Mattel 2004 Annual Report Download

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Table of contents

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  • Page 11
    Mattel, Inc. FORM 10-K 2004

  • Page 12
    ... 31, 2004 ' 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 (Exact name of registrant as specified in its charter) MATTEL, INC. 333 Continental Blvd. El Segundo, CA 90245-5012 (Address of...

  • Page 13
    ... Data ...Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ... Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors and Executive Officers of the Registrant ...Executive Compensation...

  • Page 14
    ...") designs, manufactures, and markets a broad variety of toy products worldwide through sales to retailers and wholesalers (i.e., "customers") and directly to consumers. Mattel's vision is to provide "the world's premier toy brands-today and tomorrow." Management has set six key company strategies...

  • Page 15
    ...of American Girl Brands, are generally 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 to retailers and wholesalers in Canada and most European, Asian and Latin American...

  • Page 16
    ... third-party manufacturers for the production of non-core products. Mattel's principal manufacturing facilities are located in China, Indonesia, Thailand, Malaysia and Mexico. Mattel also utilizes third-party manufacturers to manufacture its products in the US, Europe, Mexico, Asia and Australia. To...

  • Page 17
    ... compete with Mattel and other international toy companies worldwide. Additionally, in recent years, several large retailers have offered competing products under their own private labels. Seasonality Mattel's business is highly seasonal, with consumers making a large percentage of all toy purchases...

  • Page 18
    ..., chain stores, department stores, other retail outlets and, to a limited extent, wholesalers by Mattel Brands US and Fisher-Price Brands US. Mattel also operates several small retail outlets, generally near or at its corporate headquarters and distribution centers as a service to its employees and...

  • Page 19
    ...inventory practices in the toy industry has resulted in fewer advance orders and therefore less backlog of orders. Mattel believes that the amount of backlog orders at any given time may not accurately indicate future sales. Financial Instruments Currency exchange rate fluctuations may impact Mattel...

  • Page 20
    ... the time of the sale of the receivables to the bank group. Mattel's subsidiaries, Mattel International Holdings B.V., a Netherlands company, Mattel France S.A.S., a French company, and Mattel GmbH, a German company, have entered into a Euro 150 million European trade receivables facility, pursuant...

  • Page 21
    ... require the recall and repurchase or repair of articles that are banned. Similar laws exist in some states and cities and in many international markets. Mattel maintains a quality control program to ensure compliance with various US federal, state and applicable foreign product safety requirements...

  • Page 22
    ... of Mattel and President, American Girl 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 and...

  • Page 23
    ... 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 of Lionel Leisure, Inc., and President of Aviva/Hasbro. Mr. Kaye has been Senior Vice President, Human Resources since...

  • Page 24
    ... and New York, New York for its American Girl Place® stores and leased retail space in Oshkosh, Wisconsin, which are used by the American Girl Brands segment. Mattel also has leased office space in Florida, which is used by the International segment. Mattel leases a computer facility in Phoenix...

  • Page 25
    ... on common stock is at the discretion of Mattel's board of directors and is subject to customary limitations. Securities Authorized for Issuance under Equity Compensation Plans The information regarding Mattel's equity compensation plans is incorporated herein by reference to Mattel's 2005 Notice of...

  • Page 26
    ... a reduction of cost of sales are now classified as net sales in Mattel's consolidated statements of income. Close out sales for the fourth quarter of 2003, totaling $19.2 million, were included in reported net sales. This change in classification had no impact on gross profit, operating income, net...

  • Page 27
    ... indicated, the following discussion relates only to Mattel's continuing operations. Overview Mattel designs, manufactures and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers. Mattel's business is dependent in great part on its ability each...

  • Page 28
    ... in California to take advantage of synergies in the Wheels business. These increased costs were partially offset by gains on the sale of investments, net favorable legal settlements and a positive benefit from changes in currency exchange rates. A settlement with the US Internal Revenue Service...

