Toy Industry Overview Annual 2007 April 2008 Housekeeping

Toy Industry Overview  Annual 2007 April 2008 Housekeeping

Toy Industry Overview Annual 2007 April 2008 Housekeeping Presentation (1:15) + Q&A (:45) Syndicated Presentation Two documents category structure & evaluation Digital Copy of the Deck The NPD Group / Consumer Tracking Service Recalls and returns not accounted for Data presented is as of January 2008 data release Per National Retail Federation, 2007 has an extra week v. 2006 Product images are representative of the property Agenda Toy Industry Overview Toy Categories Boys and Girls Retailers Licensing Kids Toy Industry Overview The Big Picture ARP: $7.45 +2% Billions of Dollars +0.4% $22.6 $22.5 Billions of Units -2.0% $22.2 - 5.0% 3.3

3.1 2005 2006 2007 Source: The NPD Group / Consumer Tracking Service 2005 2006 - 4.1% 3.0 2007 A Bumpy Road For Toys Toy Recalls Shaky economy Toys are discretionary Toys used to shelter children Competition for Kids time is fierce Digital Kids (consumer electronics, online activities, virtual worlds) Outrageous +43% growth in Video Games Girls toys not performing well Declines in Barbie, Bratz and Dora Lack of new movie/TV licenses for girls The Good News For Toys Consumers continue to pay higher prices for toys Several segments grew Online channel (+9%) Grandfathers (+33%) Boys Ages 0-8 (+5%) Connected Web Play (+>200%) Higher birth rates continue (+6%) U.S. HH penetration for toys is high (>90%) Europe is growing (+2%) Big 5 European Countries Combined Grow Value Sales by 2% Change vs. 2006 POS -1% +1%

+2% +4% +9% 2006 2,218 2,196 1,537 1,552 2007 1,944 1,982 645 669 UK Germany France Italy 683 743 Spain UK: Transformers, Spider-Man, In the Night Garden, HSM, Online Germany: LEGO, Silverlit France: Specialty stores, Toys space in Food, Transformers, LPS Italy: Gormiti craze, LEGO, Dolls: Cicciobello, Baby Alive and Winx Club Spain: Cars, Mickey Mouse, Spider-Man, Pocoyo, Formula 1 Quarterly Trends Show Increasing Declines Total Industry % Dollar Change by Quarter in 2007 v 2006 9.7% Per National Retail Federation, January 2007 has an extra week v. January 2006 Q1 '07 v '06 Q2 '07 v '06 Q3 '07 v '06 -3.2% -3.6% Q4 '07 v '06 -5.1% Source: The NPD Group / Consumer Tracking Service Movies Helped Some Categories Grow Annual 2007 vs. 2006

Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22.2 B Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games/Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134

Dolls $2,540 8% 16% 6% -1% -3% 46% -5% -5% 38% -8% Source: The NPD Group / Consumer Tracking Service Innovation, Licensing, Line Extension, Focus Top 10 Corporate Manufacturers, 2007 Dollar Share Annual 2006 Ranking Dollar Share (%) 1 Mattel 2 Hasbro 3 MGA Entertainment 4 JAKKS Pacific 6 10 Share Point Dollar Volume Change Percent Change 2007 vs. 2006 2007 vs. 2006 16.9% 12.5%

4.3% 3.8% -0.9 -7% 0.8 5% __ -2% 0.3 5% Crayola 2.6% 0.3 10% Spin Master 2.5% 1.0 60% 5 LeapFrog 2.1% -0.3 -16% 8 LEGO Systems 2.0% 0.2 11% 7 Mega Brands 1.8%

-0.3 -12% 9 VTech 0.1 2% 1.6% Source: The NPD Group / Consumer Tracking Service Boys Ages 3-5 Soared, Girls Was Down Across The Board Dollar Share/Sales Trend Annual 2007 +2 pt. 54% 46% -2 pt. Boys +2% Girls -7% Age 0-2 21% Age 9+ 28% -3% +4% Age 6-8 21% Flat Age 0-2 21% Age 9+ 26% -2% +10% -7% Age 3-5 31%

Licensed Toys: Age 3-5: +19% Source: The NPD Group / Consumer Tracking Service Age 6-8 22% -10% -6% Age 3-5 31% Licensed Toys: Age 0-2: -13% Toy Categories Two Supercategories Drove Sales In 2007 Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts

$2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Action Figures & Accessories Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles

$2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Vehicles Annual 2007 vs. 2006

Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134

Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Plush Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603

-3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Building Sets Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0%

Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service All Other Toys Annual 2007 vs. 2006 Dollar

Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls

$2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Arts & Crafts Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics

$1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Youth Electronics Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush

$1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Games & Puzzles Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM)

-2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8%

6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Outdoor & Sports Toys Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040

-3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Infant / Preschool Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2% Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0%

Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1% -3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Dolls Annual 2007 vs. 2006 Dollar Dollar % Change Sales (MM) -2%

Total Traditional Toys $22,171 Action Figures & Accessories $1,364 Vehicles $2,288 0% Plush $1,344 0% Building Sets $678 All Other Toys $2,065 Arts & Crafts $2,603 -3% Youth Electronics $1,040 -3% Games & Puzzles $2,370 Outdoor & Sports Toys $2,744 Infant/Preschool $3,134 Dolls $2,540 8% 6% -1%

-3% -5% -5% -8% Source: The NPD Group / Consumer Tracking Service Boys and Girls Sales To Boys Were Up Overall Fueled By Growth In Boys Ages 3-8 Boys By Age of Recipient, Dollar Share, 2007 Q4: -9% +1% 17% 21% +0% Age 0-2 Age 3-5 Age 6-8 Age 9-11 -9% 11% Boys +2% 21% +4% Age 12+ 31% +10% Source: The NPD Group / Consumer Tracking Service Sesame Street Is Tops With Boys Ages 0-2 Top $ Categories (MM) & % Growth/Decline $276 All Other Infant Toys PS Vehicles PS Electronic Learning Sports Activities & Games Special Feature Plush $167

$95 $95 $77 - 3% + 15% - 4% 2007: $2,184MM % Change vs YAG: 0% $ Share of Industry: 11% ARP: $8.88 Top $ Growth Properties (MM) - 16% +20% Interesting Findings: Boys, 0-2 Years Old Grandfathers, representing 6% of dollar sales, spend 126% more for the average toy, $11.16. Grandmothers (22% of total sales) only spend $9.99 on average. 36% of purchases were for No Special Occasion, as opposed to total toys where only 29% of purchases were for No Special Occasion (Index = 124). Source: The NPD Group / Consumer Tracking Service $28 Cars the Movie $19 Spider-Man $17 Tonka Thomas & Friends $14 Laugh & Learn $14 The 3-5 Boys Group Is The Largest And Growing Top $ Categories (MM) & % Growth/Decline Action Figures

$294 Mini Vehicles $198 PS Vehicles $194 +26% +18% Boys, 3-5 Years Old 2007: $3,224MM % Change vs YAG: +10% $ Share of Industry: 16% ARP: $7.61 - 2% Top $ Growth Properties (MM) PS Electronic Learning $186 Sports Activities & Games $167 +5% +21% Spider-Man $91 Transformers $91 Interesting Findings: This segment had the strongest growth in three channels: Food/Drug (+39%), Online/Internet (+36%) and Mass Merchant/Discount (+6%) Cars the Movie For boys 3-5, Dads are up +13% and Grandpas are up +49%. Male buyers found these movie licenses especially appealing. Smart Cycle

Source: The NPD Group / Consumer Tracking Service Hot Wheels $52 $39 $19 Action Figures Stay On Top for Boys 6-8 With Transformers Driving Growth Top $ Categories (MM) & % Growth/Decline Action Figures $279 Sports Activities & Games $190 - 8% Building Sets $189 +19% +31% Boys, 6-8 Years Old 2007: $2,161MM % Change vs YAG: +4% $ Share of Industry: 11% ARP: $7.85 Top $ Growth Properties (MM) Radio/Remote Ctrl Vehicles $184 +22% Transformers Miscellaneous Toys $90 $110 +28% Spider-Man $71 Interesting Findings: The toy channel experienced 21% growth in this segment. The Food channel also grew (+52%) as did

the Online channel (+12%) 24% of all toys purchased for boys 6-8 are for their birthday. This is the highest index (141) for birthday across all age segments. Source: The NPD Group / Consumer Tracking Service Pokemon $38 Air Hogs $24 Webkinz $23 9-11 Is The Smallest Segment For Boys, And Declining Top $ Categories (MM) & % Growth/Decline Sports Activities & Games $137 +8% $136 +3% Boys, 9-11 Years Old 2007: $1,196MM % Change vs YAG: -9% $ Share of Industry: 6% ARP: $8.17 +35% Action Figures -7% Building Sets $119 - 1% -15% Top $ Growth Properties (MM) Radio/Remote Ctrl $74 -43% +5%

