Mattel 2006 Annual Report Download - page 91

As with the domestic receivables facility, each sale of accounts receivable was recorded in Mattel’s
consolidated balance sheet at the time of such sale. Under the European trade receivables facility, the outstanding
amount of receivables sold could not exceed Euro 60 million from February 1 through July 31 of each year and
could not exceed Euro 150 million at all other times.
Each of Mattel France and Mattel Germany was appointed to service the receivables sold by it to SGBN.
No servicing fees were paid by SGBN for such services. The appointment of each of Mattel France and Mattel
Germany to act as servicer was subject to termination events that were customary for transactions of this nature.
The fair value of the net servicing asset was based on an estimate of interest Mattel would earn on cash
collections prior to remitting the funds to the purchaser, partially offset by an estimate of the cost of servicing the
trade receivables sold. The net servicing asset for the European trade receivables facility was not material at
December 31, 2006 or 2005.
Mattel France and Mattel Germany were obligated to pay certain fees to the Depositor in consideration of
the Depositor providing the deposit to SGBN. During the 12-month period ending December 31, 2006, fees paid
by Mattel France and Mattel Germany to the Depositor were, on average, approximately 0.11% of the aggregate
notional amount of sold receivables outstanding during such period.
In November 2006, the commitment termination date for the European trade receivables facility was
extended until February 28, 2007. However, effective on February 9, 2007, the Depositor, Mattel France and
Mattel Germany terminated the European trade receivable facility with SGBN. The Company determined the
facility was no longer necessary based on projected international cash flows and seasonal financing needs.
Mattel’s aggregate losses on receivables sold under the domestic and European trade receivables facilities
were $11.8 million, $8.7 million, and $6.4 million during the years ended December 31, 2006, 2005, and 2004,
respectively.
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,
2006 2005
Receivables sold pursuant to the:
Domestic receivables facility .......................................... $ 255,871 $ 251,372
European receivables facility .......................................... 103,886 95,946
Other factoring arrangements .............................................. 52,505 95,763
$ 412,262 $ 443,081
Short-Term Borrowings
As of December 31, 2006, Mattel had no foreign short-term bank loans outstanding and no short-term
revolving loans outstanding under the MAPS revolving loan facility. As of December 31, 2005, Mattel had
foreign short-term bank loans outstanding totaling $18.0 million, at a weighted average interest rate of 6.5% and
short-term revolving loans outstanding of $100.0 million under the MAPS revolving loan facility, at a rate of
4.9%.
During 2006 and 2005, Mattel had average borrowings of $0 and $640.0 million, respectively, under its
domestic unsecured committed credit facilities, $47.1 million and $2.7 million, respectively, under the MAPS
revolving loan facility, and $30.4 million and $32.9 million, respectively, under its foreign credit lines and other
short-term borrowings to help finance its seasonal working capital requirements. The weighted average interest
rate on domestic borrowings was 3.1% during 2005, 5.4% and 4.9% on the MAPS revolving loan facility during
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