EXHIBIT 12
(PAGE 1 0F 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands, except ratios)
(Unaudited)
FOR THE
THREE MONTHS ENDED
-----------------------
March 31, March 31,
2000 1999
---------- ---------
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income (loss) from continuing operations before income taxes,
cumulative effect of changes in accounting principles and
extraordinary items ($ 61,644) ($ 17,420)
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 195 256
Add:
Interest expense 24,356 24,858
Appropriate portion of rents (c) 3,288 3,831
--------- ---------
Earnings available for fixed charges ($ 33,805) $ 11,525
========= =========
FIXED CHARGES:
Interest expense $ 24,356 $ 24,858
Capitalized interest 49 36
Appropriate portion of rents (c) 3,288 3,831
--------- ---------
Fixed charges $ 27,693 $ 28,725
========= =========
Ratio of earnings to fixed charges (1.22) (d) 0.40 (e)
========= =========
FOR THE YEARS ENDED DECEMBER 31, (a)(b)
------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- ---------- ---------
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income (loss) from continuing operations before income taxes,
cumulative effect of changes in accounting principles and
extraordinary items $ 165,336 $ 465,063 $ 425,082 $ 536,756 $ 504,668
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 145 (165) (144) 303 (36)
Add:
Interest expense 121,337 110,833 90,130 100,226 102,983
Appropriate portion of rents (c) 11,974 16,262 17,665 19,527 19,450
--------- --------- --------- --------- ---------
Earnings available for fixed charges $ 298,792 $ 591,993 $ 532,733 $ 656,812 $ 627,065
========= ========= ========= ========= =========
FIXED CHARGES:
Interest expense $ 121,337 $ 110,833 $ 90,130 $ 100,226 $ 102,983
Capitalized interest 527 993 991 1,789 693
Appropriate portion of rents (c) 11,974 16,262 17,665 19,527 19,450
--------- --------- --------- --------- ---------
Fixed charges $ 133,838 $ 128,088 $ 108,786 $ 121,542 $ 123,126
========= ========= ========= ========= =========
Ratio of earnings to fixed charges 2.23 X 4.62 X 4.90 X 5.40 X 5.09 X
========= ========= ========= ========= =========
(a) Although Mattel merged with The Learning Company, Inc. ("Learning
Company") in May 1999, the results of operations of Learning Company have not
been included in this calculation since the Consumer Software segment is being
reported as a discontinued operation effective March 31, 2000.
(b) The ratio of earnings to fixed charges for 1995 through 1997 has been
restated for the effects of the March 1997 merger of Tyco Toys, Inc. ("Tyco")
into Mattel, which was accounted for as a pooling of interests.
(c) Portion of rental expenses which is deemed representative of an
interest factor, not to exceed one-third of total rental expense.
(d) Primarily as a result of a $53.1 million charge to earnings taken in
the first quarter of 2000 related to the departure of certain senior executives,
earnings did not cover fixed charges by $61.5 million for the three month period
ended March 31, 2000.
(e) Earnings did not cover fixed charges by $17.2 million for the three
month period ended March 31, 1999.
EXHIBIT 12
(Page 2 of 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Amounts in thousands, except ratios)
(Unaudited)
FOR THE
THREE MONTHS ENDED
-----------------------
March 31, March 31,
2000 1999
----------- ----------
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income (loss) from continuing operations before income taxes,
cumulative effect of changes in accounting principles and
extraordinary items ($ 61,644) ($ 17,420)
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 195 256
Add:
Interest expense 24,356 24,858
Appropriate portion of rents (c) 3,288 3,831
--------- ---------
Earnings available for fixed charges ($ 33,805) $ 11,525
========= =========
FIXED CHARGES:
Interest expense $ 24,356 $ 24,858
Capitalized interest 49 36
Dividends - Series B preferred stock -- --
Dividends - Series C preferred stock -- 1,990
Dividends - Series F preference stock -- --
Appropriate portion of rents (c) 3,288 3,831
--------- ---------
Fixed charges $ 27,693 $ 30,715
========= =========
Ratio of earnings to combined fixed charges and
preferred stock dividends (1.22) (d) 0.38 (e)
========= =========
FOR THE YEARS ENDED DECEMBER 31, (a)(b)
------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- -------- ---------- ---------
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income (loss) from continuing operations before income taxes,
cumulative effect of changes in accounting principles and
extraordinary items $ 165,336 $ 465,063 $ 425,082 $ 536,756 $ 504,668
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 145 (165) (144) 303 (36)
Add:
Interest expense 121,337 110,833 90,130 100,226 102,983
Appropriate portion of rents (c) 11,974 16,262 17,665 19,527 19,450
--------- --------- --------- --------- ---------
Earnings available for fixed charges $ 298,792 $ 591,993 $ 532,733 $ 656,812 $ 627,065
========= ========= ========= ========= =========
FIXED CHARGES:
Interest expense $ 121,337 $ 110,833 $ 90,130 $ 100,226 $ 102,983
Capitalized interest 527 993 991 1,789 693
Dividends - Series B preferred stock -- -- 2,537 3,406 3,200
Dividends - Series C preferred stock 3,980 7,960 7,968 3,985 --
Dividends - Series F preference stock -- -- -- -- 3,342
Appropriate portion of rents (c) 11,974 16,262 17,665 19,527 19,450
--------- --------- --------- --------- ---------
Fixed charges $ 137,818 $ 136,048 $ 119,291 $ 128,933 $ 129,668
========= ========= ========= ========= =========
Ratio of earnings to combined fixed charges and
preferred stock dividends 2.17 X 4.35 X 4.47 X 5.09 X 4.84 X
========= ========= ========= ========= =========
(a) Although Mattel merged with Learning Company in May 1999, the results
of operations of Learning Company have not been included in this calculation
since the Consumer Software segment is being reported as a discontinued
operation effective March 31, 2000.
(b) The ratio of earnings to combined fixed charges and preferred stock
dividends for 1995 through 1997 has been restated for the effects of the March
1997 merger of Tyco into Mattel, which was accounted for as a pooling of
interests.
(c) Portion of rental expenses which is deemed representative of an
interest factor, not to exceed one-third of total rental expense.
(d) Primarily as a result of a $53.1 million charge to earnings taken in
the first quarter of 2000 related to the departure of certain senior executives,
earnings did not cover fixed charges by $61.5 million for the three month period
ended March 31, 2000.
(e) Earnings did not cover fixed charges by $19.2 million for the three
month period ended March 31, 1999.