Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

We held the following property, plant and equipment, net (in millions):



	December 31, 2018			December 31, 2017
Land	$	49.0		$	45.5
Buildings	552.3			514.3
Machinery and equipment	1,079.3			1,078.6
Gross property, plant and equipment	1,680.6			1,638.4
Less accumulated depreciation	(851.5		)	(805.3		)
Property, plant and equipment, net	$	829.1		$	833.1

Schedule of advertising expense

Advertising costs were as follows (in millions):



Year Ended
December 31, 2018		December 31, 2017		December 31, 2016
$	159.2	$	145.3	$	155.9

Schedule of new accounting pronouncements and changes in accounting principles

As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.



Recently Issued Accounting Standards Not Yet Adopted (continued)
Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters
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 the U.S. Tax Cuts and Jobs Act to be reclassified to retained earnings. This reclassification is optional and will require additional disclosure regarding whether or not reclassification is elected. This guidance is required to be adopted retrospectively.	January 1, 2019	We plan to adopt the standard on the effective date. Upon adoption, we anticipate not to elect to reclassify the income tax effects of the U.S. Tax Cuts and Jobs Act from Accumulated Other Comprehensive Income (Loss) ("AOCI") to Retained earnings (accumulated deficit).
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.	January 1, 2019	We plan to adopt the standard on the effective date. Upon adoption, we expect to: (1) record the entire change in fair value of the hedging instrument in the same line item impacted by the hedged item, (2) elect to transition from a fair value recognition model of excluded components to a straight-line amortization model, (3) recognize the excluded component amortization in the same line item as the hedged item which previously recorded in Interest expense, net, and (4) include tabular disclosures related to the effect on the Consolidated Statement of Operations of our cash flow hedges. Upon adoption, the adjustment to recognize a cumulative-effect adjustment to the opening balance of Retained earnings (accumulated deficit) related to the transition from fair value recognition of excluded components to straight-line amortization of the initial value is anticipated to be immaterial to the 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 plan to adopt the standard prospectively on the effective date. Upon adoption, no impact is currently expected, however, future hosting arrangements treated as service contracts 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 will 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. Upon adoption, we will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. We will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy.
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. This will not change the guidance on completing Step 1 of the goodwill impairment test and would be applied prospectively. Early adoption is permitted.	January 1, 2020	We plan to adopt the standard prospectively on the effective date. Upon adoption, we will no longer be required to calculate the implied fair value of goodwill to measure a goodwill impairment. Rather, a Step 1 failure will result in an immediate impairment charge based on the carrying value of the reporting unit.



Recently Issued Accounting Standards Note Yet Adopted (Continued)
Standard	Description	Effective Date	Effects on the Financial Statements or Other Significant Matters
ASU) 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19 Codification Improvements for 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.	January 1, 2020	We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
ASU 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 post-retirement plans.	December 31, 2020	We are currently evaluating the implications of adoption on our Consolidated Financial Statements.
ASU 2018-18 Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606	This guidance amends ASC 808 to clarify that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. The proposed guidance would be applied retrospectively to the date of initial adoption of Topic 606.	January 1, 2021	We are currently evaluating the implications of adoption on our 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

Recently Issued Accounting Standards Not Yet Adopted

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 (Topic 842): Codification Improvements to Topic 842, Leases

ASU 2018-11 Leases (Topic 842): Targeted Improvements

ASU 2018-20 Leases (Topic 842): Narrow-Scope Improvements for Lessors

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.

January 1, 2019

We plan to adopt the standard using the modified retrospective approach on the effective date. Upon adoption, 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. We expect our financial statement disclosures to be expanded to present additional qualitative and quantitative details of our leasing arrangements.

We have substantially completed: (1) our identification of the global lease population, (2) the data migration to a lease integration tool that will support the accounting and disclosure requirements under the standard, (3) the testing and review phase of the tool, and (4) designing processes and internal controls over the post-implementation leasing activities.

Based on our current lease portfolio, in the period of adoption we anticipate recognizing a lease liability and related right-of-use asset of $150.0 million to $170.0 million on our Consolidated Balance Sheets. We anticipate an immaterial impact on our Consolidated Statement of Operations and no impact on our Consolidated Statement of Cash Flows.