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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] for the fiscal year ended
December 31, 1994.
[_] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from _________ to _________.
Commission File Number 001-05647
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MATTEL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 95-1567322
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
333 Continental Boulevard, El Segundo, California 90245-5012
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number) (310) 252-2000
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common stock, $1 par value (and New York Stock Exchange
the associated Preference Pacific Stock Exchange
Share Purchase Rights)
6-7/8% Senior Notes Due 1997 New York Stock Exchange
6-3/4% Senior Notes Due 2000 (None)
Securities registered pursuant to Section 12(g) of the Act:
(None)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of 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 [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [_]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of the close of business on March 17, 1995 was $5,034,861,253.
Number of shares outstanding of registrant's common stock as of March 17, 1995:
Common Stock - $1 par value -- 221,076,302 shares
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Mattel, Inc. Annual Report to Shareholders for the year
ended December 31, 1994 (Incorporated into Parts I, II and IV).
2. Portions of the Mattel, Inc. 1995 Notice of Annual Meeting of Stockholders
and Proxy Statement, to be filed with the Securities and Exchange Commission
within 120 days after the close of the registrant's fiscal year
(Incorporated into Part III).
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PART I
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ITEM 1. BUSINESS
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The Company designs, develops, manufactures, markets and distributes a
broad variety of toy products on a worldwide basis. The Company's four
strongest principal product lines are BARBIE fashion dolls and doll
clothing and accessories, FISHER-PRICE toys and juvenile products, the
Company's Disney-licensed toys and die-cast HOT WHEELS vehicles, each of
which has broad worldwide appeal. Additional current principal product
lines consist of POWER WHEELS battery-powered ride-on vehicles; large
dolls; preschool toys, including SEE 'N SAY talking toys; and the UNO and
SKIP-BO games. Revenues for 1994 of $3.2 billion were a record level for
the Company.
In May 1994, the Company completed the acquisition of the assets of
Kransco, Inc. ("Kransco" and the "Kransco Acquisition"), and in July 1994,
the Company completed the acquisition of J.W. Spear & Sons PLC ("Spear" and
the "Spear Acquisition"). Products acquired from Kransco include POWER
WHEELS battery-powered ride-on vehicles, HULA HOOP and FRISBEE products
marketed under the WHAM-O trademark and MOREY BOOGIE bodyboards and other
water sport toys. Spear is a British company that holds the rights to
SCRABBLE and other games outside of North America. See Note 7 to the
Consolidated Financial Statements in the Annual Report to Shareholders for
the year ended December 31, 1994 (the "Annual Report to Shareholders"),
incorporated herein by reference. As used herein, unless the context
requires otherwise, "Mattel" or the "Company" refers to Mattel, Inc., and
its subsidiaries, and "Fisher-Price" refers to Fisher-Price, Inc., a
Delaware corporation and wholly-owned subsidiary of Mattel.
Mattel was incorporated in California in 1948 and reincorporated in
Delaware in 1968. Its executive offices are located at 333 Continental
Boulevard, El Segundo, California 90245-5012, telephone (310) 252-2000.
COMPETITION AND INDUSTRY BACKGROUND
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Competition in the toy industry is based primarily on price, quality
and play value. In recent years, the toy industry has experienced rapid
consolidation driven, in part, by the desire of industry competitors to
offer a range of products across a broader variety of categories. In the
United States, the Company competes with several large toy companies,
including Hasbro, Inc. and Tyco Toys, Inc. as well as a number of smaller
toy companies. The larger toy companies have pursued a strategy of
focusing on core product lines. Core product lines are those lines which
are expected to be marketed for an extended period of time, and which
historically have provided relatively consistent growth in sales and
profitability. By focusing on core product lines, toy manufacturers have
been able to reduce their reliance on new product introductions and the
associated risk and volatility. The
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juvenile products market, in which Fisher-Price is one of the leading
companies, is more fragmented. The more significant competitors in this
area include: Gerry Baby Products Company; Century Products Company; Graco
Children's Products, Inc.; Cosco, Inc.; and Evenflo Juvenile Furniture
Company, Inc.
The toy industry is also experiencing a shift toward greater
consolidation of retail distribution channels, such as large specialty toy
stores and discount retailers, including Toys R Us, Wal-Mart, Kmart and
Target, which have increased their overall share of the retail market.
This consolidation has resulted in an increased reliance among retailers on
the large toy companies because of their financial stability and ability to
support products through advertising and promotion and to distribute
products on a national basis. These retailers' growing acceptance of
electronic data interchange has provided toy manufacturers with an ability
to more closely monitor consumers' acceptance of a particular product or
product line.
Over the last ten years, toy companies based in the United States have
expanded their international marketing and manufacturing operations. The
Company believes a strong international distribution system can add
significantly to the sales volume of core product lines and extend the life
cycles of newly-developed products.
SEASONALITY
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Sales of toy products at retail are seasonal, with a majority of
retail sales occurring during the period from September through December.
Consequently, shipments of toy products to retailers are greater in the
third and fourth quarters than in each of the first and second quarters
combined. As the large toy retailers become more efficient in their
control of inventory levels, this seasonality is likely to increase.
In anticipation of this seasonal increase in retail sales, the Company
significantly increases its production in advance of the peak selling
period, resulting in a corresponding build-up of inventory levels. In
addition, the Company and others in the industry develop sales programs,
including offering extended payment terms, to encourage retailers to
purchase merchandise earlier in the year. These sales programs, coupled
with seasonal shipping patterns, result in significant peaks in the third
and fourth quarters in the respective levels of inventories and accounts
receivable, which contribute to a seasonal working capital financing
requirement. See "Seasonal Financing."
