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Derivative Instruments | 9 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments Mattel seeks to mitigate its exposure to foreign currency transaction risk by monitoring its foreign currency transaction exposure for the year and partially hedging such exposure using foreign currency forward exchange contracts. Mattel uses foreign currency forward exchange contracts as cash flow hedges primarily to hedge its purchases and sales of inventory denominated in foreign currencies. These contracts generally have maturity dates of up to 18 months. These derivative instruments have been designated as effective cash flow hedges, whereby the unsettled hedges are reported in Mattel’s consolidated balance sheets at fair value, with changes in the fair value of the hedges reflected in other comprehensive (loss) income (“OCI”). Realized gains and losses for these contracts are recorded in the consolidated statements of operations in the period in which the inventory is sold to customers. Additionally, Mattel uses foreign currency forward exchange contracts to hedge intercompany loans and advances denominated in foreign currencies. Due to the short-term nature of the contracts involved, Mattel has not designated these contracts as hedging instruments, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. As of September 30, 2017, September 30, 2016, and December 31, 2016, Mattel held foreign currency forward exchange contracts with notional amounts of $2.46 billion, $1.15 billion, and $1.20 billion, respectively. The notional amounts of the foreign currency forward exchange contracts outstanding as of September 30, 2017 include foreign currency forward contracts executed on September 29, 2017 to settle contracts used to hedge intercompany loans and advances that matured on October 2, 2017. The notional amounts also include additional foreign currency forward contracts executed on September 29, 2017 to replace the contracts used to hedge the intercompany loans and advances that matured and settled on October 2, 2017. The increase to the notional amounts outstanding as of September 30, 2017 was primarily due to the timing of the scheduled settlements of Mattel’s intercompany loans and advances denominated in foreign currencies. As of September 30, 2016, Mattel also held cross currency swap contracts with notional amounts of $16.9 million. The following tables present Mattel’s derivative assets and liabilities:
| Derivative Assets
| Balance Sheet Classification |  | Fair Value
|  |  | September 30, 2017 |  | September 30, 2016 |  | December 31, 2016
|  |  | (In thousands)
Derivatives designated as hedging instruments |  |  |  |  |  |  |
Foreign currency forward exchange contracts | Prepaid expenses and other current assets |  | $ | 1,951 |  |  | $ | 7,127 |  |  | $ | 18,747 |
Foreign currency forward exchange contracts | Other noncurrent assets |  | 764 |  |  | 1,122 |  |  | 5,782 |
Total derivatives designated as hedging instruments |  |  | $ | 2,715 |  |  | $ | 8,249 |  |  | $ | 24,529 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |
Foreign currency forward exchange contracts | Prepaid expenses and other current assets |  | $ | 1,369 |  |  | $ | 826 |  |  | $ | 2,678 |
Total |  |  | $ | 4,084 |  |  | $ | 9,075 |  |  | $ | 27,207 |
| Derivative Liabilities
| Balance Sheet Classification |  | Fair Value
|  |  | September 30, 2017 |  | September 30, 2016 |  | December 31, 2016
|  |  | (In thousands)
Derivatives designated as hedging instruments |  |  |  |  |  |  |
Foreign currency forward exchange contracts | Accrued liabilities |  | $ | 21,624 |  |  | $ | 5,131 |  |  | $ | 1,917 |
Foreign currency forward exchange contracts | Other noncurrent liabilities |  | 7,206 |  |  | 1,382 |  |  | 223 |
Total derivatives designated as hedging instruments |  |  | $ | 28,830 |  |  | $ | 6,513 |  |  | $ | 2,140 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |
Foreign currency forward exchange contracts | Accrued liabilities |  | $ | 1,047 |  |  | $ | — |  |  | $ | 7,072 |
Cross currency swap contract | Accrued liabilities |  | — |  |  | 1,532 |  |  | — |
Total derivatives not designated as hedging instruments |  |  | $ | 1,047 |  |  | $ | 1,532 |  |  | $ | 7,072 |
Total |  |  | $ | 29,877 |  |  | $ | 8,045 |  |  | $ | 9,212 |
The following tables present the classification and amount of gains and losses, net of tax, from derivatives reported in the consolidated statements of operations:
| For the Three Months Ended |  |
| September 30, 2017 |  | September 30, 2016 |  | Statements of Operations Classification
| Amount of Gain (Loss) Recognized in OCI |  | Amount of Gain (Loss) Reclassified from Accumulated OCI to Statements of Operations |  | Amount of Gain (Loss) Recognized in OCI |  | Amount of Gain (Loss) Reclassified from Accumulated OCI to Statements of Operations |
| (In thousands) |  |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Foreign currency forward exchange contracts | $ | (24,009 | ) |  | $ | (9,241 | ) |  | $ | 974 |  |  | $ | 2,157 |  |  | Cost of sales
| For the Nine Months Ended |  |
| September 30, 2017 |  | September 30, 2016 |  | Statements of Operations Classification
| Amount of Gain (Loss) Recognized in OCI |  | Amount of Gain (Loss) Reclassified from Accumulated OCI to Statements of Operations |  | Amount of Gain (Loss) Recognized in OCI |  | Amount of Gain (Loss) Reclassified from Accumulated OCI to Statements of Operations |
| (In thousands) |  |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Foreign currency forward exchange contracts | $ | (63,999 | ) |  | $ | (6,648 | ) |  | $ | 642 |  |  | $ | 12,472 |  |  | Cost of sales
The net losses of $9.2 million and $6.6 million reclassified from accumulated other comprehensive loss to the consolidated statements of operations for the three and nine months ended September 30, 2017, respectively, and the net gains of $2.2 million and $12.5 million reclassified from accumulated other comprehensive loss to the consolidated statements of operations for the three and nine months ended September 30, 2016, respectively, are offset by the changes in cash flows associated with the underlying hedged transactions.
| Amount of Gain (Loss) Recognized in the Statements of Operations |  | Statements of Operations Classification
| For the Three Months Ended |
| September 30, 2017 |  | September 30, 2016 |
| (In thousands) |  |
Derivatives not designated as hedging instruments |
Foreign currency forward exchange contracts | $ | 13,624 |  |  | $ | 306 |  |  | Other non-operating income/expense
Cross currency swap contract | — |  |  | (274 | ) |  | Other non-operating income/expense
Foreign currency forward exchange contracts | 9 |  |  | 619 |  |  | Cost of sales
Total | $ | 13,633 |  |  | $ | 651 |  |  |
| Amount of Gain (Loss) Recognized in the Statements of Operations |  | Statements of Operations Classification
| For the Nine Months Ended |
| September 30, 2017 |  | September 30, 2016 |
| (In thousands) |  |
Derivatives not designated as hedging instruments |
Foreign currency forward exchange contracts | $ | 64,582 |  |  | $ | 5,909 |  |  | Other non-operating income/expense
Cross currency swap contract | — |  |  | (1,532 | ) |  | Other non-operating income/expense
Foreign currency forward exchange contracts | 511 |  |  | 2,217 |  |  | Cost of sales
Total | $ | 65,093 |  |  | $ | 6,594 |  |  |
The net gains of $13.6 million and $65.1 million recognized in the consolidated statements of operations for the three and nine months ended September 30, 2017, respectively, and the net gains of $0.7 million and $6.6 million recognized in the consolidated statements of operations for the three and nine months ended September 30, 2016, respectively, are offset by foreign currency transaction gains and losses on the related hedged balances.

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