As disclosed in Note 1, Mattel is revising its unaudited consolidated financial statements for the first and second quarters of 2019 and the first, second, and third quarters of 2018 to correct for prior period misstatements which Mattel has determined did not, either individually or in the aggregate, materially misstate its previously issued consolidated financial statements. These misstatements related to the improper capitalization of certain advertising costs, the under-accrual of sales adjustments and employee related costs, an increase to the provision for income taxes, and an adjustment for the misclassification between amounts within operating cash flows. Accordingly, the accompanying financial statements as of and for the three and nine months ended September 30, 2018 have been revised to correct for such misstatements. Financial statements which were not impacted by such revisions are not presented.

The cumulative impact of correcting prior period immaterial misstatements on retained earnings of $(5.2) million as of June 30, 2019 is comprised of the adjustments for prior period errors of $7.4 million for the six months ended June 30, 2019, $(2.3) million for the year ended December 31, 2018, and $(10.3) million for the year ended December 31, 2017 and prior periods.

The revisions to Mattel's unaudited consolidated balance sheet, statements of operations and comprehensive loss, and cash flows as of and for the period ended June 30, 2019 were as follows:



	June 30, 2019
	As Previously Reported		Adjustments			As Revised
	(In thousands)
Consolidated Balance Sheet
Accrued liabilities	$	590,532	$	5,240		$	595,772
Total current liabilities	$	1,074,580	$	5,240		$	1,079,820
Retained earnings	$	1,337,552	$	(5,240	)	$	1,332,312
Total stockholders' equity	$	421,337	$	(5,240	)	$	416,097



	Six Months Ended June 30, 2019
	As Previously Reported			Adjustments			As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net sales	$	1,549,309		$	—		$	1,549,309
Cost of sales	$	968,135		$	—		$	968,135
Gross profit	$	581,174		$	—		$	581,174
Advertising and promotion expenses	$	153,954		$	—		$	153,954
Other selling and administrative expenses	$	609,595		$	(3,948	)	$	605,647
Operating loss	$	(182,375	)	$	3,948		$	(178,427	)
Loss before income taxes	$	(273,373	)	$	3,948		$	(269,425	)
Provision for income taxes	$	18,332		$	(3,474	)	$	14,858
Net loss	$	(291,705	)	$	7,422		$	(284,283	)
Comprehensive loss	$	(272,141	)	$	7,422		$	(264,719	)
Net loss per common share - basic	$	(0.84	)	$	0.02		$	(0.82	)
Net loss per common share - diluted	$	(0.84	)	$	0.02		$	(0.82	)



	Six Months Ended June 30, 2019
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(291,705	)	$	7,422		$	(284,283	)
Increase (decrease) from changes in assets and liabilities:
Accounts receivable	$	222,823		$	(5,069	)	$	217,754
Prepaid expenses and other current assets	$	146		$	(8,300	)	$	(8,154	)
Accounts payable, accrued liabilities, and income taxes payable	$	(307,889	)	$	5,947		$	(301,942	)
Net cash flows used for operating activities	$	(400,519	)	$	—		$	(400,519	)

The revisions to Mattel's unaudited consolidated balance sheet, statements of operations and comprehensive loss, and cash flows as of and for the period ended March 31, 2019 were as follows:



	March 31, 2019
	As Previously Reported		Adjustments			As Revised
	(In thousands)
Consolidated Balance Sheet
Accrued liabilities	$	661,911	$	5,240		$	667,151
Total current liabilities	$	1,006,269	$	5,240		$	1,011,509
Retained earnings	$	1,445,539	$	(5,240	)	$	1,440,299
Total stockholders' equity	$	518,517	$	(5,240	)	$	513,277



