SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended
December 31, 1999.
[_] Transition report pursuant to section 15(d) of the Securities
Exchange Act of 1934 for the transition period
from _________ to _________.
Commission File Number 001-04777
---------------------------------
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
MATTEL, INC. PERSONAL INVESTMENT PLAN
MATTEL, INC. HOURLY PERSONAL INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
MATTEL, INC.
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245-5012
<PAGE>
[PricewaterhouseCoopers LLP letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and Administrator of the
Mattel, Inc. Personal Investment Plan and the Mattel, Inc.
Hourly Personal Investment Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits for each of the plans, the Mattel, Inc. Personal Investment Plan
and the Mattel, Inc. Hourly Personal Investment Plan, present fairly, in all
material respects, the net assets available for benefits of the plans at
December 31, 1999 and 1998, and the changes in net assets available for
benefits for the years then ended, in conformity with accounting princples
generally accepted in the United States. These financial statements are
the responsibility of the plans' management; our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States, which require that we plan and perform
the audits 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, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
------------------------------
June 23, 2000
<PAGE>
<TABLE>
<CAPTION>
MATTEL, INC. PERSONAL INVESTMENT PLAN
AND THE MATTEL, INC. HOURLY PERSONAL INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
-----------------------------------------------
December 31, 1999
---------------------------
Hourly
PIP PIP
------------ ------------
ASSETS
------
<S> <C> <C>
Investment in Master Trust (Note 6) $500,316,000 $ 125,000
Interest and dividends receivable 354,000 -
------------ ------------
Total assets 500,670,000 125,000
------------ ------------
Net assets available for benefits $500,670,000 $ 125,000
============ ============
<CAPTION>
December 31, 1998
---------------------------
Hourly
PIP PIP
------------ ------------
ASSETS
------
<S> <C> <C>
Investment in Master Trust (Note 6) $457,091,000 $ 96,000
Interest and dividends receivable 871,000 -
------------ ------------
Total assets 457,962,000 96,000
------------ ------------
Net assets available for benefits $457,962,000 $ 96,000
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
MATTEL, INC. PERSONAL INVESTMENT PLAN
AND THE MATTEL, INC. HOURLY PERSONAL INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
---------------------------------------------------------
Hourly
PIP PIP
------------ ------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 11,319,000 $ 3,000
Dividends 2,649,000 -
Net appreciation in fair value
of investments 48,459,000 12,000
------------ ------------
62,427,000 15,000
------------ ------------
Contributions:
Employer 16,026,000 26,000
Employee 18,199,000 46,000
------------ ------------
34,225,000 72,000
------------ ------------
Total additions 96,652,000 87,000
------------ ------------
Deductions from net assets
attributed to:
Benefits paid to participants (53,944,000) (58,000)
------------ ------------
Net increase 42,708,000 29,000
Net assets available for benefits:
Beginning of year 457,962,000 96,000
------------ ------------
End of year $500,670,000 $ 125,000
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
MATTEL, INC. PERSONAL INVESTMENT PLAN
AND THE MATTEL, INC. HOURLY PERSONAL INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
---------------------------------------------------------
Hourly
PIP PIP
------------ ------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest $ 10,412,000 $ 2,000
Dividends 2,696,000 -
Net appreciation (depreciation)
in fair value of investments 19,271,000 (1,000)
------------ ------------
32,379,000 1,000
------------ ------------
Contributions:
Employer 14,978,000 29,000
Employee 19,546,000 39,000
------------ ------------
34,524,000 68,000
------------ ------------
Transfer from Tyco Toys, Inc.
401(k) Savings Plan (Note 1) 7,188,000 -
------------ ------------
Total additions 74,091,000 69,000
------------ ------------
Deductions from net assets
attributed to:
Benefits paid to participants (35,277,000) (34,000)
------------ ------------
Net increase 38,814,000 35,000
Net assets available for benefits:
Beginning of year 419,148,000 61,000
------------ ------------
End of year $457,962,000 $ 96,000
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
-4-
<PAGE>
MATTEL, INC. PERSONAL INVESTMENT PLAN
AND THE MATTEL, INC. HOURLY PERSONAL INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
----------------------------------------------------
1. General Description of the Plans
--------------------------------
Mattel, Inc. (the "Company") maintains two separate savings
plans, the Mattel, Inc. Personal Investment Plan (the "PIP")
and the Mattel, Inc. Hourly Personal Investment Plan (the
"Hourly PIP", collectively, the "Plans"), which are held in
the Mattel, Inc. Personal Investment Plan Master Trust (the
"Master Trust"). The following description of the Plans is
provided for general information only. Participants should
refer to the respective plan agreements for a more complete
description of specific plan provisions.
