Today & Tomorrow2012 Annual Report

2012 was a transformative year for the Toy Industry Association. We strengthened our organization by adding retailers,

licensors, reps and inventors as full voting members. We significantly grew our go-to-market trade events—Toy Fair

and Fall Toy Preview—by increasing exhibits, overall attendance and international participation. We provided new

information, data, education and affinity programs as tangible benefits for members. We effectively addressed issues

affecting toy businesses in Congress and in state houses across the nation. And we shared the joy of toys and play with

thousands of needy children.

We are proud of our accomplishments, but we also recognize that last year was a difficult one for many of our members.

With this in mind, we developed a three-year Strategic Plan that would leverage our position of renewed financial

strength and our capable professional team to support our members in building a stronger and healthier toy industry.

A key factor in our vision for 2013-2015 is the clear recognition that our industry has become truly global. Since 2000, all

significant growth in toy sales has been overseas. Nonetheless, the U.S. remains the world’s largest consumer of toys

and a leader in efforts to align safety requirements worldwide; we are tackling our alignment efforts with renewed vigor

to make it easier for toy companies to access new markets with products that will keep children safer than ever before.

Corporate responsibility, environmental sustainability, marketing to children, material and supply-chain management,

and other key policy issues affecting the global marketplace continue to emerge. TIA staff is actively monitoring these

developments and will keep you informed of issues that could impact your businesses. Your active participation in

shaping TIA’s policy and strategy decisions on these topics will be critically important. The Association is most effective

when we speak as a collective, organized voice on behalf of all interests in the toy industry: large and small, retailer and

vendor, independent and corporate.

TIA was created by and for the toy industry. To any company in the toy business that is not a TIA member, we invite you to

join us. And to all our loyal and supportive members, we say: THANK YOU!

FROM THE CHAIRMAN AND PRESIDENTSØREN TORP LAURSEN & CARTER KEITHLEY

Carter Keithley President, Toy Industry Association

SØren Torp Laursen Chair, Toy Industry Association, President, Americas & Pacific, The LEGO Group

FINANCIALS ($ in thousands)

FINANCIAL POSITION: AS OF DECEMBER 31, 2012 AND 2011 ASSETS: 2012 2011

Cash and investments $21,806 $18,897

Trade show, dues and other receivables, net 18 71

Prepaid expenses and deposits 1,367 835

Property and equipment, net 496 574

TOTAL ASSETS $23,688 $20,376

LIABILITIES & NET ASSETS:

Accounts payable and other liabilities $1,378 $1,104

Trade show, dues and other deferred income 10,713 9,893

TOTAL LIABILITIES 12,090 10,997

UNRESTRICTED NET ASSETS 11,598 9,379

TOTAL LIABILITIES AND NET ASSETS $23,688 $20,376

SUMMARY STATEMENT OF ACTIVITIES: YEARS ENDED DECEMBER 31, 2012 AND 2011 2012 2011

Program revenue $16,028 $15,986

Program expenses 11,616 10,765

Administrative expenses 2,927 2,958

OPERATING SURPLUS 1,484 2,263

Non-operating income 734 522

INCREASE IN NET ASSETS $2,218 $2,785

Membership 22%

American International Toy Fair 64%

Fall Toy Preview 13%

Other 1%

2012 Program Revenue

Membership 8%

American International Toy Fair 28%

Fall Toy Preview 11%

External Affairs & Technical Activities 34%

Strategic Communications 9%

Donations & TIF Support 6%

Other Meeting and Events 4%

2012 Program Expenses

ACCOMPLISHMENTSIn 2012, the Association achieved a net operating revenue of $1.5 million against a budgeted net of $927,000, due in large part to the negotiation of certain key contracts and a careful management of expenses. The surplus will be reinvested into the Association so that TIA continues to deliver high value products and services for the benefit of its members. TIA is an Association that exists only to serve the needs of its constituents.

MEMBERSHIP • With the addition of 161 new members, TIA reached an historic

milestone of 602 members for the year.• Eight retailers joined TIA in the inaugural year of retailer membership,

including Walmart, Toys”R”Us and Sears Holding Corporation.• New partnerships and services were introduced, including a payment

solutions program to benefit retail members, and the Toy Industry Next Generation (TING) partnership to cultivate a group of young toy professionals.

• A comprehensive membership survey was conducted to assess member needs and measure value; a second survey collected data about toy industry compensation and benefits.

• Member networking events and/or booths were hosted in New York City, Chicago, Los Angeles, and at related industry events such as the ASTRA Marketplace and Licensing Expo.

