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Revenue Recognition (Tables)
 9 Months Ended
Sep. 29, 2018
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following is a summary of our net sales by category (in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 29,
2018
 
September 29,
2018
CHCA(1)
 
 
 
Cough/Cold/Allergy/Sinus
$
113.8

 
$
364.6

Infant Nutritionals
112.4

 
325.0

Analgesics
96.8

 
282.7

Gastrointestinal
95.4

 
290.6

Smoking Cessation
72.8

 
209.9

Animal Health
20.4

 
78.6

Vitamins, Minerals and Dietary Supplements
5.0

 
12.3

Other CHCA(2)
79.6

 
230.9

Total CHCA
596.2

 
1,794.6

CHCI
 
 
 
Cough/Cold/Allergy/Sinus
94.8

 
278.2

Lifestyle
70.5

 
246.3

Personal Care and Derma-Therapeutics
60.0

 
215.3

Natural Health and Vitamins, Minerals and Dietary Supplements
32.2

 
93.3

Anti-Parasite
30.2

 
88.7

Other CHCI(3)
69.9

 
218.2

Total CHCI
357.6

 
1,140.0

Total RX
179.3

 
601.9

Total net sales
$
1,133.1

 
$
3,536.5


(1)    Includes net sales from our OTC contract manufacturing business.
(2)
Consists primarily of branded OTC, diabetic care, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales.
(3)
Consists primarily of liquid licensed products, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment net sales.
We generated net sales in the following geographic locations(1) (in millions):
 
Three Months Ended
 
Nine Months Ended
 
September 29,
2018
 
September 29,
2018
U.S.
$
739.0

 
$
2,297.7

Europe(2)
317.2

 
1,023.4

All other countries(3)
76.9

 
215.4

 
$
1,133.1

 
$
3,536.5


(1) Derived from the location of the entity that sells to a third party.
(2) Includes Ireland net sales of $9.9 million and $20.3 million for the three and nine months ended September 29, 2018, respectively.
(3) Includes net sales generated primarily in Israel, Mexico, Australia and Canada.
Contract with Customer Balances
The following table provides information about contract assets from contracts with customers (in millions):
 
Balance Sheet Location
 
January 1,
2018
 
September 29,
2018
Short-term contract assets
Prepaid expenses and other current assets
 
$
20.5

 
$
28.8
Schedule of New Accounting Pronouncements
As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
Recently Issued Accounting Standards Not Yet Adopted
Standard
 
Description
 
Effective Date
 
Effect on the Financial Statements or Other Significant Matters
ASU 2016-02 Leases (Topic 842)

ASU 2018-01 Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842

ASU 2018-10 Leases Improvements to (Topic 842)

ASU 2018-11 Leases (Topic 842): Targeted Improvements
 
This guidance was issued to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. For leases with a term of 12 months or less, lessees are permitted to make an election to not recognize right-of-use assets and lease liabilities. The guidance is required to be adopted using the modified retrospective approach. Early adoption is permitted.
 
January 1, 2019
 
We have substantially completed: (1) our identification of the global lease population, and (2) the data migration to a lease integration tool that will support the accounting and disclosure requirements under the standard. We are currently in the testing and review phase of the tool and designing processes and internal controls over the post-implementation leasing activities. We intend to apply the transition package of practical expedients allowed by the standard and to transition to the standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings on January 1, 2019. We expect our financial statement disclosures in the period of adoption to be expanded to present additional qualitative and quantitative details of our leasing arrangements. At this time, we are unable to reasonably estimate the expected increase in assets and liabilities on our Consolidated Balance Sheets; however, we do expect the right of use asset and corresponding liability to be material.
ASU 2018-02 Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
 
This guidance permits tax effects stranded in accumulated other comprehensive income as a result of tax reform to be reclassified to retained earnings. This reclassification is optional and will require additional disclosure regarding whether or not reclassification is elected.
 
January 1, 2019

 
We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
ASU 2017-12 Derivatives and Hedging (Topic 815)
 
This update was issued to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. In addition, the amendments simplify the application of hedge accounting in certain situations. Under the new rule, the entity’s ability to hedge non-financial and financial risk components is expanded. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and also eases certain documentation and assessment requirements. Early adoption is permitted.
 
January 1, 2019
 
We plan to adopt the standard on the effective date and upon adoption, we expect to elect the policy to amortize excluded components. We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
ASU 2018-15: Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
 
This guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred.
 
January 1, 2020
 
We expect to adopt the standard prospectively on the effective date. As a result, no impact is currently expected on transition, however, future hosting arrangements treated as a service contract will need to be evaluated for capitalizable costs during implementation. The Consolidated Financial Statement impact will align with the presentation of the underlying hosting contracts, which is expected to be included within Operating expenses.
ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement
 
This guidance amends ASC 820 to add, remove, and modify certain disclosure requirements for fair value measurements.
 
January 1, 2020
 
We plan to adopt the standard on the effective date and, upon adoption, we will be required to provide additional disclosures on Level 3 fair value measurements.
ASU) 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
 
This guidance changes the impairment model for most financial assets and certain other instruments, replacing the current "incurred loss" approach with an "expected loss" credit impairment model, which will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities and off-balance sheet credit exposures such as letters of credit. Early adoption is permitted.
 
