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Fair Value Measurements
6 Months Ended
Jun. 30, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The following tables present information about Mattel’s assets and liabilities measured and reported in the financial statements at fair value and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. The three levels of the fair value hierarchy are as follows:
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2 – Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
Level 3 – Valuations based on inputs that are unobservable, supported by little or no market activity, and that are significant to the fair value of the assets or liabilities.
Mattel’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following:
 
June 30, 2017
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
8,706

 
$

 
$
8,706

Available-for-sale security (b)
11,201

 

 

 
11,201

Total assets
$
11,201

 
$
8,706

 
$

 
$
19,907

Liabilities:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
26,618

 
$

 
$
26,618

 
 
 
 
 
 
 
 
 
June 30, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
10,496

 
$

 
$
10,496

Liabilities:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
17,025

 
$

 
$
17,025

Cross currency swap contract (a)

 
1,258

 

 
1,258

Total liabilities
$

 
$
18,283

 
$

 
$
18,283

 
 
 
 
 
 
 
 
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
27,207

 
$

 
$
27,207

Available-for-sale security (b)
14,939

 

 

 
14,939

Total assets
$
14,939

 
$
27,207

 
$

 
$
42,146

Liabilities:
 
 
 
 
 
 
 
Foreign currency forward exchange contracts (a)
$

 
$
9,212

 
$

 
$
9,212

 ____________________________________________
(a)
The fair value of the foreign currency forward exchange contracts and cross currency swap contracts are based on dealer quotes of market forward rates and reflect the amount that Mattel would receive or pay at their maturity dates for contracts involving the same notional amounts, currencies, and maturity dates.
(b)
The fair value of the available-for-sale security is based on the quoted price on an active public exchange.
Other Financial Instruments
Mattel’s financial instruments include cash and equivalents, accounts receivable and payable, short-term borrowings, and accrued liabilities. The fair values of these instruments approximate their carrying values because of their short-term nature and are classified as Level 2 within the fair value hierarchy.
The estimated fair value of Mattel’s long-term debt, including the current portion, was $2.20 billion (compared to a carrying value of $2.15 billion) as of June 30, 2017, $2.19 billion (compared to a carrying value of $2.10 billion) as of June 30, 2016, and $2.18 billion (compared to a carrying value of $2.15 billion) as of December 31, 2016. The estimated fair values have been calculated based on broker quotes or rates for the same or similar instruments and are classified as Level 2 within the fair value hierarchy.