Mattel 2006 Annual Report Download - page 104

American Girl Brands — including Just Like You™, the historical collection and Bitty Baby®.
American Girl Brands products are sold directly to consumers and its children’s publications are also
sold to certain retailers.
Additionally, the International segment sells products in all toy categories, except American Girl Brands.
Segment Data
The tables below present information about revenues, income and assets by segment. Mattel does not
include sales adjustments such as trade discounts and other allowances in the calculation of segment revenues
(referred to as “gross sales”). Mattel records these adjustments in its financial accounting systems at the time of
sale to each customer, but the adjustments are not allocated to individual products. For this reason, Mattel’s chief
operating decision maker uses gross sales by segment as one of the metrics to measure segment performance.
Such sales adjustments are included in the determination of segment income from operations based on the
adjustments recorded in the financial accounting systems. Segment income from operations represents operating
income, while consolidated income from operations represents income from operations before income taxes as
reported in the consolidated statements of operations. The corporate and other category includes costs not
allocated to individual segments, including charges related to incentive compensation and corporate headquarters
functions managed on a worldwide basis and the impact of changes in foreign currency rates on intercompany
transactions.
For the Year
2006 2005 2004
(In thousands)
Revenues
Domestic:
Mattel Girls & Boys Brands US ............................ $1,507,493 $1,364,922 $1,511,550
Fisher-Price Brands US ................................... 1,471,604 1,358,562 1,319,200
American Girl Brands .................................... 439,970 436,085 379,112
Total Domestic ............................................. 3,419,067 3,159,569 3,209,862
International ............................................... 2,738,967 2,463,984 2,336,236
Gross sales ................................................. 6,158,034 5,623,553 5,546,098
Sales adjustments ........................................... (507,878) (444,537) (443,312)
Net sales .................................................. $5,650,156 $5,179,016 $5,102,786
Segment Income
Domestic:
Mattel Girls & Boys Brands US ............................ $ 267,152 $ 206,496 $ 326,317
Fisher-Price Brands US ................................... 216,107 172,960 173,237
American Girl Brands .................................... 96,997 106,158 77,501
Total Domestic ............................................. 580,256 485,614 577,055
International ............................................... 419,097 316,153 299,224
999,353 801,767 876,279
Corporate and other expense (a) ................................ 270,535 137,238 145,462
Operating income ........................................... 728,818 664,529 730,817
Interest expense ............................................. 79,853 76,490 77,764
Interest (income) ............................................ (30,468) (34,211) (19,683)
Other non-operating (income), net .............................. (4,323) (29,799) (23,518)
Income before income taxes ................................... $ 683,756 $ 652,049 $ 696,254
(a) Corporate and other expense includes (i) incentive compensation expense of $108.5 million, $22.0 million,
and $41.8 million for the years ended December 31, 2006, 2005, and 2004, respectively, (ii) $16.0 million,
$7.1 million, and $16.2 million of charges related to severance for the years ended December 31, 2006,
2005, and 2004, respectively, and (iii) stock compensation expense of $27.5 million for the year ended
December 31, 2006.
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