Strategic Trad Card Games $47 -18% Interesting Findings: $36 Air Hogs Pokemon Grandparents spend the most money on average for this segment ($11.04) while parents spend the least ($7.17) Target was the only major retailer that grew in this age group (+23%); Wal-Mart (-3%) and Toys R Us (-22%) both declined Spider-Man Nerf WWE Source: The NPD Group / Consumer Tracking Service $23 $16 $15 $14 Girls Sales Experienced A 7% Decline Overall Girls, By Age of Recipient Dollars, 2007 Age 0-2 -6% 13% +3% 21% -10% Age 6-8 Age 9-11 13% Girls -7%

-7% Age 3-5 22% Age 12+ 31% -6% Source: The NPD Group / Consumer Tracking Service Girls 0-2 Experienced Largest Sales Declines Top $ Categories (MM) All Other Infant Toys $227 Traditional Plush PS Role Playing Nurturing Dolls PS Electronic Learning -14% -10% $135 $102 Girls, 0-2 Years Old -10% 2007: $1,874MM % Change vs YAG: -10% $ Share of Industry: 10% ARP: $9.43 Top $ Growth Properties (MM) $85 $73 - 4% Disney Princess $14 - 7% Fisher-Price

$9 Interesting Findings: Moms buying for their daughters ages 0-2 declined by nearly $170MM or down -18%. Licensed Toys were down -13% All three major retailers suffered declines: Toys R Us (-15%), Wal-Mart (-10%) and Target (-9%) Source: The NPD Group / Consumer Tracking Service Baby Born $8 Go Diego Go $7 Radio Flyer $7 The 3-5 Group Is The Largest Among Girls, But Declining Top $ Categories (MM) Fashion Theme Dolls/Figurines $255 $207 Cray/Markr/Pncl/Chlk Playset Theme Figurines & Access $187 Girls, 3-5 Years Old -14% +6% +4% 2007: $2,832MM % Change vs YAG: -6% $ Share of Industry: 14% ARP: $7.47 (-10%) Top $ Growth Properties (MM)

PS Electronic Learning $172 +19% Crayola $167 Fashion Role Play $29 +27% Leapster $26 Baby Alive $26 Interesting Findings: Grandfather spending grew 66%, the greatest % growth for any segment. He is also overdeveloped for this group as compared to total toys (I = 150) Target grew +5% for girls 3-5. This was the only girls segment to see growth for any of the top 3 retailers Hannah Montana Kid Tough Source: The NPD Group / Consumer Tracking Service $23 $15 Hannah Montana And High School Musical Experience Growth Among Girls 6-8, While Overall Segment Declines Top $ Categories (MM) Fashion Themed Dolls/Figs $308 Traditional Plush $142 $127

-24% Cray/Mrkr/Pen/Chlk $127 -9% $97 -13% -8% Playset Theme Fig Fashion Role Play & Access Girls, 6-8 Years Old -6% Interesting Findings: 28% of all volume for Connected Web Play toys are for girls ages 6-8, the highest of any segment. Girls 6-8 was the largest segment for Hannah Montana (53%), High School Musical (38%) and Webkinz (28%). Source: The NPD Group / Consumer Tracking Service 2007: $2,011MM % Change vs YAG: -7% $ Share of Industry: 10% ARP: $8.28 Top $ Growth Properties (MM) Hannah Montana $47 Webkinz $47 High School Musical $29 Little Tikes $12

Disney All Other $11 Girls 9-11 Is The Only Girls Segment To Show Growth Top $ Categories (MM) Fashion Themed Dolls/Figs Girls, 9-11 Years Old $143 Traditional Plush $117 Cray/Mrkr/Pen/Chlk $74 +3% +34% 2007: $1,168MM % Change vs YAG: +3% $ Share of Industry: 6% ARP: $8.36 -10% Top $ Growth Properties (MM) Youth Elect/Comm Playset Theme Fig&Acc $60 +2% $58 +0% American Girl Interesting Findings: $46 Webkinz Department/Major Chains (+55%) and All Other channel (+15%) experienced the highest growth percentage of any segment with girls 9-11 This age group had the most influence. 72% of sales resulted from asking for a toy and 44% asking for a

specific toy Littlest Pet Shop $19 High School Musical Hannah Montana Source: The NPD Group / Consumer Tracking Service $20 $18 $14 Retailers Target Moves Up To #2 Retailer Dollar Share $ %Chg 37% 37% 37% -2% -2% -2% 16% 15% 14% -5% 12% 14% 15% +1% 29% 28% 28% -2%

