Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 25, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | HLF | |
Entity Registrant Name | HERBALIFE NUTRITION LTD. | |
Entity Central Index Key | 0001180262 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 151,245,338 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 1-32381 | |
Entity Tax Identification Number | 980377871 | |
Entity Address, Address Line One | P.O. Box 309GT | |
Entity Address, Address Line Two | Ugland House, South Church Street | |
Entity Address, City or Town | Grand Cayman | |
Entity Address, State or Province | Cayman Islands | |
City Area Code | (213) | |
Local Phone Number | 745-0500 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 1,254.9 | $ 1,198.9 |
Receivables, net of allowance for doubtful accounts | 98.1 | 70.5 |
Inventories | 426.6 | 381.8 |
Prepaid expenses and other current assets | 140.5 | 153.8 |
Total current assets | 1,920.1 | 1,805 |
Property, plant, and equipment, at cost, net of accumulated depreciation and amortization | 358.9 | 360 |
Operating lease right-of-use assets | 180 | |
Marketing-related intangibles and other intangible assets, net | 310.1 | 310.1 |
Goodwill | 92.2 | 92.9 |
Other assets | 217.3 | 221.8 |
Total assets | 3,078.6 | 2,789.8 |
Current liabilities: | ||
Accounts payable | 80.4 | 81.1 |
Royalty overrides | 267 | 281.4 |
Current portion of long-term debt | 693.7 | 678.9 |
Other current liabilities | 485.6 | 547.4 |
Total current liabilities | 1,526.7 | 1,588.8 |
Long-term debt, net of current portion | 1,776.2 | 1,774.9 |
Non-current operating lease liabilities | 161 | |
Other non-current liabilities | 148.9 | 149.5 |
Total liabilities | 3,612.8 | 3,513.2 |
Commitments and contingencies | ||
Shareholders’ deficit: | ||
Common shares, $0.0005 par value; 2.0 billion shares authorized; 141.2 million (2019) and 142.8 million (2018) shares outstanding | 0.1 | 0.1 |
Paid-in capital in excess of par value | 354.5 | 341.5 |
Accumulated other comprehensive loss | (206.4) | (209.8) |
Accumulated deficit | (353.5) | (526.3) |
Treasury stock, at cost, 10.0 million (2019) and 10.0 million (2018) shares | (328.9) | (328.9) |
Total shareholders’ deficit | (534.2) | (723.4) |
Total liabilities and shareholders’ deficit | $ 3,078.6 | $ 2,789.8 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common shares, par value | $ 0.0005 | $ 0.0005 |
Common shares, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common shares, shares outstanding | 141,200,000 | 142,800,000 |
Treasury stock shares, at cost | 10,000,000 | 10,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,240,100,000 | $ 1,285,500,000 | $ 2,412,300,000 | $ 2,462,400,000 |
Cost of sales | 243,200,000 | 235,400,000 | 484,800,000 | 475,300,000 |
Gross profit | 996,900,000 | 1,050,100,000 | 1,927,500,000 | 1,987,100,000 |
Royalty overrides | 366,800,000 | 349,800,000 | 726,300,000 | 687,100,000 |
Selling, general, and administrative expenses | 477,000,000 | 510,200,000 | 912,400,000 | 970,300,000 |
Other operating income | 0 | (1,700,000) | (27,300,000) | (17,900,000) |
Operating income | 153,100,000 | 191,800,000 | 316,100,000 | 347,600,000 |
Interest expense, net | 36,300,000 | 44,300,000 | 72,400,000 | 84,200,000 |
Other (income) expense, net | (5,900,000) | 4,700,000 | (14,400,000) | 29,100,000 |
Income before income taxes | 122,700,000 | 142,800,000 | 258,100,000 | 234,300,000 |
Income taxes | 46,200,000 | 48,400,000 | 85,300,000 | 57,800,000 |
Net income | $ 76,500,000 | $ 94,400,000 | $ 172,800,000 | $ 176,500,000 |
Earnings per share: | ||||
Basic | $ 0.56 | $ 0.66 | $ 1.26 | $ 1.23 |
Diluted | $ 0.54 | $ 0.62 | $ 1.20 | $ 1.15 |
Weighted-average shares outstanding: | ||||
Basic | 137.4 | 142.3 | 137.2 | 144 |
Diluted | 142.4 | 151.9 | 144.2 | 153 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 76.5 | $ 94.4 | $ 172.8 | $ 176.5 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment, net of income taxes of $(1.5) and $(3.1) for the three months ended June 30, 2019 and 2018, respectively, and $(1.0) and $(2.0) for the six months ended June 30, 2019 and 2018, respectively | (1.8) | (50.8) | 5.3 | (29.6) |
Unrealized (loss) gain on derivatives, net of income taxes of $— for both the three months ended June 30, 2019 and 2018 and $— for both the six months ended June 30, 2019 and 2018 | (0.5) | 4.5 | (1.9) | 1.4 |
Total other comprehensive (loss) income | (2.3) | (46.3) | 3.4 | (28.2) |
Total comprehensive income | $ 74.2 | $ 48.1 | $ 176.2 | $ 148.3 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax | $ (1.5) | $ (3.1) | $ (1) | $ (2) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 172.8 | $ 176.5 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 49 | 50.8 |
Share-based compensation expenses | 20.5 | 20.2 |
Non-cash interest expense | 27.6 | 34.4 |
Deferred income taxes | 3.9 | 2 |
Inventory write-downs | 11.7 | 13.2 |
Foreign exchange transaction loss | 5 | 3.9 |
Loss on extinguishment of debt | 13.1 | |
Other | (11.8) | 16.8 |
Changes in operating assets and liabilities: | ||
Receivables | (29) | (21.8) |
Inventories | (50.8) | (2) |
Prepaid expenses and other current assets | 14.6 | (29.9) |
Accounts payable | (0.3) | 23.8 |
Royalty overrides | (16.6) | (7.9) |
Other current liabilities | (81.3) | 46.5 |
Other | (0.5) | 5.3 |
Net cash provided by operating activities | 114.8 | 344.9 |
Cash flows from investing activities: | ||
Purchases of property, plant, and equipment | (51.7) | (33) |
Net cash used in investing activities | (51.7) | (33) |
Cash flows from financing activities: | ||
Principal payments on senior secured credit facility and other debt | (10.2) | (49) |
Proceeds from convertible senior notes | 550 | |
Repurchase of convertible senior notes | (582.5) | |
Debt issuance costs | (12.5) | |
Share repurchases | (9) | (685.6) |
Proceeds from settlement of capped call transactions | 55.9 | |
Other | 1.5 | 1.1 |
Net cash used in financing activities | (17.7) | (722.6) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1.9 | (29.7) |
Net change in cash, cash equivalents, and restricted cash | 47.3 | (440.4) |
Cash, cash equivalents, and restricted cash, beginning of period | 1,215 | 1,295.5 |
Cash, cash equivalents, and restricted cash, end of period | $ 1,262.3 | $ 855.1 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization | 1. Organization Herbalife Nutrition Ltd., a Cayman Islands exempted company with limited liability, was incorporated on April 4, 2002. Herbalife Nutrition Ltd. (and together with its subsidiaries, the “Company” or “Herbalife”) is a global nutrition company that sells weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products to and through a network of independent members, or Members. In China, the Company sells its products to and through independent service providers, sales representatives, and sales officers to customers and preferred customers, as well as through Company-operated retail platforms when necessary. The Company sells its products in six geographic regions: North America; Mexico; South and Central America; EMEA, which consists of Europe, the Middle East, and Africa; Asia Pacific (excluding China); and China. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. Accordingly, as permitted by Article 10 of the SEC’s Regulation S-X, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The condensed consolidated balance sheet as of December 31, 2018 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP, as permitted by Article 10 of the SEC’s Regulation S-X. The Company’s unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 include Herbalife Nutrition Ltd. and all of its direct and indirect subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, or the 2018 10-K. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Reclassifications Certain reclassifications were made to the prior period condensed consolidated statement of cash flows to conform to the current period presentation. Recently Adopted Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842) $189.1 million and total operating lease right-of-use assets of $176.9 million, net of certain deferred rent liabilities and prepaid rent, which had no impact to the Company’s condensed consolidated statements of cash flows. See Note 4, Leases , for additional information. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . This ASU improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and makes certain targeted improvements to simplify the application of existing hedge accounting guidance. The Company has elected to record changes in the fair value of amounts excluded from the assessment of effectiveness currently in earnings. The adoption of this guidance during the first quarter of 2019 did not have a material impact on the Company’s condensed consolidated financial statements . In February 2018, the FASB issued ASU No. 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220) . This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for tax effects of items within accumulated other comprehensive income, or stranded tax effects, resulting from the Tax Cuts and Jobs Act and requires certain disclosures about those stranded tax effects. The Company has elected to not reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings . In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. . In November 2018, SEC Release No. 33-10532, Disclosure Update and Simplification , which amended and simplified certain disclosure requirements including the requirement to present an analysis of changes in shareholders’ equity for interim periods, became effective. The Company has included a reconciliation of the changes in its shareholders' deficit in Note 11, Shareholders’ Deficit . New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU changes the impairment model for most financial assets, requiring the use of an expected loss model which requires entities to estimate the lifetime expected credit loss on financial assets measured at amortized cost. Such credit losses will be recorded as an allowance to offset the amortized cost of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In addition, The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment condensed In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements on fair value measurements in Topic 820 based on the consideration of costs and benefits to promote the appropriate exercise and discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In August 2018, the FASB issued 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 ASU removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. The amendments in this update are effective for reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 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 ASU clarifies the accounting for implementation costs of a hosting arrangement that is a service contract and aligns that accounting, regardless of whether the arrangement conveys a license to the hosted software. