Mattel 2002 Annual Report Download

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2002 Annual Report

Table of contents

  • Page 1
    2002 Annual Report

  • Page 2
    Innovation is the product of knowledge turned into action.

  • Page 3
    To our shareholders: Looking back, 2002 was a very good year. Although we faced many challenges, Mattel remained true to the vision, strategies and values laid out during my first 100 days with the company - to be "The World's Premier Toy Brands - Today and Tomorrow." Mattel performed well across ...

  • Page 4
    ...Bandai, Japan's leading toy marketer, and launched our product lines in South Korea. Finally, our Canadian team delivered another solid year. In 2003, to accelerate our global brand expansion and provide more focus on in-market execution, we have named a new executive vice president of International...

  • Page 5
    ...employee competencies in 2002 - the standards of how we achieve results, which, like our corporate values, are just as important as what we achieve. The skills we are building through training and processes like MATPICS, Quality of Organization Review succession management and Career Action Planning...

  • Page 6
    .... As part of managing our supply chain and inventory levels, our overarching objective is to continue better matching our shipping with consumer demand. We also will continue to expand our Customer Business Team concept, which was implemented in 2002, to offer retailers focused support from key...

  • Page 7
    ... prices come off of 20- to 30-year lows, and transportation, insurance and employee benefit costs continue to rise. These expected cost pressures just increase our resolve to focus on the cost-saving initiatives that are under our control. In a step to help us execute these initiatives, we named...

  • Page 8
    ... program internationally and continue matching the charitable gifts of our employees. From the $25 million gift to the Mattel Children's Hospital at UCLA, to the more than one million toys donated each year to children's charities, I am proud to say that the Mattel Children's Foundation and...

  • Page 9
    ... TO MATTEL, INC. LETTER TO SHAREHOLDERS Use of a Non-GAAP Financial Measure In order to comply with SEC Regulation G, which became effective on March 28, 2003, Mattel, Inc. is including this Addendum to its 2002 Letter to Shareholders. On page one of the Letter to Shareholders, Mattel includes...

  • Page 10
    ... Continental Boulevard El Segundo, California 90245-5012 (Address of principal executive offices) Delaware (State or other jurisdiction of incorporation or organization) 95-1567322 (I.R.S. Employer Identification No.) (310) 252-2000 (Registrant's telephone number) Securities registered pursuant...

  • Page 11
    ... 14. Controls and Procedures ...Part IV Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ...Signatures ...Certifications ...85 92 94 84 84 84 84 84 Market For the Registrant's Common Equity and Related Stockholder Matters ...Selected Financial Data ...Management's Discussion...

  • Page 12
    ...Management set five key company strategies: (i) improve execution of the existing toy business; (ii) globalize the brands; (iii) extend the brands; (iv) catch new trends; and (v) develop people. Mattel faced several challenges during 2002, in its largest market, the US, including an uncertain retail...

  • Page 13
    ... their imagination. The US Boys-Entertainment segment includes Hot Wheels®, Matchbox®, and Tyco® Radio Control (collectively "Wheels") and Nickelodeon®, Harry Potter™, Yu-Gi-Oh!™, He-Man® and Masters of the Universe®, and games and puzzles (collectively "Entertainment") products. New Boys...

  • Page 14
    ...' manufacturing facilities are sufficient to handle expected volume in the foreseeable future. See Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations-Factors That May Affect Future Results." Mattel bases its production schedules for toy products on customer...

  • Page 15
    ... national and regional toy markets may include competitors who are strong in a particular toy line or geographical area, but do not compete with Mattel and other international toy companies worldwide. Additionally, in recent years, several large retailers have offered competing products under their...

  • Page 16
    ... children's products from Mattel's Pleasant Company division, is constructing a second American Girl Place®, in New York City, and has several other smaller retail outlets at its corporate headquarters and distribution centers as a service to its employees and as an outlet for excess product...

  • Page 17
    ...â„¢ book and movie property for use on Mattel's products as well as the master toy license for Batmanâ„¢, Supermanâ„¢, Justice Leagueâ„¢, Looney Tunesâ„¢ and Baby Looney Tunesâ„¢. Mattel has also entered into license agreements with, among others: Disney Enterprises, Inc., relating to classic Disney...

