Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Revenue from Segment to Consolidated

The following tables present information about revenues, income (loss), 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 (loss) from operations based on the adjustments recorded in the financial accounting systems. Segment income (loss) represents each segment’s operating income (loss), while consolidated operating income (loss) represents income (loss) from operations before net interest, other non-operating expense, net, 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, severance and restructuring, 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, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	(In thousands)
Revenues by Segment
North America	$	886,307		$	839,341		$	1,677,580		$	1,708,901
International	656,467			776,947			1,507,277			1,637,031
American Girl	63,862			93,876			175,910			247,376
Gross sales	1,606,636			1,710,164			3,360,767			3,593,308
Sales adjustments	(169,185		)	(149,181		)	(374,196		)	(322,230		)
Net sales	$	1,437,451		$	1,560,983		$	2,986,571		$	3,271,078



	For the Three Months Ended						For the Nine Months Ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	(In thousands)
Segment Income (Loss)
North America (a)	$	186,705		$	86,240		$	54,015		$	109,623
International (a)	46,466			81,307			(75,539		)	48,140
American Girl (a)	(9,638		)	(14,601		)	(40,703		)	(38,558		)
	223,533			152,946			(62,227		)	119,205
Corporate and other expense (b)	(101,659		)	(66,702		)	(281,671		)	(207,604		)
Operating income (loss)	121,874			86,244			(343,898		)	(88,399		)
Interest expense	48,156			24,646			132,702			68,557
Interest (income)	(785		)	(1,575		)	(5,631		)	(6,337		)
Other non-operating expense, net	1,911			1,910			4,366			7,532
Income (loss) before income taxes	$	72,592		$	61,263		$	(475,335	)	$	(158,151	)

__________________________________________

(a)

Segment income (loss) for the three and nine months ended September 30, 2018, included $(13.0) million and $66.8 million, respectively, of net sales reversal and bad debt expense, net attributable to the Toys "R" Us liquidation. Of the $66.8 million of charges recognized for the nine months ended September 30, 2018, $57.4 million, $7.7 million, and $1.7 million was recorded in the North America, International, and American Girl segments, respectively. Segment income (loss) for the three and nine months ended September 30, 2017, included $43.0 million of net sales reversal attributable to the Toys "R" Us liquidation. Of the $43.0 million of charges recognized for the nine months ended September 30, 2017, $43.0 million was recorded in the North America segment.

(b)

Corporate and other expense included severance and restructuring expenses of $25.5 million and $98.2 million for the three and nine months ended September 30, 2018, respectively, and $12.6 million and $21.5 million for the three and nine months ended September 30, 2017, respectively, and share-based compensation expense of $13.8 million and $36.2 million for the three and nine months ended September 30, 2018, respectively, and $17.0 million and $47.6 million for the three and nine months ended September 30, 2017, respectively.

Schedule of Segment Assets

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



	September 30, 2018		September 30, 2017		December 31, 2017
	(In thousands)
Assets by Segment
North America	$	912,008	$	1,060,312	$	692,232
International	917,668		1,144,772		829,185
American Girl	85,515		197,110		100,184
	1,915,191		2,402,194		1,621,601
Corporate and other	123,753		93,946		107,713
Accounts receivable and inventories, net	$	2,038,944	$	2,496,140	$	1,729,314

Schedule of Worldwide Revenues by Brand Category

The table below presents worldwide revenues by brand category:



	For the Three Months Ended						For the Nine Months Ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	(In thousands)
Worldwide Revenues by Brand Category (a)
Barbie	$	374,707		$	329,609		$	698,131		$	605,175
Hot Wheels	234,993			249,984			547,239			514,036
Fisher-Price and Thomas & Friends	409,497			463,689			833,468			944,680
American Girl	64,257			93,760			176,902			246,865
Toy Box	523,182			573,122			1,105,027			1,282,552
Gross sales	1,606,636			1,710,164			3,360,767			3,593,308
Sales adjustments	(169,185		)	(149,181		)	(374,196		)	(322,230		)
Net sales	$	1,437,451		$	1,560,983		$	2,986,571		$	3,271,078

__________________________________________

(a) Mattel reorganized its brands reporting structure in the first quarter of 2018. Prior period amounts have been reclassified to conform to the current period presentation.

Schedule of Revenue by Geographic Area

The table below presents information by geographic area. Revenues are attributed to countries based on location of customer.



	For the Three Months Ended						For the Nine Months Ended
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	(In thousands)
Revenues
North America	$	950,169		$	933,217		$	1,853,490		$	1,956,277
International Region (a):
Europe	317,143			356,300			656,792			691,085
Latin America	198,760			216,760			411,778			420,826
Global Emerging Markets	140,564			203,887			438,707			525,120
Total International Region	656,467			776,947			1,507,277			1,637,031
Gross sales	1,606,636			1,710,164			3,360,767			3,593,308
Sales adjustments	(169,185		)	(149,181		)	(374,196		)	(322,230		)
Net sales	$	1,437,451		$	1,560,983		$	2,986,571		$	3,271,078

__________________________________________

(a) Mattel reorganized its regional reporting structure in the first quarter of 2018. As a result, Global Emerging Markets, which was previously disclosed as Asia Pacific, includes Russia, Turkey, the Middle East, and Africa, which were previously included within Europe. Prior period amounts have been reclassified to conform to the current period presentation.