2005 2006 2007 Wal-Mart Target Toys R Us Kmart Source: The NPD Group / Consumer Tracking Service KB Toys All Other Annual Per Store Sales Declines For The Big 3 Retailers Retailer Dollar Sales Per Store (,000) Q4 Chg. -11% -8% Wal-Mart Target -6% Toys R Us $5,246 $5,666 $5,376 -5% $2,043 $1,932 $1,791 $1,959 $2,131 $2,090 +8% +9% -5% -2% -7% 2005 2006

2007 2005 2006 2007 2005 2006 2007 # Stores 3,189 3,331 3,506 1,398 1,488 1,537 679 586 586 Source: The NPD Group / Consumer Tracking Service Online Channel Grows +9% Retailer Dollar Share Online Channel; Annual 07 vs. 06; Q407 vs. Q406 +9% $ %Chg 47% 51% +3% 39% +1% 8% 5% 13% 7% +58% 9%

9% NA +35% -14% 19% NA 5% 4% 11% 12% Annual 2006 Amazon.com Annual 2007 Walmart.com Target.com $ %Chg 44% +18% 4% 12% 10% 6% 6% -42% -15% +13%* 15% 12% -15% 16% 18% +13% Q4'06 Q4'07

Toysrus.com eBay.com All Other Note: Toysrus.com and Amazon.com separated in July 2006; therefore, neither can be compared versus yearago for Annual trends. Source: The NPD Group / Consumer Tracking Service * <200 transactions: Proper caution should be used in interpretation Regional Ups & Downs For The Big 3 Retailers Retailer Dollar % Change Annual 2007 vs. 2006 CENTRAL (-3%) $% %Chg Wal-Mart 28% -4% Target 15% +3% Toys R Us 13% -12% NORTHEAST (-1%) $% %Chg Wal-Mart 20% -1% Target 11% -1% Toys R Us 20% -9% WEST (Flat) $% %Chg Wal-Mart 23% Target 20% Toys R Us 14% -2% +5% -1% Source: The NPD Group / Consumer Tracking Service SOUTH (-3%) $% %Chg Wal-Mart 37% -2% Target 13% -2% Toys R Us 13% +1% Pricing Strategy Matters Unit Distribution of Sales by Price Point Annual 2007 -2% -2% 6% 9%

6% 8% 22% +1% 20% 21% 21% 59% 57% Total Toys <$5 $10-$15 8% 11% 26% 28% +1 pt. -2 pts. 46% Source: The NPD Group / Consumer Tracking Service $20-$30 16% 50% 28% -1 pt. 22% +2 pts. -2 pts. Target $15-$20 6% 11% 14%

flat Wal-Mart $5-$10 -5% Toys R Us $30-$50 $50+ US Household Penetration For Toys High Among Dollar Stores US HH Penetration for Toys (Excluding Internet) Annual 2007 US HH Penetration Annual $ Sales/HH 70% 60% $180 $163 60% $160 $140 50% 40% $120 $93 30% $100 32% $80 $87 21% 20% 10% $7 18% 17% 16%

$49 $14 0% $40 $20 $0 Wal-Mart Dollar Share $60 28.3% Target 14.5% Dollar Tree 0.7% Dollar General 1.3% Toys R Us 14.2% Source: The NPD Group / Consumer Tracking Service / Market Summary Report K-Mart 4.0% Licensing Licensed Toys Outperformed The Industry Dollar Share of Licensed vs. Non-Licensed Toys Annual 2006 vs. 2007 Annual 2006 Annual 2007 Licensed Toys 26% Licensed Toys 27% +2% -3% Non-Licensed Toys 74% Non-Licensed Toys 73% Four Of The Top 10 Licensors Showed Growth Top 10 Licensors, Ranked on Annual 2007 Dollar Sales

Annual 2006 Ranking Dollar Volume (MM) % Chg. 07 vs. 06 1 Disney 2 Nickelodeon 8 Marvel Enterprises 3 Lucas Licensing 4 HIT Entertainment 6 Sesame Workshop 5 4Kids Entertainment 7 Warner Brothers 11 Cartoon Network $61 198% 13 Dreamworks $40 180% $1,535 $694 $453 $354 $316

