Mattel 2002 Annual Report Download - page 63
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Please find page 63 of the 2002 Mattel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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The fair value of Mattel options granted has been estimated using the Black-Scholes pricing model. The
expected life of these options used in this calculation has been determined using historical exercise patterns. The
following weighted average assumptions were used in determining fair value:
2002 2001 2000
Options granted at market price
Expected life (in years) .............................................. 6.16 5.50 5.67
Risk-free interest rate ............................................... 2.94% 4.42% 5.03%
Volatility factor .................................................... 30.09% 16.76% 19.55%
Dividend yield ..................................................... 1.07% 0.86% 0.83%
Options granted at above market price
Expected life (in years) .............................................. — — 10.00
Risk-free interest rate ............................................... — — 6.01%
Volatility factor .................................................... — — 45.63%
Dividend yield ..................................................... — — 3.40%
The weighted average fair value of Mattel options granted at market price during 2002, 2001 and 2000 were
$6.17, $3.52 and $2.96 respectively. The weighted average fair value of Mattel options granted at above market
price during 2000 was $3.18.
Income Taxes
Mattel accounts for certain income and expense items differently for financial reporting and income tax
purposes. Deferred tax assets and liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in
which the differences are expected to reverse.
Income Per Common Share
Basic income (loss) per common share is computed by dividing reported net income (loss) by the weighted
average number of common shares and common shares obtainable upon the exchange of the exchangeable shares
of Mattel’s Canadian subsidiary, Softkey Software Products Inc., outstanding during each period.
Diluted income (loss) per common share is computed by dividing reported net income (loss) by the
weighted average number of common shares, common shares obtainable upon the exchange of the exchangeable
shares of Mattel’s Canadian subsidiary, Softkey Software Products Inc., and other common equivalent shares
outstanding during each period. The calculation of common equivalent shares assumes the exercise of dilutive
stock options and warrants, net of assumed treasury share repurchases at average market prices, as applicable.
A reconciliation of weighted average shares for the years ended December 31 follows (shares in thousands):
2002 2001 2000
Common shares .................................................... 435,790 430,983 426,166
Effect of dilutive securities:
Stockoptions .................................................. 5,355 4,765 960
Warrants ...................................................... 147 418 —
Common and common equivalent shares ................................ 441,292 436,166 427,126
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