Mattel 2001 Annual Report Download - page 66

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Learning Company Stock Option Plans
Prior to the May 1999 merger, Learning Company and its subsidiaries had various incentive and
nonqualified stock option plans that provided benefits for eligible employees and non-employee directors.
Effective with the 1999 merger, each option outstanding under these plans was converted into an option to
purchase 1.2 shares of Mattel common stock. The exercise price of such options was adjusted by dividing the
Learning Company option price by 1.2. Other than options granted under some plans assumed by Learning
Company in connection with acquisitions, all Learning Company stock options vested and became fully
exercisable as a result of the 1999 merger.
The following is a summary of stock option information and weighted average exercise prices for
Learning Company’s stock option plans during the year (options in thousands):
2001 2000 1999
Number Price Number Price Number Price
Outstanding at January 1 ....................... 2,674 $17.07 10,680 $16.19 17,626 $14.30
Options granted .......................... — — — — 1,415 21.12
Options exercised ........................ (1,565) 13.33 (1,372) 9.99 (5,278) 10.99
Options canceled ......................... (984) 24.23 (6,634) 17.13 (3,083) 15.94
Outstanding at December 31 .................... 125 $ 7.56 2,674 $17.07 10,680 $16.19
Exercisable at December 31 .................... 125 $ 7.56 2,674 $17.07 9,473 $15.41
Available for grant at December 31 ............... — — —
The exercise price for Learning Company stock options outstanding as of December 31, 2001 ranges from
$4.54 per share to $16.15 per share, with a weighted average of $7.56 per share.
Compensation Cost
Mattel adopted the disclosure-only provisions of SFAS No. 123. Accordingly, no compensation cost has
been recognized in the results of operations for nonqualified stock options granted under these plans. Had
compensation cost for nonqualified stock options been determined based on their fair value at the date of grant
consistent with the method of accounting prescribed by SFAS No. 123, Mattel’s net income (loss) and earnings
per share would have been adjusted as follows (amounts in millions except per share data):
For the Year Ended
2001 2000 1999
Net income (loss)
As reported ................................................ $298.9 $(431.0) $ (82.4)
Stock option plans ........................................... (14.9) (34.6) (50.2)
Pro forma income (loss) .................................... $284.0 $(465.6) $(132.6)
Income (loss) per share
Basic
As reported ................................................ $ 0.69 $ (1.01) $ (0.21)
Stock option plans ........................................... (0.03) (0.08) (0.12)
Pro forma basic income (loss) ............................... $ 0.66 $ (1.09) $ (0.33)
Diluted
As reported ................................................ $ 0.68 $ (1.01) $ (0.20)
Stock option plans ........................................... (0.03) (0.08) (0.12)
Pro forma diluted income (loss) .............................. $ 0.65 $ (1.09) $ (0.32)
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