$257 $227 $156 Source: The NPD Group / Consumer Tracking Service 19% -10% 91% -18% -2% -11% -29% -40% Six Of The Top 10 Manufacturers Of Licensed Toys Have 75% Or More Of Their Portfolio Tied To Licenses Top 10 Manufacturers for Licensed Toys, Ranked on Annual 2007 Licensed Dollar Sales % of Total Sales Licensed Licensed Dollar Volume (MM) Mattel $578 Fisher-Price Friends (Mattel) $503 Hasbro Toys $482 34% 93% 27% Fisher-Price Core (Mattel) $190 17% Jakks Pacific $182 85% Play Along (Jakks Pacific) $181 78% Creative Designs (Jakks Pacific)

$179 75% Bandai America $170 85% LEGO Systems $150 33% Learning Curve Toys (RC2) $149 96% Source: The NPD Group / Consumer Tracking Service A Perspective On Top Properties Top 10 Properties - Ranked on Annual 2007 Dollar Sales Annual 2006 Ranking Annual 2007 vs. 2006 % Change Dollar Volume (MM) 1 Barbie $669 -7% 3 Crayola $550 6% 2 Bratz 4 Dora the Explorer $399

-14% 7 Cars the Movie $395 26% 20 Spider-Man $389 160% 6 Disney Princess $357 8% 5 Star Wars $353 -18% 30 Transformers $349 +>200% 8 Hot Wheels $510 $319 Source: The NPD Group / Consumer Tracking Service -16% 4% Top 3 Licenses Tie For #1 Top 10 Licenses - Ranked on Annual 2007 Dollar Sales Annual 2006 Ranking

Annual 2007 vs. 2006 % Change Dollar Volume (MM) 1 Dora the Explorer $399 -14% 4 Cars the Movie $395 26% 7 Spider-Man $389 160% 3 Disney Princess $357 8% 2 Star Wars $353 -18% 6 Thomas and Friends 5 Sesame Street 8 Barbie 18

Disney All Other 17 WWE $270 $257 $163 $128 $112 Source: The NPD Group / Consumer Tracking Service 6% -11% 11% 43% 25% Licensed Sales Only, Brand Data Excluded Spider-Man Climbed To #1 Growth License Spot Top 10 Absolute Dollar Growth Licenses Absolute $ Growth Change Annual 07 vs. Annual 06 (MM) Annual 07 vs. 06 Annual 07 Dollar Volume (MM) % Change $240 Spider-Man $99 Hannah Montana $389 160% $99 +>200% Cars the Movie $83 $395 26% High School Musical $78 $82

+>200% $98 173% $60 191% Pokemon $62 $40 Are You Smarter Than a 5th Grader? Ben 10 $39 Disney All Other $38 $128 43% Go Diego Go! $31 $90 53% Shrek $28 $37 +>200% Disney Princess $28 $357 8% Source: The NPD Group / Consumer Tracking Service Only Sesame Street, Winnie The Pooh, & Thomas and Friends Have Licensing Staying Power For Kids Ages 0-2

Top 10 Licenses By Descending Dollars for Ages 0-2, 2000-2007 2000 2001 2002 2003 2004 2005 2006 2007 1 SESAME STREET SESAME STREET SESAME STREET SESAME STREET SESAME STREET SESAME STREET SESAME STREET SESAME STREET 2 WINNIE THE POOH WINNIE THE POOH WINNIE THE POOH WINNIE THE POOH WINNIE THE POOH & FRIENDS DORA THE EXPLORER DORA THE

EXPLORER DORA THE EXPLORER 3 BLUES CLUES BLUES CLUES BOB THE BUILDER DORA THE EXPLORER DORA THE EXPLORER WINNIE THE POOH & FRIENDS THOMAS AND FRIENDS THOMAS AND FRIENDS 4 DISNEY STD.CHARACTE RS BARBIE MICKEY & FRIENDS CARE BEARS CARE BEARS THOMAS AND FRIENDS WINNIE THE POOH & FRIENDS CARS THE MOVIE 5 BARBIE JOHN DEERE BLUES CLUES

THOMAS AND FRIENDS DISNEY PRINCESS DISNEY PRINCESS CARS THE MOVIE DISNEY PRINCESS 6 JEEP TONKA THOMAS AND FRIENDS MICKEY & FRIENDS THOMAS AND FRIENDS CARE BEARS DISNEY PRINCESS WINNIE THE POOH & FRIENDS 7 THOMAS AND FRIENDS DISNEY STD.CHARACTE RS TONKA DISNEY PRINCESS JEEP CABBAGE PATCH CABBAGE PATCH CABBAGE PATCH 8

