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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ___________________________________________________________ 
FORM 10-Q
 ___________________________________________________________ 
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2021
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to  
Commission File Number 001-05647
___________________________________________________________ 
MATTEL, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________ 
Delaware 95-1567322
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
333 Continental Blvd. 90245-5012
El Segundo,CA 
(Address of principal executive offices) (Zip Code)
(310) 252-2000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since last report):

__________________________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $1.00 per shareMATThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large accelerated filer ☒  Accelerated filer 
☐
Non-accelerated filer 
☐
  Smaller reporting company 
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Number of shares outstanding of registrant's common stock, $1.00 par value, as of April 19, 2021: 348,775,829 shares
1

MATTEL, INC. AND SUBSIDIARIES
  Page
PART I
PART II
2

(Cautionary Statement Under the Private Securities Litigation Reform Act of 1995)
Mattel is including this Cautionary Statement to caution investors and qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Act") for forward-looking statements. This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Act. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. The use of words such as "anticipates," "expects," "intends," "plans," "confident that," and "believes," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic, and other information and assumptions, and are subject to a number of significant risks and uncertainties. A variety of factors, many of which are beyond our control, could cause actual future results to differ materially from those projected in the forward-looking statements, and are currently, and in the future may be, amplified by the COVID-19 pandemic. Specific factors that might cause such a difference include, but are not limited to: (i) potential impacts of and uncertainty regarding the COVID-19 pandemic (and actions taken in response to it by governments, businesses, and individuals) on our business operations, financial results and financial position and on the global economy, including its impact on our sales; (ii) Mattel’s ability to design, develop, produce, manufacture, source, ship, and distribute products on a timely and cost-effective basis; (iii) sufficient interest in and demand for the products and entertainment we offer by retail customers and consumers to profitably recover Mattel’s costs; (iv) downturns in economic conditions affecting Mattel’s markets which can negatively impact retail customers and consumers, and which can result in lower employment levels and lower consumer disposable income and spending, including lower spending on purchases of Mattel’s products; (v) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (vi) potential difficulties or delays Mattel may experience in implementing cost savings and efficiency enhancing initiatives; (vii) other economic and public health conditions or regulatory changes in the markets in which Mattel and its customers and suppliers operate, which could create delays or increase Mattel’s costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (viii) currency fluctuations, including movements in foreign exchange rates, which can lower Mattel’s net revenues and earnings, and significantly impact Mattel’s costs; (ix) the concentration of Mattel’s customers, potentially increasing the negative impact to Mattel of difficulties experienced by any of Mattel’s customers, such as bankruptcies or liquidations or a general lack of success, or changes in their purchasing or selling patterns; (x) the inventory policies of Mattel’s retail customers, as well as the concentration of Mattel’s revenues in the second half of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction, overproduction, and shipping delays; (xi) legal, reputational, and financial risks related to security breaches or cyberattacks; (xii) work disruptions, which may impact Mattel’s ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the impact of competition on revenues, margins, and other aspects of Mattel’s business, including the ability to offer products which consumers choose to buy instead of competitive products, the ability to secure, maintain, and renew popular licenses from licensors of entertainment properties, and the ability to attract and retain talented employees; (xiv) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xv) changes in laws or regulations in the United States and/or in other major markets, such as China, in which Mattel operates, including, without limitation, with respect to taxes, tariffs, trade policies, or product safety, which may increase Mattel’s product costs and other costs of doing business, and reduce Mattel’s earnings; (xvi) failure to realize the planned benefits from any investments or acquisitions made by Mattel; (xvii) the impact of other market conditions or third party actions or approvals, including that result in any significant failure, inadequacy, or interruption from vendors or outsourcers, which could reduce demand for Mattel’s products, delay or increase the cost of implementation of Mattel’s programs, or alter Mattel’s actions and reduce actual results; (xviii) changes in financing markets or the inability of Mattel to obtain financing on attractive terms; (xix) the impact of litigation, arbitration, or regulatory decisions or settlement actions; (xx) uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; and (xxi) other risks and uncertainties detailed in Part I, Item 1A "Risk Factors" in Mattel's 2020 Annual Report on Form 10-K (the "2020 Annual Report on Form 10-K"). Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law.
3

