Mattel 2013 Annual Report Download - page 11

PART I
Item 1. Business.
Throughout this report “Mattel” refers to Mattel, Inc. and/or one or more of its family of companies. Mattel
designs, manufactures, and markets a broad variety of toy products worldwide which are sold to its customers
and directly to consumers. Mattel’s vision is “creating the future of play.” Mattel’s objectives are to grow its
share in the marketplace, continue to improve its operating margins, and create long-term stockholder value. To
achieve these objectives, management has established the following strategies:
The first strategy is to deliver consistent growth by investing in its core brands, optimizing entertainment
partnerships, building new franchises, and working to expand and leverage its international footprint.
The second strategy is to optimize operating margins through sustaining gross margins within the
low-to-mid 50% range in the near-term and above 50% in the long-term, and delivering on cost savings
initiatives.
The third strategy is to generate significant cash flow and continue its disciplined, opportunistic, and
value-enhancing deployment.
Mattel believes its products are among the most widely recognized toy products in the world. Mattel’s
portfolio of brands and products are grouped in the following categories:
Mattel Girls & Boys Brands—including Barbie®fashion dolls and accessories (“Barbie”), Monster High®,
Disney Classics®, Ever After High®, Little Mommy®, and Polly Pocket®(collectively “Other Girls”),
Hot Wheels®, Matchbox®, and Tyco R/C®vehicles and play sets (collectively “Wheels”), and CARS®,
Disney Planes™, Radica®, Toy Story®, Max Steel®, WWE®Wrestling, Batman®, and games and puzzles
(collectively “Entertainment”).
Fisher-Price Brands—including Fisher-Price®, Little People®, BabyGear™, Laugh & Learn®, and
Imaginext®(collectively “Core Fisher-Price”), Thomas & Friends®, Dora the Explorer®, Mickey Mouse®
Clubhouse, and Disney Jake and the Never Land Pirates®(collectively “Fisher-Price Friends”), and Power
Wheels®.
American Girl Brands—including My American Girl®, the historical collection, and Bitty Baby®. American
Girl Brands products are sold directly to consumers via its catalog, website, and proprietary retail stores. Its
children’s publications are also sold to certain retailers.
Mattel, Inc. was incorporated in California in 1948 and reincorporated in Delaware in 1968. Its executive
offices are located at 333 Continental Blvd., El Segundo, California 90245-5012, telephone number
[phone].
Business Segments
This narrative discussion applies to all segments except where otherwise stated. Mattel’s operating segments
are separately managed business units, consisting of: (i) North America, which consists of the US and Canada,
(ii) International, and (iii) American Girl. The North America and International segments sell products in the
Mattel Girls & Boys Brands and Fisher-Price Brands categories, although some products are developed and
adapted for particular international markets.
For additional information on Mattel’s segment reporting, including revenues and segment income, see Part
II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of
Operations” and Part II, Item 8 “Financial Statements and Supplementary Data—Note 12 to the Consolidated
Financial Statements—Segment Information.” For additional information regarding segment assets and
geographic areas, see Part II, Item 8 “Financial Statements and Supplementary Data—Note 12 to the
Consolidated Financial Statements—Segment Information.”
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