Mattel 2013 Annual Report Download - page 61

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Buy Sell
Contract
Amount
Weighted
Average
Contract
Rate
Fair
Value
Contract
Amount
Weighted
Average
Contract
Rate
Fair
Value
(In thousands of US dollars, except for rates)
Australian dollar* ..................... $ 42,169 0.89 $ 189 $ 302 0.92 $ 9
British pound sterling* ................. 26,543 1.63 465 — — —
Canadian dollar* ...................... 4,710 0.94 (3) 15,165 0.96 379
Czech koruna ......................... 3,977 20.10 51 — — —
Danish krone ......................... — — — 14,929 5.42 34
Euro* ............................... 570,966 1.38 (982) 417,525 1.34 (10,785)
Hungarian forint ...................... 1,752 217.20 10 — — —
Indonesian rupiah ..................... 71,051 12,233.91 (1,301) — — —
Japanese yen ......................... — — — 14,934 102.78 361
Mexican peso ......................... 151,630 13.04 (97) 88,993 12.98 414
New Turkish lira ...................... — — — 380 2.05 19
New Zealand dollar* ................... 17,085 1.21 (75) — — —
Norwegian krone ...................... — — — — — —
Polish zloty .......................... 10,599 3.04 82 — — —
Russian ruble ......................... — — — 3,837 33.23 (33)
Singapore dollar ...................... 5,242 1.26 (9) — — —
Swedish krona ........................ — — — — — —
Swiss franc ........................... 27,889 0.88 (262) — — —
Taiwan dollar ......................... — — — 13,143 29.92 (16)
$933,613 $(1,932) $569,208 $ (9,618)
*The weighted average contract rate for these contracts is quoted in US dollar per local currency.
For the purchase of foreign currencies, fair value reflects the amount, based on dealer quotes, that Mattel
would pay at maturity for contracts involving the same notional amounts, currencies, and maturity dates, if they
had been entered into as of December 31, 2013. For the sale of foreign currencies, fair value reflects the amount,
based on dealer quotes, that Mattel would receive at maturity for contracts involving the same notional amounts,
currencies, and maturity dates, if they had been entered into as of December 31, 2013. The differences between
the market forward amounts and the contract amounts are expected to be fully offset by currency transaction
gains and losses on the underlying hedged transactions.
In addition to the contracts involving the US dollar detailed in the above table, Mattel also had contracts to
sell British pound sterling for the purchase of Euro. As of December 31, 2013, these contracts had a contract
amount of $43.3 million and a fair value of $(0.7) million.
Had Mattel not entered into hedges to limit the effect of currency exchange rate fluctuations on its results of
operations and cash flows, its income before income taxes would have decreased by approximately $9 million in
2013, decreased by approximately $35 million in 2012, and increased by approximately $5 million in 2011.
Venezuelan Operations
Since January 1, 2010, Mattel has accounted for Venezuela as a highly inflationary economy as the
three-year cumulative inflation rate for Venezuela exceeded 100%. Accordingly, Mattel’s Venezuelan subsidiary
uses the US dollar as its functional currency, and monetary assets and liabilities denominated in Venezuelan
bolivar fuerte generate income or expense for changes in value associated with foreign currency exchange rate
fluctuations against the US dollar. From January 2010 through January 2013, Mattel’s Venezuelan subsidiary
used the Sistema de Transacciones con Titulos en Moneda Extranjera (“SITME”) rate, which was controlled by
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