  • Page 29
    ... point benefit from changes in currency exchange rates, driven by the expansion of learning-related products and strong sales growth from new product introductions featuring Dora the Explorerâ„¢ and Winnie the Pooh. Gross sales of American Girl Brands increased 10% to $379.1 million in 2004 compared...

  • Page 30
    ... to customers on a worldwide basis across most product lines. Cost of sales in 2003 includes a charge of $4.1 million for the financial realignment plan, primarily related to the consolidation of two of Mattel's manufacturing facilities in Mexico. Advertising and Promotion Expenses Advertising and...

  • Page 31
    ...made-for-TV movie, which aired in November 2004. American Girl Brands segment income increased 25% to $77.5 million in 2004, driven by higher sales volume and improved gross profit, partially offset by higher overhead costs associated with its American Girl Place® retail store in New York City. 20

  • Page 32
    ... of a change in accounting principle resulting from the transitional impairment test of the American Girl Brands goodwill. In the third quarter of 2002, Mattel recorded a $27.3 million after-tax gain from discontinued operations related to the sale of Learning Company. In 2002, Mattel also incurred...

  • Page 33
    ... gross sales growth included an 11 percentage point benefit from changes in currency exchange rates. An increase in international sales of dolls was more than offset by declines in worldwide sales of Barbie® accessories and lower domestic sales of dolls. Worldwide gross sales of Other Girls Brands...

  • Page 34
    ... exchange rates. Sales of Fisher-Price® Friends increased in 2003 compared to 2002 in both domestic and international markets. Additionally, Mattel benefited in 2003 from launches of learning-related products, which include PowerTouch™ and other learning toys. Gross sales of American Girl Brands...

  • Page 35
    ... Mattel Brands US. Additionally, Pleasant Company, which was previously part of the US Girls segment, is now a separate segment for management reporting purposes. The results of Pleasant Company are now reported as American Girl Brands and US Infant & Preschool are now reported as Fisher-Price...

  • Page 36
    ... retail store, American Girl Place®, in New York City during the fourth quarter of 2003. Management believes the overall decrease in Domestic segment gross sales in 2003 resulted from the impact of the challenging retail environment, competition in key categories and the shift in consumer purchases...

  • Page 37
    ... US-based headquarters locations in El Segundo, Fisher-Price and American Girl, costs associated with the North American Strategy, closure of certain international offices, and consolidation of facilities. From the inception of the plan through 2003, Mattel terminated the employment of approximately...

  • Page 38
    ...as adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products or shortages in raw materials or component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could...

  • Page 39
    ... new American Girl Place® in New York City, and expansion of manufacturing facilities in Mexico as part of the financial realignment plan, and reduced spending in 2004 on information technology. In 2003 and 2002, Mattel used cash flows for investing activities of $180.8 million and $158.4 million...

  • Page 40
    ... common stock, respectively. The board of directors declared the dividend in November, and Mattel paid the dividend in December of each year. The dividend payments were approximately $187 million, $171 million and $22 million in 2004, 2003 and 2002, respectively. Seasonal Financing Mattel maintains...

  • Page 41
    ... the time of the sale of the receivables to the bank group. Mattel's subsidiaries, Mattel International Holdings B.V., a Netherlands company, Mattel France S.A.S., a French company, and Mattel GmbH, a German company, have entered into a Euro 150 million European trade receivables facility, pursuant...

  • Page 42
    $30.0 million to $418.6 million at year end 2004, mainly due to lower than expected sales volume during the holiday season and changes in currency exchange rates. Based on Mattel's analysis of point of sale information, management believes that inventory levels of Mattel products at retail are lower...

  • Page 43
    ... of liquidation events related to Gores Technology Group's sale of the entertainment and education divisions of the former Learning Company. Mattel also incurred additional costs of approximately $10 million in 2001 related to the wind down of the Consumer Software segment. Accordingly, no income...

  • Page 44
    ... 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. These shareholder complaints were consolidated into two lead cases, one under...

