Mattel 2015 Annual Report Download

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Table of contents

  • Page 1

  • Page 2

  • Page 3
    ... developed new partnerships with 9Story Media Group, Amazon Studios, DHX Media Ltd., Netï¬,ix and YouTube. Improved retail execution was a major goal in 2015, and Mattel's commercial organization helped drive outstanding progress in key areas like retail customer support, merchandising and pricing...

  • Page 4
    Mattel, Inc. Form 10-K 2015

  • Page 5
    ... was $8,698,634,000 based upon the closing market price as of the close of business June 30, 2015, the last business day of the registrant's most recently completed second fiscal quarter. Number of shares outstanding of registrant's common stock, $1.00 par value, as of February 12, 2016: 340,006,335...

  • Page 6
    ... and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services PART IV Exhibits and Financial Statement...

  • Page 7
    ... quarter of 2014 with the acquisition of MEGA Brands Inc. ("MEGA Brands"). 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® and...

  • Page 8
    ...accessories. Other Girls includes Monster High, Ever After High, Little Mommy, and Polly Pocket. Wheels includes Hot Wheels and Matchbox vehicles and play sets. Entertainment includes CARS, Disney Planes, BOOMco, Toy Story, Teenage Mutant Ninja Turtles™, Halo®, and WWE Wrestling, as well as games...

  • Page 9
    ...Financial Statements-Segment Information." American Girl Segment The American Girl segment is a direct marketer, children's publisher, and retailer best known for its BeForever flagship line of historical dolls, books, and accessories, as well as the Truly Me, Girl of the Year, and Bitty Baby brands...

  • Page 10
    ...-related toys. The North America segment competes with several large toy companies, including Bandai, Hasbro, Jakks Pacific, Leap Frog, Lego, MGA Entertainment, Spin Master, Tomy, and VTech, many smaller toy companies, and manufacturers of video games and consumer electronics. The International...

  • Page 11
    ...of net sales), respectively, for advertising and promotion. Sales Mattel's products are sold throughout the world. Products within the North America segment are sold directly to retailers, including discount and free-standing toy stores, chain stores, department stores, other retail outlets, and, to...

  • Page 12
    ...442 million. See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations- Commitments" and Part II, Item 8 "Financial Statements and Supplementary Data-Note 11 to the Consolidated Financial Statements-Commitments and Contingencies." Backlog Mattel ships...

  • Page 13
    ...information regarding issuers that file electronically with the SEC at http://www.sec.gov. Mattel's Internet website address is http://corporate.mattel.com. Mattel makes available on its Internet website, free of charge, its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports...

  • Page 14
    ...-related toys. Mattel competes domestically and internationally with a wide range of large and small manufacturers, marketers and sellers of toys, video games, consumer electronics such as tablets and mobile devices, and other play products, as well as retailers, which means that Mattel's market...

  • Page 15
    ... market its products or if media or other advertising or promotional costs increase, these factors could have an adverse effect on Mattel's business, financial condition, and results of operations. Mattel's business is highly seasonal and its operating results depend, in large part, on sales...

  • Page 16
    ... effect on Mattel's business and results of operations. If global economic conditions deteriorate, Mattel's business and financial results could be adversely affected. Mattel designs, manufactures, and markets a wide variety of toy products worldwide through sales to retailer customers and directly...

  • Page 17
    ... intellectual property and information, including its trademarks, trade names, copyrights, patents, trade secrets, and rights under intellectual property license agreements and other agreements with third parties, in the US and around the world, as well as its customer, employee, and consumer data...

  • Page 18
    ... adverse effect on Mattel's business, financial condition, and results of operations. Mattel has acquired certain intellectual properties from third parties. Declines in the profitability of these acquired brands may impact Mattel's ability to recover the carrying value of the related assets...

  • Page 19
    ... of China, where many of Mattel's manufacturing facilities and third-party manufacturers are located. The design, development and manufacture of Mattel's products could suffer if a significant number of Mattel's employees or the employees of its third-party manufacturers or their suppliers contract...

  • Page 20
    ... business. Mattel relies extensively on information technology systems across its operations, including for management of its supply chain, sale and delivery of its products, reporting its results of operations, collection and storage of consumer data, personal data of customers, employees and other...

