Mattel 2007 Annual Report Download - page 67

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accounting for changes in a valuation allowance for acquired deferred tax assets and the resolution of uncertain
tax positions accounted for under FIN 48, which is effective on January 1, 2009 for all acquisitions. Mattel has
not completed its evaluation of SFAS No. 141(R), but does not expect the adoption of SFAS No. 141(R) to have
a material effect on its operating results or financial position.
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 operations and to monitor, assess and identify meaningful trends in its operating and financial
performance. Net sales, as reported in the consolidated statements of operations, 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 and the 2007 Product Recalls. 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.
A reconciliation of gross sales to the most directly comparable GAAP financial measure, net sales, is as
follows:
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
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