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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Amendment No. 1)
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998.
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number 001-05647
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MATTEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-1567322
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
333 Continental Boulevard
El Segundo, California 90245-5012
(Address of principal executive offices)
(310) 252-2000
(Registrant's telephone number)
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, $1.00 par value (and the
associated New York Stock Exchange
Preference Share Purchase Rights) Pacific Exchange, Inc.
Depositary Shares, each representing one
twenty-fifth New York Stock Exchange
of a share of Series C Mandatorily
Convertible
Redeemable Preferred Stock
6 3/4% Senior Notes Due 2000 (None)
Securities registered pursuant to Section 12(g) of the Act:
(None)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [_]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of the close of business on March 19, 1999 was $7,029,080,861.
Number of shares outstanding of registrant's common stock, $1.00 par value, as
of March 19, 1999: 286,171,231 shares
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Mattel, Inc. Annual Report to Stockholders for the year
ended December 31, 1998 (Incorporated into Parts I, II and IV).
2. Portions of the Mattel, Inc. 1999 Notice of Annual Meeting of Stockholders
and Proxy Statement, to be filed with the Securities and Exchange
Commission within 120 days after the close of the registrant's fiscal year
(Incorporated into Part III).
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The undersigned registrant hereby amends Part IV, Item 14, Exhibit 13.0 of
its Annual Report on Form 10-K for the year ended December 31, 1998, previously
filed with the Securities and Exchange Commission on March 31, 1999.
Specifically, Note 8 to the Consolidated Financial Statements is deleted in its
entirety and is replaced, as set forth below. This note has been restated in
order to conform the operating segment disclosures to the requirements of
Statement of Financial Accounting Standards No. 131. A reference to the
registrant's segment disclosure was also added to Management's Discussion and
Analysis of Financial Condition and Results of Operations as set forth therein.
PART IV
Item 14. Exhibits, Financial Statements, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
Annual Report
Page Number(1)
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(1) Financial Statements
Consolidated Balance Sheets as of December 31, 1998 and 1997.. 33
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997 and 1996............................. 34
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996............................. 35
Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1998, 1997 and 1996....................... 36
Notes to Consolidated Financial Statements.................... 37-51
Report of PricewaterhouseCoopers LLP, Independent Accountants
to the Company............................................... 52
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(1) Incorporated by reference from the indicated pages of the Annual Report to
Stockholders for the year ended December 31, 1998. With the exception of
the information incorporated by reference in Items 1, 5, 6, 7, 8 and 14 of
this report, the Annual Report to Stockholders is not deemed filed as part
of this report.
Independent Auditors' Report
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To the Board of Directors and Stockholders
Tyco Toys, Inc.
Mount Laurel, New Jersey
We have audited the consolidated statements of operations, stockholders'
equity, and cash flows of Tyco Toys, Inc. and subsidiaries for the year ended
December 31, 1996, not separately presented herein. Those financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on those financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows of Tyco Toys, Inc.
and subsidiaries for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 4, 1997 except for note 15,
as to which the date is March 27, 1997
(2) Financial Statement Schedule for the years ended December 31, 1998, 1997
and 1996(1)
Report of Independent Accountants on Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts and Allowances
(3) Exhibits (Listed by numbers corresponding to Item 601 of Regulation S-K)
2.0 Agreement and Plan of Merger, dated as of December 13, 1998, between
the Company and The Learning Company, Inc. (incorporated by reference
to Exhibit 2.1 to the Company's Current Report on Form 8-K, dated
December 15, 1998)
2.1 Stock Option Agreement, dated as of December 13, 1998, between the
Company and The Learning Company, Inc. (incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K, dated
December 15, 1998)
3.0 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.0 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993)
3.1 Certificate of Amendment of Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit B to the Company's
Proxy Statement dated March 23, 1996)
3.2 Certificate of Amendment of Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit B to the Company's
Proxy Statement dated March 30, 1998)
3.3 By-laws of the Company, as amended to date (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form S-3
dated September 26, 1997)
4.0 Rights Agreement, dated as of February 7, 1992, between the Company
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to Exhibit 1 to the Company's Registration Statement on
Form 8-A, dated February 12, 1992)
4.1 Specimen Stock Certificate with respect to the Company's Common Stock
(incorporated by reference to the Company's Report on Form 8-A, dated
February 28, 1996)
4.2 Certificate of Designation of Series C Preferred Stock dated March 26,
1997 (incorporated by reference to Exhibit 4.7 to the Company's
Registration Statement on Form S-3 dated August 21, 1997)
4.3 Deposit Agreement dated June 24, 1996 among Tyco Toys, Inc., Midlantic
Bank, N.A., as Depositary, and all holders from time to time of
depositary receipts issued thereunder (incorporated by reference to
Exhibit 4.2 to Tyco Toys, Inc.'s Registration Statement on Form S-3
dated June 20, 1996)
4.4 Amendment to Deposit Agreement dated as of March 27, 1997 between the
Company, as
successor to Tyco and The First National Bank of Boston (incorporated
by reference to Exhibit 4.9 to the Company's Registration Statement
on Form S-3 dated September 26, 1997)
4.5 Indenture dated as of February 15, 1996 between the Company and
Chemical Trust Company of California, as Trustee (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form 8-K
dated April 11, 1996)
4.6**Warrant to Purchase Shares of Common Stock of Mattel, Inc., dated as
of June 27, 1996
4.7**Stock Subscription Warrant dated as of June 28, 1991 between Fisher-
Price, Inc. and certain investors (incorporated by reference to
Exhibit 4(c) to Fisher-Price's Report on Form 10-K for the transition
period from July 1, 1991 to December 29, 1991)
(The Company has not filed certain long-term debt instruments under
which the principal amount of securities authorized to be issued does
not exceed 10% of its total assets. Copies of such agreements will be
provided to the Securities and Exchange Commission upon request.)