  • Page 18
    ... working capital requirements for 2003 by using existing and internally generated cash, issuing commercial paper, selling certain trade receivables, and using various short-term bank lines of credit. In addition, Mattel avails itself of individual short-term foreign credit lines with a number...

  • Page 19
    ... Canada can require the recall and repurchase or repair of products that do not meet their respective standards. In 2002, Fisher-Price exited the car seat business. Mattel maintains a quality control program to ensure compliance with various US federal, state and applicable foreign product safety...

  • Page 20
    ..., Pleasant Company and Executive Vice President Executive Vice President, Worldwide Operations Chief Information Officer Chief Financial Officer President, Fisher-Price Brands Senior Vice President, Human Resources Senior Vice President and Corporate Controller Senior Vice President, General Counsel...

  • Page 21
    ...-Tyco Preschool. For more than five years prior to that time, he was President of MCA/Universal Merchandising, Senior Vice President-Sales, Marketing and Design of Just Toys, Vice President and General Manager of Baby Care for Gerber Products, Executive Vice President and Chief Operating Officer...

  • Page 22
    ... segment and for corporate support functions. Pleasant Company owns its headquarters facilities in Middleton, Wisconsin, consisting of approximately 420,000 square feet, which is used by the US Girls segment. Mattel maintains leased sales offices in California, Illinois, New York, North Carolina...

  • Page 23
    ... regarding the markets in which Mattel's common stock, par value $1.00 per share, is traded, see the cover page hereof. For information regarding the high and low closing prices of the common stock for the last two calendar years, see Item 8 "Financial Statements and Supplementary Data-Note 12...

  • Page 24
    ... in, and the liabilities and operating results of, the Consumer Software segment. (b) Certain financial information for prior years has been reclassified to conform to the current year's presentation. (c) Per share data reflect the retroactive effect of the merger with Learning Company in 1999. 15

  • Page 25
    ... this Annual Report on Form 10-K is based on the segments evaluated by management during 2002. Mattel designs, manufactures, and markets a broad variety of toy products worldwide through sales to retailers (i.e., "customers") and directly to consumers. Mattel's business is dependent in great part on...

  • Page 26
    ... full year sales. Additionally, as part of the financial realignment plan, Mattel lowered costs by closing and consolidating certain of its manufacturing and distribution facilities and reducing headcount at its US-based headquarters locations. Mattel expects that the challenging retail and consumer...

  • Page 27
    ...Potterâ„¢ sales. In July 2002, Mattel and Warner Bros. Consumer Products announced comprehensive, multi-year agreements granting Mattel master toy licenses for several of Warner Bros.' core franchises, including Looney Tunesâ„¢, Baby Looney Tunesâ„¢, Batmanâ„¢, Supermanâ„¢ and Justice Leagueâ„¢. The...

  • Page 28
    ...$15.9 million in 2002 versus $9.7 million in 2001. Included in 2002 was a $25.4 million charge recorded in the fourth quarter resulting from the settlement of shareholder litigation related to the 1999 acquisition of the Learning Company. See Item 7 "Management's Discussion and Analysis of Financial...

  • Page 29
    ...®, Polly Pocket!®, Diva Starz™, What's Her Face!™, ello™, and American Girl®. The US Boys-Entertainment segment includes Hot Wheels®, Matchbox®, and Tyco® Radio Control vehicles and playsets (collectively "Wheels"), and Nickelodeon®, Harry Potter™, Yu-Gi-Oh!™, He-Man® and Masters...

  • Page 30
    ...). The International segment continued to benefit from Mattel's strategic focus on globalization of brands, including improved product availability, better alignment of worldwide marketing and sales plans and strong product launches. The US Girls segment income increased by 5% to $389.8 million...

  • Page 31
    ... the Pictionary® game brand and associated rights. Beginning in January 2002, Mattel started manufacturing, marketing and distributing Pictionary® to international markets. In the US and Canada, Mattel is the licensor of the property through an independent contractor. Worldwide gross sales in the...

  • Page 32
    ...improving customer service levels by partnering with retailers to get the right products in the right place at the right time, lowering costs by closing and consolidating Mattel's manufacturing and distribution facilities, and improving processes such as launching fewer new SKU's by taking advantage...