TONKA THOMAS AND FRIENDS BARNEY BOB THE BUILDER WIGGLES JOHN DEERE JOHN DEERE SPIDERMAN 9 BARNEY BOB THE BUILDER SPONGEBOB SQUAREPANTS TONKA SPIDERMAN SPONGEBOB SQUAREPANTS SPONGEBOB SQUAREPANTS GO DIEGO GO! TOY STORY JEEP MAGNA DOODLE SPONGEBOB SQUAREPANTS MICKEY & FRIENDS SPIDERMAN MICKEY & FRIENDS BACKYARDIGANS

10 Source: The NPD Group / Consumer Tracking Service Only Barbie and Power Rangers Have Consistently Made The Top 10 Licenses List Since 2000 For Kids Ages 3-5 Top 10 Licenses By Descending Dollars for Ages 3-5, 2000-2007 2000 2001 2002 2003 2004 2005 2006 2007 1 BARBIE BARBIE BARBIE BARBIE SPIDERMAN DORA THE EXPLORER DORA THE EXPLORER DORA THE EXPLORER 2 POKEMON THOMAS AND FRIENDS SPIDERMAN DISNEY PRINCESS DISNEY PRINCESS

DISNEY PRINCESS DISNEY PRINCESS CARS THE MOVIE 3 TOY STORY POWER RANGERS THOMAS AND FRIENDS SPIDERMAN DORA THE EXPLORER STAR WARS THOMAS AND FRIENDS DISNEY PRINCESS 4 BLUES CLUES TONKA POWER RANGERS POWER RANGERS BARBIE THOMAS AND FRIENDS CARS THE MOVIE SPIDERMAN 5 WINNIE THE POOH BOB THE BUILDER

BOB THE BUILDER THOMAS AND FRIENDS POWER RANGERS SPIDERMAN BARBIE THOMAS AND FRIENDS 6 POWER RANGERS HOT WHEELS JEEP CARE BEARS CARE BEARS BATMAN SPIDERMAN BARBIE 7 HOT WHEELS MONSTERS, INC. TOY STORY DORA THE EXPLORER THOMAS AND FRIENDS BARBIE POWER RANGERS POWER RANGERS 8 TONKA TOY STORY

STAR WARS HULK NINJA TURTLES(TMNT) POWER RANGERS STAR WARS STAR WARS 9 CHEVROLET SCOOBY DOO DISNEY PRINCESS JEEP JEEP JEEP SPONGEBOB SQUAREPANTS DISNEY ALL OTHER SESAME STREET WINNIE THE POOH TONKA TRANSFORMERS SPONGEBOB SQUAREPANTS NINJA TURTLES(TMNT) SESAME STREET GO DIEGO GO! 10 Source: The NPD Group / Consumer Tracking Service For Kids Ages 6-8, Hot Entertainment Licenses Made It Into The

Top 10 In 2007 Top 10 Licenses By Descending Dollars for Ages 6-8, 2000-2007 2000 2001 2002 2003 2004 2005 2006 2007 1 POKEMON BARBIE BARBIE YU-GI-OH YU-GI-OH STAR WARS STAR WARS STAR WARS 2 BARBIE POKEMON STAR WARS BARBIE SPIDERMAN YU-GI-OH CARS THE MOVIE SPIDERMAN 3 STAR WARS HARRY POTTER

SPIDERMAN BEYBLADE BARBIE BARBIE DISNEY PRINCESS DISNEY PRINCESS 4 POWER RANGERS POWER RANGERS YU-GI-OH SPIDERMAN POWER RANGERS DISNEY PRINCESS BARBIE HANNAH MONTANA 5 DIGIMON STAR WARS HARRY POTTER HULK NINJA TURTLES(TMNT) BATMAN YU-GI-OH CARS THE MOVIE 6

CHEVROLET DIGIMON POKEMON TRANSFORMERS DISNEY PRINCESS SPIDERMAN SPIDERMAN POKEMON 7 POWERPUFF GIRLS POWERPUFF GIRLS POWER RANGERS POWER RANGERS BEYBLADE CABBAGE PATCH POWER RANGERS BARBIE 8 BRITNEY SPEARS WWF ZOIDS POKEMON CARE BEARS POWER RANGERS DORA THE EXPLORER

HIGH SCHOOL MUSICAL 9 WWF NASCAR TRANSFORMERS HARRY POTTER SPONGEBOB SQUAREPANTS DISNEY ALL OTHER BATMAN DORA THE EXPLORER HOT WHEELS DRAGON BALL Z RAPUNZEL HUMMER POKEMON CARE BEARS SPONGEBOB SQUAREPANTS WWE 10 Source: The NPD Group / Consumer Tracking Service Licensed Toys Became More Important Overall And In Six Supercategories As Compared To Last Year 2007 Dollar Share of Licensed vs. Non-Licensed Toys By Supercategory Share Chg. from 2006 for Licensed +1 -8 +1 +3