  • Page 21
    ... fair value of its reporting units, which could result in a write-down of its goodwill, negatively impacting its results of operations. Mattel's stock price has been volatile over the past several years and could decline in the future, resulting in losses for our investors. All the factors discussed...

  • Page 22
    ... and distribution facilities in California and Texas, all of which are used by the North America segment. Mattel has leased retail and related office space in Chicago, Illinois, Los Angeles, California, and New York, New York for its American Girl Place stores, Alpharetta, Georgia, Bloomington...

  • Page 23
    ... regarding the markets in which Mattel's common stock, par value $1.00 per share, is traded, see the cover page hereof. For information regarding the high and low closing prices of Mattel's common stock for the last two calendar years, see Item 8 "Financial Statements and Supplementary Data-Note 14...

  • Page 24
    ... of Mattel common stock with that of the S&P 500 Index and the S&P 500 Consumer Discretionary Index. The Cumulative Total Return listed below assumes an initial investment of $100 on December 31, 2010 and reinvestment of dividends. December 31, Cumulative Total Return 2010 2011 2012 2013 2014 2015...

  • Page 25
    Item 6. Selected Financial Data. For the Year Ended December 31, 2015 2014 2013 2012 2011 (In thousands, except per share and percentage information) Operating Results: Net sales Gross profit % of net sales Operating income (a) % of net sales Income before income taxes Provision for income taxes ...

  • Page 26
    ... the consolidated financial statements and the related notes. See Item 8 "Financial Statements and Supplementary Data." Overview 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...

  • Page 27
    ...is currently on track to deliver at the high-end of the Funding Our Future two-year savings target of $250 million to $300 million, helping to maintain gross margins despite challenges to revenues. Results of Operations 2015 Compared to 2014 Consolidated Results Net sales for 2015 were $5.70 billion...

  • Page 28
    ...2014 to 49.2% in 2015. The decrease in adjusted gross margin was due to unfavorable foreign exchange, higher product-related costs, unfavorable product mix, and higher royalty expenses, partially offset by price increases and Funding Our Future savings. Advertising and Promotion Expenses Advertising...

  • Page 29
    ...gross sales by brand for the North America segment for 2015 and 2014: For the Year 2015 Currency Exchange Rate Impact (In millions, except percentage information) 2014 % Change as Reported % Change in Constant Currency Mattel Girls & Boys Brands: Barbie Other Girls Wheels Entertainment Fisher-Price...

  • Page 30
    ...gross sales by brand for the International segment for 2015 and 2014: For the Year 2015 Currency Exchange Rate Impact (In millions, except percentage information) 2014 % Change as Reported % Change in Constant Currency Mattel Girls & Boys Brands: Barbie Other Girls Wheels Entertainment Fisher-Price...

  • Page 31
    ... product-related costs, partially offset by Funding Our Future savings. American Girl segment income decreased 38% to $69.9 million in 2015, as compared to $113.6 million in 2014, primarily due to lower gross profit. 2014 Compared to 2013 Consolidated Results Net sales for 2014 were $6.02 billion...

  • Page 32
    ... MEGA Brands acquisition, including the impact of the inventory fair value markup above historical cost, efforts to improve consumer takeaway, the impact of lower sales volume on Mattel's fixed cost manufacturing and distribution base, and unfavorable product mix, partially offset by price increases...

  • Page 33
    ... of Mattel's gross sales by brand for the North America segment for 2014 and 2013: For the Year 2014 Currency Exchange 2013 Rate Impact (In millions, except percentage information) % Change as Reported % Change in Constant Currency Mattel Girls & Boys Brands: Barbie Other Girls Wheels Entertainment...

  • Page 34
    ... MEGA Brands acquisition, including the impact of the inventory fair value markup above historical cost, efforts to improve consumer takeaway, the impact of lower sales volume on Mattel's fixed cost manufacturing and distribution base, and unfavorable product mix, partially offset by price increases...

  • Page 35
    ...of the MEGA Brands acquisition, including the impact of the inventory fair value markup above historical cost, the impact of lower sales volume on Mattel's fixed cost manufacturing and distribution base, unfavorable product mix, and higher input costs offset by price increases. International segment...