  • Page 33
    ... with consumers and posted sales increases at retail. According to NPD industry data for toy sales at the consumer level, Mattel gained market share in the US in dolls, vehicles, action figures, games and puzzles and core infant and preschool categories. International segment sales increased by 10...

  • Page 34
    ... of profitability; • Improve supply chain performance and economics; • Implement an information technology strategy aimed at achieving operating efficiencies; • Eliminate positions at US-based headquarters locations in El Segundo, Fisher-Price and Pleasant Company through a combination of...

  • Page 35
    ... of positions at headquarters locations in El Segundo, Fisher-Price and Pleasant Company, the North American Strategy, and consolidation of international facilities. From inception through December 31, 2002, a total of $43.3 million has been incurred related to the termination of 2,350 employees, of...

  • Page 36
    ... the last three years in tooling to support existing and new products, expansion of its existing North American manufacturing facilities in anticipation of the closure of the Murray, Kentucky, plant in mid-2002, and its long-term information technology strategy. In 2001, Mattel acquired Pictionary...

  • Page 37
    ... plans in the future. Seasonal Financing Mattel expects to finance its seasonal working capital requirements for 2003 by using existing and internally generated cash, issuing commercial paper, selling certain trade receivables, and using various short-term bank lines of credit. In March 2002, Mattel...

  • Page 38
    ... 2002, reflecting shorter payment terms to customers and improved cash collections, partially offset by lower factoring of accounts receivable. Inventories decreased by $148.9 million to $338.6 million at year end 2002. Inventory levels were positively impacted by the execution of the supply chain...

  • Page 39
    ...obtain and protect Mattel's right to create and market certain products. These arrangements include commitments for future inventory purchases and licensing payments. Certain of these commitments routinely contain provisions for guaranteed or minimum expenditures during the term of the contracts. 30

  • Page 40
    ... value at the end of five years. In the fourth quarter of 2001, Mattel received proceeds totaling $10.0 million from Gores Technology Group as a result of liquidation events related to Gores Technology Group's sale of the entertainment and education divisions of the former Learning Company. Mattel...

  • Page 41
    ... of the expected results of its Learning Company division for the third quarter of 1999, various Mattel stockholders filed purported class action complaints naming Mattel and certain of its present and former officers and directors as defendants. The complaints generally alleged, among other things...

  • Page 42
    ... December 31, 2002, largely related to attorney fees, consulting work and an employee medical screening program. In January 2003, Mattel entered into a settlement with the Oregon Department of Environmental Quality resolving its cleanup liability in return for a contribution of $0.4 million to the...

  • Page 43
    ... current and future economic factors as it relates to each of its customers' ability to pay amounts owed Mattel. Products within the Domestic segment are sold directly to large retailers, including discount and freestanding toy stores, chain stores, department stores, other retail outlets and, to...

  • Page 44
    ... depending upon the region or nation. On a consolidated basis, a small number of Mattel's customers account for a large share of net sales and accounts receivable. For year end 2002, Mattel's three largest customers, Wal-Mart, Toys "R" Us and Target, in the aggregate, accounted for approximately 50...

  • Page 45
    ... since actual shipments of products ordered and order cancellation rates are affected by consumer acceptance of product lines, strength of competing products, marketing strategies of retailers and overall economic conditions. Unexpected changes in these factors could result in excess inventory...

  • Page 46
    ... the last three years, Mattel lowered its long-term rate of return from 11.0% in 2000 to 10.0% in 2001 to 8.0% in 2002, based on recent economic and stock market conditions. The health care cost trend rates used by Mattel for its other postretirement benefit plans reflect management's best estimate...

  • Page 47
    ... costs and working capital investment for the reporting unit over a multi-year period. Additionally, management must make an estimate of its weighted average cost of capital to be used as a discount rate. The Market Approach valuation method requires Mattel to identify publicly traded companies in...

  • Page 48
    ...reported results of operations. Mattel is in the process of evaluating the alternative fair valuation methods prescribed in this statement and the impact on its financial results of operations should the company decide to adopt the recognition provisions of stock-based employee compensation. Factors...

  • Page 49
    ... factors affecting economic conditions generally. Such changes may negatively affect the sales of Mattel's products, increase exposure to losses for bad debt, or increase costs associated with manufacturing and distributing these products. Customer Concentration A small number of Mattel's customers...

