LeapFrog 2008 Annual Report Download - page 92

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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
Throughout 2006, 2007 and 2008, School segment financial measures did not reach the 10% of total net sales and
total operating income (loss) from operations set forth in SFAS 131 as a requirement for being reported as a
separate segment; however, it continued to be reported as such. During 2008, we ceased marketing directly to the
educational channel, reduced headcount and direct facilities expenses accordingly, and transferred responsibility
for this sales channel to the former U.S. Consumer operating segment.
Accordingly, in 2008, we have consolidated and reclassified the results of the former U.S. Consumer and
School segments into the United States segment for the fiscal years ended December 31, 2008, 2007 and 2006.
We charge all of our indirect operating expenses and general corporate overhead to the United States
segment and do not allocate any of these expenses to the International segment.
The accounting policies of the segments are the same as those described in Note 2 of these Notes to these
Consolidated Financial Statements.
The primary business of the two operating segments is as follows:
• The United States segment is responsible for the development, design and marketing of electronic
educational hardware products and related software, sold primarily through retail channels and through
the Company’s website in the United States.
• The International segment is responsible for the localization and marketing of electronic educational
hardware products and related software originally developed for the United States, sold primarily in
retail channels outside of the United States.
The table below shows certain information by segment for the years ended December 31, 2008, 2007 and
2006.
Years Ending December 31,
2008 2007 2006
Net sales:
United States .............................................. $363,396 $ 338,856 $ 387,624
International ............................................... 95,663 103,415 114,631
Totals ................................................ $459,059 $ 442,271 $ 502,255
Income (loss) from operations:
United States .............................................. $(55,756) $ (99,761) $(115,385)
International ............................................... (4,350) (1,409) (9,278)
Totals ................................................ $(60,106) $(101,170) $(124,663)
Total assets:
United States .............................................. $247,144 $ 310,204 $ 399,723
International ............................................... 60,188 60,259 39,474
Totals ................................................ $307,332 $ 370,463 $ 439,197
In 2008 and 2007, no countries other than the United States accounted for 10% or more of LeapFrog’s
consolidated net sales. LeapFrog 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
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