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Segment Information
 3 Months Ended
Mar. 31, 2015
Segment Information
21. Segment Information

Mattel, through its subsidiaries, sells a broad variety of toy products which are grouped into four major brand categories, including the Construction and Arts & Crafts brand category, which was introduced in the second quarter of 2014:

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™, BOOMco™, 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®, BeForever™, 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.

Construction and Arts & Crafts Brands—including MEGA BLOKS®, RoseArt®, and Board Dudes®.

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, Fisher-Price Brands, and Construction and Arts & Crafts 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Non-GAAP Financial Measures” 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 exchange rates on intercompany transactions.

 

     For the Three Months Ended  
     March 31,
2015		      March 31,
2014		  
     (In thousands)  

Revenues by Segment

      

North America

    $ 488,199       $ 441,431   

International

      422,081         489,239   

American Girl

      109,910         110,558   
  

 

 

     

 

 

  

Gross sales

   1,020,190      1,041,228   

Sales adjustments

   (97,441 )    (95,051 ) 
  

 

 

     

 

 

  

Net sales

 $ 922,749    $ 946,177   
  

 

 

     

 

 

  

Segment Income (Loss)

North America

 $ 25,049    $ 48,723   

International

   (4,436 )    31,480   

American Girl

   5,528      9,244   
  

 

 

     

 

 

  
  26,141      89,447   

Corporate and other expense (a)

   (80,608 )    (83,229 ) 
  

 

 

     

 

 

  

Operating (loss) income

   (54,467 )    6,218   

Interest expense

   20,401      17,246   

Interest (income)

   (1,668 )    (1,279 ) 

Other non-operating (income), net

   (53 )    (328 ) 
  

 

 

     

 

 

  

Loss before income taxes

 $ (73,147 )  $ (9,421 ) 
  

 

 

     

 

 

  

 

(a) Corporate and other expense includes severance and other termination-related costs of $28.0 million and $21.5 million for the three months ended March 31, 2015 and 2014, respectively, and share-based compensation expense of $11.6 million and $12.7 million for the three months ended March 31, 2015 and 2014, respectively.

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

 

     March 31,
2015		      March 31,
2014		      December 31,
2014		  
     (In thousands)  

Assets by Segment

         

North America

    $ 550,807       $ 463,905       $ 698,357   

International

      552,981         734,024         778,849   

American Girl

      105,278         110,666         108,667   
  

 

 

     

 

 

     

 

 

  
  1,209,066      1,308,595      1,585,873   

Corporate and other

   130,957      104,794      70,334   
  

 

 

     

 

 

     

 

 

  

Accounts receivable and inventories, net

 $ 1,340,023    $ 1,413,389    $ 1,656,207   
  

 

 

     

 

 

     

 

 

  

The table below presents worldwide revenues by brand category:

 

     For the Three Months Ended  
     March 31,
2015		      March 31,
2014		  
     (In thousands)  

Worldwide Revenues by Brand Category

      

Mattel Girls & Boys Brands

    $ 605,183       $ 656,861   

Fisher-Price Brands

      263,968         271,443   

American Girl Brands

      106,083         105,938   

Construction and Arts & Crafts Brands

      38,283         —     

Other

      6,673         6,986   
  

 

 

     

 

 

  

Gross sales

   1,020,190      1,041,228   

Sales adjustments

   (97,441 )    (95,051 ) 
  

 

 

     

 

 

  

Net sales

 $ 922,749    $ 946,177