Mattel 1998 Annual Report Download - page 53

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Mattel, Inc. and Subsidiaries 51
Management Report on Responsibility Report of Independent Accountants
for Financial Reporting
Note 10 - Supplemental Financial Information
As of Year End
(In thousands) 1998 1997
Inventories include the following:
Raw materials and work in process $ 42,851 $ 48,620
Finished goods 541,507 380,224
$584,358 $428,844
Prepaid expenses and other current assets
include the following:
Deferred income taxes $178,060 $170,626
Other 99,888 75,903
$277,948 $246,529
Short-term borrowings include the following:
Commercial paper $ 78,000 $ -
Notes payable 56,006 17,468
$134,006 $ 17,468
Accrued liabilities include the following:
Advertising and promotion $147,551 $144,020
Mattel restructuring and Tyco integration 33,497 108,581
Royalties 99,674 79,304
Other 370,291 297,540
$651,013 $629,445
For the Year
(In thousands) 1998 1997 1996
Selling and administrative expenses
include the following:
Research and development $178,001 $156,350 $147,174
Supplemental disclosure of cash
flow information:
Cash paid during the year for:
Income taxes $ 93,936 $105,812 $107,944
Interest 103,627 94,320 99,019
Noncash investing and financing activities:
Issuance of stock warrant - - 26,444
Conversion of 7% Notes - 16,034 -
Note 11 - New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement requires
companies to record derivatives on the balance sheet as assets or lia-
bilities, measured at fair value. It also requires that gains or losses
resulting from changes in the values of those derivatives be accounted
for depending on the use of the derivative and whether it qualifies for
hedge accounting. The Company is required to adopt this statement
for its fiscal year beginning January 1, 2000. Management believes the
adoption of this statement will not have a material impact on the
Company’s consolidated financial position or results of operations.