Mattel 2012 Annual Report Download - page 4

I ended the month meeting with my
senior management team to discuss
our future goals and how we can
best achieve them.
In short, February gave me great
perspective on how our consumers,
customers and owners are viewing
our business. It also helped crystallize
what I need to do to continue to lead
this great organization.
Having heard many different
perspectives over the past few
weeks, I believe it is safe to
say the overall response to our
performance in 2012 has been
quite positive. Consistent with that
view, as I have mentioned before,
my motto is to be “happy, but never
satisfi ed,” and this describes my
thoughts about the performance of
Mattel in 2012.
As they do every year, consumers
all around the world showed up for
the holiday season, and Mattel was
once again a big hit, as our brands
were well represented in their
toy, video and consumer product
purchases. This, in turn, pleased
our retail partners and allowed us
to deliver solid results.
In 2012, we had record sales, eclipsing
$7 billion in total gross sales for
the fi rst time. Additionally, we grew
NPD share in both the U.S. and the
Euro51. It also marked the fourth
straight year where we had strong
gross margins and tight cost
management, which drove expansion
of our adjusted operating margins.
All of these achievements resulted
in adjusted EPS growth of 13%2,
and our second consecutive year
of generating more than $1 billion
in operating profi t.
With results like that, it should not
come as a surprise that 2012 was also
a strong year for our stockholders. We
raised our dividend by 35%, paying an
annualized dividend of $1.24. For the
year, our stock price increased 32%
and our Total Shareholder Return was
37% — putting us in the 86th percentile
of the S&P 500®3.
In my 2011 letter, I laid out our four
key strategies for delivering success
and achieving our full potential:
developing a plan for growth;
structuring for growth; nurturing our
talent; and accelerating innovation.
I believe we have made tremendous
progress against these strategies.
1 NPD US Consumer Tracking Service, Euro 5 Retail Tracking Service.
2 Adjusted earnings per share excludes an $87.1 million after-tax impact on net income ($0.25 per diluted share)
related to a $137.8 million litigation charge taken in the fourth quarter of 2012. Adjusted earnings per share is a
non-GAAP fi nancial measure. The information required by Securities and Exchange Commission Regulation G
regarding these measures is available on the “Investors” section of corporate.mattel.com under the subheading
“Financial Information.”
3 Thomson Reuters; Total Shareholder Return measures stock appreciation and assumes reinvested dividends.
I am writing this letter having just completed one of my
busiest months as CEO. February 2013 started with our
fourth quarter and full-year 2012 earnings call, which
was quickly followed by a formal presentation to the
fi nancial analyst community during New York Toy Fair
and an extensive series of meetings with many of our
investors across the country.
To Our Shareholders: