Mattel 2007 Annual Report Download - page 32

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Mattel is subject to various laws and government regulations, violation of which could subject it to
sanctions. In addition, changes in such 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 Mattel’s
financial condition and results of operations.
Mattel operates in a highly regulated environment in the US and international markets. US federal, state and
local governmental entities and foreign governments regulate many aspects of Mattel’s business, including its
products and the importation and exportation of its products. These regulations may include accounting
standards, taxation requirements (including changes in applicable income tax rates, new tax laws and revised tax
law interpretations), trade restrictions, regulations regarding financial matters, environmental regulations,
advertising directed toward children, safety and other administrative and regulatory restrictions. While Mattel
takes all the steps it believes are necessary to comply with these laws and regulations, there can be no assurance
that Mattel will be in compliance in the future. Failure to comply could result in monetary liabilities and other
sanctions which could have a negative impact on Mattel’s business, financial condition and results of operations.
In addition, 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 financial condition and
results of operations.
Mattel may engage in acquisitions, mergers or dispositions, which may affect the profit, revenues, profit
margins, debt-to-capital ratio, capital expenditures or other aspects of Mattel’s business. In addition,
Mattel has certain anti-takeover provisions in its by-laws that may make it more difficult for a third party
to acquire Mattel without its consent, which may adversely affect Mattel’s stock price.
Mattel may engage in acquisitions, mergers or dispositions, which may affect the profit, revenues, profit
margins, debt-to-capital ratio, capital expenditures, or other aspects of Mattel’s business. There can be no
assurance that Mattel will be able to identify suitable acquisition targets or merger partners or that, if identified, it
will be able to acquire these targets on acceptable terms or agree to terms with merger partners. There can also be
no assurance that Mattel will be successful in integrating any acquired company into its overall operations, or
that any such acquired company will operate profitably or will not otherwise adversely impact Mattel’s results of
operations. Further, Mattel cannot be certain that key talented individuals at these acquired companies will
continue to work for Mattel after the acquisition or that they will continue to develop popular and profitable
products or services. In addition, Mattel has certain anti-takeover provisions in its bylaws that may make it more
difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel’s stock price.
******************
If any of the risks and uncertainties described in the cautionary factors listed above actually occurs, Mattel’s
business, financial condition and results of operations could be materially and adversely affected. The factors
listed above are not exhaustive. Other sections of this Annual Report on Form 10-K include additional factors
that could materially and adversely impact Mattel’s business, financial condition and results of operations.
Moreover, Mattel operates in a very competitive and rapidly changing environment. New factors emerge from
time to time and it is not possible for management to predict the impact of all of these factors on Mattel’s
business, financial condition or results of operations or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any forward-looking statements. Given these
risks and uncertainties, investors should not rely on forward-looking statements as a prediction of actual results.
Any or all of the forward-looking statements contained in this Annual Report on Form 10-K and any other public
statement made by Mattel or its representatives may turn out to be wrong. Mattel expressly disclaims any
obligation to update or revise any forward-looking statements, whether as a result of new developments or
otherwise.
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