Mattel 2001 Annual Report Download - page 11

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Entertainment, and US Infant & Preschool. For additional information with respect to Mattel’s business
segment reporting, including revenue, profit and loss and assets, see Item 7 ‘‘Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Results of Continuing Operations—Business
Segment Results’’ and Item 8 ‘‘Financial Statements and Supplementary Data—Note 10 to the Consolidated
Financial Statements.’’ For additional information regarding geographic areas, see Item 8 ‘‘Financial Statements
and Supplementary Data—Note 10 to the Consolidated Financial Statements.’’
Domestic Segment
The Domestic segment develops toys that it markets and sells in the US Girls, US Boys-Entertainment and
US Infant & Preschool segments.
US Girls segment includes brands such as Barbiefashion dolls and accessories, collector dolls, Polly
Pocket!, Diva Starz, What’s Her Face!and American Girl. In 2002, Mattel expects to introduce Barbie
as Rapunzel, a hair-play fashion doll and computer graphic imagery video, Fashion PollySparkle Style
House and Malibu Barbie, a reissue of one of the most popular Barbiedolls ever.
US Boys-Entertainment segment includes Hot Wheels, Matchbox, Hot WheelsElectric Racing and
TycoRadio Control (collectively ‘‘Wheels’’) and Disney, Nickelodeon, Harry Potter, Max Steeland
games and puzzles (collectively ‘‘Entertainment’’) products. New Boys-Entertainment products in 2002 are
expected to include Hot WheelsTurbo Jet CityPlayset, MatchboxRadio Rescue Playset, Harry Potter
Polyjuice Potion Maker, TycoRC Extreme Stunt Scooter and a toy line based on Yu-Gi-Oh!, the Japanese
cartoon and card game property.
US Infant & Preschool segment includes Fisher-Price, Power Wheels, Sesame Street, Disney
preschool and plush, Winnie the Pooh, Blue’s Clues, See N Say, Magna Doodle, and View-Master
brands. New product introductions for 2002 are expected to include Guess What Elmo, Magic RattlePooh,
Blue’s CluesMusic Studio, Rescue Heroesnew Power Force figures, PixterPRO digital creative system,
Lightning PACbattery-powered kid scooter and a preschool Grow With MeRemote Control Raceway.
International Segment
Generally, products marketed by the International segment are the same as those developed and marketed
by the Domestic segment, although some are developed or adapted for particular international markets. Mattel’s
products are sold directly in Canada and most European, Asian and Latin American countries, and through
agents and distributors in those countries where Mattel has no direct presence. See ‘‘Licenses and Distribution
Agreements.’’
Revenues from Mattel’s International segment represented approximately 31% of total consolidated net
sales in 2001.
The strength of the US dollar relative to other currencies can significantly affect the revenues and
profitability of Mattel’s international operations. Mattel enters into foreign currency forward exchange and
option contracts primarily to hedge its purchase and sale of inventory, and enters into other intercompany
transactions denominated in foreign currencies to limit the effect of exchange rate fluctuations on its results of
operations and cash flows. See Item 7a ‘‘Quantitative and Qualitative Disclosures About Market Risk’’ and
Item 8 ‘‘Financial Statements and Supplementary Data—Note 8 to the Consolidated Financial Statements.’’ For
financial information by geographic area, see Item 8 ‘‘Financial Statements and Supplementary Data—Note 10
to the Consolidated Financial Statements.’’
Manufacturing
Mattel manufactures toy products both in company-owned facilities and through independent contractors.
Products are also purchased from unrelated entities that design, develop and manufacture the products. In order
to provide greater flexibility in the manufacture and delivery of products, and as part of a continuing effort to
reduce manufacturing costs, Mattel has concentrated production of most of its core products in Mattel’s
facilities and generally uses independent contractors for the production of non-core products.
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