Free Exhibits - District Court of California - California

Case 3:07-cv-05110-WHA

Document 11

Filed 11/05/2007

Page 1 of 4

31181HX3


Case 3:07-cv-05110-WHA

Document 11

Filed 11/05/2007

Page 2 of 4

UNITED STATES
SECURITIES AND EXCHANGE COMlVIISSION

Washington, D.C. 20549

FORM lO-K
(Mark One) ~ ANNUAL

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006

D

or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to Commission File Number 001-05647

(Exact name of registrant as specified in its charter)

MATTEL, INC.

333 Continental Blvd.
EI Segundo, CA 90245-5012

(Address of principal executive offices)


Delaware
(State or other jurisdiction of incorporation or organizationl

95-1567322

(I.R.S. Employer Identification No.)


(310) 252-2000

(Registrant's telephone numherj


Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered

Common Stock, $1.00 par value

New York Stock Exchange. Inc.

Securities registered pursuant to Section 12(g) of the Act:


NONE

Indicate by check mark if the registrant is a wen-known seasoned issuer. as defined in Rule 405 of the Securities Act. Yes ~ No 0 Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or l5(d) olthc Act. Yes 0 No ~ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 1:1 or 15(d) or the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~ No 0 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part m of this Form lO-K or any amendment of this Form JO-K. Q Indicate by check mark whether registrant is a large accelerated filer, accelerated filer or non-accelerated filer. See definition of "accelerated filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act. Accelerated filer 0 Non-accelerated filer 0 Large accelerated filer ~ Indicate by check mark whether registrant is a shell company (as defined in Rule l2b-2 of the Act). Yes 0 No ~ The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant calculated using the market price as of the close of business June 30,2006 was $6,276,702,226. Number of shares outstanding of registrant's common stock, $1.00 par value, as of February 23, 2007: 393,171,940 shares

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Mattei, Inc. 2007 Notice of Annual Meeting of Stockholders and Proxy Statement, to be filed with the Securities and Exchange Commission ("SEC') within 120 days after the close of the registrant's fiscal year (incorporated into Parts II and JIJ).

Case 3:07-cv-05110-WHA

Document 11

Filed 11/05/2007

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MA TTEL, INC. AND SUBSIDIARIES Page

PART I

Item 1. Item lA. Item lB. Item 2. Item 3. Item 4. Business Risk Factors .
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Unresolved Staff Comments Properties Legal Proceedings Submission of Matters to a Vote of Security Holders .

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PART II

Item 5. Item 6. Item 7. Item 7 A. Item 8. Item 9. Item 9A. Item 9B. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities . Selected Financial Data .

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Management's Discussion and Analysis of Financial Condition and Results of Operations ... Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ., . Controls and Procedures Other Information .

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101

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PART III

Item 10. [tern 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance of the Registrant 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 .
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PART IV

Item 15. Exhibits and Financial Statement Schedules
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Signature.. . . . . .

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Case 3:07-cv-05110-WHA

Document 11

Filed 11/05/2007

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PART I
Item 1.

Business.

Martel, Inc. ("Mattei") designs, manufactures, and markets a broad variety of toy products worldwide through sales to its customers and directly to consumers. Matter s vision is to provide "the world's premier toy brands-today and tomorrow." Management has set six key company strategies: (i) improve execution of the existing toy business; (ii) globalize the brands; (iii) extend the brands into new areas; (iv) catch new trends, create new brands and enter new categories; (v) develop people: and (vi) improve productivity, simplify processes and maintain customer service levels. Martel believes its products arc among the most widely recognized toy products in the world. MatteI's portfolio of brands and products are grouped in the following categories:
Mattei Girls & Boys Brands-including Barbie'" fashion dolls and accessories ("Barbie®"), Polly Pockctl", Pixel Chix""Winx Club'" and Disney Classics (collectively "Other Girls Brands"), Hot Wheels®. Maichbox'v and Tyco® RiC vehicles and playsets (collectively "Wheels") and Batman?', CARS"', Superman?', Radica:@products, and games and puzzles (collectively "Entertainment"), Fisher-Price Brands-including Fisher-Prices', Little People's', Baby Gear" and View-Master'? (collcctively "Core Fisher-Price®"), Sesame Street?', Dora the Explorer!", Go-Diego-Got", Winnie the Pooh, Intcrac'TV'" and See 'N Say'''! (collectively "Fisher-Price® Friends") and Power Wheels's'. American Girl Brands-including Just Like You". the historical collection and Bitty Baby®. American Girl Brands products are sold directly to consumers and its children's publications are also sold to certain retailers.

Mattei was incorporated in Califomia in 1948 and reincorporated in Delaware in 1968. Its executive offices are located at 333 Continental Blvd., El Segundo. California 90245-5012, telephone number (310) 252-2000. Business Segments "Mattcl" refers to Martel, Inc. and its subsidiaries as a whole. unless the context requires otherwise. This narrative discussion applies to all segments except where otherwise stated. MatteI's reportable segments are separately managed business units and are divided on a geographic basis between domestic and international. The Domestic segment is further divided into Martel Girls & Boys Brands US, Fisher-Price Brands US and American Girl Brands. On October 10. 2005, Mattel announced the consolidation of its domestic Martel Girls & Boys Brands and Fisher-Price Brands divisions into one division. The creation of the "Mattel Brands" division, which resulted in the consolidation of some management and support functions, preserves the natural marketing and design groups that are empowered to create and market toys based on gender and age groups and is expected to more effectively and efficiently leverage MatteI's scale. These changes are consistent with Mattel's ongoing goals to enhance innovation and improve execution. In connection with this consolidation, MatteI executed an initiative in 2006 to streamline its workforce, primarily in EI Segundo, Califomia. The consolidation of these divisions did not change Mattels operating segments. Management believes that the business environment for MatteI for 2007 will be similar to that of 2006. Mattei expects to continue facing challenges both domestically and intemationally as retailers continue to tightly manage inventory. Additionally, Mattei has experienced continued cost pressures in the areas of product costs, including oil-based resin and zinc, and employee-related costs. Management believes that Mattel will continue to encounter a challenging retail environment along with cost pressures and the possibility of sales declines in the Barbiev brand. For additional information on Mattei's operating segment reporting, including revenues, segment income and assets, see Item 7 "Managernents Discussion and Analysis of Financial Condition and Results of

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