January 1, 2020
 
We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recently Issued Accounting Standards Not Yet Adopted (Continued)
Standard
 
Description
 
Effective Date
 
Effects on the Financial Statements or Other Significant Matters
ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill
 
The objective of this update is to reduce the cost and complexity of subsequent goodwill accounting and simplify the impairment test by removing the Step 2 requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value. If a reporting unit’s carrying value exceeds its fair value, an entity would record an impairment charge based on that difference, limited to the amount of goodwill attributed to that reporting unit. The proposal would not change the guidance on completing Step 1 of the goodwill impairment test. The proposed guidance would be applied prospectively. Early adoption is permitted.
 
January 1, 2020
 
Upon adoption, this guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment. After adoption, a Step 1 failure will result in an immediate impairment charge based on the carrying value of the reporting unit. We plan to adopt the standard prospectively on the effective date.
Accounting Standards Update (ASU) No. 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans
 
This guidance amends ASC 715 to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans.
 
December 31, 2020
 
We plan to adopt the standard on the effective date. We are currently evaluating the implications of adoption on our Condensed Consolidated Financial Statements.

Net sales and Cost of sales were higher in the three and nine months ended September 29, 2018 as a result of adopting ASC 606 due to net sales from contract manufacturing and certain OTC product sales being recognized on an over time basis as the performance obligation was satisfied, compared to the previous revenue recognition under ASC 605, which would have occurred when the product was shipped or delivered. This has resulted in the recognition of a contract asset.
Condensed Consolidated Statements of Operations
 
Three Months Ended
 
Nine Months Ended
 
September 29, 2018
 
September 29, 2018
(in millions, except per share amounts)
As
reported
 
Adjustments
 
Before adoption of ASC 606
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Net sales
$
1,133.1

 
$
(9.7
)
 
$
1,123.4

 
$
3,536.5

 
$
(8.4
)
 
$
3,528.1

Cost of sales
708.3

 
(5.4
)
 
702.9

 
2,148.0

 
(4.3
)
 
2,143.7

Gross profit
424.8

 
(4.3
)
 
420.5

 
1,388.5

 
(4.1
)
 
1,384.4

 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
(122.0
)
 
(4.3
)
 
(126.3
)
 
129.0

 
(4.1
)
 
124.9

 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
(11.5
)
 
0.1

 
(11.4
)
 
37.3

 
—

 
37.3

Net income (loss)
$
(67.5
)
 
$
(4.4
)
 
$
(71.9
)
 
$
49.6

 
$
(4.1
)
 
$
45.5

 
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) per share
 
 
 
 
 
 
 
 
 
 
 
Basic
$
(0.49
)
 
$
(0.03
)
 
$
(0.52
)
 
$
0.36

 
$
(0.03
)
 
$
0.33

Diluted
$
(0.49
)
 
$
(0.03
)
 
$
(0.52
)
 
$
0.36

 
$
(0.03
)
 
$
0.33



Condensed Consolidated Statements of Comprehensive Income (Loss)
 
Three Months Ended
 
Nine Months Ended
 
September 29, 2018
 
September 29, 2018
(in millions)
As
reported
 
Adjustments
 
Before adoption of ASC 606
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Net income (loss)
$
(67.5
)
 
$
(4.4
)
 
$
(71.9
)
 
$
49.6

 
$
(4.1
)
 
$
45.5

Comprehensive income (loss)
$
(79.3
)
 
$
(4.4
)
 
$
(83.7
)
 
$
(59.3
)
 
$
(4.1
)
 
$
(63.4
)


Condensed Consolidated Balance Sheet
 
September 29, 2018
(in millions)
As
reported
 
Adjustments
 
Before adoption of ASC 606
Assets
 
 
 
 
 
Inventories
$
885.3

 
$
19.1

 
$
904.4

Prepaid expenses and other current assets
359.5

 
(28.8
)
 
330.7

Total current assets
2,768.8

 
(9.7
)
 
2,759.1

Total assets
$
10,942.9

 
$
(9.7
)
 
$
10,933.2

Liabilities and Shareholders’ Equity
 
 
 
 
 
Other non-current liabilities
$
423.7

 
$
(0.2
)
 
$
423.5

Total non-current liabilities
3,789.4

 
(0.2
)
 
3,789.2

Total liabilities
5,282.9

 
(0.2
)
 
5,282.7

Shareholders’ equity
 
 
 
 
 
Controlling interests:
 
 
 
 
 
Accumulated deficit
(1,919.7
)
 
(9.5
)
 
(1,929.2
)
Total controlling interests
5,659.8

 
(9.5
)
 
5,650.3

Total shareholders’ equity
5,660.0

 
(9.5
)
 
5,650.5

Total liabilities and shareholders' equity
$
10,942.9

 
$
(9.7
)
 
$
10,933.2



Condensed Consolidated Statement of Cash Flows
 
Nine Months Ended
 
September 29, 2018
(in millions)
As
reported
 
Adjustments
 
Before adoption of ASC 606
Cash Flows From (For) Operating Activities
 
 
 
 
 
Net income
$
49.6

 
$
(4.1
)
 
$
45.5

(Decreases) in cash due to:
 
 
 
 
 
Inventories
(101.3
)
 
(4.3
)
 
(105.6
)
Accrued income taxes
(60.0
)
 
—

 
(60.0
)
Other, net
(4.4
)
 
8.4

 
4.0

Subtotal
(174.1
)
 
4.1

 
(170.0
)
Net cash from operating activities
$
398.7

 
$
—

 
$
398.7