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Mattel Reports 2012 Financial Results And Declares Quarterly Dividend

The Company’s debt-to-total-capital ratio of 33.0% is in line with the Company’s capital and investment framework, and its year-end cash balance was $1.34 billion.

For the year, net cash flows from operating activities were approximately $1.28 billion, an increase of $611 million compared with approximately $665 million in 2011. The increase is primarily driven by reductions in working capital. Cash flows used for investing activities were approximately $900 million, an increase of $725 million, compared to approximately $175 million in 2011, driven primarily by the acquisition of HIT Entertainment™. Cash flows used for financing and other activities were approximately $409 million, an increase of $7 million, compared with approximately $402 million in 2011, primarily due to lower net proceeds from the issuance of long-term debt and higher dividends, partially offset by lower share repurchases and lower repayments of long-term debt.

Capital Deployment

The Company announced today that its Board of Directors declared a first quarter cash dividend of $0.36 per share on the Company's common stock, which represents an increase of 16% versus last year’s dividend of $0.31 per share. The dividend will be payable on March 8, 2013 to stockholders of record on February 22, 2013. For the fourth quarter 2012, the Company repurchased 1.4 million shares of its common stock at a cost of approximately $51 million, and for the year, the Company repurchased 2.3 million shares of its common stock at a cost of approximately $78 million.

Litigation Charge

On January 24, 2013, the U.S. Ninth Circuit Court of Appeals issued a decision on the litigation related to Carter Bryant and MGA Entertainment, Inc. The Ninth Circuit agreed with Mattel that the verdict and damages on MGA’s toy fair claims must be reversed, and directed the District Court to dismiss the claims without prejudice. The Ninth Circuit’s decision vacates the District Court’s judgment awarding MGA approximately $172 million, consisting primarily of compensatory and punitive damages, for the claims MGA made arising out of conduct at toy fairs. Consistent with the District Court’s affirmance of the award of fees and costs against Mattel arising out of the separate copyright claims, Mattel has taken a charge of $137.8 million ($87.1 million net of taxes) with respect to the fourth quarter of 2012 to cover these fees and costs.

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