General
-------
The PIP, which was established November 1, 1983, is a
contributory thrift savings form of a defined contribution
plan covering nonunion employees of the Company and certain
of its subsidiaries. The Hourly PIP, which was established
July 1, 1996, is a similar type of savings plan covering
certain nonunion hourly employees of the Company. The
Master Trust was established on July 1, 1996 to coincide
with the creation of the Hourly PIP.
The Plans are administrated by the Company under the
direction of the Pension Committee of the Board of Directors
of the Company. The Plans' assets at December 31, 1999 and
1998 were held by The Northern Trust Company (the "Trustee")
under the direction of the Pension Committee.
Effective January 2, 1998, the Tyco Toys, Inc. 401(k)
Savings Plan (the "Tyco Plan") was merged into and became
part of the Mattel, Inc. Personal Investment Plan. All
assets of the Tyco Plan which were held by the Plan's
trustee were transferred to the PIP as of January 2, 1998,
with the remaining assets submitted by the Trustee on
March 23, 1998, the date upon which the Tyco Plan was
terminated.
Contributions
-------------
For all PIP participants, with the exception of employees
who also participate in the Fisher-Price Pension Plan, the
Company makes automatic contributions ranging from three
percent to eight percent of compensation based upon covered
participants' ages, regardless of whether the employees
elect to personally contribute to the PIP. The Company will
match 100 percent of the first two percent of compensation
contributed by an employee and 50 percent of the next four
percent. In addition, each employee may contribute up to an
additional eight percent of compensation based upon covered
participants' ages, with no matching contribution by the
Company.
All employees who were formerly participants in the Tyco
Plan have the same employee contribution, and Company
matching and automatic contribution percentages as the PIP
participants.
5
<PAGE>
1. General Description of the Plans (Continued)
--------------------------------------------
Contributions (Continued)
-------------------------
For all PIP participants who also participate in the Fisher-
Price Pension Plan, the Company makes no automatic
contributions; however, employees may contribute up to 15
percent of their compensation to the PIP. The Company will
match 100 percent of the first two percent of compensation
contributed by an employee and 50 percent of the next four
percent.
For the Hourly PIP, the Company makes automatic
contributions of one percent of compensation for all
employees, regardless of whether the employees elect to
personally contribute to the Hourly PIP. The Company will
match 25 percent of the first six percent of compensation
contributed by an employee during their first five years of
service. The match percentage increases to 30 percent and
40 percent if the employee has between six to ten years of
service and more than ten years of service, respectively.
In addition, each employee may contribute up to an
additional nine percent of compensation, with no matching
contribution by the Company.
For both Plans, participants are permitted to direct all
contributions made to the Plans into one or more of eleven
separate investment funds: a stable asset fund, a large cap
equity fund, an S&P 500 equity index fund, a global equity
fund, a small cap equity fund, a *bond index fund, a
*conservative balanced fund, a *moderate balanced fund, an
*aggressive balanced fund, the *Russell 2000 equity index
fund and the Mattel Stock fund. Participants can invest a
maximum of 50 percent of their current contributions in the
Mattel stock fund. In addition, participants cannot
transfer more than 50 percent of their account balance to
the Mattel stock fund.
Vesting
-------
Each participant is immediately vested in their
contributions plus actual earnings thereon. Vesting in the
Company's matching and automatic contribution portion of the
participant's account plus actual earnings thereon is based
on years of continuous service. Participants become 25
percent vested after two years of credited service and vest
an additional 25 percent for each additional year of service
through the fifth year at which time 100 percent vesting
occurs.
* Investment fund added to the Plans in 1999.
6
<PAGE>
1. General Description of the Plans (Continued)
--------------------------------------------
Participant Loans Receivable
----------------------------
Participants may borrow from their accounts from a minimum
of $2,000 to a maximum equal to the lesser of $50,000 or 50
percent of their vested account balance. Loan terms range
from one to five years or up to 15 years for the purchase of
a primary residence. The loans are secured by the balance
in the participant's account and bear interest at the prime
rate plus one percent set at the beginning of the month in
which the loan is granted. The interest rate is set for the
duration of the loan. As of December 31, 1999, interest
rates on loans outstanding ranged from seven percent to
eleven and a half percent. Principal and interest are paid
ratably through payroll deductions.
Participant Accounts
--------------------
Each participant's account is credited with the
participant's contribution and allocations of (a) the
Company's contribution and (b) Plan earnings. Allocations
are made based on the fund allocation percentages used for
the employees' contributions. Forfeited balances of
terminated participants' nonvested accounts are used to
reduce future Company contributions. The benefit to which a
participant is entitled is the amount that can be provided
from the participant's vested account.
Payment of Benefits
-------------------
Upon termination of service due to death, disability,
retirement or other reasons, a participant or beneficiary
may receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account.
