Mattel 2011 Annual Report Download - page 43

Download and view the complete annual report

Please find page 43 of the 2011 Mattel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

2011, as compared to a 12% increase in net sales, primarily due to higher product costs and higher royalty
expenses as a result of increased sales of products tied to licensed properties. Gross margins decreased primarily
due to higher product costs, higher royalty expenses, and unfavorable changes in foreign currency exchange
rates, partially offset by price increases.
International segment income increased 17% to $619.3 million in 2011 from $531.0 million in 2010, driven
primarily by higher net sales, partially offset by lower gross margins.
2010 Compared to 2009
Consolidated Results
Net sales for 2010 were $5.86 billion, an 8% increase, as compared to $5.43 billion in 2009, with
unfavorable changes in currency exchange rates of 2 percentage points. Net income for 2010 was $684.9 million,
or $1.86 per diluted share, as compared to net income of $528.7 million, or $1.45 per diluted share, in 2009. As
compared to 2009, net income for 2010 was positively impacted by higher net sales, higher gross profit, and a
lower effective tax rate, partially offset by higher advertising and promotion expenses, higher other selling and
administrative expenses, and unfavorable changes in foreign exchange rates.
Gross profit as a percentage of net sales increased to 50.5% in 2010 from 50.0% in 2009. The increase in
gross profit as a percentage of net sales was primarily due to effective pricing and net cost savings related to the
Global Cost Leadership program, partially offset by higher royalty expense as a result of increased sales of
products tied to licensed properties.
The following table provides a summary of Mattel’s consolidated results for 2010 and 2009 (in millions,
except percentage and basis point information):
For the Year
Year/Year Change2010 2009
Amount
% of Net
Sales Amount
% of Net
Sales %
Basis Points
of Net Sales
Net sales .................................. $5,856.2 100.0% $5,430.8 100.0% 8%
Gross profit ............................... $2,955.0 50.5% $2,714.7 50.0% 9% 50
Advertising and promotion expenses ............ 647.3 11.1 609.8 11.2 6% (10)
Other selling and administrative expenses ........ 1,405.8 24.0 1,373.7 25.3 2% (130)
Operating income ........................... 901.9 15.4 731.2 13.5 23% 190
Interest expense ............................ 64.8 1.1 71.8 1.3 –10% (20)
Interest (income) ........................... (8.4) –0.1 (8.1) –0.1 4% –
Other non-operating (income) expense, net ....... (1.3) 7.5
Income before income taxes .................. $ 846.8 14.5% $ 660.0 12.2% 28% 230
Sales
Net sales for 2010 were $5.86 billion, an 8% increase, as compared to $5.43 billion in 2009, with
unfavorable changes in currency exchange rates of 2 percentage points. Gross sales within the US increased 9%
in 2010, and accounted for 54% of consolidated gross sales in 2010 and 2009. Gross sales in international
markets increased 6% in 2010, with unfavorable changes in currency exchange rates of 4 percentage points.
Worldwide gross sales of Mattel Girls & Boys Brands increased 11% to $3.66 billion in 2010, with
unfavorable changes in currency exchange rates of 3 percentage points. Domestic gross sales of Mattel Girls &
Boys Brands increased 16% and international gross sales increased 8%, with unfavorable changes in currency
exchange rates of 4 percentage points. Worldwide gross sales of Barbie®increased 7%, with unfavorable
changes in currency exchange rates of 2 percentage points. Domestic gross sales of Barbie®increased 14% and
31