0 -1 +1 +7 +2 -5 0 +4 70 69 65 30 31 35 32 Not Licensed 73 Licensed 81 73 72 75 27 28 25 79 68 27 A 89 71

11 29 19 21 ry ess. rafts Sets l ls zl es hool nics ys l ush icles Toys t o o s D z T u c P C /P u Presc lect ro orts Veh ther In d & Ac rts & i lding s l e a / O A Bu am fant uth E r & Sp Tot gures All G n I o i Y doo nF t o u i O ct Source: The NPD Group / Consumer Tracking Service Young Boys Saw Growth Due In Part To Licenses Such As Cars, Spider-Man and Pokemon Dollar Share of Licensed Toys by Gender and Age of Recipient, Annual 2007 +3 pt. 62%

-3 pt. Boys +7% -13% Girls -5% Age 0-2, 20% Age 12+, 16% -3% Age 9-11, 8% +11% Age 6-8, 19% +19% Age 12+, 8% -10% +18% +6% Age 9-11, 10% -13% Age 6-8, 19% 38% Age 3-5, 35% Source: The NPD Group / Consumer Tracking Service Age 0-2, 26% -13% +10% -8% Age 3-5, 39%

Ages 2-4 Is The Sweet Spot For Boys Licensed Toys Individual Age Distribution of Licensed Toys for Boys, Annual 2005, 2006 and 2007, Dollar Volume (MM) $500 Gains in ages 2-4 mostly due to Thomas & Friends, Cars the Movie and Spider-Man. $450 $400 $350 Gains in ages 6-8 mostly due to Star Wars & Spider-Man. $300 $250 $200 Male 2007 Male 2006 $150 Male 2005 $100 $50 $0 <1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Source: The NPD Group / Consumer Tracking Service Girls 5 And Under Saw Declines In Licensed Toys, 64% Individual Age Distribution of Licensed Toys for Boys vs. Girls, Annual 2005, 2006 and 2007, Dollar (MM)* $450 Declines in ages 2-4 mostly due to Dora the Explorer, Sesame Street & Cabbage

Patch $400 $350 $300 $250 Gains in ages 7-10 mostly due to Hannah Montana and High School Musical $200 $150 Female 2007 Female 2006 Female 2005 $100 $50 $0 <1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Source: The NPD Group / Consumer Tracking Service Licensed Sales Only, Brand Data Excluded Where Are The Licensed Toys For Girls? Age Distribution of Licensed Toys for Boys vs. Girls, Annual 2007, Dollar Volume (MM) $500 $450 $400 Total Gap widened to $1.3 billion $350 $300 Male

$250 Female $200 $150 $100 $50 $0 <1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Source: The NPD Group / Consumer Tracking Service Licensed Sales Only, Brand Data Excluded Blockbuster movies scheduled for 2008 Boy Oh Boy! Hannah Montana/ Miley Cyrus: Best of Both Worlds Concert Tour Iron Man (May 08) Indiana Jones and the Kingdom of the Crystal Skull Speed Racer (May 08) (May 08) Kung Fu Panda Wall-E (June 08) (June 08)

(February 08) The Incredible Hulk (June 08) Batman - The Dark Knight Star Wars: The Clone Wars (July 08) (August 08) RATED R High School Musical 3: Senior Year (October 08) Harry Potter and the Half-Blood Prince (November 08) Kids! Where Is Money Being Spent For Kids? Kids Age 0-14 3% 3% 2% 2%1% Apparel & Accessories 23% 3% Toys, Board Games, Arts & Crafts Leisure Activities 4% Non-Grocery Food/Beverages Video Game System/Software 7% Footwear Books, Music, Movies Allowance 7% 13%

Consumer Electronics Subscriptions Party Supplies Room Dcor 8% Events and/or Concerts 12% 13% Source: The NPD Group / Kids Share of Wallet Baby and/or Infant Products Apparel Sales To Kids Grew With Disney Taking The Top Spot And Many Store Brands Making The List Top Apparel Brands Kids 0-13 Years Old Annual 2007 3% 3% 23% 2% 2%1% 3% Disney 4% Carters 7% Old Navy 7% Gap 13% 8% The Childrens Place Hanes Faded Glory (Wal-Mart) Gymboree Cherokee Oshkosh B Gosh Fruit Of The Loom Arizona Jean (JCP) Nike Source: The NPD Group / Consumer Tracking Service Childrens Wearer Segment

