Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

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

Mattel Girls & Boys Brands—including Barbie® fashion dolls and accessories (“Barbie”), Monster High®, Ever After High®, Polly Pocket®, and DC Super Hero Girls™ (collectively “Other Girls”), Hot Wheels® and Matchbox® vehicles and play sets (collectively “Wheels”), and CARS™, DC Comics™, WWE® Wrestling, Minecraft®, Max Steel®, BOOMco.®, Toy Story®, and games and puzzles (collectively “Entertainment”).

Fisher-Price Brands—including Fisher-Price®, Little People®, Baby Gear™, 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 Truly Me®, Girl of the Year®, BeForever®, Bitty Baby®, and WellieWishers™. American Girl Brands products are sold directly to consumers via its catalog, website, and proprietary retail stores, as well as sold directly to certain retailers.

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

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. In the following tables, 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 brands or 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						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
	(In thousands)
Revenues by Segment
North America	$	1,071,030		$	1,069,116		$	2,077,147		$	2,053,053
International	774,211			798,584			1,614,169			1,732,125
American Girl	130,109			115,651			298,933			313,504
Gross sales	1,975,350			1,983,351			3,990,249			4,098,682
Sales adjustments	(179,775		)	(191,383		)	(367,999		)	(395,813		)
Net sales	$	1,795,575		$	1,791,968		$	3,622,250		$	3,702,869

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
	(In thousands)
Segment Income
North America	$	265,597		$	230,216		$	371,096		$	283,356
International	150,232			142,576			155,949			160,250
American Girl	28,056			7,142			21,850			5,617
	443,885			379,934			548,895			449,223
Corporate and other expense (a)	(126,489		)	(79,161		)	(292,305		)	(202,354		)
Operating income	317,396			300,773			256,590			246,869
Interest expense	24,989			21,409			70,133			62,516
Interest (income)	(2,477		)	(1,990		)	(7,550		)	(5,757		)
Other non-operating expense (income), net	856			(4,785		)	23,210			(2,984		)
Income before income taxes	$	294,028		$	286,139		$	170,797		$	193,094

__________________________________________ 

(a) Corporate and other expense includes severance and restructuring expenses of $6.4 million and $33.6 million for the three and nine months ended September 30, 2016, respectively, and $13.3 million and $61.1 million for the three and nine months ended September 30, 2015, respectively, and share-based compensation expense of $12.4 million and $38.7 million for the three and nine months ended September 30, 2016, respectively, and $13.8 million and $41.1 million for the three and nine months ended September 30, 2015, respectively.

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

	September 30, 2016		September 30, 2015		December 31, 2015
	(In thousands)
Assets by Segment
North America	$	1,050,120	$	1,011,546	$	764,945
International	1,049,008		1,063,727		759,709
American Girl	184,101		147,517		108,414
	2,283,229		2,222,790		1,633,068
Corporate and other	156,125		99,245		99,552
Accounts receivable and inventories, net	$	2,439,354	$	2,322,035	$	1,732,620

The table below presents worldwide revenues by brand:

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
	(In thousands)
Worldwide Revenues by Brand
Mattel Girls & Boys Brands	$	1,061,113		$	1,120,612		$	2,142,665		$	2,327,555
Fisher-Price Brands	661,489			625,277			1,280,435			1,226,023
American Girl Brands	125,499			109,879			286,910			300,128
Construction and Arts & Crafts Brands	118,605			118,480			252,802			221,560
Other	8,644			9,103			27,437			23,416
Gross sales	1,975,350			1,983,351			3,990,249			4,098,682
Sales adjustments	(179,775		)	(191,383		)	(367,999		)	(395,813		)
Net sales	$	1,795,575		$	1,791,968		$	3,622,250		$	3,702,869