Mattel 2004 Annual Report Download - page 94

simplifying Mattel’s organization by defining common global processes based on industry best practices,
streamlining its organizational structure by eliminating redundancies, and upgrading its systems to have greater
visibility to information and data on a global basis. Also in 2002, Mattel completed the closure of its
manufacturing and distribution facilities in Murray, Kentucky, as part of the North American Strategy.
In connection with the financial realignment plan, Mattel recorded total pre-tax restructuring charges of
$37.3 million during 2003 and 2002, of which $0.1 million was not yet paid as of year end 2004. These charges
were largely related to the elimination of positions at US-based headquarters locations in El Segundo, Fisher-
Price and American Girl, costs associated with the North American Strategy, closure of certain international
offices, and consolidation of facilities. From the inception of the plan through 2003, Mattel terminated the
employment of approximately 2,570 employees.
The components of the restructuring charge and reconciliation of the liability are as follows (in millions):
Severance and
Other
Compensation
Lease
Termination
Costs Other
Total
Restructuring
Charge
Balance at year end 2001 ........................ $ 8.8 $ 1.9 $ 1.0 $ 11.7
2002 charges .............................. 19.4 1.2 4.0 24.6
Amounts incurred .......................... (24.3) (1.8) (4.4) (30.5)
Balance at year end 2002 ........................ 3.9 1.3 0.6 5.8
2003 charges .............................. 12.9 (0.3) 0.1 12.7
Amounts incurred .......................... (16.2) (0.6) (0.6) (17.4)
Balance at year end 2003 ........................ 0.6 0.4 0.1 1.1
Amounts incurred .......................... (0.5) (0.4) (0.1) (1.0)
Balance at year end 2004 ........................ $ 0.1 $ — $ — $ 0.1
In 2003, Mattel recorded a net restructuring charge totaling $4.8 million in the consolidated statement of
income, representing $12.7 million of restructuring charges related to the financial realignment plan that were
partially offset by income of $7.9 million representing an adjustment to a reserve accrued in 1999 associated with
the closure of a manufacturing facility in Beaverton, Oregon.
Note 11—Segment Information
Description of Segments
Mattel’s reportable segments are separately managed business units and are divided on a geographic basis
between domestic and international. Prior to 2003, the Domestic segment was further divided into US Girls, US
Boys—Entertainment, and US Infant & Preschool. In 2003, Mattel announced the consolidation of its US Girls
and US Boys—Entertainment segment into one segment, renamed Mattel Brands US. Additionally, Pleasant
Company, which was previously part of the US Girls segment, is now a separate segment for management
reporting purposes. The results of Pleasant Company are now reported as American Girl Brands and US Infant &
Preschool are now reported as Fisher-Price Brands US for segment reporting purposes. To facilitate the
comparison of segment results for 2004 and 2003 to 2002, segment disclosures for 2002 have been restated to
reflect these changes.
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