Mattel 2002 Annual Report Download - page 48

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exit activity or disposal activity be recognized and measured initially at fair value only when the liability is
incurred. EITF Issue No. 94-3 requires recognition of a liability at the date an entity commits to an exit plan. All
provisions of SFAS No. 146 will be effective for exit or disposal activities that are initiated after December 31,
2002. Consistent with the provisions of SFAS No. 146, Mattel will apply this statement prospectively. Mattel
does not expect that the adoption of SFAS No. 146 will have a material effect on its consolidated financial
position or results of operations.
In November 2002, the FASB issued FASB Interpretation No. (“FIN”) 45, Guarantor’s Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.FIN45
requires that upon issuance of a guarantee, the entity (i.e., the guarantor) must recognize a liability for the fair
value of the obligation it assumes under that guarantee. FIN 45’s provisions for initial recognition and
measurement will be effective on a prospective basis to guarantees issued or modified after December 31, 2002.
Consistent with the provisions of FIN 45, Mattel will apply this statement prospectively. As required by FIN 45,
the disclosure provisions have been included in these financial statements for the period ended December 31,
2002.
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation—Transition
and Disclosure, which amends SFAS No. 123. SFAS No. 148 provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee compensation. In
addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures
in both annual and interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results of operations. Mattel is in the process of
evaluating the alternative fair valuation methods prescribed in this statement and the impact on its financial
results of operations should the company decide to adopt the recognition provisions of stock-based employee
compensation.
Factors That May Affect Future Results
(Cautionary Statement Under the Private Securities Litigation Reform Act of 1995)
Certain written and oral statements made or incorporated by reference from time to time by Mattel or its
representatives in this Annual Report on Form 10-K, other filings or reports filed with the Securities and
Exchange Commission, press releases, conferences, or otherwise, are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to,
statements about: sales and inventory levels; brand and customer management programs; restructuring and
financial realignment plans; special charges and other non-recurring charges; initiatives aimed at anticipated cost
savings; operating efficiencies, including those associated with supply chain and information technology
initiatives; capital deployment plan (including statements about free cash flow, seasonal working capital, debt-to-
equity ratios, capital expenditures, acquisitions and share repurchases); cost increases; and profitability. Mattel is
including this Cautionary Statement to make applicable and take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 for any such forward-looking statements. Forward-looking
statements include any statement that may predict, forecast, indicate, or imply future results, performance, or
achievements. Forward-looking statements can be identified by the use of terminology such as “believe,”
“anticipate,” “expect,” “estimate,” “may,” “will,” “should,” “project,” “continue,” “plans,” “aims,” “intends,”
“likely,” or other similar words or phrases. Except for historical matters, the matters discussed in this Annual
Report on Form 10-K and other statements or filings made by Mattel from time-to-time may be forward-looking
statements. Management cautions you that forward-looking statements involve risks and uncertainties that may
cause actual results to differ materially from the forward-looking statements. In addition to the important factors
detailed herein and from time to time in other reports filed by Mattel with the Securities and Exchange
Commission, including Forms 8-K, 10-Q and 10-K, the following important factors could cause actual results to
differ materially from past results or those suggested by any forward-looking statements.
39