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PRODUCTS
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The Company has been able to record consistent sales and earnings
growth by focusing on a number of core product lines supplemented by
various new product introductions. The Company's four strongest core
product lines are BARBIE fashion dolls and doll clothing and accessories,
FISHER-PRICE toys and juvenile products, the Company's Disney-licensed toys
and die-cast HOT WHEELS vehicles, each of which has broad worldwide appeal.
Additional current principal product lines consist of POWER WHEELS
battery-powered ride-on vehicles; large dolls; preschool toys, including
SEE 'N SAY talking toys; and the UNO and SKIP-BO games. Core product lines
are expected to be marketed for an extended period of time and historically
have provided relatively consistent growth in sales and profitability. For
the year ended December 31, 1994, core products accounted for approximately
84% of sales. In order to provide greater flexibility in the manufacture
and delivery of products, and as part of a continuing effort to reduce
manufacturing costs, the Company has concentrated production of most of its
core products in Company-owned facilities and generally uses independent
contractors for the production of non-core products.
In September 1994, the Company entered into a License Agreement with
Original Appalachian Artworks, Inc. pursuant to which the Company obtained
the exclusive worldwide rights to manufacture, sell and distribute dolls,
doll accessories and doll clothing bearing the CABBAGE PATCH KIDS trademark
beginning in January 1995.
With respect to new product introductions, the Company's strategy is
to begin production on a limited basis until a product's initial success
has been proven in the marketplace. The production schedule is then
modified to meet anticipated demand. The Company further limits its risk
by generally having independent contractors manufacture new product lines
in order to minimize capital expenditures associated with new product
introductions. This strategy has reduced inventory risk and significantly
limited the potential loss associated with new product introductions.
New product introductions in 1994 included the 35th anniversary BARBIE
doll, the gymnast BARBIE doll and the DR. BARBIE doll, the addition of a
series of plush products, action figures and small dolls based on the
animated feature "The Lion King" to the Company's Disney line, the Fisher-
Price 3-in-1 Tournament Table and the addition of the TOP SPEED line of
vehicles to the Company's HOT WHEELS line.
New product introductions in 1995 will include Cut 'N Style BARBIE,
Baywatch BARBIE and Butterfly Princess BARBIE, CABBAGE PATCH KIDS, the
addition of MICRO vehicles to the HOT WHEELS line, Fisher-Price outdoor
play equipment and the addition of a series of plush products, action
figures and small dolls based on the animated feature "Pocahontas" to the
Company's Disney line. The Company will also introduce Nickelodeon SMUD.
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INTERNATIONAL OPERATIONS
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Revenues from the Company's international operations represented
approximately 41%, 40% and 41% of total consolidated revenues in 1994, 1993
and 1992, respectively. Products which are developed and marketed
successfully in the United States typically generate incremental sales and
profitability when marketed through the Company's international
distribution network. Generally, products marketed internationally are the
same as those marketed domestically, although some are developed or adapted
for particular international markets. The Company sells its products
directly through its marketing operations in Argentina, Australia, Austria,
the Benelux countries, Canada, Chile, France, Germany, Greece, Italy,
Japan, Mexico, Portugal, Scandinavia, Spain, Switzerland, the United
Kingdom, Venezuela and in certain areas of Eastern Europe and Asia. In
1995, the Company will begin selling its products directly in Colombia
through a newly established subsidiary. In addition to direct sales, the
Company sells principally through distributors in Central and South
America, the Middle East, South Africa and Southeast Asia. It also
licenses some of its products to other toy companies for sale in various
other countries. See "Licenses and Distribution Agreements."
The strength of the U.S. dollar relative to other currencies can
significantly affect the revenues and profitability of the Company's
international operations. The Company hedges a majority of intercompany
purchases and sales of inventory in order to protect local cash flows and
profitability from currency fluctuations. See "Financial Instruments."
For financial information by geographic area, see Note 8 to the
Consolidated Financial Statements in the Annual Report to Shareholders,
incorporated herein by reference.
PRODUCT DESIGN AND DEVELOPMENT
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Through its product design and development group, the Company
regularly refreshes, redesigns and extends existing product lines and
develops innovative new product lines. The Company's success is dependent
on its ability to continue this activity. Product design and development
are principally conducted by a group of professional designers and
engineers employed by the Company.
License agreements with third parties permit the Company to utilize
the name, character or product of the licensor in its product line. A
principal licensor is The Walt Disney Company, which licenses many of its
characters for use on the Company's products. The Company also has entered
into license agreements with, among others, the following: McDonald's,
Inc.; MCA Universal Merchandising, Inc.; the Time Warner Entertainment
Company, L.P. and DC Comics, Inc. units of Time Warner Inc.; Turner Home
Entertainment, Inc.; Children's Television Workshop; Viacom, Inc. relating
to its Nickelodeon properties; Bluebird Toys (UK) Limited; Original
Appalachian Artworks, Inc.; and General Motors Corporation. A number of
these licenses relate to product lines that are significant to the Company.
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Independent toy designers and developers bring products to the Company
and are generally paid a royalty on the net selling price of products
licensed by the Company. These independent toy designers may also create
different products for other toy companies.
The Company devotes substantial resources to product design and
development. During the years ended December 31, 1994, December 31, 1993
and December 31, 1992, the Company expended approximately $93 million, $75
million and $77 million, respectively, in connection with the design and
development of products, exclusive of royalty payments. See Note 10 to the
Consolidated Financial Statements in the Annual Report to Shareholders,
incorporated herein by reference.
ADVERTISING AND PROMOTION
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The Company supports its product lines with extensive advertising and
consumer promotions. Advertising continues at varying levels throughout
the year and peaks during the Christmas season. Advertising includes
television and radio commercials and magazine and newspaper ads.
