• Worldwide net sales flat with the prior year;
• Domestic gross sales down 3 percent and international gross sales up 3 percent;
• Worldwide gross sales for core brands: Barbie® down 11 percent; Hot Wheels® down 11 percent; Core Fisher-Price® up 1 percent and American Girl® brands up 12 percent;
• Gross margin decreased 60 basis points of net sales; SG&A flat with prior year;
• Operating income as a percentage of net sales was 17.5 percent, up 50 basis points; and
• Earnings per share of $0.69 (includes tax benefit of $0.11) vs. prior year of $0.68 (includes tax benefit of $0.16).

• Worldwide net sales up 1 percent from the prior year;
• Domestic gross sales down 2 percent and international gross sales up 5 percent;
• Worldwide gross sales for core brands: Barbie® down 13 percent; Hot Wheels® down 1 percent; Core Fisher-Price® up 1 percent and American Girl® brands up 15 percent;
• Gross margin decreased 140 basis points of net sales; SG&A increased 50 basis points of net sales;
• Operating income as a percentage of net sales was 12.8 percent, down 150 basis points; and
• Earnings per share of $1.01 (includes AJCA-related tax expense of $0.26 per share and tax benefit of $0.09 per share) vs. prior year of $1.35 (includes tax benefit of $0.15 per share).

Net income for the year was negatively impacted by incremental tax expense of $107.0 million, or $0.26 per share, resulting from the company's decision to repatriate $2.4 billion in previously unremitted foreign earnings under the American Jobs Creation Act (AJCA). The company recognized expense of $112.9 million in the second quarter in anticipation of the repatriation, and reduced the expense by $5.8 million in the fourth quarter. Net income for the year was positively impacted by $38.6 million of tax benefit, or $0.09 per share, primarily relating to audit settlements with certain tax authorities in both the U.S. and abroad. Net income in 2004 was positively impacted by a $65.1 million tax benefit, or $0.15 per share, related to an audit settlement with the Internal Revenue Service.

"As I said throughout the year, 2005 proved to be a challenging year for Mattel as we continued to experience extensive cost pressures and sales declines in the Barbie® brand, which offset much of the growth we experienced throughout our portfolio," said Robert A. Eckert, chairman and chief executive officer of Mattel. "That said, we generated strong cash flow and the balance sheet remained healthy with approximately $1 billion of cash at year-end."

Financial Overview

For the quarter, net sales were $1.84 billion, or flat with $1.85 billion in sales last year, which included a negative impact from changes in currency exchange rates of 1 percentage point. On a regional basis, fourth quarter gross sales decreased 3 percent in the U.S., and were up 3 percent in international markets, which included a negative impact from changes in currency exchange rates of 2 percentage points. Operating income for the quarter was up 2 percent at $321.7 million.

For the year, net sales were $5.18 billion, a 1 percent increase from $5.10 billion last year, which included a benefit from changes in currency exchange rates of 1 percentage point. On a regional basis, full-year gross sales were down 2 percent in the U.S., and were up 5 percent in international markets, which included a benefit from changes in currency exchange rates of 1 percentage point. Operating income for the year was $664.5 million, a decrease of 9 percent compared to the prior year, driven primarily by lower gross margins and higher selling, general and administrative expenses.

The company's debt-to-total capital ratio of 26.1 percent and year-end cash balance of $997.7 million are in line with the company's capital and investment framework. During 2005, the company repurchased 28.9 million shares of its common stock at a cost of approximately $500 million.

Mattel Brands Girls and Boys: Fourth Quarter

For the fourth quarter, worldwide gross sales for the Mattel Brands Girls and Boys business unit were $1.06 billion, down 6 percent versus a year ago. Worldwide gross sales for the Barbie® brand were down 11 percent. Worldwide gross sales for Other Girls Brands were up 23 percent. Worldwide gross sales for the Wheels category, which includes the Hot Wheels®, Matchbox® and Tyco® R/C brands, were down 7 percent. Worldwide gross sales for the Entertainment business, which includes Games and Puzzles, were down 13 percent for the quarter.

Mattel Brands Girls and Boys: Full Year

For the year, worldwide gross sales for the Mattel Brands Girls and Boys business unit were $3.14 billion, or down 3 percent. Worldwide gross sales for the Barbie® brand were down 13 percent. Worldwide gross sales for Other Girls Brands were up 25 percent for the year. Worldwide gross sales for the Wheels category were down 1 percent. Worldwide gross sales for the Entertainment business were flat.

Fisher-Price® Brands: Fourth Quarter

Fourth quarter worldwide gross sales for the Fisher-Price® Brands business unit, which includes the Fisher-Price®, Little People®, Rescue Heroes® and Power Wheels® brands, were $694.8 million, up 6 percent due to strong international sales of Core Fisher-Price® and worldwide sales of Fisher-Price® Friends.

Fisher-Price® Brands: Full Year

For the year, worldwide gross sales for the Fisher-Price® Brands business unit were $2.02 billion, up 5 percent driven by double-digit sales growth of Fisher-Price® Friends and solid sales growth of Core Fisher-Price® internationally.

American Girl® Brands: Fourth Quarter

Fourth quarter gross sales for the American Girl® Brands business unit, which offers American Girl® branded products direct to consumers, were $240.6 million, up 12 percent.

American Girl® Brands: Full Year

For the full year, gross sales for the American Girl® Brands business unit were $436.1 million, up 15 percent, primarily due to strong performance in both the Direct and Retail channels. Increased sales were fueled by the Marisol™ doll and book from the Just Like You™ contemporary line, and doll and book products related to the American Girl® live-action, made-for-TV movies.

About Mattel

Mattel, Inc., (NYSE: MAT www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products, including Barbie®, the most popular fashion doll ever introduced. The Mattel family is comprised of such best-selling brands as Hot Wheels®, Matchbox®, American Girl® and Tyco® R/C, as well as Fisher-Price® brands (www.fisher-price.com), including Little People®, Rescue Heroes®, Power Wheels® and a wide array of entertainment-inspired toy lines. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 25,000 people in 42 countries and sells products in more than 150 nations throughout the world. The Mattel vision is to be the world's premier toy brands -- today and tomorrow.