Mattel 2003 Annual Report Download - page 86

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The fair values of cash, cash equivalents, accounts receivable and payable, and short-term borrowings
approximated carrying values because of the short-term nature of these instruments. The estimated fair values of
other financial instruments subject to fair value disclosure, determined based on broker quotes or rates for the
same or similar instruments, and the related carrying amounts are as follows as of year end (in millions):
2003 2002
Book
Value
Fair
Value
Book
Value
Fair
Value
Long-term debt .......................................... $ 641.4 $ 701.8 $ 822.4 $ 878.8
Risk management contracts:
Foreign exchange forwards ............................. 1,069.3 1,121.1 1,113.0 1,147.8
$1,710.7 $1,822.9 $1,935.4 $2,026.6
Credit Concentrations
Credit is granted to customers on an unsecured basis. Sales to Mattel’s three largest customers accounted for
47% of consolidated net sales for 2003 and 50% of consolidated net sales in both 2002 and 2001. Sales to
Mattel’s three largest customers are as follows (in billions):
For the Year Ended
2003 2002 2001
Wal-Mart .................................................................. $1.0 $1.1 $1.0
Toys “R” Us ................................................................ 0.8 0.9 0.9
Target ..................................................................... 0.4 0.5 0.4
The Mattel Brands US and Fisher-Price Brands US segments sell products to each of Mattel’s three largest
customers. The International segment sells products to Wal-Mart and Toys “R” Us. The American Girl Brands
segment sells its children’s publications to Wal-Mart and Target.
Note 9—Commitments and Contingencies
Leases
Mattel routinely enters into noncancelable lease agreements for premises and equipment used in the normal
course of business. The following table shows the future minimum obligations under lease commitments in effect
at year end 2003 (in thousands):
Capitalized
Leases
Operating
Leases
2004 ................................................................... $ 300 $ 54,000
2005 ................................................................... 300 41,000
2006 ................................................................... 300 31,000
2007 ................................................................... 300 30,000
2008 ................................................................... 300 29,000
Thereafter ............................................................... 8,000 127,000
$9,500(a) $312,000
(a) Includes $7.3 million of imputed interest.
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