Mattel 2002 Annual Report Download - page 92

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On October 18, 2000, Mattel disposed of Learning Company to an affiliate of Gores Technology Group in
return for a contractual right to receive future consideration based on income generated from its business
operations and/or the net proceeds derived by the new company upon the sale of its assets or other liquidation
events, or 20% of its enterprise value at the end of five years.
In the fourth quarter of 2001, Mattel received proceeds totaling $10.0 million from Gores Technology
Group as a result of liquidation events related to Gores Technology Group’s sale of the entertainment and
education divisions of the former Learning Company. Mattel also incurred additional costs of approximately
$10 million in 2001 related to the wind down of the Consumer Software segment. Accordingly, no income was
recorded in the consolidated statement of operations for discontinued operations.
In the third quarter of 2002, Gores Technology Group completed the sale and liquidation of non-cash
proceeds related to the sales of the education and productivity divisions of the former Learning Company. Mattel
has a contractual right to share with Gores Technology Group in proceeds from the sale of the assets of the
former Learning Company and other liquidation events. Mattel recognized a gain from discontinued operations
of $27.3 million, net of taxes, in the consolidated statement of operations for the quarter ended September 30,
2002. Mattel collected the $43.3 million due from Gores Technology Group related to these events during the
fourth quarter of 2002.
Summary financial information for the discontinued operations is as follows (in millions):
For the Year (a)
2002 2000
Net sales ..................................................................... $— $337.9
Lossbeforeincometaxes........................................................ $— $(179.6)
Benefit for income taxes ........................................................ — (53.0)
Netloss.................................................................. — (126.6)
Gain(loss)ondisposal.......................................................... 43.3 (406.8)
Actual and estimated losses during phase-out period .................................. — (238.3)
43.3 (645.1)
Provision (benefit) for income taxes ............................................... 16.0 (170.6)
Netgain(loss)ondisposal................................................... 27.3 (474.5)
Total gain (loss) from discontinued operations ....................................... $27.3 $(601.1)
(a) No net gain or loss from discontinued operations was recorded in 2001.
Actual losses of the Consumer Software segment from the measurement date of March 31, 2000 as well as
estimated losses through the date of disposal were recorded as part of the loss from discontinued operations for
2000.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
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