Participants automatically become 100 percent vested in
their account balance if their termination is due to total
disability or retirement. If a participant terminates
employment after age 55 with at least five years of service,
in addition to being able to receive payment in a lump sum,
the participant has the option to receive payment in
installments over a period of 5, 10 or 15 years. These
payments may be elected in monthly, quarterly or annual
installments. In addition, funds may be withdrawn by
participants prior to retirement under limited
circumstances, subject to restrictions as defined by the
Plans.
Expenses of the Plans
---------------------
Expenses incurred in the administration of the Plans are
paid by the Company.
7
<PAGE>
2. Summary of Significant Accounting Policies
------------------------------------------
Basis of Accounting
-------------------
The financial statements of the Plans are prepared using the
accrual basis of accounting.
Valuation of Investments
------------------------
Investments held within the Master Trust are stated at their
fair values. Investments held in the large cap equity fund,
S&P 500 equity index fund, global equity fund, small cap
equity fund, moderate balanced fund, aggressive balanced
fund, the Russell 2000 equity index fund, and the Mattel
stock fund are valued using quoted market prices.
Investments in the stable asset fund, made primarily in
guaranteed investment contracts, are valued at contract
value as determined by the insurance companies. Contract
value represents contributions made under a guaranteed
investment contract, plus interest at the contract rate,
less administrative expenses charged by the insurance
company. There are no reserves charged against the contract
value for credit risk of the contract issuer or otherwise.
The average yield and crediting interest rates were
approximately 6 percent for 1999 and 1998. Such rates are
reviewed on a quarterly basis for resetting, as applicable.
Participant loans receivable are valued at cost which
approximates fair value.
Contributions
-------------
Contributions from plan participants are recorded in the
period in which the Company makes payroll deductions from
the employee's compensation. The Company's matching
contributions are recorded in the period corresponding with
the employee contributions. Employee rollover contributions
are included as Employee Contributions in the financial
statements.
Income Recognition
------------------
In accordance with policy of presenting investments at
current fair value, the net appreciation or depreciation in
the fair value of investments during the period is reflected
in the statement of changes in net assets available for
benefits. Such net appreciation or depreciation in fair
value includes realized gains and losses on dispositions of
securities during the period. Securities transactions are
recorded on a trade date basis. Interest income is recorded
as earned on an accrual basis. Dividend income is recorded
on the ex-dividend date.
Payment of Benefits
-------------------
Benefits payable to former employees are recorded in the
period in which payment occurs.
8
<PAGE>
2. Summary of Significant Accounting Policies (Continued)
------------------------------------------------------
Use of Estimates
----------------
The preparation of the financial statements in conformity
with accounting principles generally accepted in the United
States requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
changes in net assets available for benefits during the
reporting period. Actual results could differ from those
estimates.
3. Reconciliation of the Financial Statements to Form 5500
-------------------------------------------------------
There were no reconciling items in the net assets available
for benefits or benefits paid to participants for the Plans
between the financial statements and the respective Forms
5500 for the years ended December 31, 1999 and 1998.
4. Tax Status of the Plans
-----------------------
The administrator for the Plans have received determination
letters from the Internal Revenue Service dated March 1,
1995 for the PIP and January 8, 1997 for the Hourly PIP
which confirmed the qualified and tax-exempt status of the
Plans. Therefore, no provision for federal or state income
tax has been included in the Plans' financial statements.
The Plans have been amended since receiving the
determination letters; however, the Plans' administrator and
the Plans' tax counsel believe that the Plans are designed
and are currently being operated in compliance with the
applicable provisions of the Internal Revenue Code.
5. Plan Termination
----------------
The Company anticipates that the Plans will continue without
interruption, but reserves the right to discontinue the
Plans. In the event such discontinuance results in the
termination of the Plans, participants will become 100
percent vested in their accounts.
6. Investments in Master Trust
---------------------------
The Plans' investments are held in the Master Trust and the
assets of the Master Trust are held by the Trustee. At
December 31, 1999 and 1998, the PIP's interest in the net
assets of the Master Trust was approximately 99.98%. The
Hourly PIP's interest in the net assets of the Master Trust
was approximately .02%.