  • Page 45
    Environmental Fisher-Price Fisher-Price has executed a consent order with the State of New York to implement a groundwater remediation system at one of its former manufacturing facilities. The execution of the consent order was in response to the New York State Department of Environmental ...

  • Page 46
    ... other selling and administrative expenses, net income and accounts receivable. In addition, the allowance requires a high degree of judgment since it involves estimation of the impact of both current and future economic factors in relation to its customers' ability to pay amounts owed to Mattel. 35

  • Page 47
    ... to retailers, including discount and free-standing toy stores, chain stores, department stores, other retail outlets and, to a limited extent, wholesalers. Products within the International segment are sold directly to retailers and wholesalers in Canada and most European, Asian and Latin American...

  • Page 48
    ... of Mattel's inventory could be impacted by changes in public and consumer preferences, demand for product, or changes in the buying patterns of both retailers and consumers and inventory management of customers. In the toy industry, orders are subject to cancellation or change at any time prior...

  • Page 49
    At the end of each quarter, management within each business segment, Mattel Brands US, Fisher-Price Brands US, American Girl Brands and International, performs a detailed review of its inventory on an item by item basis and identifies which products are believed to be obsolete or slow-moving. ...

  • Page 50
    ...and 2004, based on economic and stock market conditions. Assuming all other benefit plan assumptions remain constant, a 1.0% decrease in the expected return on plan assets would result in an increase in benefit plan expense of approximately $2 million. The health care cost trend rates used by Mattel...

  • Page 51
    ... operating segment level or one reporting level below the operating segment. Mattel's reporting units for purposes of applying the provisions of SFAS No. 142 are: Mattel Brands US Girls division, Mattel Brands US Boys division, Fisher-Price Brands US, American Girl Brands and International. Goodwill...

  • Page 52
    ... material impact on Mattel's provision for income taxes, net income, and deferred income tax assets and liabilities. New Accounting Pronouncements In December 2004, the FASB issued SFAS No. 123R (revised 2004), Share-Based Payment, which replaced SFAS No. 123, Accounting for Stock-Based Compensation...

  • Page 53
    ...of the actuarial impact of the subsidy on benefits attributed to prior service. Mattel's net periodic benefit cost for 2004 was reduced by $1.0 million in the areas of interest cost ($0.5 million) and amortization of unrecognized net loss ($0.5 million). On January 21, 2005, the Centers for Medicare...

  • Page 54
    ... the impact of sales adjustments, such as trade discounts and other allowances. Gross sales represent sales to customers, excluding the impact of sales adjustments. Consistent with its segment reporting, Mattel presents changes in gross sales as a metric for comparing its aggregate, business unit...

  • Page 55
    ... exposure to losses from bad debts, or increase costs associated with manufacturing and distributing these products. Customer Concentration and Pricing A small number of customers account for a large share of Mattel's net sales. For 2004, Mattel's three largest customers, Wal-Mart, Toys "R" Us and...

  • Page 56
    ... harm Mattel's business and operating results. Competition from Private-Label Toys In recent years, consumer goods companies generally, including those in the toy business, have experienced the phenomenon of retail customers developing their own private-label products that directly compete with...

  • Page 57
    ...Asia, particularly in Hong Kong, and in the Guangdong province of China, where many of Mattel's manufacturing facilities and third-party manufacturers are located. The design, development and manufacture of Mattel's products could suffer if a significant number of Mattel's employees or the employees...

  • Page 58
    ... regulations, advertising directed toward children, safety and other administrative and regulatory restrictions. Changes in laws or regulations may lead to increased costs, changes in Mattel's effective tax rate, or the interruption of normal business operations that would negatively impact its...

  • Page 59
    ... Qualitative Disclosures About Market Risk. Foreign Currency Exchange Rate Risk Currency 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 Kong dollar and Indonesian...

  • Page 60
    ... movement in interest rates on Mattel's short-term borrowings would have had an immaterial impact on its 2004 results of operations. Item 8. Financial Statements and Supplementary Data. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and...

