Mattel 2007 Annual Report Download - page 99

Sales of receivables pursuant to the European trade receivables facility occurred monthly, with the last such sale
occurring on January 10, 2007. The receivables were sold by Mattel France and Mattel Germany directly to SGBN for
a purchase price equal to the nominal amount of the receivables sold. As a result, no Mattel subsidiary was used as a
special purpose entity in connection with these transactions. A portion of the purchase price was funded by SGBN and
a portion by a deposit provided by the Depositor. The amount of the deposit was reset on each date on which new
receivables were sold. Through the termination date, the deposit in 2007 was, on average, equal to approximately 54%
of the aggregate notional amount of sold receivables outstanding during such period. The deposit totaled
$120.1 million as of December 31, 2006.
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.
Mattel France and Mattel Germany were obligated to pay certain fees to the Depositor in consideration of
the Depositor providing the deposit to SGBN. Through the termination date, fees paid in 2007 by Mattel France
and Mattel Germany to the Depositor were, on average, approximately 0.1% 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 because 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 other trade receivables facilities were
$9.3 million, $11.8 million, and $8.7 million during 2007, 2006, and 2005, respectively.
The outstanding amounts of accounts receivable that were 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:
December 31,
2007 2006
(In thousands)
Receivables sold pursuant to the:
Domestic receivables facility ............................................ $251,657 $255,871
European receivables facility ............................................ — 103,886
Other factoring arrangements ................................................ 74,682 52,505
$326,339 $412,262
Short-Term Borrowings
As of December 31, 2007 and 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, 2007, Mattel had
borrowings under the domestic unsecured committed credit facilities outstanding of $349.0 million, at a weighted
average interest rate of 5.5%. As of December 31, 2006, Mattel had no borrowings outstanding under the
domestic unsecured committed credit facilities.
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