  • Page 36
    ... as dividends, share repurchases, and debt service. Positive cash flows generated annually by its domestic operations, the Credit Facility, and access to both long-term and short-term public and private debt markets at highly competitive interest rates are available to fund domestic operations and...

  • Page 37
    ... to these plans. Capital and Investment Framework To guide future capital deployment decisions, with a goal of maximizing stockholder value, Mattel's Board of Directors established the following capital and investment framework To maintain approximately $800 million to $1 billion in year-end cash...

  • Page 38
    ... due to a shift in North America from direct import sales to trade sales, which requires longer lead times. Accounts payable and accrued liabilities increased $239.8 million to $1.31 billion at December 31, 2015, as compared to $1.07 billion at December 31, 2014. The increase was primarily due...

  • Page 39
    ... of operations or financial position during 2015, 2014, or 2013. Mattel receives some protection from the impact of inflation from high turnover of inventories and its ability, under certain circumstances and at certain times, to pass on higher prices to its customers. Employee Savings Plan Mattel...

  • Page 40
    ... the world. Products within the North America segment are sold directly to retailers, including discount and free-standing toy stores, chain stores, department stores, other retail outlets and, to a limited extent, wholesalers, and directly to consumers. Products within the International segment are...

  • Page 41
    ...2014 (In millions, except percentage information) 2013 Allowance for doubtful accounts As a percentage of total accounts receivable $ 24.4 $ 1.6% 26.3 $ 1.7% 20.4 1.6% Mattel's allowance for doubtful accounts is based on management's assessment of the business environment, customers' financial...

  • Page 42
    ... test, Mattel utilizes the fair value based upon the discounted cash flows that the business can be expected to generate in the future (the "Income Approach"). The Income Approach valuation method requires Mattel to make projections of revenue, operating costs, and working capital investment for...

  • Page 43
    ... of resources to support the Polly Pocket brand in specific markets, resulting in a reduction of the forecasted future cash flows of the brand. As a result of the change, Mattel tested the asset for impairment. The Polly Pocket trade name, which previously had a carrying value of approximately...

  • Page 44
    ...a decrease in benefit plan expense during 2016 of $0.2 million. The rate of future compensation increases used by Mattel for the benefit obligation and the net periodic pension cost of its domestic defined benefit pension plans averaged 3.8% for 2015, 2014, and 2013, based on plan demographics. This...

  • Page 45
    ... stock units ("Performance RSUs"), was $41.5 million, $39.5 million, and $38.2 million in 2015, 2014, and 2013, respectively, and is also included within other selling and administrative expenses. As of December 31, 2015, total unrecognized compensation cost related to unvested share-based payments...

  • Page 46
    .... The non-GAAP financial measures included in this Annual Report on Form 10-K include gross sales, adjusted gross margin and adjusted gross profit, adjusted other selling and administrative expenses, adjusted operating income, adjusted earnings per share, and constant currency. Mattel uses these non...

  • Page 47
    Adjusted Gross Margin and Adjusted Gross Profit Adjusted gross margin represents Mattel's reported gross profit, adjusted to exclude the impact of inventory fair value markup above cost associated with the acquisition of a business, as a percentage of net sales. Adjusted gross margin is presented to...

  • Page 48
    ... Mattel's core earnings. A reconciliation between earnings per share and adjusted earnings per share is as follows: Year Ended December 31, 2015 2014 Earnings Per Share Adjustments MEGA Brands Inventory Fair Value Markup Above Cost MEGA Brands Integration & Acquisition Costs MEGA Brands Intangible...

  • Page 49
    ... consolidated statement of operations in the period in which the inventory is sold to customers. In addition, Mattel manages its exposure to currency exchange rate fluctuations through the selection of currencies used for international borrowings. Mattel does not trade in financial instruments for...

  • Page 50
    ... million in 2015, increased by approximately $32 million in 2014, and decreased by approximately $9 million in 2013. Venezuelan Operations Since January 1, 2010, Mattel has accounted for Venezuela as a highly inflationary economy as the three-year cumulative inflation rate for Venezuela exceeded 100...