  • Page 61
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Mattel, Inc. We have completed an integrated audit of Mattel, Inc.'s 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2004 and audits of its...

  • Page 62
    ... REGISTERED PUBLIC ACCOUNTING FIRM (Cont'd.) A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally...

  • Page 63
    ... and Contingencies (See Note 9) Stockholders' Equity Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares and 441.2 million shares issued in 2004 and 2003, respectively ...Additional paid-in capital ...Treasury stock at cost; 26.0 million shares and 12.7 million shares...

  • Page 64
    ... For the Year 2004 2003 2002 (In thousands, except per share amounts) Net Sales (See Note 1) ...Cost of sales (See Note 1) ...Gross Profit ...Advertising and promotion expenses ...Other selling and administrative expenses ...Restructuring and other charges ...Operating Income ...Interest expense...

  • Page 65
    ...retirement plans ...Other, net ...Net cash flows from operating activities of continuing operations ...Cash Flows From Investing Activities: Purchases of tools, dies and molds ...Purchases of other property, plant and equipment ...Proceeds from sale of investments ...Payments for businesses acquired...

  • Page 66
    ...Change in net unrealized (loss) on derivative instruments ...Minimum pension liability adjustments ...Currency translation adjustments ...Comprehensive income ...Purchase of treasury stock ...Issuance of common stock for exercise of stock options ...Tax impact of stock option exercises ...Tax impact...

  • Page 67
    ... other companies are accounted for by the equity method or cost basis, depending upon the level of the investment and/or Mattel's ability to exercise influence over operating and financial policies. Mattel does not have any minority stock ownership interests in which it has a controlling financial...

  • Page 68
    ... operating segment level or one reporting level below the operating segment. Mattel's reporting units for purposes of applying the provisions of SFAS No. 142 are: Mattel Brands US Girls division, Mattel Brands US Boys division, Fisher-Price Brands US, American Girl Brands and International. Mattel...

  • Page 69
    ...-response advertising, which is capitalized and amortized over its expected period of future benefits. Direct-response advertising consists primarily of catalog production and mailing costs that are generally amortized within three months from the date the catalogs are mailed. Product Recalls Mattel...

  • Page 70
    ... Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock compensation plans. Accordingly, no compensation cost has been recognized in the results of operations for nonqualified stock options granted under Mattel's plans, as such options are...

  • Page 71
    ... Software Products Inc., and other common equivalent shares outstanding during each period. The calculation of common equivalent shares assumes the exercise of dilutive stock options and warrants, net of assumed treasury share repurchases at average market prices, as applicable. Nonqualified stock...

  • Page 72
    ...results of operations and financial position, but does not expect it to have a material impact. On October 22, 2004, the American Jobs Creation Act of 2004 (the "Jobs Act") was signed into law. Among its various provisions, the Jobs Act creates a temporary incentive for US corporations to repatriate...

  • Page 73
    ... causing foreign currency translation impact to the US reporting units. Mattel Brands US Girls Division Mattel Brands US Boys Division Fisher-Price American Girl Brands US Brands (In thousands) Int'l Total Balance at year end 2002 ...Impact of currency exchange rate changes ...Balance at year end...

  • Page 74
    annual impairment test required by SFAS No. 142 and determined that its goodwill was not impaired as of September 30, 2004. Prior to implementing SFAS No. 142, Mattel reviewed all goodwill assets for impairment under the methodology of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets...

  • Page 75
    ... that a valuation allowance of $205.3 million was required as of year end 2004 for those loss and tax credit carryforwards that are not expected to provide future tax benefits. Management believes that it is more likely than not that Mattel will generate sufficient taxable income in the appropriate...

  • Page 76
    ... in a net benefit of $65.1 million from changes in tax estimates, and the benefit is reflected in the 2004 provision for income taxes in the consolidated statement of income. As part of the settlement, Mattel and the IRS agreed that the loss on the sale of Learning Company originally deducted in...

