TO OUR SHAREHOLDERS We knew 2016 was going to be a particularly challenging year, and as I look back, I believe we executed well against our key strategic priorities and made significant progress on resetting the Company’s foundation for growth. And this progress continues under new leadership, with Margaret Georgiadis taking the helm as the Company’s CEO in 2017. As such, we both wanted to contribute to this year’s letter to our shareholders. I will start off with some thoughts on 2016 and Margo will close with her thoughts on Mattel going forward. 2016: Setting the Foundation In the midst of our ongoing cultural and organizational transformation, political and economic uncertainty, a category slowdown, and foreign exchange headwinds, we made great progress on our key strategic priorities, particularly in our core brands and our licensed entertainment portfolio − progress which I believe sets a very strong foundation for Mattel going forward. In 2016: Our top three core brands – Barbie®, Hot Wheels® and Fisher-Price® – had strong growth globally and exited the year with positive POS momentum, which has not happened for several years.1 We strengthened our franchise partnerships with strong performance on new properties for 2016 and won key additional licenses with top partners. For example: • We partnered with Warner Brothers and successfully launched a new doll brand, DC SuperHero GirlsTM, which won the Toy Industry Association’s Toy of the Year Award in the Action Figure category, and grew the DC Comics® license with the hit movie, Batman v Superman. • We renewed our license with Disney Consumer Products for the iconic CARS® franchise and the upcoming Disney Pixar film, Cars 3. • NBCUniversal awarded us the worldwide master toy license for the Jurassic World® and Fast and FuriousTM franchises. We continued to invest for growth by building out our infrastructure in emerging markets and saw considerable growth in China and Russia. We achieved the high end of our cost savings program, delivering $295 million in gross cost savings over 2015 and 2016.2 And we continued to invest in innovation by expanding our relationships with the inventor community, building partnerships in the gaming space, and making strategic investments in digital technology platforms. Unfortunately, our fourth quarter financial results, impacted by a significant category slowdown in the holiday season, mask a significant amount of progress made by this organization. I believe this progress and the investments we’ve made provide very solid building blocks for the future and the opportunity for Mattel to grow in 2017 and beyond. Let me finish by saying I could not be more proud of what this organization has accomplished over the past two years. I know it’s been challenging, but I am confident that Margo, her leadership team and the entire Mattel family will continue to build on the progress that we’ve made. It’s been an honor to be a part of this team and I look forward to continuing the work as we pivot to growth in the days ahead. At this point, let me pass the pen over to Margo. _________________________________________________________________________ 1 Mattel Internal Financials 2 2015/2016 Annual Report on Form 10-K 2017: The Opportunity to Grow As Chris wrote, Mattel has made considerable progress in 2016 that will allow us to pivot to growth going forward. Mattel is truly a creations company that inspires the wonder of childhood and I am committed to working with Chris and this strong organization to deliver on its mission to be the recognized leader in play, learning and development worldwide. I joined Mattel because I believe early childhood development is crucial in creating the leaders of tomorrow and no company has done more in that space than Mattel. And while I have only been here a short time, I am impressed with the Mattel organization and their focus on executing Mattel’s mission and creating shareholder value. As a company, we will continue to focus on the five strategic priorities set by Chris and Richard Dickson, Mattel's President and Chief Operating Officer, in 2015 as we accelerate progress against them as we move forward: 1. Build powerful brand franchises 2. Establish Toy Box as the partner of choice 3. Develop unmatched commercial excellence 4. Rapidly build emerging market leadership 5. Drive continuous cost improvement I believe my background in running large, complex, ever-changing global companies will complement our progress to date on each of our priorities. Further, as we recognize shifts in consumer buying patterns and the importance of content to drive brand passion, and shape compelling omnichannel programs to win the path to purchase, I believe that my experience will help enable us to accelerate our growth. There is a significant amount of untapped potential at Mattel when you consider how we can innovate what we make, how we make it, how we distribute it, and how we develop lasting relationships with our customers. Mattel has many strengths for us to build on: • Coveted and unrivaled portfolio of iconic consumer brands • POS momentum • Solid slate of licensed properties • Strong foothold in key emerging markets • Very talented and experienced leadership team Chris and Richard have been investing to grow the business and we will continue to do so going forward. I recognize that there is still much more work to be done, but rest assured, Mattel will remain focused on growing the top-line and expanding operating margins as we work toward our long-term financial objectives. We will look at ways to reprioritize spending and improve efficiencies and productivity to fund additional growth. As your new CEO and Board member, I remain committed to the Company’s capital deployment framework and will continue to invest to grow the business and maximize shareholder value. And, most importantly, Mattel will remain driven by a collective passion and determination, one that has pushed us forward during the challenging times and one that has defined Mattel for more than 70 years. On behalf of everyone at Mattel, we thank all of our shareholders for their continued support as we continue the work to return Mattel to growth and profitability. Sincerely, Christopher A. Sinclair Margaret H. Georgiadis Executive Chairman Chief Executive Officer Mattel, Inc. )RUP. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________ FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2016 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-05647 ________________________________________________________ MATTEL, INC. (Exact name of registrant as specified in its charter) Delaware 95-1567322 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 333 Continental Blvd. El Segundo, CA 90245-5012 (Address of principal executive offices) (310) 252-2000 (Registrant’s telephone number) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $1.00 par value The NASDAQ Global Select Market ________________________________________________________ Securities registered pursuant to Section 12(g) of the Act: NONE ________________________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $10,657,561,740 based upon the closing market price as of the close of business June 30, 2016, the last business day of the registrant’s most recently completed second fiscal quarter. Number of shares outstanding of registrant’s common stock, $1.00 par value, as of February 10, 2017: 342,445,392 shares DOCUMENTS INCORPORATED BY REFERENCE Portions of the Mattel, Inc. 2017 Proxy Statement, to be filed with the Securities and Exchange Commission (“SEC”) within 120 days after the close of the registrant’s fiscal year (incorporated into Part III).