9
<PAGE>
6. Investments in Master Trust (Continued)
---------------------------------------
The following table presents the fair values of investments
for the Master Trust:
<TABLE>
<CAPTION>
December 31, 1999
----------------------------------------
Hourly
PIP PIP Total
------------ ------------ ------------
<S> <C> <C> <C>
Stable Asset Fund $156,476,000* $ 62,000* $156,538,000
S&P 500 Equity Index Fund 122,061,000* 17,000* 122,078,000
Large Cap Equity Fund 107,766,000* 13,000* 107,779,000
Small Cap Equity Fund 41,518,000* 18,000* 41,536,000
Mattel Stock Fund 37,469,000* 6,000 37,475,000
Global Equity Fund 19,900,000 6,000 19,906,000
Balance Fund - Aggressive 1,468,000 - 1,468,000
Bond Index Fund 1,003,000 - 1,003,000
Balanced Fund - Conservative 902,000 - 902,000
Russell 2000 Equity Index Fund 820,000 - 820,000
Balanced Fund - Moderate 623,000 - 623,000
Money Market Account 107,000 - 107,000
Participant Loans 10,557,000 3,000 10,560,000
------------ ------------ ------------
Total investments $500,670,000 $ 125,000 $500,795,000
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
----------------------------------------
Hourly
PIP PIP Total
------------ ------------ ------------
<S> <C> <C> <C>
Stable Asset Fund $160,606,000* $ 59,000* $160,665,000
Large Cap Equity Fund 111,894,000* 8,000* 111,902,000
Equity Index Fund 110,218,000* 15,000* 110,233,000
Mattel Stock Fund 38,701,000* 5,000* 38,706,000
Small Cap Equity Fund 15,742,000 5,000* 15,747,000
Global Equity Fund 9,620,000 2,000 9,622,000
Money Market Account 242,000 - 242,000
Participant Loans 10,939,000 2,000 10,941,000
------------ ------------ ------------
Total investments $457,962,000 $ 96,000 $458,058,000
============ ============ ============
</TABLE>
* Investment balance represents 5 percent or more of the
Plan's net assets available for benefits
10
<PAGE>
6. Investments in Master Trust (Continued)
---------------------------------------
During 1999 and 1998, the Plans' investments (including
gains and losses on investments bought and sold, as well as
held during the year) appreciated in value by $48,471,000
and $19,270,000, respectively, as follows:
<TABLE>
<CAPTION>
December 31, 1999
----------------------------------------
Hourly
PIP PIP Total
------------ ------------ ------------
<S> <C> <C> <C>
Mutual funds $ 55,562,000 $ 11,000 $ 55,573,000
Common and commingled
trust funds 9,407,000 3,000 9,410,000
Common stock (16,507,000) (2,000) (16,509,000)
Money market (3,000) - (3,000)
------------ ------------ ------------
Net appreciation in fair
value of investments $ 48,459,000 $ 12,000 $ 48,471,000
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
----------------------------------------
Hourly
PIP PIP Total
------------ ------------ ------------
<S> <C> <C> <C>
Mutual funds $ 37,682,000 $ - $ 37,682,000
Common and commingled
trust funds - - -
Common stock (18,498,000) (1,000) (18,499,000)
Money market 87,000 - 87,000
------------ ------------ ------------
Net appreciation
(depreciation) in fair
value of investments $ 19,271,000 $ (1,000) $ 19,270,000
============ ============ ============
</TABLE>
The Plans' administrator has directed the Trustee to invest
any excess cash balances in The Northern Trust COLTV Short-
Term Investment Fund and The Northern Trust Co. STEP Fund,
which are diversified portfolios of short-term investment
securities.
11
<PAGE>
7. Subsequent Event
----------------
Effective April 1, 2000, vesting in the Company's matching
and automatic contribution portion of the participant's
account has been amended whereby participants will become
100 percent vested after three years of credited service.
12
<PAGE>
POWER OF ATTORNEY
-----------------
We, the undersigned members of the Committee designated to
administer the Mattel, Inc. Personal Investment Plan and the Mattel, Inc.
Hourly Personal Investment Plan, do hereby severally constitute and
appoint Ronald M. Loeb, Robert Normile, Christopher O'Brien, and
John L. Vogelstein, and each of them, our true and lawful attorneys and
agents, to do any and all acts and things in our name and behalf in our
capacities as members of said Committee and to execute any and all
instruments for us and in our names in the capacities indicated below,
which said attorneys and agents, or any of them, may deem necessary
or advisable to enable said Plans to comply with the Securities Exchange
Act of 1934, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with this Annual
Report on Form 11-K, including specifically, but without limitation,
power and authority to sign for us or any of us, in our names in the
capacities indicated below, any and all amendments hereto; and we do each
hereby ratify and confirm all that said attorneys and agents or any one
of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the members of the Committee designated to administer
the Mattel, Inc. Personal Investment Plan and the Mattel, Inc. Hourly
Personal Investment Plan have duly caused this Annual Report on Form 11-K
to be signed on behalf of the Plans by the undersigned, thereunto duly
authorized in the City of El Segundo, State of California, on June 27, 2000.
MATTEL, INC. PERSONAL
INVESTMENT PLAN
MATTEL, INC. HOURLY
PERSONAL INVESTMENT
PLAN
---------------------
(Name of Plans)
By: /s/ Harold Brown
----------------
Harold Brown
By: /s/ Christopher A. Sinclair
---------------------------
Christopher A. Sinclair
<PAGE>
