Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

Description of Segments

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^®, 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 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.  Factors considered in determining the 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 organizational structure. These factors correspond to the manner in which the CODM reviews and evaluates operating performance to make decisions about resources to be allocated to these operating segments.

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”). 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 CODM 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, 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 Year Ended
	December 31, 2016			December 31, 2015			December 31, 2014
	(In thousands)
Revenues by Segment
North America	$	3,036,181		$	3,083,873		$	3,011,633
International	2,447,615			2,603,537			3,061,506
American Girl	589,918			596,218			645,309
Gross sales	6,073,714			6,283,628			6,718,448
Sales adjustments	(617,064		)	(581,015		)	(694,629		)
Net sales	$	5,456,650		$	5,702,613		$	6,023,819
Segment Income
North America	$	564,378		$	538,249		$	459,833
International	291,230			321,068			359,904
American Girl	106,423			69,899			113,571
	962,031			929,216			933,308
Corporate and other expense (a)	(442,798		)	(388,294		)	(279,594		)
Operating income	519,233			540,922			653,714
Interest expense	95,118			85,270			79,271
Interest (income)	(9,144		)	(7,230		)	(7,382		)
Other non-operating expense (income), net	23,517			(1,033		)	(5,085		)
Income before income taxes	$	409,742		$	463,915		$	586,910

(a) Corporate and other expense includes (i) incentive compensation expense of $16.5 million, $50.2 million, and $25.2 million for 2016, 2015, and 2014, respectively, (ii) $39.9 million, $72.0 million, and $51.8 million of charges related to severance and other termination-related costs for 2016, 2015, and 2014, respectively, (iii) share-based compensation expense of $53.9 million, $56.7 million, and $52.0 million for 2016, 2015, and 2014, respectively, and (iv) legal fees associated with MGA litigation matters.

	For the Year Ended
	December 31, 2016		December 31, 2015		December 31, 2014
	(In thousands)
Depreciation and Amortization by Segment
North America	$	118,047	$	122,757	$	118,633
International	88,414		90,269		86,011
American Girl	23,023		22,054		18,434
	229,484		235,080		223,078
Corporate and other	32,856		30,347		25,623
Depreciation and amortization	$	262,340	$	265,427	$	248,701

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

	For the Year Ended
	December 31, 2016		December 31, 2015		December 31, 2014
	(In thousands)
Assets by Segment
North America	$	677,203	$	764,945	$	698,357
International	766,584		759,709		778,849
American Girl	154,924		108,414		108,667
	1,598,711		1,633,068		1,585,873
Corporate and other	130,304		99,552		70,334
Accounts receivable and inventories, net	$	1,729,015	$	1,732,620	$	1,656,207

Mattel sells a broad variety of toy products, which are grouped into four major categories: Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands, and Construction and Arts & Crafts Brands. The table below presents worldwide revenues by brand category:

	For the Year Ended
	December 31, 2016			December 31, 2015			December 31, 2014
	(In thousands)
Worldwide Revenues by Brand Category
Mattel Girls & Boys Brands	$	3,194,100		$	3,464,195		$	3,897,218
Fisher-Price Brands	1,888,146			1,852,219			1,842,550
American Girl Brands	570,770			571,957			618,678
Construction and Arts & Crafts Brands	377,570			351,747			314,994
Other	43,128			43,510			45,008
Gross sales	6,073,714			6,283,628			6,718,448
Sales adjustments	(617,064		)	(581,015		)	(694,629		)
Net sales	$	5,456,650		$	5,702,613		$	6,023,819

Geographic Information

The tables below present information by geographic area. Revenues are attributed to countries based on location of customer. Long-lived assets principally include goodwill, property, plant, and equipment, net, and identifiable intangibles, net.

	For the Year Ended
	December 31, 2016			December 31, 2015			December 31, 2014
	(In thousands)
Revenues
North American Region (a)	$	3,626,099		$	3,680,091		$	3,656,942
International Region:
Europe	1,293,302			1,388,753			1,687,039
Latin America	636,535			711,041			909,432
Asia Pacific	517,778			503,743			465,035
Total International Region	2,447,615			2,603,537			3,061,506
Gross sales	6,073,714			6,283,628			6,718,448
Sales adjustments	(617,064		)	(581,015		)	(694,629		)
Net sales	$	5,456,650		$	5,702,613		$	6,023,819

	December 31, 2016		December 31, 2015		December 31, 2014
	(In thousands)
Long-Lived Assets
North American Region (b)	$	1,566,621	$	1,557,153	$	1,656,985
International Region	1,478,747		1,466,003		1,492,633
Consolidated total	$	3,045,368	$	3,023,156	$	3,149,618

(a) Revenues for the North American Region include revenues attributable to the US of $3.39 billion, $3.46 billion, and $3.41 billion for 2016, 2015, and 2014, respectively.

(b) Long-lived assets for the North American Region include long-lived assets attributable to the US of $1.57 billion, $1.57 billion, and $1.65 billion for 2016, 2015, and 2014, respectively.

Major Customers

Sales to Mattel’s three largest customers accounted for 39%, 37%, and 35% of worldwide consolidated net sales for 2016, 2015, and 2014, respectively, as follows:

	For the Year Ended
	December 31, 2016		December 31, 2015		December 31, 2014
	(In billions)
Wal-Mart	$	1.1	$	1.0	$	1.1
Toys “R” Us	0.6		0.6		0.6
Target	0.4		0.5		0.5

The North America segment sells products to each of Mattel’s three largest customers. The International segment sells products to Wal-Mart and Toys “R” Us. The American Girl segment sells its children’s publications to each of Mattel's three largest customers.