Mattel 2008 Annual Report Download - page 43

Inventories increased $57.2 million, reflecting higher input costs during the year, earlier production to meet
supply chain requirements, including longer lead times for certain international markets, and lower fourth quarter
sales.
Accounts payable and accrued liabilities decreased $83.2 million from December 31, 2007 to $1.1 billion at
December 31, 2008, primarily due to the timing and amount of payments of various accrued liability balances,
including incentive compensation, royalties, and advertising obligations.
Short-term borrowings include borrowings under the foreign and domestic unsecured committed credit
facilities. At December 31, 2008 and 2007, Mattel’s total short-term borrowings total $0 and $349.0 million,
respectively. The current portion of long-term debt increased $100.0 million to $150.0 million at December 31,
2008, as compared to December 31, 2007 due to the reclassification of $100.0 million of the 2006 Senior Notes
and $50.0 million of Medium-term notes to current, partially offset by Medium-term notes repayments of $50.0
million.
A summary of Mattel’s capitalization is as follows:
December 31,
2008 2007
(In millions, except percentage
information)
Medium-term notes .............................................. $ 200.0 6% $ 250.0 8%
2006 Senior Notes ............................................... 200.0 6 300.0 9
2008 Senior Notes ............................................... 350.0 10 — —
Total noncurrent long-term debt .................................... 750.0 22 550.0 17
Other noncurrent liabilities ........................................ 547.9 16 378.3 12
Stockholders’ equity ............................................. 2,117.1 62 2,306.7 71
$3,415.0 100% $3,235.0 100%
Total noncurrent long-term debt increased $200.0 million at December 31, 2008 as compared to
December 31, 2007, due to the $350.0 million issuance of 2008 Senior Notes, all of which was classified as
noncurrent at December 31, 2008, partially offset by the reclassification of $100.0 million of the 2006 Senior
Notes and $50.0 million of Medium-term notes to current. Mattel expects to satisfy its future long-term capital
needs through the generation of corporate earnings and issuance of long-term debt instruments, as needed. Other
noncurrent liabilities increased $169.6 million at December 31, 2008, as compared to December 31, 2007, due
primarily to increases in long-term defined benefit pension plan obligations. Stockholders’ equity of $2.1 billion
at December 31, 2008 decreased by $189.6 million from December 31, 2007, primarily as a result of payment of
the annual dividend on common stock in the fourth quarter of 2008, unfavorable currency translation
adjustments, an increase in Mattel’s net defined benefit pension plan obligations, and share repurchases, partially
offset by net income.
Mattel’s debt-to-capital ratio, including short-term borrowings and the current portion of long-term debt,
increased to 29.8% at December 31, 2008 from 29.1% at December 31, 2007, due to the aforementioned decrease
in stockholders’ equity, partially offset by the decrease in debt. Mattel’s objective is to maintain a year-end
debt-to-capital ratio of approximately 25%.
Off-Balance Sheet Arrangements
Mattel has no off-balance sheet arrangements that have or are reasonably likely to have a current or future
effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to stockholders.
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