Promotions include in-store displays, coupons, merchandising materials and
major events focusing on products and tie-ins with various consumer product
companies. To further promote the Company and its products, the Company
participates in the attractions "It's A Small World" at Disneyland and Walt
Disney World and "Autopia" at Disneyland Paris under a ten-year agreement
with The Walt Disney Company. The Company also participates in toy stores
in Disneyland, Disneyland Paris and in the Disney Village Market Place near
Walt Disney World. Separately, the Company has established a total of
sixteen BARBIE Boutiques in F.A.O. Schwarz toy stores, including the
"BARBIE on Madison" boutique at the F.A.O. Schwarz flagship store in New
York City.
During the years ended December 31, 1994, December 31, 1993 and
December 31, 1992, Mattel spent approximately $516 million (16% of net
sales), $427 million (16% of net sales) and $403 million (16% of net
sales), respectively, on worldwide advertising and promotion.
MARKETING AND SALES
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The Company's toy products are sold throughout the world. In the
United States, the Company's products are distributed directly to large
retailers, including discount and free-standing toy stores, chain stores
and department stores, and other retail outlets and, to a limited extent,
to wholesalers. Discount and free-standing toy stores continue to increase
their market share. During the year ended December 31, 1994, Toys R Us and
Wal-Mart accounted for approximately 23% and 13%, respectively, of
worldwide consolidated net sales and were the only customers accounting for
10% or more of consolidated net sales.
6
In general, the Company's major domestic and international customers
review its product lines and product concepts for the upcoming year at
showings beginning in late summer. The Company also participates in the
domestic and international toy industry trade fairs in the first quarter of
the year. A majority of the full-year orders are received by May 1. As is
traditional in the toy industry, these orders may be canceled at any time
before they are shipped. Historically, the greater proportion of shipments
of products to retailers occurs during the third and fourth quarters of the
year. See "Seasonality."
Through its marketing research departments, the Company conducts basic
consumer research and product testing and monitors demographic factors and
trends. This information assists the Company in evaluating consumer
acceptance of products, including an analysis of increasing or decreasing
demand for its products.
The Company bases its production schedules on customer orders,
modified by historical trends, results of market research and current
market information. The actual shipments of products ordered and the order
cancellation rate are affected by consumer acceptance of the product line,
the strength of competing products, marketing strategies of retailers and
overall economic conditions. Unexpected changes in these factors can
result in a lack of product availability or excess inventory in a
particular product line.
MANUFACTURING
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The Company's products are manufactured in Company-owned facilities
and by independent contractors. Products are also purchased from unrelated
entities that design, develop and manufacture the products. In order to
provide greater flexibility in the manufacture and delivery of products,
and as part of a continuing effort to reduce manufacturing costs, the
Company has concentrated production of most of its core products in the
Company's facilities and generally uses independent contractors for the
production of non-core products.
As a result of the Kransco Acquisition and Spear Acquisition, Mattel
acquired manufacturing facilities in the state of Indiana, and the United
Kingdom and Mexico, respectively, which are in addition to its existing
manufacturing facilities in the states of California, Kentucky, New York,
the United Kingdom, Mexico, the Far East (China, Indonesia and Malaysia)
and Italy. In January 1995, the Company announced a work force reduction
in its manufacturing facility located in Medina, New York as part of a
company-wide restructuring. The Company also utilizes independent
contractors to manufacture products in the United States, Mexico, the Far
East and Australia. To protect the stability of its product supply, the
Company produces many of its key products in more than one facility.
Foreign countries in which the Company's products are manufactured
(principally China, Indonesia, Malaysia and Mexico) currently enjoy "most
favored nation" ("MFN")
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status under U.S. tariff laws, which provides the most favorable category
of U.S. import duties. As a result of continuing concerns in the United
States Congress regarding China's human and worker rights policies, and the
current trade dispute covering China's inadequate protection of U.S.
intellectual property rights, there has been, and may be in the future,
opposition to the extension of MFN status for China.
The loss of MFN status for China would result in a substantial
increase in the import duty for toys manufactured in China and imported
into the United States and would result in increased costs for the Company
and others in the toy industry. The impact of such an event on the Company
would be significantly mitigated by the Company's ability to source product
for the U.S. market from countries other than China and ship product
manufactured in China to markets outside the U.S. Toward that end, the
Company has extended its production capacity in other countries. A number
of other factors, including the Company's ability to pass along the added
costs through price increases and the pricing policies of vendors in China,
could further mitigate the impact of a loss of China's MFN status.
On February 8, 1994, the European Union ("EU") adopted quotas on the
importation of certain classes of toys (as well as other products)
manufactured in China. The Company expects that the impact of these quotas
on its business will be significantly mitigated by shifts in demand in
favor of toy categories not subject to the quotas, and by the ability of
the Company to source product for the EU from countries other than China
and ship product manufactured in China elsewhere. The Company does not
currently expect that these quotas will have a material effect on its
business.
In December 1994, the EU significantly reduced the GSP duty free
treatment previously extended to toys imported into Europe. During 1994,
toys were allowed to enter the EU free under the GSP program, but effective
January 1, 1995, toys imported into the EU are assessed a GSP rate of 5.1%,
which is 70% of the normal duty rate of 7.3%. This increase in duties paid
in Europe will be offset by a reduction in worldwide duty expense resulting
from the passage of the Uruguay Round by the United States Congress in
December 1994 and its official implementation on January 1, 1995. In the
United States, all duties on dolls and traditional toys have been
completely eliminated. Canada has also reduced its tariffs to zero, with
the exception of toy sets and board games. In Japan and the EU, doll
tariffs were only reduced by an average of 20%, with tariffs in some
product categories of lesser importance to Mattel scheduled to be reduced
or phased out over a period of 5 to 10 years. The Company does not
currently expect that the net impact of these changes will have a material
effect on its business.
COMMITMENTS
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In the normal course of business, the Company enters into contractual
arrangements for future purchases of goods and services to ensure
availability and timely delivery, and to obtain and protect the right to
create and market certain toys. Such arrangements include commitments for
future inventory purchases and royalty payments pursuant to license
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agreements. Certain of these purchase agreements and licenses contain
provisions for guaranteed or minimum payments during the terms of the
contracts and licenses. See "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Commitments" and Note 6 to
the Consolidated Financial Statements in the Annual Report to Shareholders,
incorporated herein by reference.
