Mattel 2007 Annual Report Download - page 22

Mattel France and Mattel Germany were obligated to pay certain fees to the Depositor in consideration of
the Depositor providing the deposit to SGBN. Through the termination date, fees paid in 2007 by Mattel France
and Mattel Germany to the Depositor were, on average, approximately 0.1% of the aggregate notional amount of
sold receivables outstanding during such period.
In November 2006, the commitment termination date for the European trade receivables facility was
extended until February 28, 2007. However, effective on February 9, 2007, the Depositor, Mattel France and
Mattel Germany terminated the European trade receivable facility with SGBN because the Company determined
the facility was no longer necessary based on projected international cash flows and seasonal financing needs.
Government Regulations and Environmental Quality
Mattel’s toy products sold in the US are subject to the provisions of the Consumer Product Safety Act and
the Federal Hazardous Substances Act, and may also be subject to the requirements of the Flammable Fabrics
Act or the Food, Drug, and Cosmetics Act, and the regulations promulgated pursuant to such statutes. The
Consumer Product Safety Act and the Federal Hazardous Substances Act enable the Consumer Product Safety
Commission (“CPSC”) to exclude from the market consumer products that fail to comply with applicable
product safety regulations or otherwise create a substantial risk of injury, as well as articles that contain excessive
amounts of a banned hazardous substance. The CPSC may also require the recall, repurchase, replacement, 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. Notwithstanding the foregoing, there can be no assurance that all
of Mattel’s products are or will be free from defects or are hazard-free. A product recall could have a material
adverse effect on Mattel’s results of operations and financial condition, depending on the product affected by the
recall and the extent of the recall efforts required. A product recall could also negatively affect Mattel’s
reputation and the sales of other Mattel products. See Item 1A “Risk Factors—Factors That May Affect Future
Results” and Item 8 “Financial Statements and Supplementary Data—Note 4 to the Consolidated Financial
Statements—Product Recalls.”
Mattel’s advertising is subject to the Federal Trade Commission Act, The Children’s Television Act of
1990, the rules and regulations promulgated by the Federal Trade Commission and the Federal Communications
Commission, as well as laws of certain countries that regulate advertising and advertising to children. In addition,
Mattel’s websites that are directed towards children are subject to The Children’s Online Privacy Protection Act
of 1998. Mattel is subject to various other federal, state and local laws and regulations applicable to its business.
Mattel believes that it is in substantial compliance with these laws and regulations.
Mattel’s operations are from time to time the subject of investigations, conferences, discussions, and
negotiations with various federal, state and local environmental agencies with respect to the discharge or cleanup
of hazardous waste and compliance by those operations with environmental laws and regulations. See Item 7
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Environmental” and
Item 8 “Financial Statements and Supplementary Data—Note 10 to the Consolidated Financial Statements—
Commitments and Contingencies.”
Employees
The total number of persons employed by Mattel and its subsidiaries at any one time varies because of the
seasonal nature of its manufacturing operations. At December 31, 2007, Mattel’s total number of employees was
approximately 31,000.
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