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. Revenue Recognition The Company’s net sales consist of product sales. In general, the Company's performance obligation is to transfer its products to its Members. The Company generally recognizes revenue when product is delivered to its Members. For China independent service providers and for third-party importers utilized in certain other countries where sales historically have not been material, the Company recognizes revenue based on the Company’s estimate of when the service provider or third-party importer sells the products because the Company is deemed to be the principal party of these product sales due to the additional selling and operating requirements relating to pricing of products, conducting business with physical locations, and other selling and marketing activities required of the service providers and third-party importers. The Company’s Members, excluding its China independent service providers, may receive distributor allowances, which are comprised of discounts, rebates, and wholesale commission payments from the Company. Distributor allowances resulting from the Company’s sales of its products to its Members are recorded against net sales because the distributor allowances represent discounts from the suggested retail price. The Company compensates its sales leader Members with royalty overrides for services rendered, relating to the development, retention, and management of their sales organizations. Royalty overrides are payable based on achieved sales volume. Royalty overrides are classified as an operating expense reflecting the services provided to the Company. The Company compensates its China independent service providers and third-party importers utilized in certain other countries for providing marketing, selling, and customer support services. As the Company is the principal party of the product sales as described above, the service fees payable to China independent service providers and the compensation received by third-party importers for the services they provide are recorded in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income. The Company recognizes revenue when it delivers products to its United States Members; distributor allowances, inclusive of discounts and wholesale commissions, are recorded as a reduction to net sales; and royalty overrides are classified as an operating expense. Shipping and handling services relating to product sales are recognized as fulfillment activities on the Company’s performance obligation to transfer products and are therefore recorded within net sales as part of product sales and are not considered as separate revenues. Shipping and handling costs paid by the Company are included in cost of sales. The Company presents sales taxes collected from customers on a net basis. The Company generally receives the net sales price in cash or through credit card payments at the point of sale. Accounts receivable consist principally of credit card receivables arising from the sale of products to the Company’s Members, and its collection risk is reduced due to geographic dispersion. Credit card receivables were $72.4 million and $52.7 million as of June 30, 2019 and December 31, 2018, respectively. Substantially all credit card receivables were current as of June 30, 2019 and December 31, 2018. The Company recorded $0.5 million and $0.4 million during the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $0.5 million during the six months ended June 30, 2019 and 2018, respectively, in bad-debt expense related to allowances for the Company’s receivables. As of June 30, 2019 and December 31, 2018, the Company’s allowance for doubtful accounts was $1.6 million and $1.5 million, respectively. As of June 30, 2019 and December 31, 2018, the majority of the Company’s total outstanding accounts receivable were current. The Company records advance sales deposits when payment is received but revenue has not yet been recognized. In the majority of the Company’s markets, advance sales deposits are generally recorded to income when the product is delivered to its Members. Additionally, advance sales deposits also include deferred revenues due to the timing of revenue recognition for products sold through China independent service providers. The estimated deferral period for advance sales deposits is generally within one week. During the six months ended June 30, 2019, the Company recognized substantially all of the revenues that were included within advance sales deposits as of December 31, 2018 and any remaining such balance was not material as of June 30, 2019. Advance sales deposits are included in Other current liabilities on the Company’s condensed consolidated balance sheets. See Note 14, Detail of Certain Balance Sheet Accounts In general, if a Member returns product to the Company on a timely basis, they may obtain replacement product from the Company for such returned products. In addition, in general the Company maintains a buyback program pursuant to which it will repurchase products sold to a Member who has decided to leave the business. Allowances for product returns, primarily in connection with the Company’s buyback program, are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Allowances for product returns were $4.8 million and $4.9 million as of June 30, 2019 and December 31, 2018, respectively. The Company’s products are grouped in five principal categories: weight management; targeted nutrition; energy, sports, and fitness; outer nutrition; and literature and promotional items. However, the effect of economic factors on the nature, amount, timing, and uncertainty of revenue recognition and cash flows are similar among all five product categories. The Company defines its operating segments through six geographic regions. The effect of economic factors on the nature, amount, timing, and uncertainty of revenue recognition and cash flows are similar among the regions with the Company’s Primary Reporting Segment. See Note 7, Segment Information Distributor Compensation – U.S. In the U.S., distributor compensation, including Royalty overrides, is capped if the Company does not meet an annual requirement as described in the consent order discussed in more detail in Note 6, Contingencies Other Operating Income To encourage local investment and operations, governments in various China provinces conduct grant programs. The Company applied for and received several such grants in China. Government grants are recorded into income when a legal right to the grant exists, there is a reasonable assurance that the grant proceeds will be received, and the substantive conditions under which the grants were provided have been met. Generally, these substantive conditions are the Company maintaining operations and paying certain taxes in the relevant province and obtaining government approval by completing an annual application process. The Company believes the continuing obligation with respect to the funds is a general requirement that they are used only for its business in China. The Company did not recognize any government grant income related to its regional headquarters and distribution centers within China during the three months ended June 30, 2019. The Company recognized government grant income related to its regional headquarters and distribution centers within China of approximately $1.7 million during the three months ended June 30, 2018 and $21.3 million and $17.9 million during the six months ended June 30, 2019 and 2018, respectively, in other operating income within its condensed consolidated statements of income. The Company intends to continue applying for government grants in China when programs are available; however, there is no assurance that the Company will receive grants in future periods. During the six months ended June 30, 2019, the Company also recognized $6.0 million in other operating income related to the finalization of insurance recoveries in connection with the flooding at one of its warehouses in Mexico during September 2017, which damaged certain of the Company’s inventory stored within the warehouse. See Note 7, Contingencies Other (Income) Expense, Net During the three months ended June 30, 2019, the Company recognized a gain of $5.9 million on the revaluation of the non-transferable contractual contingent value right, or CVR, provided for each share tendered in the October 2017 modified Dutch auction tender offer (See Note 11, Shareholders’ Deficit During the six months ended June 30, 2019, the Company recognized a gain of $14.4 million on the revaluation of the CVR in other (income) expense, net within its condensed consolidated statements of income. During the six months ended June 30, 2018, the Company recognized a loss of $16.0 million on the revaluation of the CVR and a $13.1 million loss on extinguishment of $475.0 million aggregate principal amount of the Company’s convertible senior notes due 2019 (See Note 5, Long-Term Debt These non-cash expenses are included as non-cash adjustments to net income in the Company’s cash flows from operating activities within its condensed consolidated statements of cash flows. Restricted The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets that sum to the total of the same such amounts shown in the Company’s condensed consolidated statements of cash flows: June 30, 2019 December 31, 2018 (in millions) Cash and cash equivalents $ 1,254.9 $ 1,198.9 Restricted cash included in Prepaid expenses and other current assets 1.7 3.3 Restricted cash included in Other assets 5.7 12.8 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 1,262.3 $ 1,215.0 The majority of the Company’s consolidated restricted cash is held by certain of its foreign entities and consists of cash deposits that are required due to the business operating requirements in those jurisdictions. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consist primarily of finished goods available for resale. Inventories are stated at lower of cost (primarily on the first-in, first-out basis) and net realizable value. The following are the major classes of inventory: June 30, 2019 December 31, 2018 (in millions) Raw materials $ 56.2 $ 51.9 Work in process 6.9 7.1 Finished goods 363.5 322.8 Total $ 426.6 $ 381.8 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 4. Leases Generally, the Company leases certain office space, warehouses, distribution centers, manufacturing centers, and equipment. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. The Company also rents or subleases certain real estate to third parties. Sublease income was not material for the three and six months ended June 30, 2019 and 2018. In general, the Company’s leases include one or more options to renew, with renewal terms that generally vary from one to ten years. The exercise of lease renewal options is generally at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of twelve months or less are not recorded on the Company’s condensed consolidated balance sheets, and the Company does not separate nonlease components from lease components. The Company’s lease assets and liabilities recognized within its condensed consolidated balance sheets were as follows: June 30, 2019 Balance Sheet Location (in millions) ASSETS: Operating lease right-of-use assets $ 180.0 Operating lease right-of-use assets Finance lease right-of-use assets 0.6 Property, plant, and equipment, at cost, net of accumulated depreciation and amortization(1) Total lease assets $ 180.6 LIABILITIES: Current: Operating lease liabilities $ 32.9 Other current liabilities Finance lease liabilities 0.4 Current portion of long-term debt Non-current: Operating lease liabilities 161.0 Non-current operating lease liabilities Finance lease liabilities 0.3 Long-term debt, net of current portion Total lease liabilities $ 194.6 (1) Finance lease assets are recorded net of accumulated amortization of $1.1 million as of June 30, 2019. Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost are as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 (in millions) Operating lease cost(1)(2) $ 16.5 $ 32.3 Finance lease cost Amortization of right-of-use assets 0.1 0.2 Interest on lease liabilities — — Net lease cost $ 16.6 $ 32.5 (1) Includes short-term leases and variable lease costs, which were $3.2 million and $0.3 million, respectively, for the three months ended June 30, 2019 and $5.9 million and $0.6 million, respectively, for the six months ended June 30, 2019. Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. (2) Amounts include $15.6 million and $30.6 million for the three and six months ended June 30, 2019, respectively, recorded to selling, general, and administrative expenses within the Company’s condensed consolidated statements of income and $0.9 million and $1.7 million for the three and six months ended June 30, 2019, respectively, capitalized as part of the cost of another asset, which includes inventories. During the three and six months ended June 30, 2018, the Company recognized rental expense of $16.2 million and $30.9 million, respectively, in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income pursuant to FASB ASC Topic 840, Leases As of June 30, 2019, annual scheduled lease payments were as follows: Operating Leases(1) Finance Leases(2) (in millions) 2019 $ 15.3 $ 0.2 2020 42.3 0.4 2021 32.9 0.1 2022 26.6 — 2023 15.6 — Thereafter 127.4 — Total lease payments 260.1 0.7 Less: imputed interest 66.2 — Present value of lease liabilities $ 193.9 $ 0.7 (1) Operating lease payments exclude $0.3 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Finance lease payments exclude $0.6 million of legally binding minimum lease payments for leases signed but not yet commenced. In general, for the majority of the Company’s material leases, the renewal options are not included in the calculation of its right-of-use assets and lease liabilities, as the Company does not believe that it is reasonably certain that these renewal options will be exercised. Periodically, the Company assesses its leases to determine whether it is reasonably certain that these renewal options will be exercised. As of December 31, 2018, future minimum rental commitments for non-cancelable operating leases were as follows: Operating Leases (in millions) 2019 $ 43.1 2020 36.3 2021 27.4 2022 23.0 2023 12.5 Thereafter 111.4 Total $ 253.7 The majority of the Company’s leases are for real estate and in general, the individual lease contracts do not provide information about the rate implicit in the lease. Because the Company is not able to determine the rate implicit in its leases, it instead generally uses its incremental borrowing rate to determine the present value of lease liabilities. In determining its incremental borrowing rate, the Company reviewed the terms of its leases, its senior secured credit facility, swap rates, and other factors. The weighted-average remaining lease term and weighted-average discount rate used to calculate the present value of lease liabilities are as follows: June 30, 2019 Weighted-average remaining lease term: Operating leases 9.0 years Finance leases 1.7 years Weighted-average discount rate: Operating leases 5.8 % Finance leases 5.7 % Supplemental cash flow information related to leases is as follows: Six Months Ended June 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 23.2 Operating cash flows for finance leases — Financing cash flows for finance leases 0.2 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 24.2 Finance leases — |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. Long-Term Debt Long-term debt consists of the following: June 30, 2019 December 31, 2018 (in millions) Borrowings under senior secured credit facility, carrying value $ 974.5 $ 983.6 2.00% convertible senior notes due 2019, carrying value of liability component 671.2 656.4 2.625% convertible senior notes due 2024, carrying value of liability component 426.4 416.0 7.250% senior notes due 2026, carrying value 395.0 394.8 Other 2.8 3.0 Total 2,469.9 2,453.8 Less: current portion 693.7 678.9 Long-term portion $ 1,776.2 $ 1,774.9 Senior Secured Credit Facility On March 9, 2011, the Company entered into a senior secured credit facility, or the 2011 Credit Facility, which initially consisted of a $700.0 million revolving credit facility, or the 2011 Revolving Credit Facility, with a syndicate of financial institutions as lenders. The 2011 Credit Facility was subsequently amended on July 26, 2012 to include a $500.0 million term loan, or the 2011 Term Loan, with a syndicate of financial institutions as lenders. On May 4, 2015, the Company amended the 2011 Credit Facility to extend the maturity date of the 2011 Revolving Credit Facility by one year to March 9, 2017. The 2011 Term Loan matured on March 9, 2016 and the $229.7 million outstanding was repaid in full. Prior to its termination, the 2011 Term Loan most recently bore interest at either LIBOR plus the applicable margin between 2.00% and 3.00% or the base rate plus the applicable margin between 1.00% and 2.00%, based on the Company’s consolidated leverage ratio. The Company terminated the 2011 Revolving Credit Facility on February 15, 2017 and the $410.0 million outstanding was repaid in full. Prior to its termination, the 2011 Revolving Credit Facility most recently bore interest at either LIBOR plus the applicable margin between 4.00% and 5.00% or the base rate plus the applicable margin between 3.00% and 4.00%, based on the Company’s consolidated leverage ratio. On February 15, 2017, the Company entered into a $1,450.0 million senior secured credit facility, or the 2017 Credit Facility, consisting of a $1,300.0 million term loan B, or the 2017 Term Loan B, and a $150.0 million revolving credit facility, or the 2017 Revolving Credit Facility, with a syndicate of financial institutions as lenders. The 2017 Revolving Credit Facility was to mature on February 15, 2022 and the 2017 Term Loan B was to mature on February 15, 2023. The 2017 Credit Facility was amended, effective March 16, 2018, to make certain technical amendments in connection with the offering of the 2024 Convertible Notes, as defined below. The Company terminated the 2017 Credit Facility on August 16, 2018 and the $1,178.1 million outstanding was repaid in full. Prior to its termination, the 2017 Term Loan B most recently bore interest at either the eurocurrency rate plus a margin of 5.50% or the base rate plus a margin of 4.50%, and the 2017 Revolving Credit Facility most recently bore interest at either the eurocurrency rate plus a margin of either 4.50% or 4.75% or the base rate plus a margin of either 3.50% or 3.75%, based on the Company’s consolidated leverage ratio. The eurocurrency rate was based on adjusted LIBOR and was subject to a floor of 0.75%. The base rate represented the highest of the Federal Funds Rate plus 0.50%, one-month adjusted LIBOR plus 1.00%, and the prime rate set by Credit Suisse, and was subject to a floor of 1.75%. The 2017 Term Loan B was issued to the lenders at a 2% discount, or $26.0 million. The Company incurred approximately $22.6 million of debt issuance costs in connection with the 2017 Credit Facility. The debt issuance costs and the discount were recorded on the Company’s condensed consolidated balance sheet and were being amortized over the life of the 2017 Credit Facility using the effective-interest method. The Company wrote off all remaining unamortized debt issuance costs and discount related to the 2017 Credit Facility upon its termination, which is included in the loss on extinguishment as described below. On August 16, 2018, the Company entered into a new $1.25 billion senior secured credit facility, or the 2018 Credit Facility, consisting of a $250.0 million term loan A, or the 2018 Term Loan A, a $750.0 