LICENSES AND DISTRIBUTION AGREEMENTS
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The Company's level of licensing activity has expanded in recent
years. Royalties paid to licensors during the years ended December 31,
1994, December 31, 1993 and December 31, 1992 were approximately $84
million, $69 million and $50 million, respectively. See Note 6 to the
Consolidated Financial Statements in the Annual Report to Shareholders,
incorporated herein by reference.
The Company also distributes products which are independently designed
and manufactured.
FINANCIAL INSTRUMENTS
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From time to time, the Company enters into foreign currency forward
exchange contracts and swap agreements as hedges for payment of inventory
purchases, collection of sales and various other intercompany transactions.
The contracts are intended to fix a portion of the Company's product cost
and intercompany cash flows, and thereby moderate the impact of foreign
currency fluctuations. The Company does not speculate in foreign
currencies.
For additional information regarding foreign currency contracts, see
Note 6 to the Consolidated Financial Statements in the Annual Report to
Shareholders, incorporated herein by reference.
SEASONAL FINANCING
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The Company's financing of seasonal working capital typically grows
throughout the first half of the year and peaks in the third or fourth
quarter, when accounts receivable are at their highest due to increased
sales volume and Company sales programs, and when inventories are at their
highest in anticipation of expected second half sales volume. See
"Seasonality." Borrowings for seasonal financing are generally repaid in
full by year-end from cash flows generated in the fourth quarter from sales
and collection of accounts receivable.
To finance its working capital requirements, the Company maintains and
periodically revises or replaces a revolving credit agreement with a
commercial bank group. The
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agreement in effect during 1994 consisted of unsecured domestic facilities
providing a total of $500.0 million in seasonal financing. The facilities
also provided for up to $250.0 million in advances and backup for commercial
paper issuances ($125.0 million of which was a 364-day facility and the
other $125.0 million was a three-year facility), and up to an additional
$250.0 million (a three-year facility) for nonrecourse purchases of certain
trade accounts receivable by the bank group. In connection with the
agreement, the Company was required to comply with certain consolidated
financial covenants for debt-to-capital, interest coverage and tangible net
worth levels. Interest was charged at various rates not greater than the
base rate charged by the agent bank. Commitment fees on the unused line
available for advances were not greater than .1375%.
In 1994, the Company's domestic seasonal borrowings outstanding under
the revolving credit agreement and other bank borrowings averaged
approximately $271 million and reached a peak of approximately $613 million
during the third quarter. This balance was fully repaid by December 31,
1994. The Company's 1994 seasonal borrowings outstanding under
international credit lines averaged approximately $36 million and reached a
peak of approximately $74 million in the third quarter.
Effective in March 1995, the Company amended its revolving credit
agreement. The new agreement consists of unsecured facilities providing a
total of $650.0 million in seasonal financing from substantially the same
group of commercial banks. The facilities provide for up to $400.0 million
in advances and backup for commercial paper issuances (a three-year
facility), and up to an additional $250.0 million (a three-year facility)
for nonrecourse purchases of certain trade accounts receivable by the bank
group. In connection with the agreement, the Company is required to comply
with certain consolidated financial covenants for debt-to-capital, interest
coverage and tangible net worth levels.
Concurrently with the consummation of the Kransco Acquisition, the
Kransco seasonal credit line was terminated and Kransco's domestic seasonal
working capital needs were financed by Mattel's revolving credit agreement.
The Company believes the amounts available to it under its revolving
credit agreement and its foreign credit lines will be adequate to meet its
seasonal financing requirements.
RAW MATERIALS
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Packaging materials, most plastics and zinc essential to the
production and marketing of toy products are currently in adequate supply.
These and other raw materials are generally available from a number of
suppliers. Prices for resin and packaging materials are expected to rise
in 1995.
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TRADEMARKS, COPYRIGHTS, AND PATENTS
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Most of the Company's products are sold under trademarks, trade names
and copyrights and a number of those products incorporate patented devices
or designs. Trade names and trademarks are significant assets to the
Company in that they provide product recognition and acceptance worldwide.
The Company customarily seeks patent, trademark or copyright
protection covering its products, and it owns or has applications pending
for United States and foreign patents covering many of its products. A
number of these trademarks and copyrights relate to product lines that are
significant to the Company and the Company believes its rights to these
properties are adequately protected.
The Company also licenses various of its trademarks, characters and
other property rights to others for use in connection with the sale by
others of non-toy products and other products which do not compete with the
Company's products.
GOVERNMENT REGULATIONS
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The Company's toys are subject to the provisions of the Consumer
Product Safety Act, the Federal Hazardous Substances Act and the Flammable
Fabrics Act, and the regulations promulgated thereunder. The Consumer
Product Safety Act and the Federal Hazardous Substances Act enable the
Consumer Product Safety Commission (the "CPSC") to exclude from the market
consumer products that fail to comply with applicable product safety
regulations or otherwise create a substantial risk of injury, and articles
that contain excessive amounts of a banned hazardous substance. The
Flammable Fabrics Act enables the CPSC to regulate and enforce flammability
standards for fabrics used in consumer products. The CPSC may also require
the repurchase by the manufacturer of articles which are banned. Similar
laws exist in some states and cities and in various international markets.
Fisher-Price's car seats are subject to the provisions of the National
Highway Transportation Safety Act, which enables the National Highway
Traffic Safety Administration ("NHTSA") to promulgate performance standards
for child restraint systems. Fisher-Price conducts periodic tests to
ensure that its child restraint systems meet applicable standards. A
Canadian agency, Transport Canada, also regulates child restraint systems
sold for use in Canada. As with the CPSC, NHTSA and Transport Canada can
require the recall and repurchase or repair of products which do not meet
their respective standards.
