May 13, 2010 - Mattel 2010 Analyst Meeting

Back in 2000, we also said our goal was to catch new trends within our existing businesses and create new brands and enter new categories. I know that we have teased a lot about our newest Monster property so I'm very excited to finally be able to say that the Monsters are here and introduce the Monster High franchise, an original storyline that brings together the hip teenage descendents of the world's most famous monsters to brave the horrors of high school. Never in Mattel history have we launched such a comprehensive franchise program that includes an all-encompassing toy line, publishing, entertainment in the form of webisodes and a live action musical in the works, as well as an apparel partner. The dolls are just beginning to ship and promotions and tie-ins will begin this Summer with a natural push during Back-To-School and Halloween.

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We are also optimistic about the revenue outlook for 2011. We have plans designed to continue to drive positive momentum in our core brands. Later today many of these plans will be shared with you.

We also anticipate the continued global expansion of our WWE Wrestling business as WWE broadens its global distribution of its entertainment offerings. Our Thomas property should be fully up and running and benefit from clean aisles at retail. We also fully expect the Toy Story franchise to develop into another strong evergreen property and we have a very strong slate of new licensed entertainment properties in CARS 2 and Green Lantern. And finally, we should realize some more benefits from the 2010 launch of our Monster High franchise.

Another opportunity to offset headwinds lies in our commitment to efficiency and improving our manufacturing capabilities. Over the years, we have driven significant improvements in how we manufacture things like fashion dolls and diecast cars. These efficiencies have allowed us to provide good price/value to the consumer while maintaining or improving our margin structure. For example, as labor costs in China begin to rise, we looked for opportunities to automate labor intensive activities like hair rooting for fashion dolls and decorating diecast cars.

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The question is Monster High. Can we give a little bit more color on the economics and how this thing's going to play out?

And not unusually, we just don't know yet. I mean, we can't predict how the thing will unfold. We love all our children. We love every new idea we come up with and hope it's going to be the next Barbie. I think what makes us feel particularly good about Monster High is we've been around this idea for quite a while. Everyone we showed it to gets excited about it. So it's allowing us to create partnerships even before anything physical exists. Just the concept, the intellectual property, the branding, the storyline, how it plays out is appealing to retailers and to potential partners.

How the demand plays out over time I don't know. But what we're trying to indicate to you today is this isn't one of those things where we put a product on the air for a couple of Saturdays and hope it sells. And if it doesn't sell, we move on. This is a commitment of significant marketing energy from our standpoint to see if we can create a franchise. Maybe we can, maybe we can't. But I'll tell you it's the beginning of what we see as some opportunities to create franchises like this going forward. So we want to give it our best shot which may take us some time. It will start with toys, it will follow with books, the apparel will hit this year. Most of that is in the licensing revenue side of the business as opposed to - we're not going to make apparel and we're not going to publish the book, somebody else is.