaking me in. Appreciate it.

Okay. Thank you. So I just went to summarize, make a few closing comments, and thank you all for the question. This call run a little longer given that it's a fourth quarter, a big year. We also gave your guidance. There's no comment of Toys Fair, but it's fair to say that 2019 was an important point, important inflection points for the Company. In our turnarounds, you saw methodical execution of our strategy. It is working. We have achieved significant improvements across key profitability metrics including growth, margin, operating income, EBITDA, EPS. And importantly, we achieved free cash flow positive, which is a big point in the turnaround. We also increase revenue in constant currency and global market share in the fourth quarter, which was very competitive and at the same time retain a global leadership position for the year. We also continue to make progress in capturing value from our IP with five new film projects announced, three television series with Netflix, and a lot of activity in our franchise management team. So all in all, I would say, we are very proud of the accomplishments of the Company, of the team, around the world. Our 2020 guidance reflects continued momentum and we hope to share with you more as we go forward. Thank you and I'd like now to turn the call over to Dave for very last closing comments.

Thank you, Ynon, and thank you, everyone, for joining the call today. The replay of this call will be available via webcast and audio beginning at 8:30 PM Eastern time today. The webcast link can be found on our Investor page or for an audio replay, please dial 404 537-3406. The passcode is 5764607. Thank you for participating in today's call.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.