The Company maintains a quality control program to ensure product
safety compliance with the various federal, state and international
requirements.
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EFFECTS OF INFLATION
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Inflation rates in the U.S. and major foreign countries in which the
Company operates have not had a significant impact on operating results for
the three years ended December 31, 1994. The U.S. Consumer Price Index
increased 2.7% in 1994, 2.7% in 1993 and 2.9% in 1992. The Company is
afforded some protection from the impact of inflation as a result of high
turnover of inventories and benefited from inflation on the repayment of
fixed-rate liabilities during these periods.
EMPLOYEES
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The total number of persons employed by the Company and its
subsidiaries at any one time varies because of the seasonal nature of its
manufacturing operations. At December 31, 1994, the Company's total number
of employees, including its international operations, was approximately
22,000.
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EXECUTIVE OFFICERS OF THE REGISTRANT
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The executive officers of the Company, all of whom are appointed annually
by the Board of Directors and serve at the pleasure of the Board, are as
follows:
EXECUTIVE
OFFICER
NAME AGE POSITION SINCE
- --------------------- --- ------------------------------- ---------
John W. Amerman 63 Chairman of the Board & 1980
Chief Executive Officer
Jill E. Barad 43 President & Chief Operating 1984
Officer and a Director of
Mattel, Inc.
James A. Eskridge 52 President, Fisher-Price, Inc. 1988
and a Director of Mattel, Inc.
Joseph C. Gandolfo 52 President, Mattel Operations 1990
Lindsey F. Williams 58 President, Mattel International 1976
and a Director of Mattel, Inc.
Francesca Luzuriaga 40 Executive Vice President, Finance 1994
Ned Mansour 46 Senior Vice President, 1992
General Counsel & Secretary
E. Joseph McKay 54 Senior Vice President, Human 1993
Resources and Administration
Gary P. Rolfes 43 Senior Vice President 1993
& Controller
William Stavro 55 Vice President 1993
& Treasurer
Mr. Amerman has been Chairman of the Board & Chief Executive Officer since
February 1987 and a member of the Board of Directors since November 1985.
Prior to that he served as President of Mattel International.
Ms. Barad has been President & Chief Operating Officer since August 1992
and a member of the Board of Directors since November 1991. From December
1989 until August 1992, she was
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President, Mattel USA. Prior to that she served in various executive
positions in the Marketing, Product Design and Product Development areas.
Mr. Eskridge has been a member of the Board of Directors since February
1993 and President of Fisher-Price, Inc. since November 1993. Prior to
that he was Executive Vice President & Chief Financial Officer of Mattel,
Inc.
Mr. Gandolfo has been President, Mattel Operations, since April 1990.
Prior to that he was General Manager of Manufacturing, Thompson Consumer
Electronics.
Mr. Williams has been a member of the Board of Directors since November
1991 and has been President, Mattel International for more than five years.
Ms. Luzuriaga has been Executive Vice President, Finance since December
1994. From March 1989 until December 1994, she served in several senior
managerial positions at Mattel, including Controller and Treasurer.
Mr. McKay has been Senior Vice President, Human Resources and
Administration since November 1993. From December 1991 until November 1993
he was Vice President, Human Resources. He was Senior Director Human
Resources from March 1991 to December 1991. Prior to that he was Vice
President Human Resources-Administration of Mileage Plus, Inc.
Mr. Mansour has been Senior Vice President, General Counsel & Secretary
since February 1993. From May 1992 until February 1993 he was Senior Vice
President & General Counsel and from April 1991 until May 1992 he was Vice
President & Associate General Counsel. Prior to that he was Vice President
& Assistant General Counsel.
Mr. Rolfes has been Senior Vice President & Controller since November 1993.
From June 1993 to November 1993 he was Vice President & Controller. Prior
to that he held various executive positions within the finance department.
Mr. Stavro has been Vice President & Treasurer since November 1993. From
March 1992 to November 1993 he was Vice President and Assistant Treasurer.
Prior to that he was Assistant Treasurer for more than five years.
ITEM 2. PROPERTIES
- ------- ----------
Mattel owns its corporate headquarters consisting of approximately
335,000 square feet in El Segundo, California, which is subject to a $45.0
million mortgage. Mattel also leases buildings in El Segundo consisting
of approximately 265,000 square feet, which are primarily used for its
design and development and audio visual departments. Fisher-Price owns its
headquarters facilities in East Aurora, New York, consisting of
approximately 290,000 square feet.
14
The Company maintains sales offices in California, Illinois, New York
and Texas, and warehouse and distribution facilities in California,
Kentucky, New York, Tennessee and Texas. The Company owns a computer
facility in Phoenix, Arizona. Internationally, the Company has offices
and/or warehouse space in Argentina, Australia, Belgium, Canada, Chile,
Denmark, France, Germany, Greece, Hong Kong and in certain other areas of
Asia, Italy, Japan, Mexico, The Netherlands, Spain, Switzerland, the United
Kingdom and Venezuela. The Company's principal manufacturing facilities
are located in China, Indonesia, Italy, Malaysia, Mexico, the United
Kingdom and the United States. See "Manufacturing."
Most of the Company's facilities are occupied under long-term leases
and, for the most part, are fully utilized, although excess manufacturing
capacity exists from time to time based on product mix and demand. With
respect to leases which are scheduled to expire during the next twelve
months, the Company may negotiate new lease agreements, renew leases or
utilize alternative facilities.
As a result of the Kransco and Spear Acquisitions, the Company
acquired leased sales offices and warehouse and distribution facilities in
California and Virginia, and leased or owned domestic manufacturing
facilities in Indiana, and international manufacturing facilities in Mexico
and the United Kingdom. The Company is currently evaluating the
desirability of maintaining certain of these facilities and expects to
sell, sublease or not renew the leases of those facilities which are
vacant, under-utilized or redundant.
