Derivative Instruments

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative InstrumentsMattel 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 (loss) ("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. 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. Mattel utilizes derivative contracts to hedge certain purchases of commodities, which were not material. As of March 31, 2021, March 31, 2020, and December 31, 2020, Mattel held foreign currency forward exchange contracts and other commodity derivative instruments, with notional amounts of $951.5 million, $1.37 billion, and $855.0 million, respectively.

The following tables present Mattel's derivative assets and liabilities:


	Derivative Assets
	Balance Sheet Classification	Fair Value
		March 31, 2021		March 31, 2020		December 31, 2020
		(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contracts	Prepaid expenses and other current assets	$	4,534	$	21,121	$	3,641
Foreign currency forward exchange and other contracts	Other noncurrent assets	1,250		2,525		50
Total derivatives designated as hedging instruments		$	5,784	$	23,646	$	3,691
Derivatives not designated as hedging instruments
Foreign currency forward exchange and other contracts	Prepaid expenses and other current assets	$	2,050	$	13,811	$	1,982
Foreign currency forward exchange and other contracts	Other noncurrent assets	—		—		38
Total derivatives not designated as hedging instruments		$	2,050	$	13,811	$	2,020
		$	7,834	$	37,457	$	5,711

	Derivative Liabilities
	Balance Sheet Classification	Fair Value
		March 31, 2021		March 31, 2020		December 31, 2020
		(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contracts	Accrued liabilities	$	11,009	$	6,841	$	20,330
Foreign currency forward exchange and other contracts	Other noncurrent liabilities	808		2,507		4,361
Total derivatives designated as hedging instruments		$	11,817	$	9,348	$	24,691
Derivatives not designated as hedging instruments
Foreign currency forward exchange and other contracts	Accrued liabilities	$	5,487	$	1,594	$	803
Foreign currency forward exchange and other contracts	Other noncurrent liabilities	—		224		—
Total derivatives not designated as hedging instruments		$	5,487	$	1,818	$	803
		$	17,304	$	11,166	$	25,494

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

For the Three Months Ended

March 31, 2021

March 31, 2020

Statements of Operations Classification

(In thousands)

Foreign currency forward exchange contracts:

Amount of gains recognized in OCI

4,057

9,190

Amount of (losses) gains reclassified from accumulated OCI to consolidated statements of operations

(3,314)

3,210

Cost of sales

The net (losses) gains reclassified from accumulated other comprehensive loss to the consolidated statements of operations during the three months ended March 31, 2021 and 2020, respectively, were offset by the changes in cash flows associated with the underlying hedged transactions.


	Derivatives Not Designated As Hedging Instruments
	For the Three Months Ended
	March 31, 2021		March 31, 2020		Statements of Operations Classification
	(In thousands)
Amount of net loss recognized in the Statements of Operations
Foreign currency forward exchange and other contract (losses)	$	(8,636)	$	(38,369)	Other non-operating income/expense, net
Foreign currency forward exchange and other contract gains	639		—		Cost of sales
	$	(7,997)	$	(38,369)

The net losses recognized in the consolidated statements of operations during the three months ended March 31, 2021 and 2020, respectively, were offset by foreign currency transaction gains and losses on the related hedged balances.