  • Page 50
    ... significant shifts in market share among competitors in recent years, causing some large retailers to experience liquidity problems. In 2001 and 2002, two large customers of Mattel filed for bankruptcy and a third filed for bankruptcy in 2003. Mattel's sales to customers are typically made...

  • Page 51
    ... of operations. Success of New Initiatives Mattel has announced initiatives to improve the execution of its core business, globalize and extend Mattel's brands, catch new industry trends and develop people, including a supply chain initiative and a long-term information technology strategy. Such...

  • Page 52
    ...new developments or otherwise. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Risk Management Exchange rate fluctuations may impact Mattel's results of operations and cash flows. Inventory purchase transactions denominated in the Euro, British pound sterling, Mexican peso, Hong...

  • Page 53
    ...amount, based on dealer quotes that Mattel would pay at maturity for contracts involving the same currencies and maturity dates, if they had been entered into as of year end 2002. For the sale of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel would receive at...

  • Page 54
    ...As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, Mattel changed its method of accounting for goodwill in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Los Angeles, California January 29, 2003 45

  • Page 55
    ...Cash and short term investments ...Accounts receivable, less allowances of $23.3 million at December 31, 2002 and $55.9 million at December 31, 2001 ...Inventories ...Prepaid expenses and other current assets ...Total current assets ...Property, Plant and Equipment Land ...Buildings ...Machinery and...

  • Page 56
    ......Total long-term liabilities ...Stockholders' Equity Special voting preferred stock $1.00 par value, $10.00 liquidation preference per share, one share authorized, issued and outstanding, representing the voting rights of 0.3 million and 1.1 million outstanding exchangeable shares in 2002 and 2001...

  • Page 57
    MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Year 2002 2001 2000 (In thousands, except per share amounts) Net Sales ...Cost of sales ...Gross Profit ...Advertising and promotion......Weighted average number of common and... notes are an integral part of these statements. 48

  • Page 58
    ...of long-term debt ...Payments of long-term debt ...Exercise of stock options ...Payment of dividends on common stock ...Net cash flows (used for) from financing activities of continuing operations ...Net Cash From (Used for) Discontinued Operations (See Note 14) ...Effect of Exchange Rate Changes on...

  • Page 59
    ... treasury stock ...Tax benefit of stock option exercises ...Tax benefit of prior year stock option exercises ...Compensation cost related to stock option modifications ...Conversion of exchangeable shares ...Issuance of stock warrant ...Shares issued for Learning Company treasury stock ...Dividends...

  • Page 60
    ... the exchange rate changes. Cash and Short-Term Investments Cash includes cash equivalents, which are highly liquid investments with maturities of three months or less when purchased. Marketable Securities Marketable securities are comprised of investments in publicly-traded securities, classified...

  • Page 61
    .... Mattel's reporting units for purposes of applying the provisions of SFAS No. 142 are: Pleasant Company, US Girls, US Boys-Entertainment, US Infant & Preschool and International. Mattel tests its goodwill and other intangible assets for impairment annually based on a combination of the fair value...

  • Page 62
    ... of operations for nonqualified stock options granted under Mattel's plans as such options are granted at not less than the quoted market price of Mattel's common stock on the date of grant. Had compensation cost for nonqualified stock options been determined based on their fair value at the date of...

  • Page 63
    ...at above market price Expected life (in years) ...Risk-free interest rate ...Volatility factor ...Dividend yield ... 6.16 5.50 5.67 2.94% 4.42% 5.03% 30.09% 16.76% 19.55% 1.07% 0.86% 0.83 10.00 6.01% 45.63% 3.40% The weighted average fair value of Mattel options granted at market price during 2002...

  • Page 64
    ...the years ended December 31 (shares in thousands): 2002 2001 2000 Nonqualified stock options granted at: Market price ...Above market price ...Warrants ... 19,547 - - 19,547 13,778 15,227 3,000 32,005 25,594 16,337 3,000 44,931 Derivative Instruments Mattel uses foreign currency forward exchange...

  • Page 65
    ... adjustment of $252.2 million, net of tax, as the cumulative effect of change in accounting principles resulting from the transitional impairment test of the Pleasant Company reporting unit goodwill. In the third quarter of 2002, Mattel performed the annual impairment test required by SFAS No...