ITEM 3. LEGAL PROCEEDINGS
- ------- -----------------
The Company's Fisher-Price subsidiary has executed a consent order
with the State of New York involving a remedial action/feasibility study
for voluntary cleanup of contamination at one of its manufacturing plants.
The ultimate liability associated with this cleanup presently is estimated
to be less than $1,375,000, approximately $575,000 of which has been
incurred through December 31, 1994.
The Company is involved in various litigation and other legal matters
which are being defended and handled in the ordinary course of business.
None of these matters is expected to result in outcomes having a material
adverse effect on the Company's liquidity, operating results or
consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
None
15
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- ------- STOCKHOLDER MATTERS
-----------------------------------------------------
For information regarding the markets in which the Company's common
stock is traded, see the cover page hereof, and for information regarding
the high and low sales prices of the Company's common stock for the last
two calendar years, see Note 9 to the Consolidated Financial Statements in
the Annual Report to Shareholders, incorporated herein by reference.
As of March 1, 1995, the Company had approximately 37,000 holders of
record of its common stock.
The Company paid per share dividends of $0.032 in January and April of
1993. In each of July and October of 1993 and January of 1994, the Company
paid dividends of $0.038 per share, and in April, July and October 1994 and
January 1995, the Company paid dividends of $0.048 per share. The
dividends have been adjusted to reflect five-for-four stock splits which
the Company declared on its common stock to holders of record on December
17, 1993 and January 6, 1995.
ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------
The information under the caption "Five-Year Financial Summary" on
page 26 in the Annual Report to Shareholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- RESULTS OF OPERATIONS
---------------------------------------------------------------
The information under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 27
through 31 in the Annual Report to Shareholders is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
The consolidated financial statements of Mattel, Inc. and
Subsidiaries, together with the report of Price Waterhouse LLP dated
February 6, 1995, included on pages 32 through 51 in the Annual Report to
Shareholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------- FINANCIAL DISCLOSURE
---------------------------------------------------------------
None
16
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
Information required under this Item relating to members of the Board
of Directors is incorporated by reference herein from the Company's 1995
Notice of Annual Meeting of Stockholders and Proxy Statement. The
information with respect to executive officers of the Company appears under
the heading "Executive Officers of the Registrant" in Part I herein.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
The information required under this Item is incorporated by reference
herein from the Company's 1995 Notice of Annual Meeting of Stockholders and
Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
The information required under this Item is incorporated by reference
herein from the Company's 1995 Notice of Annual Meeting of Stockholders and
Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The information required under this Item is incorporated by reference
herein from the Company's 1995 Notice of Annual Meeting of Stockholders and
Proxy Statement.
17
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
- -------- -------------------------------------------------------
(a) The following documents are filed as part of this report:
Annual Report
Page Number(1)
-------------
(1) Financial Statements
Consolidated Balance Sheets as of 32-33
December 31, 1994 and December 31, 1993
Consolidated Statements of Income for 34
the years ended December 31, 1994,
December 31, 1993 and December 31, 1992
Consolidated Statements of Cash Flows for 35
the years ended December 31, 1994,
December 31, 1993 and December 31, 1992
Consolidated Statements of Shareholders' 36
Equity for the years ended December 31, 1994,
December 31, 1993 and December 31, 1992
Notes to Consolidated Financial Statements 37-50
Report of Price Waterhouse LLP, Independent 51
Accountants to the Company
1
Incorporated by reference from the indicated pages of the Annual
Report to Shareholders for the year ended December 31, 1994. With the
exception of the information incorporated by reference in Items 1, 5, 6, 7,
8 and 14 of this report, the Annual Report to Shareholders is not deemed
filed as part of this report.
18
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Stockholders
of Fisher-Price, Inc.
We have audited the consolidated statements of income, stockholders' equity
and cash flows of Fisher-Price, Inc. and subsidiaries for the fiscal year
ended January 3, 1993. We have also audited the financial statement
schedules. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of
operations and cash flows of Fisher-Price, Inc. and subsidiaries for the
fiscal year ended January 3, 1993, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial
statement schedules referred to above, when considered in relation to the
basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
Boston, Massachusetts
February 4, 1993
19
(2) Financial Statement Schedule for the years ended December 31, 1994,
December 31, 1993 and December 31, 1992(1)
Schedule V - Valuation and Qualifying Accounts and Allowances
(3) Exhibits (Listed by numbers corresponding to Item 601 of Regulation S-K)
2.0 Agreement and Plan of Merger, dated as of August 19, 1993, by
and among the Company, MAT Acquisition, Inc. and Fisher-Price,
Inc. (incorporated by reference from Exhibit 2.1 to the
Company's Registration Statement on Form S-4, Registration
Statement No. 33-50749)
2.1 Amended and Restated Asset Purchase Agreement, dated as of
March 26, 1994 and amended and restated as of May 15, 1994,
by and between Kransco and Mattel, Inc. (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on
Form 8-K dated May 31, 1994)
3.0 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.0 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1993)
3.1 By-laws of the Company, as amended to date (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992)
4.0 Rights Agreement, dated as of February 7, 1992, between the
Company and The First National Bank of Boston, as Rights Agent
(incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, dated February 12, 1992)
(The Company has not filed certain long-term debt instruments
under which the principal amount of securities authorized to
be issued does not exceed 10% of the total assets of the
Company. Copies of such agreements will be provided to the
Securities and Exchange Commission upon request.)
10.0 Credit Agreement dated as of March 10, 1995 among the Company,
the Banks named therein and Bank of America National Trust
and Savings Association, as Agent (incorporated by reference
to Exhibit 99.5 to the Company's Current Report on Form 8-K
dated March 21, 1995)
- -------------------
1
All other schedules are omitted because they are not applicable or
the required information is shown in the financial statements or notes thereto.
