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Segment Information
 3 Months Ended
Mar. 31, 2014
Segment Information

21. Segment Information

Mattel, through its subsidiaries, sells a broad variety of toy products which are grouped into three major brand categories:

Mattel Girls & Boys Brands—including Barbie® fashion dolls and accessories (“Barbie”), Monster High®, Disney Classics®, Ever After High®, Little Mommy®, and Polly Pocket (collectively “Other Girls”), Hot Wheels® and Matchbox® vehicles and play sets (collectively “Wheels”), and CARS®, Disney Planes™, Radica®, Toy Story®, Max Steel®, WWE® Wrestling, Batman®, and games and puzzles (collectively “Entertainment”).

Fisher-Price Brands—including Fisher-Price®, Little People®, BabyGear™, Laugh & Learn®, and Imaginext® (collectively “Core Fisher-Price”), Thomas & Friends®, Dora the Explorer®, Mickey Mouse® Clubhouse, and Disney Jake and the Never Land Pirates® (collectively “Fisher-Price Friends”), and Power Wheels®.

American Girl Brands—including My American Girl®, the historical collection, and Bitty Baby®. American Girl Brands products are sold directly to consumers via its catalog, website, and proprietary retail stores. Its children’s publications are also sold to certain retailers.

Mattel’s 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.

 

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” and reconciled to net sales in Part I, Item 2 “Non-GAAP Financial Measure” of this Quarterly Report on Form 10-Q). 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 represents each segment’s operating income, while consolidated operating income represents income from operations before net interest, other non-operating income (expense), and income taxes as reported in the consolidated statements of operations. The corporate and other expense 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 Three Months Ended  
     March 31,
2014		     March 31,
2013		  
     (In thousands)  

Revenues by Segment

     

North America

    $ 441,431      $ 456,469   

International

      489,239        527,011   

American Girl

      110,558        104,950   
  

 

 

    

 

 

  

Gross sales

      1,041,228        1,088,430   

Sales adjustments

      (95,051 )      (92,824 ) 
  

 

 

    

 

 

  

Net sales

    $ 946,177      $ 995,606   
  

 

 

    

 

 

  

Segment Income

     

North America

    $ 48,723      $ 68,127   

International

      31,480        61,995   

American Girl

      9,244        11,955   
  

 

 

    

 

 

  
     89,447        142,077   

Corporate and other expense (a)

      (83,229 )      (76,246 ) 
  

 

 

    

 

 

  

Operating income

      6,218        65,831   

Interest expense

      17,246        20,337   

Interest (income)

      (1,279 )      (1,400 ) 

Other non-operating (income) expense, net

      (328 )      2,729   
  

 

 

    

 

 

  

(Loss) Income before income taxes

    $ (9,421 )    $ 44,165   
  

 

 

    

 

 

  

 

(a) Corporate and other expense includes severance and other termination-related costs of $21.5 million and $5.5 million for the three months ended March 31, 2014 and 2013, respectively, and share-based compensation expense of $12.7 million and $13.9 million for the three months ended March 31, 2014 and 2013, respectively.

Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances.

 

     March 31,
2014		      March 31,
2013		      December 31,
2013		  
     (In thousands)  

Assets by Segment

         

North America

    $ 463,905       $ 475,702       $ 723,886   

International

      734,024         683,083         920,770   

American Girl

      110,666         94,569         100,438   
  

 

 

     

 

 

     

 

 

  
     1,308,595         1,253,354         1,745,094   

Corporate and other

      104,794         97,340         83,854   
  

 

 

     

 

 

     

 

 

  

Accounts receivable and inventories, net

    $ 1,413,389       $ 1,350,694       $ 1,828,948   
  

 

 

     

 

 

     

 

 

  

 

The table below presents worldwide revenues by brand category:

 

     For the Three Months Ended  
     March 31,
2014		     March 31,
2013		  
     (In thousands)  

Worldwide Revenues by Brand Category

     

Mattel Girls & Boys Brands

    $ 656,861      $ 692,170   

Fisher-Price Brands

      271,443        287,265   

American Girl Brands

      105,938        100,455   

Other

      6,986        8,540   
  

 

 

    

 

 

  

Gross sales

      1,041,228        1,088,430   

Sales adjustments

      (95,051 )      (92,824 ) 
  

 

 

    

 

 

  

Net sales

    $ 946,177      $ 995,606