Mattel 2012 Annual Report Download - page 64

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Venezuelan Operations
Since January 1, 2010, Mattel has accounted for Venezuela as a highly inflationary economy as the three-
year cumulative inflation rate for Venezuela exceeded 100%. Accordingly, Mattel’s Venezuelan subsidiary uses
the US dollar as its functional currency, and monetary assets and liabilities denominated in Venezuelan bolivar
fuertes generate income or expense for changes in value associated with foreign currency exchange rate
fluctuations against the US dollar. Mattel’s Venezuelan subsidiary uses the Sistema de Transacciones con Titulos
en Moneda Extranjera (“SITME”) rate, which is controlled by the Central Bank of Venezuela, to remeasure
monetary assets and liabilities denominated in Venezuelan bolivar fuertes. The SITME rate was quoted at 5.30
Venezuelan bolivar fuertes per US dollar at December 31, 2012.
Mattel’s Venezuelan subsidiary represented less than 0.1% of Mattel’s consolidated net sales in 2012 and
had approximately $27 million of net monetary assets denominated in Venezuelan bolivar fuertes as of
December 31, 2012. For every $10 million of net monetary assets denominated in Venezuelan bolivar fuertes, a
10% increase/(decrease) in the foreign currency exchange rate would decrease/(increase) Mattel’s pre-tax income
by approximately $1 million.
On February 9, 2013, it was announced that the Central Bank of Venezuela had revised its official exchange
rate to 6.30 Venezuelan bolivar fuertes per US dollar and eliminated the SITME. These changes are not expected
to have a material impact on Mattel’s operating results or financial position.
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