20
10.1 Second Amended and Restated Transfer and Administration
Agreement dated as of March 10, 1995 among the Company, Mattel
Sales Corp., Fisher-Price, Inc., the Banks named therein and
NationsBank of Texas, N.A., as Agent (incorporated by reference
to Exhibit 99.6 to the Company's Current Report on Form 8-K
dated March 21, 1995)
10.2 Underwriting Agreement dated May 19, 1993 between the Company,
Morgan Stanley & Co. Incorporated and Kidder, Peabody & Co.
Incorporated (incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993)
10.3 Stock Subscription Warrant dated as of June 28, 1991 between
Fisher-Price, Inc. and certain investors (incorporated by
reference to Exhibit 4(c) to Fisher-Price's Report on Form
10-K for the transition period from July 1, 1991 to December
29, 1991)
10.4 Underwriting Agreement dated July 31, 1992 between the Company,
Morgan Stanley & Co. Incorporated and Kidder, Peabody & Co.
Incorporated (incorporated by reference to Exhibit 10.5 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
10.5 Distribution Agreement dated September 19, 1994 among the
Company, Morgan Stanley & Co. Incorporated and CS First Boston
Corporation (incorporated by reference to Exhibit 99.0 to the
Company's Current Report on Form 8-K dated September 20, 1994)
Executive Compensation Plans and Arrangements of the Company
- ------------------------------------------------------------
10.6 Form of Indemnity Agreement between Mattel and its directors and
certain of its executive officers (incorporated by reference to
Exhibit B to Notice of Annual Meeting of Stockholders of the
Company dated March 24, 1987)
10.7 Form of Employment Agreement between the Company and certain
executive officers (incorporated by reference to Exhibit 10.6 of
Amendment No. 1 of the Company's Annual Report on Form 10-K for
the fiscal year ended December 26, 1987)
10.8 Form of Employment Agreement between the Company and certain
executive officers (incorporated by reference to Exhibit 10.8
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
10.9 Form of Amended & Restated Employment Agreement between the
Company and certain executive officers (incorporated by
reference to Exhibit 10.13 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993)
21
10.10 Mattel, Inc. Management Incentive Plan (incorporated by
reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K dated April 14, 1994)
10.11 Mattel, Inc. Long-Term Incentive Plan (incorporated by
reference to Exhibit 99.2 to the Company's Current Report
on Form 8-K dated April 14, 1994)
10.12 Mattel, Inc. Financial Security Program Agreement for certain
officers (incorporated by reference to Exhibit 10.7 of the
Company's Registration Statement No. 2-95161 on Form S-1, filed
January 7, 1985)
10.13 Form of Deferred Compensation Plan for Directors (incorporated
by reference to Exhibit No. 10.11 of Amendment No. 1 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 26, 1987)
10.14 Mattel, Inc. 1990 Stock Option Plan (incorporated by reference
to Exhibit A to the Notice of Annual Meeting of Stockholders and
Proxy Statement of the Company dated March 15, 1990)
10.15 Amendment No. 1 to the Mattel, Inc. 1990 Stock Option Plan
(incorporated by reference to the information under the heading
"Amendment to Mattel 1990 Stock Option Plan" on page F-1 of the
Joint Proxy Statement/Prospectus of the Company and Fisher-Price
included in the Company's Registration Statement on Form S-4,
Registration Statement No. 33-50749)
10.16 Form of Award Agreement evidencing award of stock appreciation
rights granted pursuant to the Company's 1990 Stock Option Plan
to certain executive officers of the Company ("Award Agreement")
(incorporated by reference to Exhibit 10.12 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1991)
10.17 Form of First Amendment to Award Agreement (incorporated by
reference to Exhibit 10.21 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993)
10.18 Notice of Grant of Stock Options and Grant Agreement
(incorporated by reference to Exhibit 99.0 to the Company's
Current Report on Form 8-K dated May 31, 1994)
10.19 Grant Agreement fo a Non-Qualified Stock Option (incorporated
by reference to Exhibit 99.1 to the Company's Current Report
on Form 8-K dated May 31, 1994)
10.20 Award Cancellation Agreement (incorporated by reference to
Exhibit 99.2 to the Company's Current Report on Form 8-K dated
May 31, 1994)
22
10.21 Form of Restricted Stock Award Agreement under the Mattel 1990
Stock Option Plan (incorporated by reference to Exhibit 10.22
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993)
10.22 Mattel, Inc. Supplemental Executive Retirement Plan effective
as of October 7, 1990 (incorporated by reference to Exhibit
10.10 of the Company's Annual Report on Form 10-K for the fiscal
year ended December 29, 1990)
10.23 Mattel, Inc. Supplemental Executive Retirement Plan effective
as of April 1, 1994 (incorporated by reference to Exhibit 99.7
to the Company's Current Report on Form 8-K dated March 21,
1995)
10.24 Description of the Mattel, Inc. Deferred Compensation Plan for
Officers (incorporated by reference to Exhibit 10.16 to the
Mattel, Inc. Annual Report on Form 10-K for the year ended
December 31, 1991)
10.25 Fisher-Price, Inc. Matching Savings Plan, 1994 Restatement
(incorporated by reference to Exhibit 99.8 to the Company's
Current Report on Form 8-K dated March 21, 1995)
10.26 The Fisher-Price, Inc. Pension Plan (1989 Restatement)
(incorporated by reference to Exhibit 10(l) to Fisher-Price's
Registration Statement on Form 10 dated June 28, 1991)
10.27 Mattel, Inc. Personal Investment Plan, 1993 Restatement
(incorporated by reference to Exhibit 99.9 to the Company's
Current Report on Form 8-K dated March 21, 1995)
10.28 First Amendment to the Mattel, Inc. Personal Investment Plan,
1993 Restatement (incorporated by reference to Exhibit 99.10
to the Company's Current Report on Form 8-K dated March 21,
1995)
11.0* Computation of Income per Common and Common Equivalent Share
13.0* Pages 26 through 53 of the Mattel, Inc. Annual Report to
Shareholders for the year ended December 31, 1994
21.0* Subsidiaries of the Registrant
23.0* Consent of Price Waterhouse LLP
23.1* Consent of Coopers & Lybrand L.L.P.
