63276--2/26/2007--MATTEL_INC

related topics

{customer, product, revenue}

{loss, insurance, financial}

{operation, natural, condition}

{financial, litigation, operation}

{cost, regulation, environmental}

{acquisition, growth, future}

{personnel, key, retain}

{property, intellectual, protect}

{condition, economic, financial}

{operation, international, foreign}

Factors That May Affect Future Results (Cautionary Statement Under the Private Securities Litigation Reform Act of 1995) If Mattel does not successfully satisfy consumer preferences, enhance existing products, develop and introduce new products and achieve consumer acceptance of those products, Mattel s results of operations may be adversely affected. Mattel s business is susceptible to changes in popular culture, media, fashion, and technology. Misperceptions of trends in popular culture, media and movies, fashion, or technology can negatively affect Mattel s sales. Mattel s business is seasonal and therefore its operating results will depend, in large part, on sales during the relatively brief traditional holiday season. Improved inventory management by retailers resulting in shorter lead times for production and possible shipping disruptions during peak demand times may affect Mattel s ability to deliver its products in time to meet retailer demands. Uncertainty and adverse changes in the general economic conditions of markets in which Mattel participates may negatively affect Mattel s business. The concentration of Mattel s business with a small retail customer base that makes no binding long-term commitments means that economic difficulties or changes in the purchasing policies of its major customers could have a significant impact on Mattel s business and operating results. The production and sale of private-label toys by Mattel s retail customers may result in lower purchases of Mattel-branded products by those retail customers. Liquidity problems or bankruptcy of Mattel s key customers could increase Mattel s exposure to losses from bad debts and could have a material adverse effect on Mattel s business, financial condition and results of operations. A reduction or interruption in the delivery of raw materials, parts and components from its suppliers or a significant increase in the price of supplies could negatively impact the gross profit margins realized by Mattel on the sale of its products or result in lower sales. Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on Mattel s financial condition. Recalls, post-manufacture repairs of Mattel products, product liability claims, absence or cost of insurance, and associated administrative costs could harm Mattel s reputation, increase costs or reduce sales. Failure by Mattel to protect its proprietary intellectual property and information could have a material adverse effect on Mattel s business, financial condition and results of operations. Political developments, including trade relations, and the threat or occurrence of war or terrorist activities could materially impact Mattel, its personnel and facilities, its customers and suppliers, retail and financial markets, and general economic conditions. Disruptions in Mattel s manufacturing operations due to political instability, civil unrest, SARS, avian flu or other diseases could negatively impact Mattel s business, financial position and results of operations. Earthquakes or other catastrophic events out of our control may damage Mattel s facilities or those of its contractors and harm Mattel s results of operations. Significant changes in currency exchange rates could have a material adverse effect on Mattel s business and results of operations. Increases in interest rates, reduction of Mattel s credit ratings or the inability of Mattel to meet the debt covenant coverage requirements in its credit facilities could negatively impact Mattel s ability to conduct its operations. Mattel s failure to successfully market or advertise its products could have a material adverse effect on Mattel s business, financial condition and results of operations. Failure to successfully implement new initiatives could have a material adverse effect on Mattel s business, financial condition and results of operations. Mattel depends on key personnel and may not be able to hire, retain and integrate sufficient qualified personnel to maintain and expand its business. Mattel is subject to various laws and government regulations, violation of which could subject it to sanctions. In addition, changes in such laws or regulations may lead to increased costs, changes in Mattel s effective tax rate, or the interruption of normal business operations that would negatively impact Mattel s financial condition and results of operations. Mattel may engage in acquisitions, mergers or dispositions, which may affect the profit, revenues, profit margins, debt-to-capital ratio, capital expenditures or other aspects of Mattel s business. In addition, Mattel has certain anti-takeover provisions in its by-laws that may make it more difficult for a third party to acquire Mattel without its consent, which may adversely affect Mattel s stock price.

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63276--2/26/2007--MATTEL_INC_/DE/