	Three Months Ended March 31, 2019
	As Previously Reported			Adjustments			As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net sales	$	689,246		$	—		$	689,246
Cost of sales	$	449,456		$	—		$	449,456
Gross profit	$	239,790		$	—		$	239,790
Advertising and promotion expenses	$	69,465		$	—		$	69,465
Other selling and administrative expenses	$	301,284		$	(3,948	)	$	297,336
Operating loss	$	(130,959	)	$	3,948		$	(127,011	)
Loss before income taxes	$	(177,549	)	$	3,948		$	(173,601	)
Provision for income taxes	$	6,169		$	(3,474	)	$	2,695
Net loss	$	(183,718	)	$	7,422		$	(176,296	)
Comprehensive loss	$	(162,426	)	$	7,422		$	(155,004	)
Net loss per common share - basic	$	(0.53	)	$	0.02		$	(0.51	)
Net loss per common share - diluted	$	(0.53	)	$	0.02		$	(0.51	)



	Three Months Ended March 31, 2019
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(183,718	)	$	7,422		$	(176,296	)
Increase (decrease) from changes in assets and liabilities:
Accounts receivable	$	351,450		$	(5,069	)	$	346,381
Prepaid expenses and other current assets	$	(28,417	)	$	(8,300	)	$	(36,717	)
Accounts payable, accrued liabilities, and income taxes payable	$	(327,821	)	$	5,947		$	(321,874	)
Net cash flows used for operating activities	$	(192,810	)	$	—		$	(192,810	)

The revisions to Mattel's unaudited consolidated balance sheet, statements of operations and comprehensive loss, and cash flows as of and for the period ended September 30, 2018 were as follows:



	September 30, 2018
	As Previously Reported		Adjustments			As Revised
	(In thousands)
Consolidated Balance Sheet
Accrued liabilities	$	683,470	$	7,388		$	690,858
Total current liabilities	$	1,494,003	$	7,388		$	1,501,391
Retained earnings	$	1,614,343	$	(7,388	)	$	1,606,955
Total stockholders' equity	$	666,410	$	(7,388	)	$	659,022



	Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments		As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net sales	$	2,986,571		$	3,958	$	2,990,529
Cost of sales	$	1,901,440		$	—	$	1,901,440
Gross profit	$	1,085,131		$	3,958	$	1,089,089
Advertising and promotion expenses	$	318,538		$	—	$	318,538
Other selling and administrative expenses	$	1,110,491		$	—	$	1,110,491
Operating loss	$	(343,898	)	$	3,958	$	(339,940	)
Loss before income taxes	$	(475,335	)	$	3,958	$	(471,377	)
Provision for income taxes	$	70,571		$	990	$	71,561
Net loss	$	(545,906	)	$	2,968	$	(542,938	)
Comprehensive loss	$	(599,142	)	$	2,968	$	(596,174	)
Net loss per common share - basic	$	(1.58	)	$	0.01	$	(1.57	)
Net loss per common share - diluted	$	(1.58	)	$	0.01	$	(1.57	)



	Nine Months Ended September 30, 2018
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(545,906	)	$	2,968		$	(542,938	)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Deferred income taxes	$	1,435		$	990		$	2,425
(Decrease) increase from changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	$	(255,781	)	$	(3,958	)	$	(259,739	)
Prepaid expenses and other current assets	$	9,250		$	(7,388	)	$	1,862
Accounts payable, accrued liabilities, and income taxes payable	$	(107,601	)	$	7,388		$	(100,213	)
Net cash flows used for operating activities	$	(731,452	)	$	—		$	(731,452	)

The revisions to Mattel's unaudited consolidated balance sheet, statements of operations and comprehensive loss, and cash flows as of and for the periods ended June 30, 2018 were as follows:



	June 30, 2018
	As Previously Reported		Adjustments			As Revised
	(In thousands)
Consolidated Balance Sheet
Accrued liabilities	$	585,585	$	7,388		$	592,973
Total current liabilities	$	1,097,445	$	7,388		$	1,104,833
Retained earnings	$	1,608,026	$	(7,388	)	$	1,600,638
Total stockholders' equity	$	663,971	$	(7,388	)	$	656,583



