Mattel 2006 Annual Report Download - page 109

Note 13—Quarterly Financial Information (Unaudited)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(In thousands, except per share amounts)
Year Ended December 31, 2006
Net sales .......................................... $793,347 $957,655 $1,790,312 $2,108,842
Gross profit ........................................ 331,958 416,120 851,369 1,012,346
Advertising and promotion expenses .................... 88,853 100,554 205,886 255,682
Other selling and administrative expenses (a) ............. 275,096 265,655 323,248 368,001
Operating (loss) income .............................. (31,991) 49,911 322,235 388,663
Income (loss) before income taxes ...................... (36,495) 42,354 304,553 373,344
Net income (b) ...................................... $ 30,170 $ 37,380 $ 239,025 $ 286,352
Net income per common share—basic ................... $ 0.08 $ 0.10 $ 0.63 $ 0.76
Weighted average number of common shares ............. 388,766 386,191 378,628 378,261
Net income per common share—diluted .................. $ 0.08 $ 0.10 $ 0.62 $ 0.75
Weighted average number of common and common
equivalent shares .................................. 391,287 388,777 382,664 384,008
Dividends declared per common share ................... $ — $ — $ — $ 0.65
Common stock market price:
High .......................................... $ 18.13 $ 17.57 $ 19.79 $ 23.80
Low .......................................... 14.78 15.94 15.88 19.44
Year Ended December 31, 2005
Net sales .......................................... $783,120 $886,823 $1,666,145 $1,842,928
Gross profit ........................................ 344,060 386,817 761,257 880,734
Advertising and promotion expenses .................... 87,709 93,116 191,607 256,683
Other selling and administrative expenses ................ 250,822 265,176 260,850 302,376
Operating income ................................... 5,529 28,525 308,800 321,675
Income before income taxes ........................... 8,948 26,006 311,339 305,756
Net income (loss) (c) ................................. $ 6,507 $ (93,987) $ 225,339 $ 279,160
Net income (loss) per common share—basic .............. $ 0.02 $ (0.23) $ 0.56 $ 0.70
Weighted average number of common shares ............. 416,096 409,769 403,743 400,213
Net income (loss) per common share—diluted ............. $ 0.02 $ (0.23) $ 0.55 $ 0.69
Weighted average number of common and common
equivalent shares .................................. 421,105 409,769 407,222 402,507
Dividends declared per common share ................... $ — $ — $ — $ 0.50
Common stock market price:
High .......................................... $ 21.42 $ 21.00 $ 19.45 $ 17.00
Low .......................................... 18.35 17.60 16.39 14.53
(a) Other selling and administrative expenses for the third quarter of 2006 included stock compensation
expense of $19.3 million related to the correction of prior period unintentional accounting errors.
(b) Net income for the year ended December 31, 2006 was favorably impacted by income tax benefits of
$56.8 million as a result of settlements with foreign tax authorities in the first quarter of 2006, and
$6.2 million in the second quarter of 2006 related to a settlement with a state tax authority for tax years
1997 and 1998.
(c) Net income for the year ended December 31, 2005 was impacted by an incremental income tax expense of
$112.9 million in the second quarter of 2005, and a reduction to income tax expense of $5.9 million in the
fourth quarter of 2005 related to the repatriation of unremitted foreign earnings under the Jobs Act.
Additionally, net income in the fourth quarter of 2005 was impacted by a $38.6 million income tax benefit
primarily related to audit settlements with certain tax authorities in both the US and abroad.
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