  • Page 66
    ... the book value of the related goodwill assets, including Pleasant Company goodwill. Therefore, no goodwill assets, including Pleasant Company's goodwill, were considered impaired under SFAS No. 121. The following table provides a reconciliation of the net income (loss) reported for the years ended...

  • Page 67
    ...reserves, depreciation, employee compensation-related expenses, and certain other expenses that are recognized in different years for financial statement and income tax purposes. Mattel's deferred income tax assets (liabilities) are comprised of the following (in thousands): As of Year End 2002 2001...

  • Page 68
    ... Internal Revenue Service has completed its examination of the Mattel, Inc. federal income tax returns through December 31, 1997. Note 4-Employee Benefits Mattel and certain of its subsidiaries have retirement plans covering substantially all employees of these companies. Expense related to Mattel...

  • Page 69
    ......$215,551 $195,217 2002 For the Year 2001 2000 Assumptions Weighted average discount rate ...Rate of future compensation increases ...Long-term rate of return on plan assets ...Other Retirement Plans 6.5% 7.0% 7.5% 4.0% 4.0% 4.0% 8.0% 10.0% 11.0% Domestic employees are eligible to participate...

  • Page 70
    ... certain contributions made by Mattel and employees to an excess benefit plan, earn various rates of return. The liability for these plans as of year end 2002 and 2001 was $36.1 million and $36.8 million, respectively. Mattel's contribution to these plans and the related administrative expense were...

  • Page 71
    .... In March 2002, Mattel amended and restated its existing unsecured committed revolving credit facility into a $1.060 billion, 3-year facility that expires in 2005. Interest is charged at various rates selected by Mattel, ranging from market commercial paper rates to the bank reference rate. The...

  • Page 72
    ...domestic receivables facility, Mattel Sales Corp. and Fisher-Price, Inc. (which are wholly-owned subsidiaries of Mattel) can sell trade receivables from Wal-Mart and Target to Mattel Factoring, a Delaware corporation and wholly-owned subsidiary of Mattel. Mattel Factoring is a special purpose entity...

  • Page 73
    ... February 1 through July 31 of each year and may not exceed Euro 150 million at all other times. Pursuant to a letter agreement between Societe Generale Nederland and Mattel International Holdings B.V., Mattel France S.A.S. and Mattel GmbH dated July 1, 2002, the commitment termination date for the...

  • Page 74
    ... Voting Preferred Stock and Related Exchangeable Shares Mattel is authorized to issue one share of $1.00 par value Special Voting Preferred Stock, which was issued in exchange for one share of Learning Company special voting stock in connection with the May 1999 merger. The par value and liquidation...

  • Page 75
    ... fund Mattel's stock option plans. The number of shares to be repurchased is authorized on an annual basis by the board of directors based upon anticipated reissuance needs. No shares were repurchased in 2002, 2001 and 2000 under this plan. Dividends As part of its financial realignment plan, Mattel...

  • Page 76
    ... market value of Mattel's common stock on the date of grant. Options granted to employees at market price usually expire within ten years from the date of grant and vest on a schedule determined by the Compensation/Options Committee of the board of directors, generally semi-annually over three years...

  • Page 77
    ... deferrable nonvested stock units to its chief executive officer pursuant to the terms of his employment contract. These units vest at a rate of 25% annually in 2000, 2001, and 2002, with the remaining units vesting in 2008. The aggregate fair market value of the nonvested stock units is being...

  • Page 78
    ... agreement at fair market value, at no gain or loss to Mattel. Foreign Exchange Risk Management Exchange rate fluctuations may impact Mattel's results of operations and cash flow. Inventory purchase transactions denominated in the Euro, British pound sterling, Mexican peso, Hong Kong dollar...

  • Page 79
    ...comprehensive income (loss) to its results of operations over the life of the contracts, generally 18 months or less. As of year end, Mattel held the following foreign exchange risk management contracts (in millions): 2002 Notional Exposure Amount Hedged 2001 Notional Exposure Amount Hedged Foreign...

  • Page 80
    ... based on broker quotes or rates for the same or similar instruments, and the related carrying amounts are as follows as of year end (in millions): 2002 Book Value Fair Value Book Value 2001 Fair Value Long-term debt ...Risk management contracts: Foreign exchange forwards ... $ 822.4 1,113...