(1) All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
10.0 Second Amended and Restated Credit Agreement dated as of March 11,
1998 among the Company, the Banks named therein and Bank of America
National Trust and Savings Association, as Agent (incorporated by
reference to Exhibit 99.0 to the Company's Current Report on Form
8-K dated August 21, 1998)
10.1 Receivables Purchase Agreement dated as of March 11, 1998 among the
Company, Mattel Factoring, Inc., the Banks named therein and
NationsBank of Texas, N.A., as Agent (incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated
August 21, 1998)
10.2 Distribution Agreement dated November 12, 1997 among the Company,
Morgan Stanley & Co. Incorporated and Credit Suisse First Boston
Corporation (incorporated by reference to Exhibit 1.0 to the
Company's Current Report on Form 8-K dated November 12, 1997)
Executive Compensation Plans and Arrangements of the Company
10.3 Form of Indemnity Agreement between Mattel and its directors and
certain of its executive officers (incorporated by reference to
Exhibit B to Notice of Annual Meeting of Stockholders of the
Company dated March 24, 1987)
10.4 Amended and Restated Employment Agreement dated January 1, 1997
between the Company and Jill E. Barad (incorporated by reference to
Exhibit 10.0 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997)
10.5 Employment Agreement dated May 5, 1997 between the Company and Gary
S. Baughman (incorporated by reference to Exhibit 99.2 to the
Company's Current Report on Form 8-K dated August 21, 1998)
10.6 Amended and Restated Employment Agreement dated September 9, 1996
between the Company and Joseph C. Gandolfo (incorporated by
reference to Exhibit 10.12 to the Company's Annual Report on Form
10-K for the year ended December 31, 1996)
10.7 Amended and Restated Employment Agreement dated July 29, 1996
between the Company and Ned Mansour (incorporated by reference to
Exhibit 10.13 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1996)
10.8** Amended and Restated Employment Agreement dated April 14, 1997
between the Company and Harry J. Pearce
10.9 Employment Agreement dated December 20, 1996 between the Company and
Bruce L. Stein (incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the year ended December
31, 1996)
10.10 Mattel, Inc. Management Incentive Plan (incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
10.11 Mattel, Inc. Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.16 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
10.12**Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors
10.13 Mattel, Inc. Amended & Restated Supplemental Executive Retirement
Plan as of May 1, 1996 (incorporated by reference to Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996)
10.14**Mattel, Inc. Deferred Compensation Plan
10.15 The Fisher-Price, Inc. Pension Plan (1989 Restatement) (incorporated
by reference to Exhibit 10(l) to Fisher-Price's Registration
Statement on Form 10 dated June 28, 1991)
10.16 The Fisher-Price Section 415 Excess Benefit Plan (incorporated by
reference to Exhibit 10(n) to Fisher-Price's Registration Statement
on Form 10 dated June 28, 1991)
10.17 Mattel, Inc. Personal Investment Plan, April 1, 1997 Restatement
(incorporated by reference to Exhibit 99.3 to the Company's Current
Report on Form 8-K dated August 21, 1998)
10.18**Mattel, Inc. PIP Excess Plan
10.19**Pleasant Company Retirement Savings Plan and Trust Agreement, dated
July 1, 1995
10.20 Amended and Restated Mattel, Inc. 1996 Stock Option Plan
(incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1996)
10.21 Amendment to Amended and Restated Mattel, Inc. 1996 Stock Option
Plan (incorporated by reference to Exhibit 4.2 to the Company's
Registration Statement on Form S-8 dated March 26, 1999)
10.22 Form of Option Agreement for Outside Directors under the 1996 Stock
Option Plan (incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996)
10.23**Form of Option Agreement under the 1996 Stock Option Plan
10.24 Mattel, Inc. 1997 Premium Price Stock Option Plan (incorporated by
reference to Exhibit A to the Company's Proxy Statement dated March
30, 1998)
10.25 First Amendment to the Mattel, Inc. 1997 Premium Price Stock Option
Plan (incorporated by reference to Exhibit 10.0 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
10.26**Second Amendment to the Mattel, Inc. 1997 Premium Price Stock Option
Plan
10.27 Form of Option and TLSAR Agreement under the Mattel, Inc. 1997
Premium Price Stock Option Plan (25% Premium Grant), as amended
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
10.28 Form of Option and TLSAR Agreement under the Mattel, Inc. 1997
Premium Price Stock Option Plan (33 1/3% Premium Grant), as amended
(incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998)
11.0** Computation of Income per Common and Common Equivalent Share
12.0** Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
13.0* Pages 24 through 54 of the Mattel, Inc. Annual Report to
Stockholders for the year ended December 31, 1998
21.0** Subsidiaries of the Registrant
23.0* Consent of PricewaterhouseCoopers LLP
23.1* Consent of Deloitte & Touche LLP
24.0** Power of Attorney
27.0** Financial Data Schedule (EDGAR filing only)
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* Filed herewith.
