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
SIX MONTHS ENDED
-----------------------------
June 30, June 30,
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 ($53,354) ($287,806)
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 441 448
Add:
Interest expense 60,301 52,472
Appropriate portion of rents (c) 7,001 7,380
----------- -----------
Earnings available for fixed charges $14,389 ($227,506)
=========== ===========
FIXED CHARGES:
Interest expense $60,301 $ 52,472
Capitalized interest 51 503
Appropriate portion of rents (c) 7,001 7,380
----------- -----------
Fixed charges $67,353 $ 60,355
=========== ===========
Ratio of earnings to fixed charges 0.21(d) (3.77)(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 $170,164 $459,446 $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 131,609 110,833 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 $313,892 $586,376 $532,733 $656,812 $627,065
=========== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $131,609 $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 $144,110 $128,088 $108,786 $121,542 $123,126
=========== ======== ======== ======== ========
Ratio of earnings to fixed charges 2.18 X 4.58 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 $53.0 million for the
six month period ended June 30, 2000.
(e) As a result of restructuring and other nonrecurring charges of $293.1
million incurred in the second quarter of 1999, earnings did not cover
fixed charges by $287.9 million for the six month period ended June 30,
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
SIX MONTHS ENDED
----------------------------
June 30, June 30,
2000 1999
------------ ------------
EARNINGS AVAILABLE FOR FIXED
CHARGES:
Income (loss) from continuing operations before income taxes,
cumulative effect changes in accounting principles and
extraordinary items ($53,354) ($287,806)
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 441 448
Add:
Interest expense 60,301 52,472
Appropriate portion of rents (c) 7,001 7,380
------- --------
Earnings available for fixed charges $14,389 ($227,506)
======= ========
FIXED CHARGES:
Interest expense $60,301 $ 52,472
Capitalized interest 51 503
Dividends - Series B preferred stock - -
Dividends - Series C preferred stock - 3,980
Dividends - Series F preference stock - -
Appropriate portion of rents (c) 7,001 7,380
------- --------
Fixed charges $67,353 $ 64,335
======= ========
Ratio of earnings to combined fixed charges and
preferred stock dividends 0.21 (d) (3.54)(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 changes in accounting principles and
extraordinary items $170,164 $459,446 $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 131,609 110,833 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 $313,892 $586,376 $532,733 $656,812 $627,065
======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $131,609 $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 $148,090 $136,048 $119,291 $128,933 $129,668
======== ======== ======== ======== ========
Ratio of earnings to combined fixed charges and
preferred stock dividends 2.12 X 4.31 X 4.47 X 5.09 X 4.84X
======== ======== ======== ======== =======
(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 fixed charges 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 $53.0 million for the
six month period ended June 30, 2000.
(e) As a result of restructuring and other nonrecurring charges of $293.1
million incurred in the second quarter of 1999, earnings did not cover
fixed charges and preferred stock dividends by $291.8 million for the six
month period ended June 30, 1999.