million term loan B, or the 2018 Term Loan B, and a $250.0 million revolving credit facility, or the 2018 Revolving Credit Facility. The 2018 Term Loan A and 2018 Revolving Credit Facility both mature on August 16, 2023. The 2018 Term Loan B matures upon the earlier of: (i) August 18, 2025, or (ii) December 15, 2023 if the outstanding principal on the 2024 Convertible Notes, as defined below, exceeds $350.0 million and the Company exceeds certain leverage ratios on December 15, 2023. All obligations under the 2018 Credit Facility are unconditionally guaranteed by certain direct and indirect wholly-owned subsidiaries of Herbalife Nutrition Ltd. and secured by the equity interests of certain of Herbalife Nutrition Ltd.’s subsidiaries and substantially all of the assets of the domestic loan parties. Also on August 16, 2018, the Company issued $400 million aggregate principal amount of senior unsecured notes, or 2026 Notes as described below, and used the proceeds from the 2018 Credit Facility and the 2026 Notes to repay in full the $1,178.1 million outstanding under the 2017 Credit Facility. For accounting purposes, pursuant to FASB ASC Topic 470, Debt The 2018 Term Loan B was issued to the lenders at a 0.25% discount, or $1.9 million. The Company incurred approximately $11.7 million of debt issuance costs in connection with the 2018 Credit Facility. The discount and debt issuance costs are recorded on the Company’s condensed consolidated balance sheet and are being amortized over the life of the 2018 Credit Facility using the effective-interest method. Borrowings under both the 2018 Term Loan A and 2018 Revolving Credit Facility bear interest at either the eurocurrency rate plus a margin of 3.00% or the base rate plus a margin of 2.00%. Borrowings under the 2018 Term Loan B bear interest at either the eurocurrency rate plus a margin of 3.25% or the base rate plus a margin of 2.25%. The eurocurrency rate is based on adjusted LIBOR. The base rate represents the highest of the Federal Funds Rate plus 0.50%, one-month adjusted LIBOR plus 1.00%, and the prime rate quoted by The Wall Street Journal, and is subject to a floor of 1.00%. The Company is required to pay a commitment fee on the 2018 Revolving Credit Facility of 0.50% per annum on the undrawn portion of the 2018 Revolving Credit Facility. Interest is due at least quarterly on amounts outstanding under the 2018 Credit Facility. The 2018 Credit Facility requires the Company to comply with a leverage ratio. The 2018 Credit Facility also contains affirmative and negative covenants customary for financings of this type, including, among other things, limitations or prohibitions on repurchasing common shares, declaring and paying dividends and other distributions, redeeming and repurchasing certain other indebtedness, loans and investments, additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the 2018 Credit Facility contains customary events of default. As of June 30, 2019 and December 31, 2018, the Company was in compliance with its debt covenants under the 2018 Credit Facility. The 2018 Term Loan A and 2018 Term Loan B are payable in consecutive quarterly installments which began on December 31, 2018. In addition, beginning in 2020, the Company may be required to make mandatory prepayments towards the 2018 Term Loan B based on the Company’s consolidated leverage ratio and annual excess cash flows as defined under the terms of the 2018 Credit Facility. The Company is also permitted to make voluntary prepayments. Amounts outstanding under the 2018 Term Loan A and 2018 Term Loan B may be voluntarily prepaid without premium or penalty, subject to customary breakage fees in connection with the prepayment of a eurocurrency loan. These prepayments, if any, will be applied against remaining quarterly installments owed under the 2018 Term Loan A and 2018 Term Loan B in order of maturity with the remaining principal due upon maturity, unless directed otherwise by the Company. As of June 30, 2019 and December 31, 2018, the weighted-average interest rate for borrowings under the 2018 Credit Facility was 5.72% and 6.80%, respectively. During the six months ended June 30, 2019, the Company repaid a total amount of $10.0 million on amounts outstanding under the 2018 Credit Facility. During the six months ended June 30, 2018, the Company repaid a total amount of $48.8 million on amounts outstanding under the 2017 Credit Facility. As of June 30, 2019 and December 31, 2018, the U.S. dollar amount outstanding under the 2018 Credit Facility was $985.0 million and $995.0 million, respectively. Of the $985.0 million outstanding under the 2018 Credit Facility as of June 30, 2019, $240.6 million was outstanding under the 2018 Term Loan A and $744.4 million was outstanding under the 2018 Term Loan B. Of the $995.0 million outstanding under the 2018 Credit Facility as of December 31, 2018, $246.9 million was outstanding under the 2018 Term Loan A and $748.1 million was outstanding under the 2018 Term Loan B. There were no borrowings outstanding under the 2018 Revolving Credit Facility as of June 30, 2019 and December 31, 2018. There were no outstanding foreign currency borrowings under the 2018 Credit Facility as of June 30, 2019 and December 31, 2018. During the three months ended June 30, 2019 and 2018, the Company recognized $14.9 million and $24.9 million, respectively, of interest expense relating to the 2018 Credit Facility and 2017 Credit Facility, which included $0.1 million and $1.2 million, respectively, relating to non-cash interest expense relating to the debt discount and $0.4 million and $1.1 million, respectively, relating to amortization of debt issuance costs. During the six months ended June 30, 2019 and 2018, the Company recognized $29.9 million and $49.1 million, respectively, of interest expense relating to the 2018 Credit Facility and 2017 Credit Facility, which included $0.1 million and $2.3 million, respectively, relating to non-cash interest expense relating to the debt discount and $0.8 million and $2.1 million, respectively, relating to amortization of debt issuance costs. The fair value of the outstanding borrowings on the 2018 Term Loan A is determined by utilizing over-the-counter market quotes for similar instruments, which are considered Level 2 inputs as described in Note 13, Fair Value Measurements Fair Value Measurements Convertible Senior Notes due 2019 During February 2014, the Company initially issued $1 billion aggregate principal amount of convertible senior notes, or the 2019 Convertible Notes, in a private offering to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company granted an option to the initial purchasers to purchase up to an additional $150 million aggregate principal amount of 2019 Convertible Notes which was subsequently exercised in full during February 2014, resulting in a total issuance of $1.15 billion aggregate principal amount of 2019 Convertible Notes. The 2019 Convertible Notes are senior unsecured obligations which rank effectively subordinate to any of the Company’s existing and future secured indebtedness, including amounts outstanding under the 2018 Credit Facility, to the extent of the value of the assets securing such indebtedness. The 2019 Convertible Notes pay interest at a rate of 2.00% per annum payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2014. The 2019 Convertible Notes mature on August 15, 2019, unless earlier repurchased or converted. The Company may not redeem the 2019 Convertible Notes prior to their stated maturity date. Holders of the 2019 Convertible Notes may convert their notes at their option under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending March 31, 2014, if the last reported sale price of the Company’s common shares for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price for the 2019 Convertible Notes on each applicable trading day; (ii) during the five business-day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of 2019 Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Company’s common shares and the conversion rate for the 2019 Convertible Notes for each such day; or (iii) upon the occurrence of specified corporate events. On and after May 15, 2019, holders may convert their 2019 Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2019 Convertible Notes will be settled in cash and, if applicable, the Company’s common shares, based on the applicable conversion rate at such time. The 2019 Convertible Notes had an initial conversion rate of 23.1816 common shares per $1,000 principal amount of the 2019 Convertible Notes, or an initial conversion price of approximately $43.14 per common share. The conversion rate is subject to adjustment upon the occurrence of certain events and was 23.2245 common shares per $1,000 principal amount of the 2019 Convertible Notes, or a conversion price of approximately $43.06 per common share, as of June 30, 2019. The Company incurred approximately $26.6 million of issuance costs during the first quarter of 2014 relating to the issuance of the 2019 Convertible Notes. Of the $26.6 million issuance costs incurred, $21.5 million and $5.1 million were recorded as debt issuance costs and additional paid-in capital, respectively, in proportion to the allocation of the proceeds of the 2019 Convertible Notes. The $21.5 million of debt issuance costs recorded on the Company’s condensed consolidated balance sheet are being amortized over the contractual term of the 2019 Convertible Notes using the effective-interest method. During February 2014, the $1.15 billion aggregate principal amount of the 2019 Convertible Notes were initially allocated between long-term debt, or liability component, and additional paid-in capital, or equity component, within the Company’s condensed consolidated balance sheet at $930.9 million and $219.1 million, respectively. The liability component was measured using the nonconvertible debt interest rate. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the face value of the 2019 Convertible Notes as a whole. Since the Company must still settle these 2019 Convertible Notes at face value at or prior to maturity, this liability component will be accreted up to its face value resulting in additional non-cash interest expense being recognized within the Company’s condensed consolidated statements of income while the 2019 Convertible Notes remain outstanding. The effective-interest rate on the 2019 Convertible Notes is approximately 6.2% per annum. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. During March 2018, the Company issued $550 million aggregate principal amount of new convertible senior notes due 2024, or 2024 Convertible Notes as described below, and subsequently used the proceeds, along with cash on hand, to repurchase $475.0 million of its existing 2019 Convertible Notes from a limited number of holders in privately negotiated transactions for an aggregate purchase price of $583.5 million, which included $1.0 million of accrued interest. For accounting purposes, pursuant to ASC 470, these transactions were accounted for as an extinguishment of 2019 Convertible Notes and an issuance of new 2024 Convertible Notes. The Company allocated the purchase price between the fair value of the liability component and the equity component of the 2019 Convertible Notes at $459.4 million and $123.0 million, respectively. As a result, the Company recognized $446.4 million as a reduction to long-term debt representing the carrying value of the liability component and $123.0 million as a reduction to additional paid-in capital representing the equity component of the repurchased 2019 Convertible Notes. The $13.1 million difference between the fair value and carrying value of the liability component of the repurchased 2019 Convertible Notes was recognized as a loss on extinguishment of debt as a result of the transaction and is recorded in other (income) expense, net within the Company’s condensed consolidated statement of income. The accounting impact of the new 2024 Convertible Notes is described in further detail below. As of June 30, 2019, the remaining outstanding principal on the 2019 Convertible Notes was $675.0 million, the unamortized debt discount and debt issuance costs were $3.8 million, and the carrying amount of the liability component was $671.2 million, which was recorded to current portion of long-term debt within the Company’s condensed consolidated balance sheet. As of December 31, 2018, the outstanding principal on the 2019 Convertible Notes was $675.0 million, the unamortized debt discount and debt issuance costs were $18.6 million, and the carrying amount of the liability component was $656.4 million, . During the three months ended June 30, 2019 and 2018, the Company recognized $10.9 million and $10.4 million, respectively, of interest expense relating to the 2019 Convertible Notes, which included $6.8 million and $6.4 million, respectively, relating to non-cash interest expense relating to the debt discount and $0.6 million and $0.6 million, respectively, relating to amortization of debt issuance costs. During the six months ended June 30, 2019 and 2018, the Company recognized $21.6 million and $27.4 million, respectively, of interest expense relating to the 2019 Convertible Notes, which included $13.5 million and $16.8 million, respectively, relating to non-cash interest expense relating to the debt discount and $1.3 million and $1.6 million, respectively, relating to amortization of debt issuance costs. In conjunction with the issuance of the 2019 Convertible Notes, during February 2014, the Company paid approximately $685.8 million to enter into prepaid forward share repurchase transactions, or the Forward Transactions, with certain financial institutions, and paid approximately $123.8 million to enter into capped call transactions with respect to its common shares, or the Capped Call Transactions, with certain financial institutions. Subsequently, in conjunction with the repurchase of a portion of the 2019 Convertible Notes, during March 2018, the Company entered into agreements with the option counterparties to the Capped Call Transactions to terminate a portion of such existing transactions. See Note 11, Shareholders’ Deficit Convertible Senior Notes due 2024 During March 2018, the Company issued $550 million aggregate principal amount of convertible senior notes, or the 2024 Convertible Notes, in a private offering to qualified institutional buyers, pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2024 Convertible Notes are senior unsecured obligations which rank effectively subordinate to any of the Company’s existing and future secured indebtedness, including amounts outstanding under the 2018 Credit Facility, to the extent of the value of the assets securing such indebtedness. The 2024 Convertible Notes pay interest at a rate of 2.625% per annum payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2018. The 2024 Convertible Notes mature on March 15, 2024, unless redeemed, repurchased or converted in accordance with their terms prior to such date. Holders of the 2024 Convertible Notes may convert their notes at their option under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending June 30, 2018, if the last reported sale price of the Company’s common shares for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price for the 2024 Convertible Notes on each applicable trading day; (ii) during the five business-day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of 2024 Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Company’s common shares and the conversion rate for the 2024 Convertible Notes for each such day; (iii) if the Company calls the 2024 Convertible Notes for redemption; or (iv) upon the occurrence of specified corporate events. On and after December 15, 2023, holders may convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2024 Convertible Notes will be settled, at the Company’s election, in cash, the Company’s common shares, or a combination thereof, based on the applicable conversion rate at such time. The 2024 Convertible Notes had an initial conversion rate of 16.0056 common shares per $1,000 principal amount of the 2024 Convertible Notes, or an initial conversion price of approximately $62.48 per common share. The conversion rate is subject to adjustment upon the occurrence of certain events and was 16.0352 common shares per $1,000 principal amount of the 2024 Convertible Notes, or a conversion price of approximately $62.36 per common share, as of June 30, 2019. The Company incurred approximately $12.9 million of issuance costs during the first quarter of 2018 relating to the issuance of the 2024 Convertible Notes. Of the $12.9 million issuance costs incurred, $9.6 million and $3.3 million were recorded as debt issuance costs and additional paid-in capital, respectively, in proportion to the allocation of the proceeds of the 2024 Convertible Notes. The $9.6 million of debt issuance costs, which was recorded as an additional debt discount on the Company’s condensed consolidated balance sheet, are being amortized over the contractual term of the 2024 Convertible Notes using the effective-interest method. During March 2018, the $550 million aggregate principal amount of the 2024 Convertible Notes were initially allocated between long-term debt, or liability component, and additional paid-in-capital, or equity component, within the Company’s condensed consolidated balance sheet at $410.1 million and $139.9 million, respectively. The liability component was measured using the nonconvertible debt interest rate. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the face value of the 2024 Convertible Notes as a whole. Since the Company must still settle these 2024 Convertible Notes at face value at or prior to maturity, this liability component will be accreted up to its face value resulting in additional non-cash interest expense being recognized within the Company’s condensed consolidated statements of income while the 2024 Convertible Notes remain outstanding. The effective-interest rate on the 2024 Convertible Notes is approximately 8.4% per annum. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. As of June 30, 2019, the outstanding principal on the 2024 Convertible Notes was $550.0 million, the unamortized debt discount and debt issuance costs were $123.6 million, and the carrying amount of the liability component was $426.4 million, which was recorded to long-term debt within the Company’s condensed consolidated balance sheet. As of December 31, 2018, the outstanding principal on the 2024 Convertible Notes was $550.0 million, the unamortized debt discount and debt issuance costs were $134.0 million, and the carrying amount of the liability component was $416.0 million, which was recorded to long-term debt within the Company’s condensed consolidated balance sheet. The fair value of the liability component relating to the 2024 Convertible Notes was approximately $464.1 million and $448.1 million as of June 30, 2019 and December 31, 2018, respectively. During the three months ended June 30, 2019 and 2018, the Company recognized $8.9 million and $8.5 million, respectively, of interest expense relating to the 2024 Convertible Notes, which included $4.9 million and $4.5 million, respectively, relating to non-cash interest expense relating to the debt discount and $0.4 million and $0.3 million, respectively, relating to amortization of debt issuance costs. During the six months ended June 30, 2019 and 2018, the Company recognized $17.7 million and $9.3 million, respectively, of interest expense relating to the 2024 Convertible Notes, which included $9.8 million and $5.0 million, respectively, relating to non-cash interest expense relating to the debt discount and $0.7 million and $0.3 million, respectively, relating to amortization of debt issuance costs. Senior Notes due 2026 During August 2018, the Company issued $400 million aggregate principal amount of senior notes, or the 2026 Notes, 2026 Notes 2026 Notes 2026 Notes At any time prior to August 15, 2021, the Company may redeem all or part of the 2026 Notes at a redemption price equal to 100% of their principal amount, plus a “make whole” premium as of the redemption date, and accrued and unpaid interest to the redemption date. In addition, at any time prior to August 15, 2021, the Company may redeem up to 40% of the aggregate principal amount of the 2026 Notes with the proceeds of one or more equity offerings, at a