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,
2021		March 31,
2020		December 31,
2020
 (Unaudited; in thousands, except share data)
ASSETS
Current Assets
Cash and equivalents$615,238 $499,407 $762,181 
Accounts receivable, net of allowances for credit losses of $13.1 million, $20.9 million and $15.9 million, respectively
680,642 528,522 1,033,966 
Inventories609,835 560,645 514,673 
Prepaid expenses and other current assets187,186 218,516 172,070 
Total current assets2,092,901 1,807,090 2,482,890 
Noncurrent Assets
Property, plant, and equipment, net451,001 519,777 473,794 
Right-of-use assets, net294,819 298,288 291,601 
Goodwill1,392,289 1,382,852 1,393,834 
Other noncurrent assets871,306 796,345 878,970 
Total Assets$5,102,316 $4,804,352 $5,521,089 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings$878 $150,000 $969 
Accounts payable361,902 306,440 495,363 
Accrued liabilities689,686 657,254 831,922 
Income taxes payable30,106 12,290 27,125 
Total current liabilities1,082,572 1,125,984 1,355,379 
Noncurrent Liabilities
Long-term debt2,837,732 2,848,924 2,854,664 
Noncurrent lease liabilities255,670 262,631 249,353 
Other noncurrent liabilities452,411 408,930 465,350 
Total noncurrent liabilities3,545,813 3,520,485 3,569,367 
Stockholders’ Equity
Common stock $1.00 par value, 1.0 billion shares authorized; 441.4 million shares issued
441,369 441,369 441,369 
Additional paid-in capital1,836,958 1,836,067 1,842,680 
Treasury stock at cost: 92.6 million shares, 94.5 million shares and 93.2 million shares, respectively
(2,267,961)(2,316,110)(2,282,939)
Retained earnings1,424,591 1,202,440 1,539,809 
Accumulated other comprehensive loss(961,026)(1,005,883)(944,576)
Total stockholders’ equity473,931 157,883 596,343 
Total Liabilities and Stockholders’ Equity$5,102,316 $4,804,352 $5,521,089 
The accompanying notes are an integral part of these consolidated financial statements.
4

MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
March 31,
2021		March 31,
2020
 (Unaudited; in thousands, except per share amounts)
Net Sales$874,192 $594,069 
Cost of sales465,188 338,886 
Gross Profit409,004 255,183 
Advertising and promotion expenses74,096 76,282 
Other selling and administrative expenses303,870 328,711 
Operating Income (Loss)31,038 (149,810)
Interest expense130,482 48,980 
Interest (income)(820)(2,084)
Other non-operating (income) expense, net(1,086)3,023 
Loss Before Income Taxes(97,538)(199,729)
Provision for income taxes20,305 11,892 
Income from equity method investments2,625 880 
Net Loss$(115,218)$(210,741)
Net Loss Per Common Share - Basic$(0.33)$(0.61)
Weighted-average number of common shares349,041 346,867 
Net Loss Per Common Share - Diluted$(0.33)$(0.61)
Weighted-average number of common and potential common shares349,041 346,867 
The accompanying notes are an integral part of these consolidated financial statements.
5

MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 For the Three Months Ended
 March 31,
2021		March 31,
2020
 (Unaudited; in thousands)
Net Loss$(115,218)$(210,741)
Other Comprehensive Loss, Net of Tax
Currency translation adjustments(28,133)(145,634)
Employee benefit plan adjustments2,348 3,060 
Net unrealized gains on available-for-sale security1,964 195 
Net unrealized gains on derivative instruments:
Unrealized holding gains4,057 9,190 
Reclassification adjustments included in net loss3,314 (3,210)
7,371 5,980 
Other Comprehensive Loss, Net of Tax(16,450)(136,399)
Comprehensive Loss$(131,668)$(347,140)

The accompanying notes are an integral part of these consolidated financial statements.
6

MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
2021		March 31,
2020
 (Unaudited; in thousands)
Cash Flows From Operating Activities:
Net Loss$(115,218)$(210,741)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Depreciation36,533 43,654 
Amortization9,514 9,965 
Share-based compensation15,112 14,275 
Bad debt expense237 5,248 
Inventory obsolescence10,892 10,190 
Deferred income taxes1,851 5,210 
Income from equity method investments(2,625)(880)
Loss on extinguishment of long-term borrowings83,213 — 
(Gain) loss on sale of assets/business, net(19,735)1,580 
Changes in assets and liabilities:
Accounts receivable338,305 365,002 
Inventories(135,103)(109,938)
Prepaid expenses and other current assets(12,943)(16,343)
Accounts payable, accrued liabilities, and income taxes payable(262,635)(316,291)
Other, net11,369 24,580 
Net cash flows used for operating activities(41,233)(174,489)
Cash Flows From Investing Activities:
Purchases of tools, dies, and molds(18,171)(11,363)
Purchases of other property, plant, and equipment(12,119)(23,943)
Payments of foreign currency forward exchange contracts, net(3,245)(46,565)
Proceeds from sale of assets/business39,208 738 
Other, net653 (24)
Net cash flows provided by (used for) investing activities6,326 (81,157)
Cash Flows From Financing Activities:
(Payments of) proceeds from short-term borrowings, net(91)150,000 
Payments of long-term borrowings(1,287,022)— 
Proceeds from long-term borrowings, net1,188,000 — 
Other, net(6,592)(678)
Net cash flows (used for) provided by financing activities(105,705)149,322 
Effect of Currency Exchange Rate Changes on Cash and Equivalents(6,331)(24,297)
Decrease in Cash and Equivalents(146,943)(130,621)
Cash and Equivalents at Beginning of Period762,181 630,028 
Cash and Equivalents at End of Period$615,238 $499,407 
The accompanying notes are an integral part of these consolidated financial statements.
7

MATTEL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common
Stock		Additional
Paid-In
Capital		Treasury
Stock		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
 (Unaudited; in thousands)
Balance, December 31, 2020$441,369 $1,842,680 $(2,282,939)$1,539,809 $(944,576)$596,343 
Net loss— — — (115,218)— (115,218)
Other comprehensive loss, net of tax— — — — (16,450)(16,450)
Issuance of treasury stock for stock option exercises— (803)1,913 — — 1,110 
Issuance of treasury stock for restricted stock units vesting— (20,031)13,065 — — (6,966)
Share-based compensation— 15,112 — — — 15,112 
Balance, March 31, 2021$441,369 $1,836,958 $(2,267,961)$1,424,591 $(961,026)$473,931 
Common
Stock		Additional
Paid-In
Capital		Treasury
Stock		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Total
Stockholders’
Equity
 (Unaudited; in thousands)
Balance, December 31, 2019$441,369 $1,825,569 $(2,318,921)$1,413,181 $(869,484)$491,714 
Net loss— — — (210,741)— (210,741)
Other comprehensive loss, net of tax— — — — (136,399)(136,399)
Issuance of treasury stock for restricted stock units vesting— (3,777)2,811 — — (966)
Share-based compensation— 14,275 — — — 14,275 
Balance, March 31, 2020$441,369 $1,836,067 $(2,316,110)$1,202,440 $(1,005,883)$157,883 
The accompanying notes are an integral part of these consolidated financial statements.
8

