Mattel 2007 Annual Report Download - page 69

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Buy Sell
Contract
Amount
Weighted
Average
Contract
Rate
Fair
Value
Contract
Amount
Weighted
Average
Contract
Rate
Fair
Value
(In thousands of US dollars)
Euro* ............................... $300,793 1.45 $302,502 $359,304 1.38 $379,017
Canadian dollar* ...................... — — — 59,860 0.95 63,294
British pound sterling* ................. — — — 19,709 1.98 19,725
Japanese yen ......................... 4,840 112.94 4,898 11,042 113.12 11,182
Australian dollar* ..................... 14,560 0.86 14,880 28,623 0.85 29,062
Swiss franc .......................... 19,257 1.15 19,556 — — —
Mexican peso ........................ 77,946 10.82 77,423 8,777 10.98 8,714
Indonesian rupiah ..................... 57,426 9,402 57,017 — — —
New Zealand dollar* ................... 6,758 0.75 6,897 2,256 0.77 2,191
Czech koruna ......................... — — — 737 18.14 733
Taiwan dollar ........................ — — — 9,798 32.56 9,858
Singapore dollar ...................... — — — 2,823 1.46 2,860
Hungarian forint ...................... — — — 526 177.24 536
Polish zloty .......................... — — — 12,639 2.51 12,818
New Turkish lira ...................... — — — 3,709 1.18 3,704
$481,580 $483,173 $519,803 $543,694
*The weighted average contract rate for these contracts is quoted in US dollar per local currency.
For the purchase of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel
would pay at maturity for contracts involving the same currencies and maturity dates, if they had been entered
into as of December 31, 2007. For the sale of foreign currencies, fair value reflects the amount, based on dealer
quotes, that Mattel would receive at maturity for contracts involving the same currencies and maturity dates, if
they had been entered into as of December 31, 2007. The differences between the fair value and the contract
amounts are expected to be fully offset by currency transaction gains and losses on the underlying hedged
transactions.
In addition to the contracts involving the US dollar detailed in the above table, Mattel also had contracts to
sell British pound sterling for the purchase of Euro. As of December 31, 2007, these contracts had a contract
amount of $67.3 million and a fair value of $66.4 million.
Had Mattel not entered into hedges to limit the effect of currency exchange rate fluctuations on its results of
operations and cash flows, its income before income taxes would have increased by approximately $7 million in
2007 and decreased by approximately $1 million in 2006 and $3 million in 2005.
Interest Rate Risk
In December 2005, Mattel, MAPS, a wholly-owned subsidiary of Mattel, Bank of America, N.A., as a
lender and administrative agent, and other financial institutions executed a credit agreement (“the MAPS
facility”) which provided for (i) a term loan facility of $225.0 million consisting of a term loan advanced to
MAPS in the original principal amount of $225.0 million, with $50.0 million of such amount to be repaid on each
of December 15, 2006 and December 15, 2007, and the remaining aggregate principal amount of $125.0 million
to be repaid on December 9, 2008, and (ii) a revolving loan facility consisting of revolving loans advanced to
MAPS in the maximum aggregate principal amount at any time outstanding of $100.0 million, with a maturity
date of December 9, 2008. Interest was charged at various rates selected by Mattel based on Eurodollar rates or
bank reference rates. On December 15, 2006, in addition to the required payment of $50.0 million, MAPS
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