Mattel 2006 Annual Report Download - page 98

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The following is a summary of stock option information and weighted average exercise prices for Mattel’s
stock option plans during the year ended December 31, 2006 (amounts in thousands, except average exercise
price and average remaining life):
2006 2005 2004
Number
Average
Exercise
Price Number
Average
Exercise
Price Number
Average
Exercise
Price
Outstanding at January 1 ................. 47,851 $18.53 45,437 $18.57 42,733 $19.07
Granted ........................... 2,505 17.90 7,619 18.68 7,455 16.98
Exercised ......................... (7,385) 16.12 (2,077) 13.68 (1,595) 13.82
Forfeited .......................... (19) 17.94 (938) 18.88 (901) 18.87
Canceled .......................... (4,445) 22.51 (2,190) 23.09 (2,255) 25.10
Outstanding at December 31 .............. 38,507 $18.50 47,851 $18.53 45,437 $18.57
Exercisable at December 31 ............... 35,529 $18.54 46,871 $18.54 32,371 $18.69
Available for grant at December 31 ......... 35,961 42,472 11,274
There were 50 million shares of common stock authorized for equity instrument awards under the 2005
Plan.
The intrinsic value of a stock option is the amount by which the current market value of the underlying stock
exceeds the exercise price of an option. The total intrinsic value of options exercised during the year ended
December 31, 2006, 2005 and 2004 was $38.6 million, $13.3 million and $6.8 million, respectively. At
December 31, 2006, the total intrinsic value of options outstanding was $197.7 million, with an average
remaining life of 5.1 years. At December 31, 2006, the total intrinsic value of options exercisable was
$183.7 million, with an average remaining life of 4.9 years.
Mattel uses treasury shares purchased under its share repurchase program to satisfy stock option exercises.
Cash received from stock options exercised during the year ended December 31, 2006 and 2005 was
$116.9 million and $28.4 million, respectively, and the tax benefit for exercises during the year ended
December 31, 2006 and 2005 was $8.5 million and $4.3 million, respectively.
Learning Company Stock Option Plans
Prior to its 1999 merger, with Mattel, The Learning Company (“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. No options were available for grant under any Learning
Company stock option plan during 2006, 2005, or 2004.
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):
2006 2005 2004
Number Price Number Price Number Price
Outstanding at January 1 ........................... 77 $4.54 77 $4.54 81 $4.63
Options exercised ............................ (77) 4.54 — — (4) 4.88
Options canceled ............................. — — — — — —
Outstanding and exercisable at December 31 ........... — $ — 77 $4.54 77 $4.54
89