- -------------------
* Filed herewith.
23
24.0* Power of Attorney (on page 26 of Form 10-K)
27.0* Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K
Mattel, Inc. filed the following Current Reports on Form 8-K
during the quarterly period ended December 31, 1994
Financial
Date of Report Items Reported Statements Filed
------------------ -------------- ----------------
October 18, 1994 5, 7 None
November 17, 1994 5, 7 None
December 20, 1994 5, 7 None
(c) Exhibits Required by Item 601 of Regulation S-K
See Item (3) above
(d) Financial Statement Schedule
Schedule V - Valuation and Qualifying Accounts and Allowances
Copies of Form 10-K (which includes Exhibit 24.0), Exhibits
11.0, 13.0, 21.0, 23.0, 23.1 and the Annual Report to
Shareholders are available to stockholders of the Company
without charge. Copies of other Exhibits can be obtained by
stockholders of the Company upon payment of ten cents per page
for such Exhibits. Written requests should be sent to
Secretary, Mattel, Inc., 333 Continental Boulevard,
El Segundo, California 90245-5012.
- -------------------
* Filed herewith.
24
SIGNATURES
----------
Pursuant to the requirements 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: /s/ Gary P. Rolfes
-------------------------
GARY P. ROLFES
Senior Vice President and
Date: As of March 22, 1995 Controller
--------------------
25
POWER OF ATTORNEY
-----------------
We, the undersigned directors and officers of Mattel, Inc. do hereby
severally constitute and appoint John W. Amerman, Ned Mansour, Leland P.
Smith and John L. Vogelstein, and each of them, our true and lawful
attorneys and agents, to do any and all acts and things in our name and
behalf in our capacities as directors and officers and to execute any and
all instruments for us and in our names in the capacities indicated below,
which said attorneys and agents, or any of them, may deem necessary or
advisable to enable said Corporation to comply with the Securities Exchange
Act of 1934, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission, in connection with this Annual Report
on Form 10-K, including specifically, but without limitation, power and
authority to sign for us or any of us, in our names in the capacities
indicated below, any and all amendments hereto; and we do each hereby
ratify and confirm all that said attorneys and agents, or any one of them,
shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ John W. Amerman Chairman of the Board March 22, 1995
- ------------------- and Chief Executive Officer
JOHN W. AMERMAN
/s/ Francesca Luzuriaga Executive Vice President, March 22, 1995
- ----------------------- Finance (principal financial
FRANCESCA LUZURIAGA officer)
/s/ Jill E. Barad Director, President and March 22, 1995
- ----------------- Chief Operating Officer
JILL E. BARAD
26
Signature Title Date
- --------- ----- ----
/s/ Harold Brown Director March 22, 1995
- ----------------
HAROLD BROWN
/s/ James A. Eskridge Director and President, March 22, 1995
- --------------------- Fisher-Price, Inc.
JAMES A. ESKRIDGE
/s/ Tully M. Friedman Director March 22, 1995
- ---------------------
TULLY M. FRIEDMAN
/s/ Ronald M. Loeb Director March 22, 1995
- ------------------
RONALD M. LOEB
/s/ Edward H. Malone Director March 22, 1995
- --------------------
EDWARD H. MALONE
/s/ Edward N. Ney Director March 22, 1995
- -----------------
EDWARD N. NEY
/s/ William D. Rollnick Director March 22, 1995
- -----------------------
WILLIAM D. ROLLNICK
/s/ John L. Vogelstein Director March 22, 1995
- ----------------------
JOHN L. VOGELSTEIN
/s/ Lindsey F. Williams Director and President, March 22, 1995
- ----------------------- Mattel International
LINDSEY F. WILLIAMS
27
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
---------------------------------
To the Board of Directors of Mattel, Inc.
Our audits of the consolidated financial statements referred to in our
report dated February 6, 1995 appearing on page 51 of the December 31, 1994
Annual Report to Shareholders of Mattel, Inc. (which report and
consolidated financial statements are incorporated by reference in this
Annual Report on Form 10-K) and the report of other auditors also included
an audit of the Financial Statement Schedule listed in Item 14(a)(2) of
this Form 10-K. In our opinion, based on our audits and the report of
other auditors, this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/ PRICE WATERHOUSE LLP
- ------------------------
Los Angeles, California
February 6, 1995
28
MATTEL, INC. AND SUBSIDIARIES SCHEDULE V
VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES
(In thousands)
Balance at Additions Balance
Beginning Charged to Net at End
of Year Operations Deductions of Year
---------- ---------- ---------- --------
Allowance for
Doubtful Accounts
- --------------------
Year Ended
December 31, 1994 $ 21,024 $ 7,282 $ (12,206)(a) $ 16,100
Year Ended
December 31, 1993 35,115 4,169 (18,260)(a) 21,024
Year Ended
December 31, 1992 31,545 21,686 (18,116)(a) 35,115
Allowance for
Inventory Obsolescence
- -------------------------
Year Ended
December 31, 1994 $ 19,432 $ 37,039 $ (27,935)(b) $ 28,536
Year Ended
December 31, 1993 16,109 32,084 (28,761)(b) 19,432
Year Ended
December 31, 1992 18,820 26,882 (29,593)(b) 16,109
(a) Includes write-offs, recoveries of previous write-offs, and currency
translation adjustments.
(b) Includes writedowns and currency translation adjustments.
29