  • Page 77
    ... are located. Mattel also has unfunded postretirement health insurance plans covering certain eligible domestic employees. A summary of the components of Mattel's net benefit cost (income) for the years ended December 31 is as follows (in thousands): Defined Benefit Pension Plans 2004 2003...

  • Page 78
    ... pension plans Discount rate ...Weighted average rate of future compensation increases ...Long-term rate of return on plan assets ...Postretirement benefit plans Discount rate ...Annual increase in Medicare Part B premium ...Health care cost trend rate: Pre-65 ...Post-65 ...Ultimate cost trend rate...

  • Page 79
    ... 61,425 $ 57,158 Service cost ...7,998 7,162 121 129 Interest cost ...21,584 21,019 3,404 3,570 Participant contributions ...55 360 - - Plan amendments ...- (169) - - Special termination benefits ...519 - - - Impact of currency exchange rate changes ...4,381 7,856 - - Actuarial loss (gain) ...23,528...

  • Page 80
    ... 2004 2003 Defined benefit pension plans Discount rate ...Weighted average rate of future compensation increases ...Postretirement benefit plans Discount rate ...Annual increase in Medicare Part B premium ...Health care cost trend rate: Pre-65 ...Post-65 ...Ultimate cost trend rate (pre- and post...

  • Page 81
    ... the assumed health care cost trend rate for each future year would impact the postretirement benefit obligation as of year end 2004 by approximately $6 million and $(5) million, respectively, while a one percentage point increase/(decrease) would impact the service and interest cost recognized for...

  • Page 82
    ... Plans Mattel has annual incentive compensation plans under which officers and key employees may earn incentive compensation based on Mattel's performance and subject to certain approvals of the Compensation Committee of the board of directors. For 2004, 2003 and 2002, $41.8 million, $33.3 million...

  • Page 83
    ... the time of the sale of the receivables to the bank group. Mattel's subsidiaries, Mattel International Holdings B.V., a Netherlands company, Mattel France S.A.S., a French company, and Mattel GmbH, a German company, have entered into a Euro 150 million European trade receivables facility, pursuant...

  • Page 84
    ... issued in exchange for one share of Learning Company special voting stock in connection with the May 1999 merger, was redeemed at its liquidation preference of $10.00 on January 7, 2003, the automatic redemption date for the exchangeable shares of Softkey Software Products Inc., Mattel's indirect...

  • Page 85
    ... depending on market conditions. Dividends In 2004, 2003 and 2002, Mattel paid a dividend per share of $0.45, $0.40 and $0.05, respectively, to holders of its common stock. The board of directors declared the dividend in November, and Mattel paid the dividend in December of each year. The payment of...

  • Page 86
    ...Stock Compensation Plans Mattel Stock Option Plans Under various plans, Mattel has the ability to grant incentive stock options, nonqualified stock options, stock appreciation rights, nonvested stock awards, and shares of common stock to officers, key employees, and other persons providing services...

  • Page 87
    ...% of the fair 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 Committee of the board of directors, generally semi-annually over three...

  • Page 88
    ... of income for 2004 and 2003, respectively. Derivative Financial Instruments Currency 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 Kong dollar and Indonesian...

  • Page 89
    ... 2004 from accumulated other comprehensive loss to its results of operations over the life of the contracts, generally within 18 months or less. Fair Value of Financial Instruments Mattel's financial instruments include cash, cash equivalents, marketable securities, investments, accounts receivable...

  • Page 90
    ...of $1.7 million, $0.9 million and $0.8 million in 2004, 2003 and 2002, respectively. Commitments In the normal course of business, Mattel enters into contractual arrangements to obtain and protect Mattel's right to create and market certain products, and for future purchases of goods and services to...

  • Page 91
    ... 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. These shareholder complaints were consolidated into two lead cases, one under...

  • Page 92
    ...-certify a class action. Environmental Fisher-Price Fisher-Price has executed a consent order with the State of New York to implement a groundwater remediation system at one of its former manufacturing facilities. The execution of the consent order was in response to the New York State Department of...

