Mattel 2008 Annual Report Download - page 103

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Segment Data
The following tables 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, share-based payments,
corporate headquarters functions managed on a worldwide basis, and the impact of changes in foreign currency
rates on intercompany transactions.
For the Year
2008 2007 2006
(In thousands)
Revenues
Domestic:
Mattel Girls & Boys Brands US ............................ $1,437,933 $1,445,028 $1,507,493
Fisher-Price Brands US ................................... 1,418,213 1,511,055 1,471,604
American Girl Brands .................................... 463,056 431,510 439,970
Total Domestic ............................................. 3,319,202 3,387,593 3,419,067
International ............................................... 3,166,820 3,205,341 2,738,967
Gross sales ................................................. 6,486,022 6,592,934 6,158,034
Sales adjustments ........................................... (568,020) (622,844) (507,878)
Net sales .................................................. $5,918,002 $5,970,090 $5,650,156
Segment Income
Domestic:
Mattel Girls & Boys Brands US ............................ $ 158,170 $ 212,181 $ 267,152
Fisher-Price Brands US ................................... 161,025 225,533 216,107
American Girl Brands .................................... 86,581 98,519 96,997
Total Domestic ............................................. 405,776 536,233 580,256
International ............................................... 357,628 420,898 419,097
763,404 957,131 999,353
Corporate and other expense (a) ................................ 221,612 227,053 270,535
Operating income ........................................... 541,792 730,078 728,818
Interest expense ............................................. 81,944 70,974 79,853
Interest (income) ............................................ (25,043) (33,305) (30,468)
Other non-operating (income), net .............................. (3,073) (10,989) (4,323)
Income before income taxes ................................... $ 487,964 $ 703,398 $ 683,756
(a) Corporate and other expense includes (i) incentive compensation expense of $15.4 million, $83.6 million,
and $108.5 million for 2008, 2007, and 2006, respectively, (ii) $34.4 million, $3.0 million, and $16.0 million
of charges related to severance for 2008, 2007, and 2006, respectively, (iii) share-based compensation
expense of $35.7 million, $22.2 million, and $27.5 million for 2008, 2007, and 2006, respectively, and
(iv) legal fees associated with the product recall-related litigation and MGA litigation matters.
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