  • Page 51
    ...pre-tax charge to its consolidated statement of operations of up to $95 million. Greek Operations During July 2015, Greece defaulted on its debt to the International Monetary Fund, which has led to renewed concerns about its economic and financial stability and the possibility that it will no longer...

  • Page 52
    ... Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that Mattel's internal control over financial reporting was effective as of December 31, 2015. The effectiveness of the Company's internal control...

  • Page 53
    ...the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal...

  • Page 54
    MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2015 December 31, 2014 (In thousands, except share data) ASSETS Current Assets Cash and equivalents Accounts receivable, net of allowances of $24.4 million and $26.3 million in 2015 and 2014, respectively Inventories Prepaid ...

  • Page 55
    MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Year 2015 2014 (In thousands, except per share amounts) 2013 Net Sales Cost of sales Gross Profit Advertising and promotion expenses Other selling and administrative expenses Operating Income Interest expense Interest (...

  • Page 56
    MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year 2015 2014 (In thousands) 2013 Net Income Other Comprehensive (Loss) Income, Net of Tax: Currency translation adjustments Defined benefit pension plan... notes are an integral part of these statements. 52

  • Page 57
    ... STATEMENTS OF CASH FLOWS For the Year 2015 2014 (In thousands) 2013 Cash Flows From Operating Activities: Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation Amortization Asset impairment Deferred income taxes Share-based compensation...

  • Page 58
    ...of treasury stock for stock option exercises Issuance of treasury stock for restricted stock units vesting Deferred compensation Share-based compensation Tax benefits from share-based payment arrangements Dividend equivalents for restricted stock units Dividends Balance, December 31, 2013 Net income...

  • Page 59
    ... at cost, which approximates market value. Accounts Receivable and Allowance for Doubtful Accounts Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial...

  • Page 60
    ..., Mattel does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. Revenue Recognition and Sales Adjustments Revenue is recognized upon shipment or upon receipt of products by the customer...

  • Page 61
    ... gross revenue in the period the related revenue is recognized. Advertising and Promotion Costs Costs of media advertising are expensed the first time the advertising takes place, except for direct-response advertising, which is capitalized and amortized over its expected period of future benefits...

  • Page 62
    ...15, 2017. Early application is permitted after December 15, 2016. Mattel is currently evaluating the impact of the adoption of ASU 2014-09 and ASU 2015-14 on its operating results and financial position. In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of...

  • Page 63
    ...costs of completion, disposal, and transportation. ASU 2015-11 will be effective for interim and annual reporting periods beginning after December 15, 2016. Early application is permitted. Mattel is currently evaluating the impact of the adoption of ASU 2015-11 on its operating results and financial...

  • Page 64
    ... with the acquisition of MEGA Brands during 2014, Mattel recognized $95.0 million of amortizable identifiable intangible assets, primarily related to trade names and existing product lines. During the second quarter of 2013, Mattel changed its brand strategy for Polly Pocket®, which includes...

  • Page 65
    ... approximately $14 million, which was reflected within other selling and administrative expenses in the consolidated statement of operations for the North America and International operating segments during 2013. In conjunction with the Polly Pocket trade name impairment test, Mattel reassessed the...

  • Page 66
    ...) 455,712 $ As of December 31, 2015, Mattel had federal and foreign loss carryforwards totaling $640.6 million and tax credit carryforwards of $50.3 million, which excludes carryforwards that do not meet the threshold for recognition in the financial statements. Utilization of these loss and tax...

  • Page 67
    ... the first financial reporting period in which information becomes available indicating that such benefits will morelikely-than-not be realized. Mattel records unrecognized tax benefits for US federal, state, local, and foreign tax positions related primarily to transfer pricing, tax credits claimed...

  • Page 68
    ... exercise of nonqualified stock options and vesting of other stock compensation awards resulted in a (decrease)/increase to additional paid-in capital totaling $(2.8) million, $21.2 million, and $50.4 million in 2015, 2014, and 2013, respectively. Note 4-Employee Benefit Plans Mattel and certain of...

  • Page 69
    ... 31 is as follows: Defined Benefit Pension Plans 2015 2014 2013 Postretirement Benefit Plans 2015 2014 2013 (In thousands) Net periodic benefit cost: Service cost Interest cost Expected return on plan assets Amortization of prior service credit Recognized actuarial loss Settlement loss Curtailment...

