Mattel 2010 Annual Report Download - page 106

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, and
corporate headquarters functions managed on a worldwide basis, and the impact of changes in foreign currency
rates on intercompany transactions.
For the Year
2010 2009 2008
(In thousands)
Revenues
Domestic:
Mattel Girls & Boys Brands US ............................ $1,626,407 $1,402,224 $1,437,933
Fisher-Price Brands US ................................... 1,352,729 1,310,886 1,418,213
American Girl Brands .................................... 486,644 462,899 463,056
Total Domestic ............................................. 3,465,780 3,176,009 3,319,202
International ............................................... 2,920,830 2,758,315 3,166,820
Gross sales ................................................. 6,386,610 5,934,324 6,486,022
Sales adjustments ........................................... (530,415) (503,478) (568,020)
Net sales .................................................. $5,856,195 $5,430,846 $5,918,002
Segment Income
Domestic:
Mattel Girls & Boys Brands US ............................ $ 409,445 $ 293,366 $ 158,170
Fisher-Price Brands US ................................... 222,046 231,855 161,025
American Girl Brands .................................... 112,923 103,446 86,581
Total Domestic ............................................. 744,414 628,667 405,776
International ............................................... 531,003 422,505 357,628
1,275,417 1,051,172 763,404
Corporate and other expense (a) ................................ (373,515) (320,004) (221,612)
Operating income ........................................... 901,902 731,168 541,792
Interest expense ............................................. 64,839 71,843 81,944
Interest (income) ............................................ (8,434) (8,083) (25,043)
Other non-operating (income) expense, net ....................... (1,328) 7,361 (3,073)
Income before income taxes ................................... $ 846,825 $ 660,047 $ 487,964
(a) Corporate and other expense includes (i) incentive compensation expense of $106.7 million, $96.6 million,
and $15.4 million for 2010, 2009, and 2008, respectively, (ii) $21.0 million, $31.5 million, and $34.4 million
of charges related to severance for 2010, 2009, and 2008, respectively, (iii) share-based compensation
expense of $67.1 million, $50.0 million, and $35.8 million for 2010, 2009, and 2008, respectively,
(iv) charges to establish a legal settlement reserve for product liability-related litigation totalling $27.4
million and $15.3 million for 2009 and 2008, respectively, a reduction to the legal settlement reserve of $8.7
million for 2010, and a $4.8 million benefit and $6.0 million benefit for 2010 and 2009,
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