  • Page 93
    ... president of the Girls division. Also in 2003, Mattel substantially completed the consolidation of two of its manufacturing facilities in Mexico to streamline manufacturing within North America. In 2002, as part of its financial realignment plan, Mattel commenced a long-term information technology...

  • Page 94
    ... $0.1 million was not yet paid as of year end 2004. These charges were largely related to the elimination of positions at US-based headquarters locations in El Segundo, FisherPrice and American Girl, costs associated with the North American Strategy, closure of certain international offices, and...

  • Page 95
    ... corporate headquarters functions managed on a worldwide basis. Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances. 2004 For the Year 2003 (In thousands) 2002 Revenues Domestic: Mattel Brands US ...Fisher-Price Brands US ...American Girl...

  • Page 96
    ...of shareholder litigation related to the 1999 acquisition of Learning Company. As of Year End 2004 2003 (In thousands) Assets Domestic: Mattel Brands US ...Fisher-Price Brands US ...American Girl Brands ...Total Domestic ...International ...Corporate and other ...Accounts receivable and inventories...

  • Page 97
    ... of toy products, which are grouped into three major categories: Mattel Brands, Fisher-Price Brands and American Girl Brands. The table below presents worldwide revenues by category (in thousands): 2004 For the Year 2003 2002 Worldwide Revenues Mattel Brands ...Fisher-Price Brands ...American Girl...

  • Page 98
    ... US and Fisher-Price Brands US segments sell products to each of Mattel's three largest customers. The International segment sells products to Wal-Mart and Toys "R" Us. The American Girl Brands segment sells its children's publications to Wal-Mart and Target. Close Out Sales Information As discussed...

  • Page 99
    ... of cost of sales by segment, worldwide and geographic area (in thousands): For the Year 2003 (a) 2002 Segment Domestic: Mattel Brands US ...Fisher-Price Brands US ...American Girl Brands ...Total Domestic ...International ...Worldwide Mattel Brands ...Fisher-Price Brands ...American Girl Brands...

  • Page 100
    ... product lines. These sales were previously classified as a reduction of cost of sales. Commencing October 1, 2003, close out sales are reported as net sales in Mattel's consolidated statements of income. Accordingly, close out sales for the fourth quarter of 2003, totaling $19.2 million, were...

  • Page 101
    ... Financial Information As of Year End 2004 2003 (In thousands) Inventories include the following: Raw materials and work in process ...$ Finished goods ...$ Property, plant and equipment, net include the following: Land ...Buildings ...Machinery and equipment ...Tools, dies and molds ...Capitalized...

  • Page 102
    ... of liquidation events related to Gores Technology Group's sale of the entertainment and education divisions of the former Learning Company. Mattel also incurred additional costs of approximately $10 million in 2001 related to the wind down of the Consumer Software segment. Accordingly, no income...

  • Page 103
    ... Statements and Supplementary Data-Management's Report on Internal Control over Financial Reporting." Changes in Internal Control Over Financial Reporting Mattel continues to implement a conversion to new and upgraded financial and human resources information technology systems that began in...

  • Page 104
    ... as provisions related to accounting and financial matters applicable to the Chief Executive Officer, Chief Financial Officer, Corporate Controller and other finance organization employees (the "finance code of ethics"). The Code of Conduct is publicly available on Mattel's corporate website at http...

  • Page 105
    ... filed as part of this report under Item 8 "Financial Statements and Supplementary Data." Page Management's Report on Internal Control over Financial Reporting ...Report of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets as of December 31, 2004 and 2003 ...Consolidated...

  • Page 106
    ... 2005 Distribution Agreement dated November 12, 1997 among Mattel, Morgan Stanley & Co. Incorporated and Credit Suisse First Boston Corporation Master Agreement for the Transfer of Receivables dated 30th November, 2001 among Societe Generale Bank Nederland N.V., Mattel International Holdings B.V. as...

