Mattel 2012 Annual Report Download - page 76

than their carrying values as a basis for determining whether it is necessary to perform the two-step impairment
test. ASU 2012-02 will be effective for Mattel for fiscal years beginning after September 15, 2012. Mattel does
not expect the adoption of ASU 2012-02 to have a material effect on its operating results or financial position.
In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated
Other Comprehensive Income, which requires an entity to present either on the face of the statement where net
income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive
income by the respective line items of net income but only if the amount reclassified is required under US GAAP
to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not
required under US GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference
to other disclosures required under US GAAP that provide additional details about those amounts. ASU 2013-02
will be effective for interim and annual reporting periods beginning after December 15, 2012. Mattel does not
expect the adoption of ASU 2013-02 to have a material effect on its operating results or financial position.
Note 2—Goodwill and Other Intangibles
Goodwill is allocated to various reporting units, which are at the operating segment level, for purposes of
evaluating whether goodwill is impaired. As more fully described in “Note 12 to the Consolidated Financial
Statements—Segment Information,” on January 1, 2012, Mattel changed its operating segments to align with its
new organizational structure, which resulted in changes to its reporting units. The new reporting units are:
(i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been
aggregated into a single reporting unit as the components have similar economic characteristics. The similar
economic characteristics include the nature of the products, the nature of the production processes, the customers,
and the manner in which the products are distributed. Mattel reassigned goodwill to the new reporting units based
on a relative fair value approach.
The change in the carrying amount of goodwill by operating segment for 2012 and 2011 is shown below.
Brand-specific goodwill held by foreign subsidiaries is allocated to the North America and American Girl
operating segments selling those brands, thereby causing a foreign currency translation impact for these
operating segments. Prior period amounts have been reclassified to conform to the current year presentation.
North America International American Girl Total
(In thousands)
Balance at December 31, 2010 ................... $ 394,063 $ 216,124 $ 213,820 $ 824,007
Currency exchange rate impact ................... (158) (1,512) (198) (1,868)
Balance at December 31, 2011 ................... 393,905 214,612 213,622 822,139
Acquisition ................................... 151,348 100,898 — 252,246
Currency exchange rate impact ................... 1,645 4,659 109 6,413
Balance at December 31, 2012 ................... $ 546,898 $ 320,169 $ 213,731 $1,080,798
In 2012, Mattel performed the annually required impairment tests and determined that its goodwill was not
impaired since, for each of the reporting units, its fair value substantially exceeded its carrying amount. Mattel
has not recorded any goodwill impairment subsequent to its initial adoption of Accounting Standards
Codification (“ASC”) 350-20, Goodwill, on January 1, 2002.
Acquisition of HIT Entertainment
On February 1, 2012, Mattel acquired Helium Holdings 1A Ltd, a private limited company existing under
the laws of Jersey (“HIT Entertainment”), pursuant to the Stock Purchase Agreement dated as of October 23,
2011, between Mattel’s wholly-owned subsidiary, Mattel Entertainment Holdings Limited, a private limited
company existing under the laws of England and Wales (the “Purchasing Sub”), HIT Entertainment’s parent
company, HIT Entertainment Scottish Limited Partnership, a limited partnership existing under the laws of
Scotland and majority-owned by a consortium of funds led by Apax Partners, LLP and its affiliates (the “Selling
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