	Three Months Ended June 30, 2018
	As Previously Reported			Adjustments		As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net sales	$	840,748		$	3,958	$	844,706
Cost of sales	$	587,546		$	—	$	587,546
Gross profit	$	253,202		$	3,958	$	257,160
Advertising and promotion expenses	$	82,393		$	—	$	82,393
Other selling and administrative expenses	$	360,000		$	—	$	360,000
Operating loss	$	(189,191	)	$	3,958	$	(185,233	)
Loss before income taxes	$	(234,022	)	$	3,958	$	(230,064	)
Provision for income taxes	$	6,909		$	990	$	7,899
Net loss	$	(240,931	)	$	2,968	$	(237,963	)
Comprehensive loss	$	(325,860	)	$	2,968	$	(322,892	)
Net loss per common share - basic	$	(0.70	)	$	0.01	$	(0.69	)
Net loss per common share - diluted	$	(0.70	)	$	0.01	$	(0.69	)



	Six Months Ended June 30, 2018
	As Previously Reported			Adjustments		As Revised
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss
Net sales	$	1,549,120		$	3,958	$	1,553,078
Cost of sales	$	1,077,045		$	—	$	1,077,045
Gross profit	$	472,075		$	3,958	$	476,033
Advertising and promotion expenses	$	153,230		$	—	$	153,230
Other selling and administrative expenses	$	784,617		$	—	$	784,617
Operating loss	$	(465,772	)	$	3,958	$	(461,814	)
Loss before income taxes	$	(547,927	)	$	3,958	$	(543,969	)
Provision for income taxes	$	4,257		$	990	$	5,247
Net loss	$	(552,184	)	$	2,968	$	(549,216	)
Comprehensive loss	$	(594,476	)	$	2,968	$	(591,508	)
Net loss per common share - basic	$	(1.60	)	$	0.01	$	(1.59	)
Net loss per common share - diluted	$	(1.60	)	$	0.01	$	(1.59	)



	Six Months Ended June 30, 2018
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(552,184	)	$	2,968		$	(549,216	)
Adjustments to reconcile net loss to net cash flows used for operating activities:
Deferred income taxes	$	(827	)	$	990		$	163
Increase (decrease) from changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	$	274,306		$	(3,958	)	$	270,348
Prepaid expenses and other current assets	$	(27,784	)	$	(7,388	)	$	(35,172	)
Accounts payable, accrued liabilities, and income taxes payable	$	(328,998	)	$	7,388		$	(321,610	)
Net cash flows used for operating activities	$	(556,609	)	$	—		$	(556,609	)



	March 31, 2018
	As Previously Reported		Adjustments			As Revised
	(In thousands)
Consolidated Balance Sheet
Accounts receivable, net	$	676,119	$	(3,958	)	$	672,161
Total current assets	$	2,221,670	$	(3,958	)	$	2,217,712
Other noncurrent assets	$	928,519	$	990		$	929,509
Total assets	$	5,304,090	$	(2,968	)	$	5,301,122
Accrued liabilities	$	578,909	$	7,388		$	586,297
Total current liabilities	$	987,179	$	7,388		$	994,567
Retained earnings	$	1,848,957	$	(10,356	)	$	1,838,601
Total stockholders' equity	$	982,466	$	(10,356	)	$	972,110



	Three Months Ended March 31, 2018
	As Previously Reported			Adjustments			As Revised
	(In thousands)
Consolidated Statement of Cash Flows
Net loss	$	(311,253	)	$	—		$	(311,253	)
Decrease from changes in assets and liabilities, net of acquired assets and liabilities:
Prepaid expenses and other current assets	$	(40,052	)	$	(7,388	)	$	(47,440	)
Accounts payable, accrued liabilities, and income taxes payable	$	(367,298	)	$	7,388		$	(359,910	)
Net cash flows used for operating activities	$	(273,732	)	$	—		$	(273,732	)