redemption price equal to 107.250%, plus accrued and unpaid interest. Furthermore, at any time on or after August 15, 2021, the Company may redeem all or part of the 2026 Notes at the following redemption prices, expressed as percentages of principal amount, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve-month period beginning on August 15 of the years indicated below: Percentage 2021 103.625 % 2022 101.813 % 2023 and thereafter 100.000 % The 2026 Notes contain customary negative covenants, including, among other things, limitations or prohibitions on restricted payments, incurrence of additional indebtedness, liens, mergers, asset sales and transactions with affiliates. In addition, the 2026 Notes contain customary events of default. The Company incurred approximately $5.4 million of issuance costs during the third quarter of 2018 relating to the issuance of the 2026 Notes 2026 Notes As of June 30, 2019, the outstanding principal on the 2026 Notes 2026 Notes 2026 Notes Fair Value Measurements During the three months ended June 30, 2019, the Company recognized $7.4 million of interest expense relating to the 2026 Notes Valuation of 2019 Convertible Notes and 2024 Convertible Notes – Level 2 and Level 3 Inputs In order to determine the initial value of the 2019 Convertible Notes and the 2024 Convertible Notes, the Company determined the fair value of the liability component of the 2019 Convertible Notes and the 2024 Convertible Notes using two valuation methods. The Company reviewed market data that was available for publicly traded, senior, unsecured nonconvertible corporate bonds issued by companies with similar credit ratings. Assumptions used in the estimate represent what market participants would use in pricing the liability component, including market yields and credit standing to develop the straight debt yield estimate. The Company also used a lattice model, which included inputs such as stock price, the Convertible Note trading price, volatility and dividend yield to estimate the straight debt yield. The Company combined the results of the two valuation methods to determine the fair value of the liability component of the 2019 Convertible Notes and the 2024 Convertible Notes. Most of these inputs are primarily considered Level 2 and Level 3 inputs. The Company used similar valuation approaches to determine the subsequent fair value of the liability component only for disclosure purposes, which includes using a lattice model and (1) reviewing market data relating to its 2026 Notes and comparable yield curves to determine its straight debt yield estimate, or (2) reviewing market data relating to publicly traded, senior, unsecured nonconvertible corporate bonds issued by companies with similar credit ratings in order to determine its straight debt yield estimate. Total Debt The Company’s total interest expense was $42.4 million and $49.1 million for the three months ended June 30, 2019 and 2018, respectively, and $84.8 million and $93.7 million for the six months ended June 30, 2019 and 2018, respectively, which was recognized within its condensed consolidated statements of income. As of June 30, 2019, annual scheduled principal payments of debt were as follows: Principal Payments (in millions) 2019 $ 687.3 2020 22.0 2021 26.3 2022 27.8 2023 188.7 Thereafter 1,660.6 Total $ 2,612.7 Certain vendors and government agencies may require letters of credit or similar guaranteeing arrangements to be issued or executed. As of June 30, 2019, the Company had $38.0 million of issued but undrawn letters of credit or similar arrangements, which included the Mexico Value Added Tax, or VAT, related surety bonds described in Note 6, Contingencies |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 6. Contingencies The Company is from time to time engaged in routine litigation. The Company regularly reviews all pending litigation matters in which it is involved and establishes reserves deemed appropriate by management for these litigation matters when a probable loss estimate can be made. The matters described in this Note may take several years to resolve. While the Company believes it has meritorious defenses, it cannot be sure of their ultimate resolution. Although the Company may reserve amounts for certain matters that the Company believes represent the most likely outcome of the resolution of these related disputes, if the Company is incorrect in its assessment, the Company may have to record additional expenses, when it becomes probable that an increased potential liability is warranted. Tax Matters The Mexican Tax Administration Service commenced audits of the Company’s Mexican subsidiaries for the period from January to September 2007 and on May 10, 2013, the Company received an assessment of approximately $15.3 million, translated at the June 30, 2019 spot rate, related to that period. This assessment is subject to interest and inflationary adjustments. On July 11, 2013, the Company filed an administrative appeal disputing the assessment. On September 22, 2014, the Mexican Tax Administration Service denied the Company’s administrative appeal. The Company commenced litigation in the Tax Court of Mexico in November 2014 to dispute the assertions made by the Mexican Tax Administration Service in the case. On January 16, 2018, the Tax Court of Mexico issued a verdict upholding the assessment issued by the Mexican Tax Administration Service. On April 16, 2018, the Company filed an appeal of this verdict, and in July 2019, the Circuit Court issued a written verdict upholding the assessment and the judgment of the Tax Court of Mexico. The Company currently plans to lodge a further timely appeal of the case. The Company has not recognized a loss as the Company does not believe a loss is probable. The Company issued a surety bond in the amount of $18.8 million, translated at the June 30, 2019 spot rate, through an insurance company to guarantee payment of the tax assessment as required while the Company pursues an appeal of the assessment, and the surety bond remained effective as of June 30, 2019. The Mexican Tax Administration Service has delayed processing VAT refunds for companies operating in Mexico and the Company believes that the process for its Mexico subsidiary to receive VAT refunds may be delayed. As of June 30, 2019, the Company had $31.3 million of Mexico VAT related assets, of which $19.5 million was within other assets and $11.8 million was within prepaid expenses and other current assets on its condensed consolidated balance sheet. This amount relates to VAT payments made over various periods and the Company believes these amounts are recoverable by refund or they may be applied against certain future tax liabilities. Effective January 1, 2019, a tax reform law changed the rules concerning possible use of VAT assets, specifically providing that, for VAT balances generated after December 31, 2018, those balances could not be offset against taxes other than VAT obligations currently due. The Company has not recognized any losses related to these VAT related assets as the Company does not believe a loss is probable. With respect to these Mexican matters, t he Company is currently unable to reasonably estimate a possible loss or range of loss that could result from an unfavorable outcome if an assessment was re-issued or any additional assessments were to be issued for these or other periods. The Company believes that it has meritorious defenses if an assessment is re-issued or would have meritorious defenses if any additional assessment is issued. The Company has received tax assessments for multiple years from the Federal Revenue Office of Brazil related to withholding/contributions based on payments to the Company’s Members. The aggregate combined amount of all these assessments is equivalent to approximately $15.9 million, translated at the June 30, 2019 spot rate. The Company is currently litigating these assessments at the tax administrative level. The Company has not accrued a loss for the majority of the assessments because the Company does not believe a loss is probable. The Company is currently unable to reasonably estimate the amount of the loss that may result from an unfavorable outcome if additional assessments for other periods were to be issued. The Company is under examination in several Brazilian states related to ICMS and ICMS-ST taxation. Some of these examinations have resulted in assessments for underpaid tax that the Company has appealed. The State of São Paulo has audited the Company for the 2013 and 2014 tax years. During July 2016, for the State of São Paulo, the Company received an assessment in the aggregate amount of approximately $41.7 million, translated at the June 30, 2019 spot rate, relating to various ICMS issues for its 2013 tax year. In August 2016, the Company filed a first-level administrative appeal which was denied in February 2017. The Company filed a further appeal on March 9, 2017. On March 20, 2018, the Court held a hearing and a verdict was issued in June 2019, remanding the case back to the first-level administrative court. During August 2017, for the state of São Paulo, the Company received an assessment in the aggregate amount of approximately $15.5 million, translated at the June 30, 2019 spot rate, relating to various ICMS issues for its 2014 tax year. In September 2017, the Company filed a first-level administrative appeal for the 2014 tax year. The first-level administrative appeal was denied. The Company filed an appeal at the second-level administrative court in December 2018 and a verdict was issued in April 2019, remanding the case back to the first-level administrative court. During September 2018, for the State of Rio de Janeiro, the Company received an assessment in the aggregate amount of approximately $9.2 million, translated at the June 30, 2019 spot rate, relating to various ICMS-ST issues for its 2016 and 2017 tax years. On November 8, 2018, the Company filed a first-level administrative appeal, which was subsequently denied. On April 5, 2019, the Company appealed this tax assessment to the Administrative Council of Tax Appeals (second-level administrative appeal). The Company has also received other ICMS tax assessments in Brazil. During the fourth