Mattel 2005 Annual Report Download - page 46

The outstanding amounts of accounts receivable that have been sold under these facilities and other
factoring arrangements, net of collections from customers, have been excluded from Mattel’s consolidated
balance sheets and are summarized as follows (in thousands):
December 31,
2005 2004
Receivables sold pursuant to the:
Domestic receivables facility ........................................ $ 251,372 $ 253,378
European receivables facility ........................................ 95,946 93,766
Other factoring arrangements ............................................ 95,763 99,117
$ 443,081 $ 446,261
Financial Position
Mattel’s cash and equivalents were $997.7 million at December 31, 2005, a decrease of $159.1 million from
2004. The decrease was primarily driven by treasury stock repurchases of $487.1 million, the repayment of the
$150.0 million 6
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⁄ 8 % notes in July 2005 and the 10.15% mortgage note for $39.1 million in November 2005
upon maturity and payment of dividends on common stock of $200.5 million, partially offset by cash flows
generated by operating activities, $225.0 million of proceeds under the MAPS term loan facility and
$100.0 million under the MAPS revolving loan facility. Accounts receivable were flat at December 31, 2005 as
compared to 2004. Inventories decreased $41.7 million to $376.9 million at December 31, 2005, mainly due to
tighter management of inventory levels by Mattel, and changes in currency exchange rates. Based on its analysis
of point of sale information, management believes that inventory levels of Mattel products at retail were lower at
December 31, 2005 than 2004.
Current portion of long-term debt decreased $89.1 million to $100.0 million at December 31, 2005,
compared to December 31, 2004 due to the repayment of $150.0 million of 6
1
⁄ 8 % senior notes in July 2005 and
the 10.15% mortgage note for $39.1 million in November 2005, partially offset by the reclassification of
$50.0 million of medium-term notes and $50.0 million of the MAPS term loan facility, which mature within
twelve months. Accounts payable, accrued liabilities and income taxes payable decreased $263.9 million from
December 31, 2004 to $1.2 billion, mainly due to lower income taxes payable, primarily as a result of higher
payments of income taxes in foreign jurisdictions, changes in currency exchange rates, lower payables to vendors
and lower advertising accruals.
A summary of Mattel’s capitalization is as follows (in millions, except percentage information):
December 31,
2005 2004
Medium-term notes .............................................. $ 350.0 12% $ 400.0 13%
Term loan ..................................................... 175.0 6 — —
Total long-term debt ............................................. 525.0 18 400.0 13
Other long-term liabilities ......................................... 282.4 10 243.5 8
Stockholders’ equity ............................................. 2,101.7 72 2,385.8 79
$2,909.1 100% $3,029.3 100%
Total long-term debt increased $125.0 million at December 31, 2005 compared to December 31, 2004 due
to the aforementioned proceeds from the MAPS term loan facility of $225.0 million, partially offset by the
reclassification of $50.0 million of medium term notes and $50.0 million of the term loan payable during 2006 to
current portion of long-term debt. Mattel expects to satisfy its future long-term capital needs through the
generation of corporate earnings and issuance of long-term debt instruments. Stockholders’ equity of $2.1 billion
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