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.
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