Mattel 2013 Annual Report Download - page 36

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marketing campaigns for its existing key brands. Mattel will focus on optimizing its marketing and promotional
spend across its brands, customers, and regions to take advantage of its scale across its entire business. Mattel
also seeks to leverage the strength of its brands, countries, and customers, which include growing its girls
portfolio, continuing to invest in emerging and developing markets, and improving execution in both its e-
commerce and brick and mortar channels.
Results of Operations
2013 Compared to 2012
Consolidated Results
Net sales for 2013 were $6.48 billion, a 1% increase, as compared to $6.42 billion in 2012, with an
unfavorable impact from changes in currency exchange rates of 1 percentage point. Net income for 2013 was
$903.9 million, or $2.58 per diluted share, as compared to net income of $776.5 million, or $2.22 per diluted
share, in 2012. As compared to 2012, net income for 2013 was positively impacted by lower other selling and
administrative expenses due to a 2012 litigation charge of $137.8 million, arising out of the litigation between
Mattel and MGA Entertainment, Inc. (the “Litigation Charge”), and higher gross margins. In 2012, the Litigation
Charge reduced net income by $87.1 million, or $0.25 per share.
The following table provides a summary of Mattel’s consolidated results for 2013 and 2012 (in millions,
except percentage and basis point information):
For the Year Year/Year
Change2013 2012
Amount
% of Net
Sales Amount
% of Net
Sales %
Basis Points
of Net Sales
Net sales .................................. $6,484.9 100.0% $6,420.9 100.0% 1%
Gross profit ............................... $3,478.9 53.6% $3,409.2 53.1% 2% 50
Advertising and promotion expenses ............ 750.2 11.6 717.8 11.2 5% 40
Other selling and administrative expenses ........ 1,560.6 24.1 1,670.4 26.0 –7% (190)
Operating income ........................... 1,168.1 18.0 1,021.0 15.9 14% 210
Interest expense ............................ 78.5 1.2 88.8 1.4 –12% (20)
Interest (income) ........................... (5.6) –0.1 (6.8) –0.1 –19% —
Other non-operating (income), net .............. (3.9) (6.0)
Income before income taxes .................. $1,099.1 16.9% $ 945.0 14.7% 16% 220
Sales
Net sales for 2013 were $6.48 billion, a 1% increase, as compared to $6.42 billion in 2012, with an
unfavorable impact from changes in currency exchange rates of 1 percentage point.
28