• A member recognition program was launched to honor the years of membership of all members of the Association.

• Through unprecedented participation by its members, the TIA Credit Interchange Program’s EZCredit® database grew to more than 35,000 submissions.

MEETINGS AND EVENTS • The 109th American International Toy Fair was ranked the 41st largest

trade show in America by Trade Show Executive magazine and the winner of its award for “Best Use of Social Media” at a trade event. Convene magazine also awarded Toy Fair’s “Play Happens: The Game” its “Best in Show Award for Social Media Initiatives.”

• Toy Fair grew by 2% over 2011: o 3% increase in buyers (overall) and a 6% increase in international buyers o 9% increases in both mass market retailers and licensors o Participation from 24 of the Top 25 U.S. Toy Sellers* o Significant growth of on-site media and overall coverage in

domestic and international media • Fall Toy Preview 2012 also saw increased participation: o 3% increase in buyers (overall) and a 9% increase in international buyers o 14% increase in licensors o Participation from 20 of Top 25 U.S. Toy Sellers*• PlayCon, TIA’s International Conference of Play Professionals took

place for the first time in Washington, DC (co-locating with TIA’s annual Fly-In).• Hosted inaugural ToyDesignCon at The Strong in Rochester, New York

for the creative teams at TIA member companies.

*as ranked by The NPD Group

EXTERNAL AFFAIRS • Ensured that no negative federal or state legislation was passed in 2012 directly targeting toys or children’s products.• Industry-led updates to the national toy safety standard (ASTM

F963) were approved by the U.S. Consumer Product Safety Commission as federal law.

• Advocated on behalf of the industry in legislative and regulatory policy discussions, including the Federal Trade Commission’s development of amendments to the Children’s Online Privacy Protection Act (COPPA).

• Developed new Members-Only resources for mobile app developers.• Connected TIA members with influential state and federal

policymakers at the Washington, DC Fly-In and California Toy Day.• Continued partnerships with international associations, such as Canadian Toy Association and Toy Industries of Europe, to better align toy safety standards on a global scale and facilitate

global trade. • Increased TIA’s visibility and impact on domestic and international

environmental regulation and policy issues.• Hosted a booth seen by more than 1,000 medical professionals at the

America Academy of Pediatrics national conference and educated the audience about the industry’s leadership in the area of toy safety and standards.

• Restructured external affairs staff to enhance issue expertise and advocacy capabilities and to increase TIA’s presence in

Washington, DC.

COMMUNICATIONS • Launched “TIA Knowledge Network,” which includes regular

webinars and in-person sessions on a range of topics pertinent to the toy industry, such as anti-counterfeiting, protection of intellectual property, safety and legislative updates, testing and reporting requirements, public relations, trade topics, and more.

• Created new member information resources on recent updates in the area of marketing to children and online privacy protection.

• Re-designed and re-launched ToyAssociation.org (industry-facing) and ToyInfo.org (consumer-facing) websites with expanded information resources and improved technology.

• Enhanced outreach to consumers through ToyInfo.org and social media contests such as “How Does Your Family Play,” and at events like the Big City Moms “Biggest Baby Shower”

in Manhattan.• Ensured that messages about the toy industry’s commitment

to safety in all types of play—both traditional and online—were delivered to media, legislators and NGOs.

• The Toy of the Year (TOTY) Awards received a record-breaking number of product submissions and votes in each of the five ballots, bringing both consumer awareness and industry participation in the program—including attendance at the

awards ceremony—to an all-time high.

PHILANTHROPY;TOY INDUSTRY FOUNDATION (TIF) • Thanks to the generosity of hundreds of toy industry

manufacturers, retailers, distributors and licensors, TIF collected 1.8 million toys and games (+150% over 2011) worth $16 million (+146%), through its signature Toy Bank program.

• Toys were distributed to 145 charities within The Toy Bank network, bringing play to children who are impoverished, ill, living in foster care or with a parent in the military, and affected by natural disasters such as Hurricane Sandy.

• Distributed 130,000 toys to children in military families on 35 U.S. bases through TIF’s national partnership with Boys & Girls Clubs of America Military Services.

• Launched a new national partnership with CASA for Children (Court Appointed Special Advocates), extending TIF’s reach to children entering the foster care system.

• Disbursed almost $400,000 in grant funding to organizations whose missions are in alignment with helping children in need.

• TIF’s Play Connects program granted $40,000 to worthy children’s charities nominated by TIA members.

• Built awareness about industry philanthropy with “Christmas in July” broadcast media campaign and launch of “Make a Stand for Kids” consumer fundraising initiative.

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