Mattel 2007 Annual Report Download - page 115

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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
2007 2006 2005
(In thousands)
Revenues
Domestic:
Mattel Girls & Boys Brands US ............................ $1,445,028 $1,507,493 $1,364,922
Fisher-Price Brands US ................................... 1,511,055 1,471,604 1,358,562
American Girl Brands .................................... 431,510 439,970 436,085
Total Domestic ............................................. 3,387,593 3,419,067 3,159,569
International ............................................... 3,205,341 2,738,967 2,463,984
Gross sales ................................................. 6,592,934 6,158,034 5,623,553
Sales adjustments ........................................... (622,844) (507,878) (444,537)
Net sales .................................................. $5,970,090 $5,650,156 $5,179,016
Segment Income
Domestic:
Mattel Girls & Boys Brands US ............................ $ 212,181 $ 267,152 $ 206,496
Fisher-Price Brands US ................................... 225,533 216,107 172,960
American Girl Brands .................................... 98,519 96,997 106,158
Total Domestic ............................................. 536,233 580,256 485,614
International ............................................... 420,898 419,097 316,153
957,131 999,353 801,767
Corporate and other expense (a) ................................ 227,053 270,535 137,238
Operating income ........................................... 730,078 728,818 664,529
Interest expense ............................................. 70,974 79,853 76,490
Interest (income) ............................................ (33,305) (30,468) (34,211)
Other non-operating (income), net .............................. (10,989) (4,323) (29,799)
Income before income taxes ................................... $ 703,398 $ 683,756 $ 652,049
(a) Corporate and other expense includes (i) incentive compensation expense of $83.6 million, $108.5 million,
and $22.0 million for 2007, 2006, and 2005, respectively, (ii) $3.0 million, $16.0 million, and $7.1 million of
charges related to severance for 2007, 2006, and 2005, respectively, and (iii) stock compensation expense of
$22.2 million and $27.5 million for 2007 and 2006, respectively.
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