  • Page 70
    ...: For the Year 2015 2014 2013 Defined benefit pension plans: Discount rate Weighted average rate of future compensation increases Long-term rate of return on plan assets Postretirement benefit plans: Discount rate Annual increase in Medicare Part B premium Health care cost trend rate: Pre...

  • Page 71
    ... year Change in Plan Assets: Plan assets at fair value, beginning of year Actual return on plan assets Employer contributions Impact of currency exchange rate changes Benefits paid Plan assets at fair value, end of year Net Amount Recognized in Consolidated Balance Sheets: Funded status, end of year...

  • Page 72
    ...pension and postretirement benefit plans are as follows: December 31, 2015 2014 Defined benefit pension plans: Discount rate Weighted average rate of future compensation increases Postretirement benefit plans: Discount rate Annual increase in Medicare Part B premium Health care cost trend rate: Pre...

  • Page 73
    ...market changes in Mattel's stock price. Furthermore, the Plan limits the percentage of the employee's total account balance that may be allocated to the Mattel Stock Fund to 25%. Employees may generally reallocate their account balances on a daily basis. However, pursuant to Mattel's insider trading...

  • Page 74
    ...based compensation expense of $1.4 million for the 2011-2013 market-related component. For the January 1, 2014-December 31, 2016 LTIP performance cycle, Mattel also granted 2014-2016 Performance RSUs under the Mattel, Inc. 2010 Equity and Long-Term Compensation Plan to officers and certain employees...

  • Page 75
    ... 2014-2016 market-related component is expected to offset any shares earned for the 2014-2016 performance-related component. The fair values of the performance-related components were based on the closing stock prices of Mattel's common stock on each of the grant dates. The fair values of the market...

  • Page 76
    ... Interest on the 2014 Senior Notes is payable semi-annually on May 6 and November 6 of each year, beginning November 6, 2014. Mattel may redeem all or part of the 2014 Senior Notes at any time or from time to time at its option, at a redemption price equal to the greater of (i) 100% of the principal...

  • Page 77
    ... which none is currently outstanding. Common Stock Repurchase Program During 2015, Mattel did not repurchase any shares of its common stock. During 2014, Mattel repurchased 4.9 million shares of its common stock at a cost of $177.2 million. During 2013, Mattel repurchased 11.0 million shares of its...

  • Page 78
    ...balances for each component of other comprehensive income, including current period other comprehensive income and reclassifications out of accumulated other comprehensive income (loss): For the Year Ended December 31, 2015 Derivative Instruments Defined Benefit Pension Plans...December 31, 2013 $ (2,...

  • Page 79
    ... employment or service with Mattel. Nonqualified stock options are granted at not less than 100% of the fair market value of Mattel's common stock on the date of grant, expire no later than 10 years from the date of grant, and vest on a schedule determined by the Compensation Committee of the Board...

  • Page 80
    ... 2010 Plan. As of December 31, 2015, total unrecognized compensation cost related to unvested share-based payments totaled $85.4 million and is expected to be recognized over a weighted-average period of 2.0 years. Stock Options Mattel recognized compensation expense of $15.2 million, $12.5 million...

  • Page 81
    ...benefits related to RSU compensation expense recognized in the consolidated statements of operations during 2015, 2014, and 2013 totaled $11.0 million, $10.6 million, and $10.6 million, respectively. The following is a summary of RSU information and weighted average grant date fair values for Mattel...

  • Page 82
    ... accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. As of December 31, 2015 and 2014, Mattel held foreign currency forward exchange contracts with notional amounts of $930.8 million and $1.19 billion...

  • Page 83
    ...$ 39,931 (883) $ (13,103) (4,897) Cost of sales The net gains (losses) of $52.6 million, $(0.9) million, and $(4.9) million reclassified from accumulated other comprehensive loss to the consolidated statements of operations during 2015, 2014, and 2013, respectively, are offset by the changes in...

  • Page 84
    ... statements of operations during 2015, 2014, and 2013, respectively, are offset by foreign currency transaction gains and losses on the related hedged balances. Note 10-Fair Value Measurements The following table presents information about Mattel's assets and liabilities measured and reported...

