Mattel, Inc. engages in the design, manufacture, and marketing of toy products worldwide. Segments The company’s segments include North America, which consists of the U.S. and Canada; International; and American Girl. North America The North America segment markets and sells toys in the U.S. and Canada through the Mattel Girls & Boys Brands and Fisher-Price Brands categories. In the Mattel Girls & Boys Brands category, Barbie includes brands, such as Barbie fashion dolls and accessories, and Polly Pocket, Little Mommy, Disney Classics, and Monster High are included within Other Girls Brands. Wheels includes Hot Wheels, Matchbox, and Tyco R/C vehicles and play sets; and entertainment includes CARS, Radica, Toy Story, Max Steel, WWE Wrestling, Batman, and Superman, as well as games and puzzles. The Fisher-Price Brands category includes Fisher-Price, Little People, BabyGear, Imaginext, Dora the Explorer, Bubble Guppies, Thomas & Friends, Mike The Knight, Octonauts, Mickey Mouse Clubhouse, Disney’s Jake and the Never Land Pirates, and Power Wheels. International The International segment markets products which are the same as those developed and marketed by the North America segment, although some are developed or adapted for particular international markets. The company’s products are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, and in Australia and New Zealand, and through agents and distributors in those countries where it has no direct presence. American Girl The American Girl segment is a direct marketer, children’s publisher, and retailer of historical dolls, books, and accessories, as well as the My American Girl and Bitty Baby brands. American Girl also publishes Advice & Activity books and the American Girl magazine. In January 2013, American Girl introduced Saige, the 2013 Girl of the Year doll. American Girl products are sold primarily in the U.S. Markets and Customers Products within the North America segment are sold directly to retailers, including discount and free-standing toy stores, chain stores, department stores, other retail outlets, and to wholesalers. Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, and in Australia and New Zealand. The company also has retail outlets in Latin America and Europe that serve as outlets for its products. American Girl products are sold directly to consumers, and its children’s publications are also sold to certain retailers. The company has 14 American Girl retail stores: American Girl Place in Chicago, Illinois, Los Angeles, California, and New York, New York, and American Girl stores in Alpharetta, Georgia, Bloomington, Minnesota, Chesterfield, Missouri, Dallas, Texas, Houston, Texas, Lone Tree, Colorado, Lynnwood, Washington, McLean, Virginia, Miami, Florida, Natick, Massachusetts, and Overland Park, Kansas, each of which features children’s products from the American Girl segment. American Girl also has a retail outlet in Oshkosh, Wisconsin that serves as an outlet for its products. Additionally, the company sells certain of its products online through its Website. During 2012, the company’s major customers were Wal-Mart, Toys ‘R’ Us, and Target. Licenses Agreements The company has entered into agreements to license entertainment properties from Disney Enterprises, Inc. (including Disney characters such as Mickey Mouse, Disney Princess, Jake and the Never Land Pirates, CARS and Toy Story from Pixar, Winnie the Pooh, and certain Disney films and television properties); Viacom International, Inc. relating to its Nickelodeon properties, including Dora the Explorer and Go Diego Go!; Warner Bros. Consumer Products, including Batman, Superman, Justice League, and Green Lantern; Sesame Workshop through December 31, 2010 relating to its Sesame Street properties including Elmo, and WWE Wrestling. Strategy The company’s strategy includes the following: deliver consistent growth by continuing the momentum in its core brands, optimizing entertainment partnerships, building new franchises, and working to expand and leverage its international footprint; optimize operating margins through sustaining gross margins within the low-to-mid 50% range in the near-term and above 50% in the long-term, and delivering on cost savings initiatives; and generate significant cash flow and continue disciplined, opportunistic, and value-enhancing deployment. Government Regulations The company’s products sold in the U.S. are subject to the provisions of the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, the Federal Hazardous Substances Act, and the Consumer Product Safety Improvement Act of 2008, and may also be subject to the requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act and the regulations promulgated pursuant to such statutes. In addition, the company’s online and other digital communications activity are or may be subject to U.S. and foreign privacy-related regulations, including the U.S. Children’s Online Privacy Protection Act of 1998 and the EU Data Protection Directive (Directive 95/46/EC) and related national regulations. Competition The North America segment competes with toy companies, including Bandai, Hasbro, Jakks Pacific, Leap Frog, Lego, MGA Entertainment, Spin Master, Tomy, and VTech. The International segment competes with toy companies including Bandai, Hasbro, Lego, MGA Entertainment, Playmobil, Tomy, and VTech, other national and regional toy companies, and manufacturers of video games and consumer electronics. History Mattel, Inc. was founded in 1945.