Mattel 2003 Annual Report Download - page 31

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International Segment
The following table provides a summary of percentage changes in gross sales within the International
segment in 2003 versus 2002:
Non-US Regions:
%Change in
Gross Sales
Impact of Change
in Currency Rates
(in % pts)
Europe ........................................................... 20 15
Latin America ...................................................... (1) (6)
Canada ........................................................... 15 11
Asia Pacific ....................................................... 25 13
Total International .................................................. 15 10
International gross sales increased 15% in 2003 compared to 2002, including a benefit from changes in
currency exchange rates of 10 percentage points. The increase in gross sales was due to growth across all product
lines, including Barbie®,Hot Wheels®and core Fisher-Price®,combined with growth in the Entertainment
category, including games and puzzles, Yu-Gi-Oh!™and Batman™.International segment income increased 20%
to $365.0 million in 2003, largely due to increased volume and gross profit improvement, partially offset by
higher advertising and promotion expenses in an attempt to rebuild volume momentum in core brands and launch
new brands.
2002 Compared to 2001
Consolidated Results
Net income for 2002 was $230.1 million, or $0.52 per diluted share, as compared to net income of
$298.9 million, or $0.68 per diluted share, for 2001. In the first quarter of 2002, Mattel implemented SFAS
No. 142, Goodwill and Other Intangible Assets,and recorded a transition adjustment of $252.2 million, net of
tax, as the cumulative effect of change in accounting principles resulting from the transitional impairment test of
the American Girl Brands goodwill. In the third quarter of 2002, Mattel recorded a $27.3 million after-tax gain
from discontinued operations related to the sale of Learning Company. In 2002, Mattel also incurred a pre-tax
charge of $48.3 million ($31.9 million after-tax) related to the financial realignment plan. The combined effect of
these items was a net after-tax charge of $256.8 million for 2002. In the first quarter of 2001, Mattel
implemented SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,and recorded a
transition adjustment of $12.0 million, net of tax, as the cumulative effect of change in accounting principles
related to the unrealized holding losses on CyperPatrol securities that had been previously deferred in
accumulated other comprehensive loss. In 2001, Mattel also incurred a pre-tax charge of $50.2 million
($35.2 million after-tax) related to the financial realignment plan and a $5.5 million after-tax charge related to
loss on derivative instruments. The combined effect of these items was a net after-tax charge of $52.7 million for
2001.
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