  • Page 85
    ...may exceed its fair value. During the second quarter of 2013, Mattel changed its brand strategy for Polly Pocket, which includes a more focused allocation of resources to support the Polly Pocket brand in specific markets, resulting in a reduction of the forecasted future cash flows of the brand. As...

  • Page 86
    ... $0.9 million in 2015, 2014, and 2013, respectively. Commitments In the normal course of business, Mattel enters into contractual arrangements to obtain and protect Mattel's right to create and market certain products and for future purchases of goods and services to ensure availability and timely...

  • Page 87
    ... liabilities in the consolidated balance sheets. Loss reserves are accrued based on Mattel's estimate of the aggregate liability for claims incurred. Litigation Litigation Related to Carter Bryant and MGA Entertainment, Inc. In April 2004, Mattel filed a lawsuit in Los Angeles County Superior Court...

  • Page 88
    ... Bratz works found by the jury to have been created by Bryant during his Mattel employment were Mattel's property and that hundreds of Bratz female fashion dolls infringe Mattel's copyrights. The Court also upheld the jury's award of damages in the amount of $100 million and ordered an accounting of...

  • Page 89
    ... the award of $170 million in damages for alleged trade secret misappropriation and approximately $140 million in attorney's fees and costs. On January 24, 2013, the Ninth Circuit Court of Appeals issued a ruling on Mattel's appeal. In that ruling, the Court found that MGA's claim for trade secrets...

  • Page 90
    ... agreement between the parties relating to the supply and sale of toys in Brazil. Yellowstone's complaint sought alleged loss of profits of approximately $1 million, plus an unspecified amount of damages consisting of: (i) compensation for all investments made by Yellowstone to develop Mattel...

  • Page 91
    ...and accessories ("Barbie"), Monster High®, Disney Classics®, Ever After High®, Little Mommy®, and Polly Pocket (collectively "Other Girls"), Hot Wheels® and Matchbox® vehicles and play sets (collectively "Wheels"), and CARS®, Disney Planes™, BOOMco®, Radica®, Toy Story®, Max Steel®, WWE...

  • Page 92
    ... related to incentive compensation, share-based payments, and corporate headquarters functions managed on a worldwide basis, and the impact of changes in foreign currency rates on intercompany transactions. For the Year 2015 2014 (In thousands) 2013 Revenues by Segment North America International...

  • Page 93
    ... below presents worldwide revenues by brand category: For the Year 2015 2014 (In thousands) 2013 Worldwide Revenues by Brand Category Mattel Girls & Boys Brands Fisher-Price Brands American Girl Brands Construction and Arts & Crafts Brands Other Gross sales Sales adjustments Net sales $ 3,464,195...

  • Page 94
    ... largest customers accounted for 37%, 35%, and 36% of worldwide consolidated net sales for 2015, 2014, and 2013, respectively, as follows: For the Year 2015 2014 (In billions) 2013 Wal-Mart Toys "R" Us Target $ 1.0 0.6 0.5 $ 1.1 0.6 0.5 $ 1.2 0.7 0.5 The North America segment sells products...

  • Page 95
    Note 13-Supplemental Financial Information December 31, 2015 (In thousands) 2014 Inventories include the following: Raw materials and work in process Finished goods Property, plant, and equipment, net includes the following: Land Buildings Machinery and equipment Software Tools, dies, and molds ...

  • Page 96
    For the Year 2015 2014 (In thousands) 2013 Currency transaction (losses) gains included in: Operating income $ Other non-operating income (expense), net Net transaction (losses) gains $ Other selling and administrative expenses include the following: Design and development $ Identifiable intangible...

  • Page 97
    ...common share-diluted Weighted average number of common and potential common shares Dividends declared per common share Common stock market price: High Low Year Ended December 31, 2014 Net sales Gross profit Advertising and promotion expenses Other selling and administrative expenses Operating income...

  • Page 98
    ... and create opportunities to bring new technologyenabled products to market. These acquisitions are immaterial, individually and in the aggregate, to Mattel. On February 1, 2016, Mattel announced that its Board of Directors declared a first quarter dividend of $0.38 per common share. The dividend is...