MATTEL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.     Basis of Presentation
The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of Mattel, Inc. and its subsidiaries ("Mattel") as of and for the periods presented have been included.
The December 31, 2020 balance sheet data was derived from audited financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. As Mattel's business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with Mattel's consolidated financial statements and related notes in the 2020 Annual Report on Form 10-K.
Certain prior period amounts have been reclassified to conform to the current period presentation.
2.     Accounts Receivable
Mattel estimates current expected credit losses based on collection history and management’s assessment of the current economic trends, business environment, customers’ financial condition, accounts receivable aging, and customer disputes that may impact the level of future credit losses. Accounts receivable are net of allowances for credit losses of $13.1 million, $20.9 million, and $15.9 million as of March 31, 2021, March 31, 2020, and December 31, 2020, respectively.
3.     Inventories
Inventories include the following:
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
Raw materials and work in process$119,417 $107,880 $110,010 
Finished goods490,418 452,765 404,663 
$609,835 $560,645 $514,673 
4.     Property, Plant, and Equipment
Property, plant, and equipment, net includes the following: 
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
Land$22,029 $24,856 $24,913 
Buildings312,114 297,910 335,407 
Machinery and equipment764,276 769,761 772,349 
Software345,477 367,143 344,268 
Tools, dies, and molds603,817 719,615 607,915 
Leasehold improvements119,828 179,872 131,578 
2,167,541 2,359,157 2,216,430 
Less: accumulated depreciation(1,716,540)(1,839,380)(1,742,636)
$451,001 $519,777 $473,794 
9

During the three months ended March 31, 2021, Mattel completed the sale of a manufacturing plant based in Mexico, which included land and buildings, resulting in a pre-tax gain of $15.8 million. The assets sold were previously designated as held for sale, and included within property, plant, and equipment, net in the consolidated balance sheets as of December 31, 2020 and March 31, 2020.
5.     Goodwill
Goodwill is allocated to various reporting units, which are at the operating segment level, for the purpose of evaluating whether goodwill is impaired. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl. Components of the operating segments have been aggregated into a single reporting unit as the components have similar economic characteristics. The similar economic characteristics include the nature of the products, the nature of the production processes, the customers, and the manner in which the products are distributed. Mattel tests its goodwill for impairment annually in the third quarter and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.
The change in the carrying amount of goodwill by operating segment for the three months ended March 31, 2021 is shown below. Brand-specific goodwill held by foreign subsidiaries is allocated to the North America segment, thereby causing a foreign currency translation impact. During the three months ended March 31, 2021, Mattel sold its arts, crafts, and stationery business resulting in a reduction of goodwill of approximately $2 million.
 December 31,
2020		DispositionsCurrency
Exchange Rate
Impact		March 31,
2021
(In thousands)
North America$733,401 $(1,290)$259 $732,370 
International452,862 (1,056)542 452,348 
American Girl207,571 — — 207,571 
$1,393,834 $(2,346)$801 $1,392,289 
6.     Other Noncurrent Assets
Other noncurrent assets include the following: 
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
Identifiable intangible assets (net of accumulated amortization of $296.4 million, $258.0 million, and $286.9 million, respectively)
$509,844 $534,044 $518,190 
Deferred income taxes71,157 62,674 72,682 
Mattel's amortizable intangible assets primarily consist of trademarks. Mattel tests its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Mattel's amortizable intangible assets were not impaired during the three months ended March 31, 2021 and 2020.
7.     Accrued Liabilities
Accrued liabilities include the following: 
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
Incentive compensation$143,414 $135,833 $126,601 
Advertising and promotion78,755 71,563 163,181 
Current lease liabilities73,155 78,247 79,540 
Royalties24,191 22,701 54,442 
10