  • Page 81
    ... minimum expenditures during the terms of the contracts. Current and future commitments for guaranteed payments reflect Mattel's focus on expanding its product lines through alliances with businesses in other industries. Licensing and related agreements provide for terms extending from 2003 through...

  • Page 82
    ..., wasted corporate assets, and grossly mismanaged Mattel in connection with Mattel's acquisition of Learning Company and its approval of severance packages to certain former executives. Some of the derivative suits were consolidated into one lawsuit filed in Los Angeles Superior Court in California...

  • Page 83
    ... December 31, 2002, largely related to attorney fees, consulting work and an employee medical screening program. In January 2003, Mattel entered into a settlement with the Oregon Department of Environmental Quality resolving all cleanup liability in return for a contribution of $0.4 million to the...

  • Page 84
    ... $24.6 million pre-tax restructuring charge as part of the financial realignment plan, principally related to further elimination of positions at headquarters locations in El Segundo, Fisher-Price and Pleasant Company, the North American Strategy, and consolidation of international facilities. From...

  • Page 85
    ...®, Polly Pocket!®, Diva Starz™, What's Her Face!™, ello™, and American Girl®. The US Boys-Entertainment segment includes Hot Wheels®, Matchbox® and Tyco® Radio Control vehicles and playsets (collectively "Wheels"), and Nickelodeon®, Harry Potter™, Yu-Gi-Oh!™, He-Man® and Masters of...

  • Page 86
    ...settlement of shareholder litigation related to the 1999 acquisition of Learning Company. Corporate and other decreased in 2001 compared to 2000, primarily due to lower financial realignment plan charges in 2001 and a $53.1 million charge in 2000 related to the departure of certain senior executives...

  • Page 87
    ...284,191 Mattel sells a broad variety of toy products, which are grouped into three major categories: Girls, BoysEntertainment and Infant & Preschool. The table below presents worldwide revenues by category: 2002 For the Year 2001 (In thousands) 2000 Girls ...$2,314,673 Boys-Entertainment ...1,299...

  • Page 88
    ... $1,983,276 $1,455,779 579,371 $2,035,150 (a) Decrease in 2002 compared to prior years is due to a one-time pre-tax transition adjustment of $400.0 million resulting from the transitional impairment test of the Pleasant Company reporting unit goodwill as a result of implementing SFAS No. 142. In...

  • Page 89
    ... share amounts) Year Ended December 31, 2002 Net sales ...Gross profit ...Advertising and promotion expenses ...Other...average number of common and common equivalent shares ...Dividends declared per common share ...Common stock market price: High ...Low ... $ 741,984 331,894 82,671 213,719 14,800 20,...

  • Page 90
    ...per share amounts) Year Ended December 31, 2001 (a) Net sales ...Gross profit ...Advertising and promotion expenses ...Other ... income (loss) ...Weighted average number of common and common equivalent shares ...Dividends declared per common share ...Common stock market price: High ...Low ... $715,166...

  • Page 91
    ... pooling of interests. On March 31, 2000, Mattel's board of directors resolved to dispose of its Consumer Software segment, which was comprised primarily of Learning Company. As a result of this decision, the Consumer Software segment was reported as a discontinued operation effective March 31, 2000...

  • Page 92
    ... value at the end of five years. In the fourth quarter of 2001, Mattel received proceeds totaling $10.0 million from Gores Technology Group as a result of liquidation events related to Gores Technology Group's sale of the entertainment and education divisions of the former Learning Company. Mattel...

  • Page 93
    ...principal financial officer, concluded that these disclosure controls and procedures were effective in timely alerting them to material information relating to Mattel required to be included in Mattel's periodic reports. During the fourth quarter of 2002, Mattel began a planned conversion to new and...

  • Page 94
    ... 31, 2002, 2001 and 2000(1) Schedule II-Valuation and Qualifying Accounts and Allowances 3. 2.0 Exhibits (Listed by numbers corresponding to Item 601 of Regulation S-K) 45 46 48 49 50 51 Agreement and Plan of Merger, dated as of December 13, 1998, between Mattel and The Learning Company, Inc...

