LeapFrog 2005 Annual Report Download - page 107

LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
and the substantive allegations are largely the same. By stipulation and order, the Company is due to respond
to the amended and consolidated complaint on March 27, 2006. Discovery has not commenced and no trial date
has been set. The Company has not accrued any amount related to this matter because it is not probable that a
liability has been incurred and the amount of liability, if any, is not currently estimable.
20. Segment Reporting
The Company’s reportable segments include U.S. Consumer, International and Education and Training. The
Company records all indirect expenses at its U.S. Consumer segment, and does not allocate these expenses to its
International and Education and Training segments. The accounting policies of the segments are the same as
those described in Note 2 of these notes to consolidated financial statements.
The U.S. Consumer segment includes the design, production and marketing of electronic educational toys and
books, sold primarily through the retail channels. For the International segment, the Company designs, markets and
sells products primarily in the non-U.S. consumer product market. The Education and Training segment includes
the design, production and marketing of educational books and toys sold primarily to school systems.
Net Sales
Income
(Loss) from
Operations
Total
Assets
2005
U.S. Consumer ...................................... $478,179 $ (4,854) $487,281
Education and Training ................................ 40,347 927 16,730
International ......................................... 131,231 24,880 101,818
Total ............................................... $649,757 $ 20,953 $605,829
2004
U.S. Consumer ...................................... $431,861 $ (49,886) $435,255
Education and Training ................................ 55,235 10,947 17,167
International ......................................... 153,193 24,956 107,372
Total ............................................... $640,289 $ (13,983) $559,794
2003
U.S. Consumer ...................................... $545,976 $ 83,209 $472,928
Education and Training ................................ 37,469 (194) 20,100
International ......................................... 96,567 26,443 59,631
Total ............................................... $680,012 $109,458 $552,659
In 2005, no single country other than the United States accounted for 10% or more of the Company’s
consolidated net sales. In 2004 and 2003, the Company had net sales in the United Kingdom of $67.8 million and
$39.0 million respectively. No other country accounted for more than 10% of the Company’s net sales for 2003
and 2004.The Company attributes sales to non-United States countries on the basis of sales billed by each of its
foreign subsidiaries to its customers. For example, the Company attributes sales to the United Kingdom based on
the sales billed by the Company’s United Kingdom-based foreign subsidiary, Leap Frog Toys (UK) Limited, to
its customers. Additionally, the Company attributes sales to non-United States countries if product is shipped
from Macau or one of the Company’s leased warehouses in the United States to a distributor in a foreign country.
The Company’s long-lived assets are comprised of net fixed assets, net intangibles, and other assets. As of
December 31, 2005, 2004 and 2003, long-lived assets located in foreign countries were $6,421, $10,973 and
$1,842, respectively. The majority of long-lived assets outside of the United States relate to manufacturing
tooling held by the Company’s wholly-owned subsidiary located in Macau.
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