8.     Seasonal Financing
On December 20, 2017, Mattel entered into a syndicated facility agreement, which was subsequently amended in 2018, 2019, and 2021 (as amended, the "Credit Agreement"), as a borrower (in such capacity, the "Borrower") and guarantor thereunder, along with certain of the Borrower's domestic and foreign subsidiaries as additional borrowers and/or guarantors thereunder.
On March 19, 2021, Mattel entered into the fourth amendment to the Credit Agreement, which amended certain terms, including, but not limited to, certain components of the borrowing base, a reduction of the aggregate principal commitments of the senior secured revolving credit facilities (the "senior secured revolving credit facilities") from $1.60 billion to $1.40 billion, and an extension of the maturity date from November 18, 2022 to March 19, 2024.
The senior secured revolving credit facilities consist of (i) an asset based lending facility with aggregate commitments up to $1.11 billion, subject to borrowing base capacity, secured by substantially all of the accounts receivable and inventory of the Borrower and certain of its subsidiaries who are borrowers and/or guarantors under the Credit Agreement, as well as (ii) a revolving credit facility with $294.0 million in aggregate commitments secured by certain fixed assets and intellectual property of the U.S. borrowers under the Credit Agreement, and certain equity interests in the borrower and guarantor subsidiaries under the Credit Agreement.
Borrowings under the senior secured revolving credit facilities (i) are limited by jurisdiction-specific borrowing base calculations based on the sum of specified percentages of eligible accounts receivable, eligible inventory and certain fixed assets and intellectual property, as applicable, minus the amount of any applicable reserves, and (ii) bear interest at a floating rate, which can be either, at the Borrower's option, (a) an adjusted LIBOR rate plus an applicable margin ranging from 1.25% to 1.75% per annum or (b) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum, in each case, such applicable margins to be determined based on the Borrower's average borrowing availability remaining under the senior secured revolving credit facilities.
In addition to paying interest on the outstanding principal under the senior secured revolving credit facilities, the Borrower is required to pay (i) an unused line fee per annum of the average daily unused portion of the senior secured revolving credit facilities, (ii) a letter of credit fronting fee based on a percentage of the aggregate face amount of outstanding letters of credit, and (iii) certain other customary fees and expenses of the lenders and agents.
Mattel had no borrowings under the senior secured revolving credit facilities as of March 31, 2021, $150.0 million of borrowings as of March 31, 2020, and no borrowings under the senior secured revolving credit facilities as of December 31, 2020. Outstanding letters of credit under the senior secured revolving credit facilities totaled approximately $11 million, $13 million, and $11 million as of March 31, 2021, March 31, 2020, and December 31, 2020, respectively.
As of March 31, 2021, Mattel was in compliance with all covenants contained in the Credit Agreement. The Credit Agreement is a material agreement, and failure to comply with the covenants may result in an event of default under the terms of the senior secured revolving credit facilities. If Mattel were to default under the terms of the senior secured revolving credit facilities, its ability to meet its seasonal financing requirements could be adversely affected.
9.     Long-Term Debt
Long-term debt includes the following:
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
2010 Senior Notes due October 2040$250,000 $250,000 $250,000 
2011 Senior Notes due November 2041300,000 300,000 300,000 
2013 Senior Notes due March 2023250,000 250,000 250,000 
2017/2018 Senior Notes due December 2025275,000 1,500,000 1,500,000 
2019 Senior Notes due December 2027600,000 600,000 600,000 
2021 Senior Notes due April 2026600,000 — — 
2021 Senior Notes due April 2029600,000 — — 
Debt issuance costs and debt discount(37,268)(51,076)(45,336)
$2,837,732 $2,848,924 $2,854,664 

11

On March 19, 2021, Mattel issued (i) $600 million aggregate principal amount of 3.375% Senior Notes due 2026 (the "2026 Notes") and (ii) $600 million aggregate principal amount of 3.750% Senior Notes due 2029 (the "2029 Notes" and, together with the 2026 Notes, the "Notes"). The 2026 Notes will mature on April 1, 2026 and the 2029 Notes will mature on April 1, 2029, unless earlier redeemed in accordance with their respective terms. The Notes are guaranteed by Mattel’s existing and, subject to certain exceptions, future wholly owned domestic restricted subsidiaries that guarantee Mattel’s senior secured revolving credit facilities or certain other indebtedness.
The net proceeds from the offering, together with cash on hand, were used to redeem $1,225 million in aggregate principal amount of Mattel’s outstanding 6.750% Senior Notes due December 2025 (the "2025 Notes") and pay related prepayment premiums and transaction fees and expenses. As a result of the partial redemption of the 2025 Notes, Mattel incurred a loss on extinguishment of $83.2 million, comprised of $62.0 million of prepayment premium costs and a $21.2 million write-off of the unamortized debt issuance costs, which was recorded within interest expense in the consolidated statements of operations. Following completion of the partial redemption of the 2025 Notes, $275 million aggregate principal amount of the 2025 Notes remains outstanding.
10.     Other Noncurrent Liabilities
Other noncurrent liabilities include the following:
March 31,
2021		March 31,
2020		December 31,
2020
 (In thousands)
Benefit plan liabilities$221,345 $205,694 $225,957 
Noncurrent income tax payable72,252 70,902 71,342 
Deferred income tax liability 60,929 54,896 60,892 
11.     Accumulated Other Comprehensive Income (Loss)
The following tables present changes in the accumulated balances for each component of other comprehensive income (loss), including other comprehensive income (loss) and reclassifications out of accumulated other comprehensive income (loss) for each period:
 For the Three Months Ended March 31, 2021
 Derivative
Instruments		Available-for-Sale SecurityEmployee Benefit PlansCurrency
Translation
Adjustments		Total
 (In thousands)
Accumulated Other Comprehensive Loss, Net of Tax, as of December 31, 2020$(15,369)$(7,522)$(186,854)$(734,831)$(944,576)
Other comprehensive income (loss) before reclassifications4,057 1,964 (67)(28,133)(22,179)
Amounts reclassified from accumulated other comprehensive loss3,314 — 2,415 — 5,729 
Net increase (decrease) in other comprehensive income (loss)7,371 1,964 2,348 (28,133)(16,450)
Accumulated Other Comprehensive Loss, Net of Tax, as of March 31, 2021$(7,998)$(5,558)$(184,506)$(762,964)$(961,026)
12