  • Page 95
    ... Exhibit 10.7 to Mattel's Annual Report on Form 10-K for the year ended December 31, 2001) Amendment to Master Agreement for the Transfer of Receivables dated July 1, 2002 among Societe Generale Bank Nederland, Mattel International Holdings B.V., Mattel France S.A.S. and Mattel GmbH (incorporated by...

  • Page 96
    ...) Amendment to Employment Agreement and Stock Option Grant Agreements between Mattel and Adrienne Fontanella dated February 10, 2000 (incorporated by reference to Exhibit 10.8 to Mattel's Annual Report on Form 10-K for the year ended December 31, 1999) Executive Employment Agreement dated January 31...

  • Page 97
    ...) Amendment No. 1 to Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.43 to Mattel's Annual Report on Form 10-K for the year ended December 31, 2000) Mattel, Inc. Amended & Restated Supplemental Executive Retirement Plan as of May 1, 1996...

  • Page 98
    ....60 to Mattel's Annual Report on Form 10-K for the year ended December 31, 2000) Notice of Grant of Stock Options and Grant Agreement under the 1990 Plan (incorporated by reference to Exhibit 10.61 to Mattel's Annual Report on Form 10-K for the year ended December 31, 2000) Grant Agreement for a Non...

  • Page 99
    ...Grant Agreement (Three Year Vesting) under the 1996 Plan, as amended Form of Option Grant Agreement (Dutch National) under the 1996 Plan, as amended Form of Option Grant Agreement (Netherlands Resident) under the 1996 Plan, as amended Mattel, Inc. 1997 Premium Price Stock Option Plan (the "1997 Plan...

  • Page 100
    ... to stockholders of Mattel without charge. Copies of other exhibits can be obtained by stockholders of Mattel 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. 91

  • Page 101
    .... Signature Title Date /s/ ROBERT A. ECKERT Robert A. Eckert KEVIN M. FARR Kevin M. Farr Chairman of the Board and Chief Executive Officer Chief Financial Officer (principal financial officer) Senior Vice President and Corporate Controller (principal accounting officer) Director March 24...

  • Page 102
    Signature Title Date Director Tully M. Friedman /s/ RONALD M. LOEB Ronald M. Loeb ANDREA L. RICH Andrea L. Rich Director March 24, 2003 March 24, 2003 /s/ Director March 24, 2003 /s/ WILLIAM D. ROLLNICK William D. Rollnick CHRISTOPHER A. SINCLAIR Christopher A. Sinclair Director March 24...

  • Page 103
    ..., that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could...

  • Page 104
    ..., that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could...

  • Page 105
    ...559 (a) Increase in bad debt expense charged to the results of operations compared to prior years is primarily due to charges totaling $33.5 million in 2002 and $22.1 million in 2001 related to the Kmart bankruptcy and charges totaling $8.5 million in 2001 largely related to the bankruptcy declared...

  • Page 106
    ...May 1999 merger with The Learning Company, Inc. ("Learning Company"), accounted for as a pooling of interests. As more fully described in Note 14 to the Consolidated Financial Statements, the Consumer Software segment, which was comprised primarily of Learning Company, was reported as a discontinued...

  • Page 107
    ... of the May 1999 merger with Learning Company, accounted for as a pooling of interests. As more fully described in Note 14 to the Consolidated Financial Statements, the Consumer Software segment, which was comprised primarily of Learning Company, was reported as a discontinued operation effective...

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    ... charges ...$130,555 (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 was reported as a discontinued operation effective March...

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    ......$130,555 5.76X 3.53X 2.34X 2.12X 4.31X (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 was reported as a discontinued operation effective March 31, 2000...

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    ... and Director, Los Angeles County Museum of Art William Stavro Senior Vice President and Treasurer BUSINESS UNIT EXECUTIVES Ralph V. Whitworth (2) (6) Principal, Relational Investors, LLC Matthew C. Bousquette President, Mattel Brands Ellen L. Brothers President, Pleasant Company and Executive...

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    ... OFFICES 333 Continental Blvd. El Segundo, California 90245-5012 310-252-2000 For more information, please visit Mattel's corporate Website: www.mattel.com TRANSFER AGENT AND REGISTAR Mattel, Inc. Common Stock EquiServe Trust Company, N.A. STOCK EXCHANGE LISTINGS Mattel, Inc. Common Stock New York...

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    Mattel, Inc., 333 Continental Boulevard, El Segundo, California 90245 ®