  • Page 99
    ... website or in a Current Report on Form 8-K. Mattel has posted the Board of Directors' corporate governance guidelines and the charters of its Audit, Compensation and Governance and Social Responsibility Committees of the Board of Directors on its corporate website at http://corporate.mattel.com...

  • Page 100
    ...Supplementary Data." Page Management's Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2015 and 2014 Consolidated Statements of Operations for the Years Ended December 31, 2015, 2014, and 2013...

  • Page 101
    ... November 21, 2011, regarding Mr. Stockton's promotion to Chief Executive Officer Letter Agreement between Mattel, Inc. and Peter D. Gibbons, dated March 28, 2013, regarding an offer of employment for the position of EVP, Global Operations Letter Agreement among Mattel, Inc., MEGA Brands Inc. and...

  • Page 102
    ... to the PIP Amendment Four and Merger Agreement for the PIP and the MEGA Brands America, Inc. 401(k) Savings Plan Amendment Five to the PIP Mattel, Inc. 2005 Equity Compensation Plan (the "2005 Plan") Amendment No. 1 to the 2005 Plan 10-Q 001-05647 10.1 October 27, 2015 DEF 14A 10-Q S-8 10-Q 10...

  • Page 103
    ...the 2010 Plan Form of Grant Agreement for Long-Term Incentive Program Performance-Based Restricted Stock Units for Senior Executives under the 2010 Plan for Certain Executive Officers with Employment Agreements and Certain Executive Officers Participating in the Mattel, Inc. Executive Severance Plan...

  • Page 104
    ...Grant Agreement for NQSOs to Employees under the Amended 2010 Plan Computation of Earnings to Fixed Charges Subsidiaries of the Registrant as of December 31, 2015 Consent of Independent Registered Public Accounting Firm Power of Attorney (on page 103 of Form 10K) Certification of Principal Executive...

  • Page 105
    ... of this Annual Report on Form 10-K (including Exhibit 24.0) and Exhibits 12.0, 21.0, 23.0, 31.0, 31.1, and 32.0 are available to stockholders of Mattel without charge. Written requests should be sent to: Secretary, Mail Stop M1-1516, Mattel, Inc., 333 Continental Blvd., El Segundo, California 90245...

  • Page 106
    ... of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MATTEL, INC. Registrant By: KEVIN M. FARR Kevin M. Farr Chief Financial Officer /s/ Date: February 25, 2016 102

  • Page 107
    ... of the Board and Chief Executive Officer (principal executive officer) Chief Financial Officer (principal financial officer) Senior Vice President and Corporate Controller (principal accounting officer) Director Director Director Director Director Director Director February 25, 2016 February 25...

  • Page 108
    ... to Operations Net Deductions and Other (In thousands) Balance at End of Year Allowance for Doubtful Accounts: Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Allowance for Inventory Obsolescence: Year ended December 31, 2015 Year ended December 31, 2014 Year...

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    ...MATTEL, INC. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES For the Year (Unaudited; in thousands, except ratios) 2015 2014 2013 2012 2011 Earnings Available for Fixed Charges: Income from continuing operations... factor, which is approximately one-third of total rental expense.

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    ... or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 25, 2016 By: /s/ CHRISTOPHER A. SINCLAIR Christopher A. Sinclair Chairman and Chief Executive Officer (principal executive officer)

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    ... and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 25, 2016 By: /s/ KEVIN M. FARR Kevin M. Farr Chief Financial Officer...

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    BOARD OF DIRECTORS EXECUTIVE OFFICERS Mattel, Inc. 'LUHFWRUV$QG2I¿FHUV Christopher A. Sinclair Chairman of the Board and &KLHI([HFXWLYH2I¿FHU, 0DWWHO,QF Christopher A. Sinclair Chairman of the Board...KDLU Member, Compensation Committee 0LFKDHO-'RODQ&KDLU Responsibility Committee  ...

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    CORPORATE OFFICE MEDIA RELATIONS TRADEMARK LEGENDS 333 Continental Boulevard (O6HJXQGR 310-252-2000 For more information, please YLVLW0DWWHO¶VFRUSRUDWH:HEVLWH KWWSFRUSRUDWHPDWWHOFRP TRANSFER AGENT AND REGISTRAR Financial media should contact: Stephanie Cota, Senior Vice President, ...

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