Mattel 2000 Annual Report Download - page 38

thirty six
Mattel, Inc. and Subsidiaries
In July 2000, Mattel completed an offering in Europe of Euro
200 million aggregate principal amount of notes due July 2002.
Interest is payable annually at the rate of Euro 6.625%. Cash pro-
ceeds of approximately $191 million were received and used for gen-
eral corporate purposes. Mattel entered into a cross currency interest
rate swap to convert the interest rate and principal amount from
Euros to US dollars.
Medium-term notes have maturity dates from 2001 through
2013 and bear interest at fixed rates from 6.50% to 8.55%.
Mattel repaid its 6-3/4% senior notes upon maturity in
May 2000. Additionally, Mattel repaid $201.0 million of outstanding
5-1/2% senior convertible notes (“5-1/2% Notes”) upon maturity in
November 2000. These notes were assumed by Mattel in connection
with the May 1999 merger with Learning Company and were classi-
fied as part of the net investment in discontinued operations as of
December 31, 1999.
Scheduled Maturities
The aggregate amounts of long-term debt maturing in the next five
years are as follows (in thousands):
Mortgage
Senior Notes MT Notes Note Other Total
2001 $ - $ 30,500 $ 694 $1,529 $ 32,723
2002 190,710 30,000 767 - 221,477
2003 350,000 30,000 849 - 380,849
2004 - 50,000 939 - 50,939
2005 150,000 - 39,131 - 189,131
Thereafter - 400,000 - - 400,000
NOTE 5 - STOCKHOLDERS’ EQUITY
Preference Stock and Preference Share Purchase Rights
Mattel is authorized to issue up to 20.0 million shares of $0.01 par
value preference stock, of which none is currently outstanding. There
are 2.0 million shares of $0.01 par value preference stock designated
as Series E Junior Participating Preference Stock in connection with a
distribution of Preference Share Purchase Rights (the “Rights”) to
Mattel’s common stockholders. The Rights may be exercised by their
holders to purchase shares of Mattel’s Series E Junior Participating
Preference Stock upon the occurrence of a change of control as
defined in the rights agreement. The Rights will expire on February 17,
2002, unless the Rights are earlier redeemed or exchanged by Mattel.
Preferred Stock
Mattel is authorized to issue 3.0 million shares of $1.00 par value pre-
ferred stock, of which none is currently outstanding.
- Special Voting Preferred Stock and Related Exchangeable Shares
Mattel is authorized to issue one share of $1.00 par value Special
Voting Preferred Stock, which was issued in exchange for one share of
Learning Company special voting stock in connection with the May
1999 merger. The par value and liquidation preference of the Special
Voting Preferred Stock are $1.00 and $10.00 per share, respectively.
The Special Voting Preferred Stock has a number of votes equal to the
number of outstanding exchangeable shares of Softkey Software
Products Inc. that are not owned by Mattel, its subsidiaries or any
entity controlled by Mattel. The Special Voting Preferred Stock votes
together with the holders of Mattel’s common stock as a single class
on all matters on which the holders of Mattel’s common stock may
vote. No dividends are paid on the Special Voting Preferred Stock.
The Special Voting Preferred Stock will be redeemed for $10.00 on
February 4, 2005, the redemption date for the exchangeable shares,
unless the board of directors of Mattel’s Canadian subsidiary, Softkey
Software Products Inc., extends or accelerates the redemption date.
As of December 31, 2000 and 1999, there were 1.6 million and
3.2 million outstanding exchangeable shares, respectively, that were
not owned by Mattel, its subsidiaries or any entity controlled by
Mattel. As a result of the May 1999 merger, each exchangeable share
is convertible at the option of the holder, without additional payment,
for the right to receive 1.2 shares of Mattel common stock until
February 4, 2005. On that date, any exchangeable shares not previ-
ously converted will be redeemed at the current market price of
Mattel’s common stock multiplied by 1.2. The redemption price will
be paid in the form of Mattel’s common stock, plus cash equal to any
unpaid dividends. The board of directors of Softkey Software
Products Inc. may extend the automatic redemption date at its option
and may accelerate the automatic redemption date if the number of
outstanding exchangeable shares is less than 0.5 million. Holders of
exchangeable shares are entitled to receive dividends declared on
Mattel’s common stock multiplied by 1.2 as if the exchangeable shares
had been converted into common stock. Holders of exchangeable
shares vote their shares through the Special Voting Preferred Stock at
the rate of 1.2 votes per exchangeable share on all matters on which
the holders of Mattel’s common stock may vote. As a result of the
1999 merger, each exchangeable share will include the right to
acquire exchangeable shares under a rights agreement issued by
Softkey Software Products Inc. These rights have an economically
equivalent value to the Rights attached to Mattel’s common stock.
During 2000, 1999 and 1998, 1.6 million, 1.9 million and
9.1 million exchangeable shares, respectively, were converted by
the holders into common stock at the rate of 1.2 common shares
per exchangeable share.
In 1998, Softkey Software Products Inc. issued 8.7 million
warrants in private placements in Canada for net proceeds of
$134.3 million. Each warrant was subsequently exchanged in
accordance with its provisions into one exchangeable share without
additional payment in 1998.
- Series C Mandatorily Convertible Redeemable Preferred Stock
(“Series C Preferred Stock”)
In 1999, all 771.9 thousand shares of Series C Preferred Stock out-
standing (and the related depositary shares) were converted by the
holders into 7.7 million shares of Mattel common stock pursuant to
terms of the certificate of designations.