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Revenue Recognition
 12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue recognition REVENUE RECOGNITION

We adopted ASU 2014-09 Revenue from Contracts with Customers and its related amendments (collectively, "ASC 606") on January 1, 2018 using the modified retrospective method for all contracts not completed as of the adoption date. The reported results for 2018 reflect the application of ASC 606 while the results for 2017 and 2016 were prepared under the guidance of Revenue Recognition ("ASC 605"). The adoption of ASC 606 represents a change in accounting principle that closely aligns revenue recognition with the transfer of control of our products and provides enhanced disclosures of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Revenue is recognized when or as a customer obtains control of promised products. The amount of revenue recognized reflects the consideration we expect to be entitled to receive in exchange for these products (refer to Note 1 for revenue recognition policies).

We generated third-party revenue in the following geographic locations(1) during each of the periods presented below (in millions):
 
Year Ended
 
December 31,
2018
 
December 31,
2017
 
December 31,
2016
U.S.
$
3,098.3

 
$
3,272.3

 
$
3,353.0

Europe(2)
1,347.6

 
1,343.6

 
1,582.1

All other countries(3)
285.8

 
330.3

 
345.5

 
$
4,731.7

 
$
4,946.2

 
$
5,280.6


(1)    The net sales by geography is derived from the location of the entity that sells to a third party.
(2)
Includes Ireland net sales of $25.7 million, $30.4 million, and $89.1 million for the years ended December 31, 2018, December 31, 2017, and December 31, 2016, respectively.
(3) Includes revenue generated primarily in Israel, Mexico, Australia, and Canada.

The following is a summary of our revenue by category (in millions):
 
Year Ended
 
December 31, 2018
 
December 31, 2017
 
December 31,
2016
CHCA(1)
 
 
 
 
 
Cough/Cold/Allergy/Sinus
$
492.1

 
$
483.7

 
$
454.6

Infant Nutritionals
423.2

 
413.9

 
427.0

Gastrointestinal
400.8

 
340.0

 
335.4

Analgesics
380.6

 
349.8

 
343.5

Smoking Cessation
296.4

 
297.2

 
308.5

Animal Health
93.9

 
141.3

 
143.7

Vitamins, Minerals and Dietary Supplements
16.5

 
45.4

 
160.4

Other CHCA(2)
308.1

 
358.6

 
334.0

Total CHCA
2,411.6

 
2,429.9

 
2,507.1

CHCI
 
 
 
 
 
Cough/Cold/Allergy/Sinus
384.6

 
372.0

 
348.2

Lifestyle
319.5

 
315.7

 
300.2

Personal Care and Derma-Therapeutics
273.3

 
269.0

 
269.1

Natural Health and Vitamins, Minerals and Dietary Supplements
124.4

 
119.5

 
124.5

Anti-Parasites
105.5

 
104.5

 
111.0

Other CHCI(3)
288.6

 
310.3

 
499.2

Total CHCI
1,495.9

 
1,491.0

 
1,652.2

Total RX
824.2

 
969.7

 
1,042.8

Active pharmaceutical ingredients
—

 
55.6

 
78.5

Total net sales
$
4,731.7

 
$
4,946.2

 
$
5,280.6


(1)    Includes net sales from our OTC contract manufacturing business.
(2)
Consists primarily of feminine hygiene, diabetes care, dermatological care, branded OTC, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the segment.
(3)
Consists primarily of liquids licensed products, diagnostic products and other miscellaneous or otherwise uncategorized product lines and markets, none of which is greater than 10% of the CHCI segment.

While the majority of revenue is recognized at a point in time, certain of our product revenue is recognized on an over time basis. Predominately, over time customer contracts exist in contract manufacturing arrangements, which occur in both the CHCA and CHCI segments. Contract manufacturing revenue was $300.5 million for the year ended December 31, 2018.

We also recognized a portion of the store brand OTC product revenue in the CHCA segment on an over time basis; however, the timing between over time and point in time revenue recognition for store brand contracts is not significant due to the short time period between the customization of the product and shipment or delivery.

Contract Balances

The following table provides information about contract assets from contracts with customers (in millions):
 
Balance Sheet Location
 
January 1,
2018
 
December 31,
2018
Short-term contract assets
Prepaid expenses and other current assets
 
$
20.5

 
$
25.5



Impact on consolidated financial statements

Net sales and Cost of sales were higher in the year ended December 31, 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.
Consolidated Statements of Operations
(in millions, except per share amounts)
 
Year Ended
 
December 31, 2018
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Net sales
$
4,731.7

 
$
(5.1
)
 
$
4,726.6

Cost of sales
2,900.2

 
(2.4
)
 
2,897.8

Gross profit
1,831.5

 
(2.7
)
 
1,828.8

 
 
 
 
 
 
Operating income (loss)
236.5

 
(2.7
)
 
233.8

 
 
 
 
 
 
Income tax expense
159.6

 
0.1

 
159.7

Net income (loss)
$
131.0

 
$
(2.8
)
 
$
128.2

 
 
 
 
 
 
Earnings (loss) per share
 
 
 
 
 
Basic
$
0.95

 
$
(0.02
)
 
$
0.93

Diluted
$
0.95

 
$
(0.02
)
 
$
0.93


Consolidated Statements of Comprehensive Income (Loss)
(in millions)
 
Year Ended
 
December 31, 2018
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Net income (loss)
$
131.0

 
$
(2.8
)
 
$
128.2

Comprehensive loss
$
(36.5
)
 
$
(2.8
)
 
$
(39.3
)

Consolidated Balance Sheet
(in millions)
 
Year Ended
 
December 31, 2018
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Assets
 
 
 
 
 
Inventories
$
878.0

 
$
17.2

 
$
895.2

Prepaid expenses and other current assets
400.0

 
(25.5
)
 
374.5

Total current assets
2,902.2

 
(8.3
)
 
2,893.9

Total assets
$
10,983.4

 
$
(8.3
)
 
$
10,975.1

Liabilities and Shareholders’ Equity
 
 
 
 
 
Other non-current liabilities
$
443.4

 
$
(0.1
)
 
$
443.3

Total non-current liabilities
3,777.9

 
(0.1
)
 
3,777.8

Total liabilities
5,315.3

 
(0.1
)
 
5,315.2

Shareholders’ equity
 
 
 
 
 
Controlling interests:
 
 
 
 
 
Accumulated deficit
(1,838.3
)
 
(8.2
)
 
(1,846.5
)
Total controlling interests
5,668.0

 
(8.2
)
 
5,659.8

Total shareholders’ equity
5,668.1

 
(8.2
)
 
5,659.9

Total liabilities and shareholders' equity
$
10,983.4

 
$
(8.3
)
 
$
10,975.1


Consolidated Statement of Cash Flows
(in millions)
 
Year Ended
 
December 31, 2018
 
As
reported
 
Adjustments
 
Before adoption of ASC 606
Cash Flows From (For) Operating Activities
 
 
 
 
 
Net income (loss)
$
131.0

 
$
(2.8
)
 
$
128.2

Increase (Decrease) in cash due to:
 
 
 
 
 
Inventories
(98.6
)
 
(2.4
)
 
(101.0
)
Accrued income taxes
68.1

 
0.1

 
68.2

Other, net
(8.8
)
 
5.1

 
(3.7
)
Subtotal
(19.4
)
 
2.8

 
(16.6
)
Net cash from (for) operating activities
$
593.0

 
$
—

 
$
593.0