12% 13% Restaurant Traffic Was Up +1% for Kids 0-12 Top QSR Restaurants for Kids 0-12, Annual 2007 3% 3% 2% 2%1% 23% 3% McDonalds (15%) Burger King (4%) 4% 7% 7% Wendys (3%) Taco Bell 13% 8% 13% 12% Pizza Hut KFC Sonic Dunkin Donuts Subway Dominos Source: The NPD Group / Consumer Tracking Service FoodService Video Games Continue Strong Growth As Traditional Toys Growth Levels Off +43% $40 3% 3% 2% 2%1% 23% 3% Toys Video Games

4% $35 7% $18B Retail Sales ($ Billions) $30 7% $25 13% 8% 12% $20 13% $15 $22B $10 $5 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: The NPD Group / Consumer Tracking Service Note: Toy data reflects multiple methodologies. Significant changes were made in both 2002 and 2003. Among Kids, Girls Show Higher Rate Of Growth Video Games Industry Dollar Sales - Millions Girls 8 & under Girls 9-12 $2,500 Annual 07 vs. 06 % Change Boys 8 & under Boys 9-12 $2.2B 22% $2,000 $1,500 $1.2B 16%

$1,000 $745M $440M $500 $0 2003 2004 2005 Source: The NPD Group / Consumer Tracking Service 2006 2007 40% 45% Portable Gaming Is Hot For Kids Unit Share, Kids 12 & Under PS3 Xbox Gamecube 360 2007 2006 PSP Wii PS2 DS replacing GBA Nintendo Portable 0 10 20 Source: The NPD Group / Consumer Tracking Service 30 40 50 Licenses Drive Top Games For Kids 78.3 million units of games sold for kids 12 & under in 2007 equating to $2.4 B Source: The NPD Group / Consumer Tracking Service Kids Were Into These Big Games Too!

Source: The NPD Group / Consumer Tracking Service Kids Footwear Was Up +3%: Brands Matter! Top Footwear Brands Kids 0-13 Years Old Annual 2007 Skechers Nike Stride Rite 3% 3% 2% 2%1% 23% 3% Heelys 4% Vans 7% Crocs 7% 13% Timberland 8% Faded Glory 12% 13% Smart Fit (Payless) Adidas Source: The NPD Group / Consumer Tracking Service Footwear Childrens Wearer Segment Top Music Artists (CD & Digital Albums) Kids 0-12 Years Old Annual 2007 Source: The NPD Group / Consumer Tracking Service Top VHS/DVD Sales/Rentals Kids 0-12 Years Old As Primary Viewers Annual 2007 Source: The NPD Group / VideoWatch Kids Personal Ownership And Usage Of Consumer Electronics (2007) 3% 3%

80 3% Ownership Usage 2% 2%1% 23% 4% 70 7% 60 7% 50 13% 8% 13% 12% 40 30 20 10 0 Video CD Player Console TV (NP) Stereo (P) PDMP Game (P) (P) Video DVD (P) Cell DVD (NP) Digital Desktop Laptop Phone Camera Computer Source: The NPD Group / Kids & Consumer Electronics Wave 3 Video Camera P Portable NP Non- Electronics: Average Age Of Initial Kid Use Continues To Decline Laptop

Digital Camera PDMP Cell Phone 11 Age 10 9 8 7 6 2005 2006 Source: The NPD Group / Kids & Consumer Electronics Wave 3 2007 Most Of Kids Digital Time Is Spent On Games And Music % of Time Spent on Digital Activities Across 4 Key Devices (PDMP, Computer, Cell Phone, Video Game Systems) Watch music videos 3% Watch online/streaming video clips 3% Download ringtones/ ringtunes 2% Watch TV shows 3% Watch movies 8% Play games 45% Send or receive pictures/ images 5% 3% 3% 2% 2%1% 23% 3%

Listen to music 31% 4% 7% 7% 13% 8% 12% Source: The NPD Group / Kids & Digital Content 2007 Edition 13% Boys Are From Mars, Girls Are From Venus Top No3Special Retailers Online Online Video Movie Games licenses Web TV Connected licenses Play Licensed Birthday Mom ARP Dad Toys Combined Occasion Channel Channel Industry Landscape Opportunities NewHigher Growth TV Grandparents Higher Toy Licenses Birth Safety InPrices Europe Rates for Girls

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