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Derivative Instruments
 12 Months Ended
Dec. 31, 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 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 does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change in the consolidated statements of operations. As of December 31, 2017 and 2016, Mattel held foreign currency forward exchange contracts with notional amounts of $987.7 million and $1.20 billion, respectively.
The following table presents Mattel’s derivative assets and liabilities:
 
Derivative Assets
 
Balance Sheet Classification
 
Fair Value
 
 
 
December 31, 2017
 
December 31, 2016
 
 
 
(In thousands)
Derivatives designated as hedging instruments:
 
 
 
 
 
Foreign currency forward exchange contracts
Prepaid expenses and other current assets
 
$
2,175

 
$
18,747

Foreign currency forward exchange contracts
Other noncurrent assets
 
115

 
5,782

Total derivatives designated as hedging instruments
 
 
$
2,290

 
$
24,529

Derivatives not designated as hedging instruments:
 
 
 
 
 
Foreign currency forward exchange contracts
Prepaid expenses and other current assets
 
$
5,514

 
$
2,678

Total
 
 
$
7,804

 
$
27,207

 
 
 
 
 
 
 
Derivative Liabilities
 
Balance Sheet Classification
 
Fair Value
 
 
 
December 31, 2017
 
December 31, 2016
 
 
 
(In thousands)
Derivatives designated as hedging instruments:
 
 
 
 
 
Foreign currency forward exchange contracts
Accrued liabilities
 
$
15,970

 
$
1,917

Foreign currency forward exchange contracts
Other noncurrent liabilities
 
3,159

 
223

Total derivatives designated as hedging instruments
 
 
$
19,129

 
$
2,140

Derivatives not designated as hedging instruments:
 
 
 
 
 
Foreign currency forward exchange contracts
Accrued liabilities
 
$
191

 
$
7,072

Total
 
 
$
19,320

 
$
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:
 
Derivatives Designated As Hedging Instruments
 
Consolidated Statements of
Operations Classification
 
For the Year Ended
 
 
December 31,
2017
 
December 31,
2016
 
December 31,
2015
 
 
(In thousands)
 
 
Foreign currency forward exchange contracts:
 
 
 
 
 
 
 
Amount of (loss) gain recognized in OCI
$
(55,377
)
 
$
18,733

 
$
37,926

 
 
Amount of (loss) gain reclassified from accumulated OCI to the consolidated statements of operations
(16,810
)
 
16,627

 
52,588

 
Cost of sales

The net (losses) gains of $(16.8) million, $16.6 million, and $52.6 million reclassified from accumulated other comprehensive loss to the consolidated statements of operations during 2017, 2016, and 2015, respectively, are offset by the changes in cash flows associated with the underlying hedged transactions.
 
Derivatives Not Designated As Hedging Instruments
 
Consolidated Statements of
Operations Classification
 
For the Year Ended
 
 
December 31,
2017
 
December 31,
2016
 
December 31,
2015
 
 
(In thousands)
 
 
Amount of gain (loss) recognized in the statements of operations:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts
$
70,200

 
$
(11,056
)
 
$
(51,679
)
 
Other non-operating expense/income, net
Cross currency swap contract
—

 
—

 
5,288

 
Other non-operating expense/income, net
Foreign currency forward exchange contracts
511

 
1,631

 
(265
)
 
Cost of sales
Total
$
70,711

 
$
(9,425
)
 
$
(46,656
)
 
 

The net gains (losses) of $70.7 million, $(9.4) million, and $(46.7) million recognized in the consolidated statements of operations during 2017, 2016, and 2015, respectively, are offset by foreign currency transaction gains and losses on the related hedged balances.