Mattel 2009 Annual Report Download - page 96

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Rate Senior Notes. These derivative instruments were designated as effective cash flow hedges,whereby the
hedges were reported in Mattel’s consolidated balance sheets at fair value, with changes in the fair value of the
hedges reflected in OCI. Under the terms of the agreements, Mattel received quarterly interest payments from the
swap counterparties based on the three-month LIBOR plus 40 basis points and made semi-annual interest
payments to the swap counterparties based on a fixed rate of 5.871%. The three-month LIBOR used to determine
interest payments under the interest rate swap agreements had reset every three months, matching the variable
interest on the Floating Rate Senior Notes.
The following table presents Mattel’s derivative assets and liabilities at December 31, 2009 (in thousands):
Asset Derivatives Liability Derivatives
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as
hedging instruments:
Foreign currency forward
exchange contracts ......
Prepaid expenses and other
current assets $ 7,008 Accrued liabilities $21,032
Foreign currency forward
exchange contracts ...... Other noncurrent assets 962 Other noncurrent liabilities 19
Total derivatives designated
as hedging instruments . . . $ 7,970 $21,051
Derivatives not designated
as hedging instruments:
Foreign currency forward
exchange contracts ......
Prepaid expenses and other
current assets $ 2,222 $ —
Total derivatives ......... $10,192 $21,051
The following tables present the location and amount of gains and losses, net of taxes, from derivatives
reported in the consolidated statements of operations in 2009:
Amount of Loss
Recognized
in OCI
Amount of Loss
Reclassified from
Accumulated OCI
to Statements of
Operations
Statements of
Operations
Location
(In thousands)
Derivatives designated as hedging instruments:
Foreign currency forward exchange contracts ....... $(29,253) $(8,247) Cost of sales
Interest rate swaps ............................. (349) (1,550) Interest expense
Total ....................................... $(29,602) $(9,797)
The net loss of $9.8 million reclassified from accumulated OCI to the consolidated statements of operations
during 2009, are offset by the changes in cash flows associated with the underlying hedged transactions.
Amount of Gain
Recognized in Statements
of Operations
Statements of
Operations
Location
(In thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward exchange contracts ................. $16,633 Non-operating
(income) expense
Foreign currency forward exchange contracts ................. 4,160 Cost of sales
Total ................................................. $20,793
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