Mattel 2012 Annual Report Download - page 104

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customers and its toy consumers. Prior to the reorganization, the functions of the US operations were divided
between the Mattel Girls & Boys Brands US and Fisher-Price Brands US operating segments. Both of these
segments had distinct and separate reporting structures. The reorganization consolidated functions within the US
into a single reporting structure that is no longer structured around brands, including the US sales, customer
marketing, customer forecasting, customer service, and finance teams. The new structure is primarily organized
based on customer-focused teams that are designated to specific retail customers. As a result, the reorganization
changed the way the US business is being operated, and combined the US business with Canada under one
leadership team, to form the North America division. As part of the reorganization, new executive positions were
created and prior executive positions within the US operations were eliminated or restructured to align to the
North America division. Mattel’s strategic goals and internal reporting of financial information have also been
changed consistent with this reorganization into the North America division.
The change to Mattel’s organizational structure and formation of the North America division resulted in
changes to Mattel’s operating segments. The new operating segments are: (i) North America, which consists of
the US and Canada, (ii) International, and (iii) American Girl. The North America and International segments
sell products in the Mattel Girls & Boys Brands and Fisher-Price Brands categories, although some are developed
and adapted for particular international markets. Factors considered in determining the new operating segments
include the nature of business activities, the management structure directly accountable to the Chief Operating
Decision Maker (“CODM”) for operating and administrative activities, availability of discrete financial
information, and strategic priorities within the new organizational structure. These factors correspond to the
manner in which the CODM currently reviews and evaluates operating performance to make decisions about
resources to be allocated to these operating segments. Effective January 1, 2012, the CODM reviews key
financial information, including gross sales, operating income, accounts receivable, and inventory for the new
operating segments. Prior to 2012, the CODM reviewed and evaluated operating performance to make decisions
about resources to be allocated based on the Mattel Girls & Boys Brands US, Fisher-Price Brands US, American
Girl Brands, and International segments. Operating performance for Mattel Girls & Boys Brands US and Fisher-
Price Brands US is no longer reviewed by the CODM.
The prior period operating segment amounts have been reclassified to conform to the current year
presentation.
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