  • Page 107
    ... Generale Bank Nederland N.V., Mattel International Holdings B.V., Mattel France S.A.S. and Mattel GmbH Amendment to Master Agreement for the Transfer of Receivables dated July 12, 2004 among Societe Generale Bank Nederland N.V., Mattel International Holdings B.V., Mattel France S.A.S. and Mattel...

  • Page 108
    ... Executive Employment Agreement dated November 13, 2000 between Mattel and Thomas A. Debrowski 2002 Mattel Incentive Plan Mattel, Inc. 2003 Long-Term Incentive Plan Mattel, Inc. Deferred Compensation and PIP Excess Plan Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors 10-K 001...

  • Page 109
    ... Amendment to the Fisher-Price Pension Plan Sixth Amendment to the Fisher-Price Pension Plan Seventh Amendment to the Fisher-Price Pension Plan Eighth Amendment to the Fisher-Price Pension Plan The Fisher-Price Section 415 Excess Benefit Plan Mattel, Inc. Personal Investment Plan, October 1, 2001...

  • Page 110
    ... Plan Notice of Grant of Stock Options and Grant Agreement under the 1990 Plan Grant Agreement for a Non-Qualified Stock Option under the 1990 Plan Award Cancellation Agreement under the 1990 Plan Amended and Restated Mattel, Inc. 1996 Stock Option Plan (the "1996 Plan") Amendment to the 1996 Plan...

  • Page 111
    ...the 1999 Plan, as amended Computation of Income per Common and Common Equivalent Share Subsidiaries of the Registrant as of December 31, 2004 Consent of Independent Registered Public Accounting Firm Power of Attorney (on page 102 of Form 10-K) Certification of Principal Executive Officer dated March...

  • Page 112
    ... 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, Mail Stop M1-1516, Mattel, Inc., 333 Continental Blvd., El Segundo, California 90245-5012...

  • Page 113
    ...Title Date /s/ ROBERT A. ECKERT Robert A. Eckert KEVIN M. FARR Kevin M. Farr Chairman of the Board and Chief Executive Officer (principal executive officer) Chief Financial Officer (principal financial officer) Senior Vice President and Corporate Controller (principal accounting officer) Director...

  • Page 114
    Signature Title Date /s/ TULLY M. FRIEDMAN Tully M. Friedman RONALD M. LOEB Ronald M. Loeb ANDREA L. RICH Andrea L. Rich RONALD L. SARGENT Ronald L. Sargent Director March 4, 2005 /s/ Director March 4, 2005 /s/ Director March 4, 2005 /s/ Director March 4, 2005 /s/ CHRISTOPHER A. ...

  • Page 115
    ...463)(d) (54,365)(d) $65,231 53,647 49,118 (a) Decrease in bad debt expense charged to the results of operations in 2003 compared to 2002 is primarily due to charges totaling $33.5 million in 2002 related to the Kmart bankruptcy. (b) Includes writeoffs, recoveries of previous writeoffs, and currency...

  • Page 116
    ... BASIC 2004 For the Year Ended December 31, (a) 2003 2002 2001 (In thousands, except per share amounts) 2000 Income from continuing operations ...Gain (loss) from discontinued operations, net of tax ...Cumulative effect of change in accounting principles, net of tax ...Net income (loss) applicable...

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    ... Dilutive stock options ...Stock subscription and other warrants ...Weighted average number of common and common equivalent shares ...Net Income (Loss) Per Common Share-Diluted: Income from continuing operations ...Gain (loss) from discontinued operations ...Cumulative effect of change in accounting...

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    ...'s internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons...

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    ...'s internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons...

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    ... Vice President, Worldwide Operations Joseph F. Eckroth, Jr. Chief Information Officer Kevin M. Farr Chief Financial Officer Alan Kaye Senior Vice President, Human Resources Douglas E. Kerner Senior Vice President and Corporate Controller Robert Normile Senior Vice President, General Counsel and...

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