For the Three Months Ended March 31, 2020
 Derivative
Instruments		Available-for-Sale SecurityEmployee Benefit PlansCurrency
Translation
Adjustments		Total
 (In thousands)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of December 31, 2019$11,041 $(8,260)$(169,857)$(702,408)$(869,484)
Other comprehensive income (loss) before reclassifications9,190 195 1,702 (145,634)(134,547)
Amounts reclassified from accumulated other comprehensive loss(3,210)— 1,358 — (1,852)
Net increase (decrease) in other comprehensive income (loss)5,980 195 3,060 (145,634)(136,399)
Accumulated Other Comprehensive Income (Loss), Net of Tax, as of March 31, 2020$17,021 $(8,065)$(166,797)$(848,042)$(1,005,883)

The following table presents the classification and amount of the reclassifications from accumulated other comprehensive income (loss) to the consolidated statements of operations:
For the Three Months Ended
March 31,
2021		March 31,
2020		Statements of Operations
Classification
 (In thousands) 
Derivative Instruments
(Loss) gain on foreign currency forward exchange and other contracts$(3,206)$3,193 Cost of sales
Tax effect of net (loss) gain(108)17 Provision for income taxes
$(3,314)$3,210 Net loss
Employee Benefit Plans
Amortization of prior service credit (a)$398 $466 Other non-operating income/expense, net
Recognized actuarial loss (a)(2,783)(2,340)Other non-operating income/expense, net
(2,385)(1,874)
Tax effect of net (loss) gain(30)516 Provision for income taxes
$(2,415)$(1,358)Net loss
_______________________________________
(a)The amortization of prior service credit and recognized actuarial loss are included in the computation of net periodic benefit cost. Refer to "Note 16 to the Consolidated Financial Statements—Employee Benefit Plans" of this Quarterly Report on Form 10-Q for additional information regarding Mattel's net periodic benefit cost.
Currency Translation Adjustments
Mattel's reporting currency is the U.S. dollar. The translation of its net investments in subsidiaries with non-U.S. dollar functional currencies subjects Mattel to the impact of foreign currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-U.S. dollar functional currencies are translated into U.S. dollars at fiscal period-end exchange rates. Income and expense items are translated at weighted-average exchange rates prevailing during the fiscal period. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Currency translation adjustments resulted in a net loss of $28.1 million for the three months ended March 31, 2021, primarily due to the weakening of the Brazilian real, Mexican peso, Euro, and Turkish lira against the U.S. dollar. Currency translation adjustments resulted in a net loss of $145.6 million for the three months ended March 31, 2020, primarily due to the weakening of the Mexican peso, Russian ruble, Brazilian real, and British pound sterling against the U.S. dollar.
13

