Mattel 2004 Annual Report Download - page 54

Non-GAAP Financial Measure
In this Annual Report on Form 10-K, Mattel includes a non-GAAP financial measure, gross sales, which it
uses to analyze its continuing operations and to monitor, assess and identify meaningful trends in its operating
and financial performance. Net sales, as reported in the consolidated statements of income, include the impact of
sales adjustments, such as trade discounts and other allowances. Gross sales represent sales to customers,
excluding the impact of sales adjustments. Consistent with its segment reporting, Mattel presents changes in
gross sales as a metric for comparing its aggregate, business unit, brand and geographic results to highlight
significant trends in Mattel’s business. Changes in gross sales are discussed because, while Mattel records the
detail of such sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are
generally not associated with individual products, making net sales less meaningful. A reconciliation of gross
sales to the most directly comparable GAAP financial measure, net sales, is as follows (in millions):
For the Year
2004 2003 2002
Revenues
Domestic:
Mattel Brands US ............................................. $1,511.6 $1,594.1 $1,790.0
Fisher-Price Brands US ......................................... 1,319.2 1,265.2 1,282.2
American Girl Brands .......................................... 379.1 344.5 350.2
Total Domestic ................................................... 3,209.9 3,203.8 3,422.4
International ..................................................... 2,336.2 2,175.7 1,890.9
Gross sales ....................................................... 5,546.1 5,379.5 5,313.3
Sales adjustments ................................................. (443.3) (419.4) (428.0)
Net sales from continuing operations .................................. $5,102.8 $4,960.1 $4,885.3
Factors That May Affect Future Results
(Cautionary Statement Under the Private Securities Litigation Reform Act of 1995)
Certain written and oral statements made or incorporated by reference from time to time by Mattel or its
representatives in this Annual Report on Form 10-K, other filings or reports filed with the SEC, press releases,
conferences, or otherwise, are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 and may include, but are not limited to, statements about: sales and inventory
levels; brand and customer management programs; increased competition; initiatives to promote revenue growth;
globalization initiatives; restructuring and financial realignment plans; special charges and other non-recurring
charges; initiatives aimed at anticipated cost savings; operating efficiencies, including those associated with
supply chain and information technology initiatives; capital and investment framework (including statements
about free cash flow, seasonal working capital, debt-to-capital ratios, capital expenditures, strategic acquisitions,
dividends and share repurchases); cost increases; increased advertising and promotion spending; and
profitability. Mattel is including this Cautionary Statement to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 for any such forward-looking
statements. Forward-looking statements include any statement that may predict, forecast, indicate, or imply
future results, performance, or achievements. Forward-looking statements can be identified by the use of
terminology such as “believe,” “anticipate,” “expect,” “estimate,” “may,” “will,” “should,” “project,” “continue,”
“plans,” “aims,” “intends,” “likely,” or other similar words or phrases. Except for historical matters, the matters
discussed in this Annual Report on Form 10-K and other statements or filings made by Mattel from time-to-time
may be forward-looking statements. Management cautions you that forward-looking statements involve risks and
uncertainties that may cause actual results to differ materially from the forward-looking statements. In addition to
the important factors detailed herein and from time-to-time in other reports filed by Mattel with the SEC,
including Forms 8-K, 10-Q and 10-K, the following important factors could cause actual results to differ
materially from past results or those suggested by any forward-looking statements.
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