** Previously filed.
(b) Reports on Form 8-K
Mattel, Inc. filed the following Current Reports on Form 8-K during the
quarterly period ended December 31, 1998:
Financial
Items Statements
Date of Report Reported Filed
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October 29, 1998....................................... 5 None
November 16, 1998...................................... 5 None
December 15, 1998...................................... 5, 7 None
(c) Exhibits Required by Item 601 of Regulation S-K
See Item (3) above
(d) Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts and Allowances
Copies of Form 10-K (which includes Exhibit 24.0), Exhibits 11.0, 12.0,
13.0, 21.0, 23.0 and 23.1 and the Annual Report to Stockholders are
available to stockholders of the Company without charge. Copies of other
Exhibits can be obtained by stockholders of the Company upon payment of
twelve cents per page for such Exhibits. Written requests should be sent to
Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo, California
90245-5012.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 1 to the Annual
Report on Form 10-K/A to be signed on its behalf by the undersigned, thereunto
duly authorized.
MATTEL, INC.
Registrant
Kevin M. Farr*
By: _________________________________
Kevin M. Farr
Senior Vice President and
Corporate Controller
Date: As of June 9, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment No. 1 to the Annual Report on Form 10-K/A has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature Title Date
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Jill E. Barad* Chairman of the Board, June 9, 1999
____________________________________ President and Chief
Jill E. Barad Executive Officer
Harry J. Pearce* Chief Financial Officer June 9, 1999
____________________________________ (principal financial
Harry J. Pearce officer)
Kevin M. Farr* Senior Vice President and June 9, 1999
____________________________________ Corporate Controller
Kevin M. Farr (principal accounting
officer)
Harold Brown* Director June 9, 1999
____________________________________
Harold Brown
Tully M. Friedman* Director June 9, 1999
____________________________________
Tully M. Friedman
Joseph C. Gandolfo* Director and President, June 9, 1999
____________________________________ Worldwide Manufacturing
Joseph C. Gandolfo Operations
Signature Title Date
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Ronald M. Loeb* Director June 9, 1999
____________________________________
Ronald M. Loeb
Ned Mansour* Director, President, June 9, 1999
____________________________________ Corporate Operations and
Ned Mansour General Counsel
Andrea L. Rich* Director June 9, 1999
____________________________________
Andrea L. Rich
William D. Rollnick* Director June 9, 1999
____________________________________
William D. Rollnick
Pleasant T. Rowland* Vice Chairman of the Board June 9, 1999
____________________________________ and President, Pleasant
Pleasant T. Rowland Company
Christopher A. Sinclair* Director June 9, 1999
____________________________________
Christopher A. Sinclair
John L. Vogelstein* Director June 9, 1999
____________________________________
John L. Vogelstein
*By: /s/ Robert Normile
_______________________________
Robert Normile
Attorney-in-Fact
June 9, 1999
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Mattel, Inc.
Our audits of the consolidated financial statements referred to in our report
dated February 1, 1999, except as to Note 8 for which the date is May 28, 1999,
appearing on page 52 of the December 31, 1998 Annual Report to Stockholders of
Mattel, Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K/A) also included an
audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form
10-K/A. In our opinion, this Financial Statement Schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
Los Angeles, California
February 1, 1999, except as to Note 8 for which the date is May 28, 1999
SCHEDULE II
MATTEL, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES
(In thousands)
Balance at Additions Balance
Beginning Charged to Net at End
of Year Operations Deductions of Year
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Allowance for Doubtful Accounts
Year Ended December 31, 1998...... $30,737 $34,780 $(24,313)(a) $41,204
Year Ended December 31, 1997...... 21,009 21,036 (11,308)(a) 30,737
Year Ended December 31, 1996...... 13,119 21,381 (13,491)(a) 21,009
Allowance for Inventory
Obsolescence
Year Ended December 31, 1998...... $33,774 $65,251 $(41,703)(b) $57,322
Year Ended December 31, 1997...... 35,645 52,312 (54,183)(b) 33,774
Year Ended December 31, 1996...... 30,620 73,004 (67,979)(b) 35,645
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(a) Includes write-offs, recoveries of previous write-offs, and currency
translation adjustments. Increase in net deductions over 1997 is due to
beginning balances from acquired companies ($1.4 million) and transfers to
legal reserve for insolvent customers ($11.6 million).
(b) Primarily represents relief of previously established reserves resulting
from the disposal of related inventory, raw materials, write-downs and
currency translation adjustments.