12.     Foreign Currency Transaction Exposure
Currency exchange rate fluctuations may impact Mattel's results of operations and cash flows. Mattel's currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income (loss) in the consolidated statements of operations. Gains and losses on unhedged intercompany loans and advances are recorded as a component of other non-operating (income) expense, net in the consolidated statements of operations in the period in which the currency exchange rate changes. Inventory transactions denominated in the Euro, Mexican peso, Australian dollar, British pound sterling, Canadian dollar, Russian ruble, and Brazilian real were the primary transactions that caused foreign currency transaction exposure for Mattel during the three months ended March 31, 2021.
Currency transaction gains (losses) included in the consolidated statements of operations are as follows:
 For the Three Months Ended
 March 31,
2021		March 31,
2020		Statements of Operations Classification
 (In thousands)
Currency transaction (losses) gains$(13,791)$224 Operating income/loss
Currency transaction (losses)(3,308)(832)Other non-operating income/expense, net
Currency transaction (losses), net$(17,099)$(608)
13.     Derivative Instruments
Mattel 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.
14

The following tables present Mattel's derivative assets and liabilities:
 Derivative Assets
 Balance Sheet ClassificationFair Value
 March 31,
2021		March 31,
2020		December 31,
2020
(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contractsPrepaid expenses and other current assets$4,534 $21,121 $3,641 
Foreign currency forward exchange and other contractsOther noncurrent assets1,250 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 contractsPrepaid expenses and other current assets$2,050 $13,811 $1,982 
Foreign currency forward exchange and other contractsOther 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 ClassificationFair Value
 March 31,
2021		March 31,
2020		December 31,
2020
(In thousands)
Derivatives designated as hedging instruments
Foreign currency forward exchange and other contractsAccrued liabilities$11,009 $6,841 $20,330 
Foreign currency forward exchange and other contractsOther noncurrent liabilities808 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 contractsAccrued liabilities$5,487 $1,594 $803 
Foreign currency forward exchange and other contractsOther noncurrent liabilities— 224 — 
Total derivatives not designated as hedging instruments$5,487 $1,818 $803 
$17,304 $11,166 $25,494 
15

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, 2021March 31, 2020Statements 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, 2021March 31, 2020Statements 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 gains639 — 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.
14.     Fair Value Measurements
The following tables present information about Mattel's assets and liabilities measured and reported in the financial statements at fair value on a recurring basis as of March 31, 2021, March 31, 2020, and December 31, 2020 and indicate 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, either directly or indirectly.
•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.
16

Mattel's financial assets and liabilities include the following:
March 31, 2021
Level 1Level 2Level 3Total
(In thousands)
Assets:
Foreign currency forward exchange contracts and other (a)$— $7,834 $— $7,834 
Available-for-sale (b)6,232 — — 6,232 
Total assets$6,232 $7,834 $— $14,066 
Liabilities:
Foreign currency forward exchange contracts and other (a)$— $17,304 $— $17,304 
March 31, 2020
Level 1Level 2Level 3Total
(In thousands)
Assets:
Foreign currency forward exchange contracts and other (a)$— $37,457 $— $37,457 
Available-for-sale (b)3,725 — — 3,725 
Total assets$3,725 $37,457 $— $41,182 
Liabilities:
Foreign currency forward exchange contracts and other (a)$— $11,166 $— $11,166 
December 31, 2020
Level 1Level 2Level 3Total
(In thousands)
Assets:
Foreign currency forward exchange contracts and other (a)$— $5,711 $— $5,711 
Available-for-sale (b)4,268 — — 4,268 
Total assets$4,268 $5,711 $— $9,979 
Liabilities:
Foreign currency forward exchange contracts and other (a)$— $25,494 $— $25,494 
 ____________________________________________
(a)The fair value of the foreign currency forward exchange contracts and other commodity derivative instruments is based on dealer quotes of market forward rates and reflects 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, accrued liabilities, short-term borrowings, and long-term debt. The fair values of these instruments, excluding long-term debt, approximate their carrying values because of their short-term nature. Cash and equivalents are classified as Level 1 and all other financial instruments are classified as Level 2 within the fair value hierarchy.