quarter of 2015, the Company filed appeals with state judicial courts against three of the assessments. The Company had issued surety bonds in the aggregate amount of $11.3 million, translated at the June 30, 2019 spot rate, to guarantee payment of some of the tax assessments as required while the Company pursues the appeals. In addition, the Company has received several ICMS tax assessments in the aggregate amount of $6.4 million, translated at the June 30, 2019 spot rate, from several other Brazilian states where surety bonds have not been issued. Litigation in all these cases is currently ongoing. The Company has not recognized a loss as the Company does not believe a loss is probable. The Company has received various tax assessments in multiple states in India for multiple years from the Indian VAT authorities in an amount equivalent to approximately $10.4 million, translated at the June 30, 2019 spot rate. These assessments are for underpaid VAT. The Company is litigating these cases at the tax administrative level and the tax tribunal levels as it believes it has meritorious defenses. The Company has not recognized a loss as it does not believe a loss is probable. The Korea Customs Service audited the importation activities of Herbalife Korea for the period January 2011 through May 2013. The total assessment for the audit period is $30.7 million, translated at the June 30, 2019 spot rate. The Company has paid the assessment and has recognized these payments within other assets on its condensed consolidated balance sheet. The Company lodged a first-level administrative appeal, which was denied on October 21, 2016. On January 31, 2017, the Company filed a further appeal to the National Tax Tribunal of Korea. In November 2018, the Company received an unfavorable decision from the National Tax Tribunal of Korea. In February 2019, the Company submitted an appeal to the Seoul Administrative Court. The Korea Customs Service audited the importation activities of Herbalife Korea for the period May 2013 through December 2013. The total assessment for the audit period is $10.0 million, translated at the June 30, 2019 spot rate. The Company has paid the assessment and has recognized this payment within other assets on its condensed consolidated balance sheet as of June 30, 2019. In July 2019, the Company filed an appeal to the National Tax Tribunal of Korea. The Company disagrees with the assertions made in the assessments, as well as the calculation methodology used in the assessments. The Company has not recognized a loss as the Company does not believe a loss is probable. During the course of 2016, the Company received various questions from the Greek Social Security Agency and on December 29, 2016, the Greek Social Security Agency issued an assessment with respect to Social Security Contributions on Member earnings for the 2006 year. For Social Security issues, the statute of limitations is open for 2007 and later years in Greece. Despite the assessment amount being immaterial, the Company could receive similar assessments covering other years. The Company continues to litigate the assessment. The Company has not recognized a loss as it does not believe a loss is probable. The Company is currently unable to reasonably estimate the amount of the loss that may result from an unfavorable outcome if additional assessments for other periods were to be issued. The Italian tax authorities audited the Company for the periods 2014 and 2015. The Company has responded to the various points relating to income tax and non-income tax matters initially raised by the tax authorities to date . The Italian tax authorities are discussing certain of its preliminary findings with the Company . It is possible that the Company could receive a final assessment from the Italian authorities after these discussions. The Company believes that it has adequately accrued for income tax matters that are known to date. In regards to non-income tax matters, t he Company has not recognized a loss as it does not believe a loss is probable . The Company believes that it has meritorious defenses if a formal assessment is issued by the Italian tax authorities. The Company is currently unable to reasonably estimate the amount of loss that may result from an unfavorable outcome if a formal assessment is issued by the Italian tax authorities. During March 2018, the Chinese Customs Service began an audit of the Company’s Chinese importations covering the periods 2015 through 2017. The Company has responded to the initial questions from the Customs Service and the audit is ongoing. The Company is currently unable to determine the outcome of this audit and reasonably estimate the amount of loss if an assessment is issued. U.S. Federal Trade Commission Consent Order On July 15, 2016, the Company and the Federal Trade Commission, or the FTC, entered into a proposed Stipulation to Entry of Order for Permanent Injunction and Monetary Judgment, or the Consent Order. The Consent Order was lodged with the U.S. District Court for the Central District of California on July 15, 2016 and became effective on July 25, 2016, or the Effective Date. The Consent Order resolved the FTC’s multi-year investigation of the Company. Pursuant to the Consent Order, under which the Company neither admitted nor denied the FTC’s allegations (except as to the Court having jurisdiction over the matter), the Company made, through its wholly-owned subsidiary Herbalife International of America, Inc., a $200 million payment to the FTC. Additionally, the Company implemented and continues to enhance certain existing procedures in the U.S. Among other requirements, Other Matters As a marketer of foods, dietary and nutritional supplements, and other products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. The effects of these claims to date have not been material to the Company. The Company currently maintains product liability insurance with an annual deductible of $12.5 million. As previously disclosed, the SEC and the Department of Justice, or DOJ, have been conducting investigations into the Company’s compliance with the Foreign Corrupt Practices Act, or FCPA, in China, which are mainly focused on the Company’s China external affairs expenditures relating to its China business activities and the adequacy of and compliance with the Company’s internal controls relating to such expenditures. These investigations are proceeding, the government is continuing to request documents and other information relating to these matters, and the Company has commenced discussions with the government regarding possible resolution of these matters. The Company has conducted its own review and has taken remedial and improvement measures based upon this review, including but not limited to replacement of a number of employees and enhancements of Company policies and procedures in China. The Company is continuing to cooperate with the SEC and DOJ. Although a likely outcome could include resolutions or government actions, the Company cannot predict the eventual scope, duration, or outcome of the government investigations at this time, including potential monetary payments, injunctions, or other relief, the results of which may be materially adverse to the Company, its financial condition, its results of operations, and its operations. At the present time, the Company is unable to reasonably estimate the amount of loss relating to these matters. As previously disclosed, the SEC has also requested from the Company documents and other information relating to the Company’s disclosures regarding its marketing plan in China. The Company is discussing a possible resolution with the SEC and, based on the course of these discussions to date, believes that a final resolution of this matter is likely to include a civil penalty in the amount of $20.0 million and has accordingly recorded an accrued liability in that amount within its condensed consolidated balance sheet as of June 30, 2019. While the Company believes the final resolution of this matter is nearing a conclusion, there can be no assurance as to the timing or the terms of any final resolution, or that a settlement will be reached at all. In the event a settlement is not reached, litigation may ensue and, accordingly, the actual loss incurred in connection with this matter could be less than or exceed the amount accrued and may be materially adverse to the Company, its financial condition, its results of operations, and its operations. At the present time, the Company is unable to reasonably estimate the amount of any potential loss in excess of the amount already accrued relating to this matter. On September 18, 2017, the Company and certain of its subsidiaries and Members were named as defendants in a purported class action lawsuit, titled Rodgers, et al. v Herbalife Ltd., et al. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 7. Segment Information The Company is a nutrition company that sells a wide range of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products. The Company’s products are manufactured by the Company in its Changsha, Hunan, China extraction facility; Suzhou, China facility; Nanjing, China facility; Lake Forest, California facility; and Winston-Salem, North Carolina facility, as well as by third-party providers, and then are sold to Members who consume and sell Herbalife products to retail consumers or other Members. Revenues reflect sales of products by the Company to its Members and are categorized based on geographic location. As of June 30, 2019, the Company sold products in 94 countries throughout the world and was organized and managed by six geographic regions: North America, Mexico, South and Central America, EMEA, Asia Pacific, and China The Company defines its operating segments as those geographical operations. The operating information for the two reportable segments is as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Net sales: Primary Reporting Segment $ 1,053.1 $ 998.7 $ 2,074.9 $ 1,963.4 China 187.0 286.8 337.4 499.0 Total net sales $ 1,240.1 $ 1,285.5 $ 2,412.3 $ 2,462.4 Contribution margin(1): Primary Reporting Segment $ 461.5 $ 440.7 $ 899.5 $ 855.0 China(2) 168.6 259.6 301.7 445.0 Total contribution margin $ 630.1 $ 700.3 $ 1,201.2 $ 1,300.0 Selling, general, and administrative expenses(2) 477.0 510.2 912.4 970.3 Other operating income — (1.7 ) (27.3 ) (17.9 ) Interest expense, net 36.3 44.3 72.4 84.2 Other (income) expense, net (5.9 ) 4.7 (14.4 ) 29.1 Income before income taxes 122.7 142.8 258.1 234.3 Income taxes 46.2 48.4 85.3 57.8 Net income $ 76.5 $ 94.4 $ 172.8 $ 176.5 (1) Contribution margin consists of net sales less cost of sales and Royalty overrides. For the China segment, contribution margin does not include service fees to China independent service providers. (2) Service fees to China independent service providers totaling $108.2 million and $151.7 million for the three months ended June 30, 2019 and 2018, respectively, and $184.7 million and $262.6 million for the six months ended June 30, 2019 and 2018, respectively, are included in selling, general, and administrative expenses. The following table sets forth net sales by geographic area: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Net sales: United States $ 272.0 $ 256.4 $ 522.7 $ 481.9 China 187.0 286.8 337.4 499.0 Mexico 121.2 118.2 240.5 232.2 Others 659.9 624.1 1,311.7 1,249.3 Total net sales $ 1,240.1 $ 1,285.5 $ 2,412.3 $ 2,462.4 |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 8. Share-Based Compensation The Company has share-based compensation plans, which are more fully described in Note 9, Share-Based Compensation Share-based compensation expense amounted to $9.9 million and $10.4 million for the three months ended June 30, 2019 and 2018, respectively, and $20.5 million and $20.2 million for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, the total unrecognized compensation cost related to all non-vested stock awards was $71.5 million and the related weighted-average period over which it is expected to be recognized is approximately 1.6 years. The following table summarizes the activity for stock appreciation rights, or SARs, under all share-based compensation plans for the six months ended June 30, 2019: Number of Awards Weighted-Average Exercise Price Per Award Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value(1) (in thousands) (in millions) Outstanding as of December 31, 2018(2)(3) 8,470 $ 26.82 6.1 years $ 272.1 Granted — $ — Exercised(4) (594 ) $ 24.21 Forfeited(5) (238 ) $ 29.67 Outstanding as of June 30, 2019(2)(3) 7,638 $ 26.94 5.6 years $ 120.9 Exercisable as of June 30, 2019(6) 6,338 $ 26.57 5.2 years $ 102.6 Vested and expected to vest as of June 30, 2019 7,633 $ 26.94 5.6 years $ 120.8 (1) The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards. (2) Includes less than 0.1 million market condition SARs as of both June 30, 2019 and December 31, 2018. (3) Includes 2.9 million and 3.1 million performance condition SARs as of June 30, 2019 and December 31, 2018, respectively, which represent the maximum amount that can vest. (4) Includes less than 0.1 million performance condition SARs. ( 5 ) Includes 0.2 million performance condition SARs. ( 6 ) Includes less than 0.1 million market condition and 2.4 million performance condition SARs. There were no SARs granted during the three and six months ended June 30, 2019 and 2018. The total intrinsic value of SARs exercised during the three months ended June 30, 2019 and 2018 was $5.3 million and $64.8 million, respectively. The total intrinsic value of SARs exercised during the six months ended June 30, 2019 and 2018 was $17.2 million and $187.0 million, respectively. The following table summarizes the activities for stock units under all share-based compensation plans for the six months ended June 30, 2019: Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Outstanding and nonvested as of December 31, 2018(1) 1,611 $ 42.09 Granted(2) 947 $ 55.71 Vested (195 ) $ 45.60 Forfeited(3) (442 ) $ 40.28 Outstanding and nonvested as of June 30, 2019(1) 1,921 $ 48.87 Expected to vest as of June 30, 2019(4) 1,668 $ 48.98 (1) Includes 560,986 and 708,836 performance-based stock unit awards as of June 30, 2019 and December 31, 2018, respectively, which represents the maximum amount that can vest. (2) Includes 209,182 performance-based stock unit awards, which represents the maximum amount that can vest. (3) Includes 357,032 performance-based stock unit awards. ( 4 ) Includes 353,562 performance-based stock unit awards. The total vesting date fair value of stock units which vested during the three months ended June 30, 2019 and 2018 was $1.9 million and $2.1 million, respectively. The total vesting date fair value of stock units which vested during the six months ended June 30, 2019 and 2018 was $10.9 million and $2.1 million, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes Income taxes were $46.2 million and $48.4 million for the three months ended June 30, 2019 and 2018, respectively, and $85.3 million and $57.8 million for the six months ended June 30, 2019 and 2018, respectively. The effective income tax rate was 37.7% and 33.9% for the three months ended June 30, 2019 and 2018, respectively, and 33.0% and 24.7% for the six months ended June 30, 2019 and 2018, respectively. The increase in the effective tax rate for the three months ended June 30, 2019 as compared to the same period in 2018 was primarily due to the decrease in net benefits from discrete events, partially offset by changes in the geographic mix of the Company’s income. Included in the discrete events for the three months ended June 30, 2019 and 2018 was the impact of $0.4 million and $10.9 million, respectively, of excess tax benefits from share-based compensation arrangements. The increase in the effective tax rate for the six months ended June 30, 2019 as compared to the same period in 2018 was primarily due to the decrease in net benefits from discrete events, partially offset by changes in the geographic mix of the Company’s income. Included in the discrete events for the six months ended June 30, 2019 and 2018 was the impact of $2.8 million and $30.2 million, respectively, of excess tax benefits from share-based compensation arrangements. As of June 30, 2019, the total amount of unrecognized tax benefits, including related interest and penalties, was $71.4 million. If the total amount of unrecognized tax benefits was recognized, $49.3 million of unrecognized tax benefits, $11.3 million of interest, and $1.7 million of penalties would impact the effective tax rate. The Company believes that it is reasonably possible that the amount of unrecognized tax benefits could decrease by up to approximately $3.4 million within the next twelve months. Of this possible decrease, $0.5 million would be due to the settlement of audits or resolution of administrative or judicial proceedings. The remaining possible decrease of $2.9 million would be due to the expiration of statute of limitations in various jurisdictions. For a description on contingency matters relating to income taxes, see Note 6, Contingencies On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act of 2017, or the Act. The Act, which is also commonly referred to as “U.S. Tax Reform,” significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a modified territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. During both the fourth quarters of 2018 and 2017, the Company recorded valuation allowances related to its continued inability to fully utilize foreign tax credits generated. See Note 12, Income Taxes |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities Foreign Currency Instruments The Company designates certain foreign currency derivatives, primarily comprised of foreign currency forward contracts, as freestanding derivatives for which hedge accounting does not apply. The changes in the fair market value of these freestanding derivatives are included in selling, general, and administrative expenses in the Company’s condensed consolidated statements of income. The Company primarily uses freestanding foreign currency derivatives to hedge foreign currency-denominated intercompany transactions and to partially mitigate the impact of foreign currency fluctuations. The fair value of the freestanding foreign currency derivatives is based on third-party quotes. The Company’s foreign currency derivative contracts are generally executed on a monthly basis. The Company designates as cash flow hedges those foreign currency forward contracts it enters into to hedge forecasted inventory purchases and intercompany management fees that are subject to foreign currency exposures. Forward contracts are used to hedge forecasted inventory purchases over specific months. Changes in the fair value of these forward contracts, excluding forward points, designated as cash flow hedges are recorded as a component of accumulated other comprehensive loss within shareholders’ deficit, and are recognized in cost of sales in the condensed consolidated statement of income during the period which approximates the time the hedged inventory is sold. The Company also hedges forecasted intercompany management fees over specific months. These contracts allow the Company to sell Euros in exchange for U.S. dollars at specified contract rates. Changes in the fair value of these forward contracts, excluding forward points, designated as cash flow hedges are recorded as a component of accumulated other comprehensive loss within shareholders’ deficit, and are recognized in selling, general, and administrative expenses within the Company’s condensed consolidated statement of income during the period when the hedged item and underlying transaction affect earnings. As of June 30, 2019 and December 31, 2018, the aggregate notional amounts of all foreign currency contracts outstanding designated as cash flow hedges were approximately $27.4 million and $43.8 million, respectively. As of June 30, 2019, these outstanding contracts were expected to mature over the next fifteen months. The Company’s derivative financial instruments are recorded on the condensed consolidated balance sheets at fair value based on third-party quotes. As of June 30, 2019, the Company recorded assets at fair value of $0.3 million and liabilities at fair value of $0.8 million relating to all outstanding foreign currency contracts designated as cash flow hedges. As of December 31, 2018, the Company recorded assets at fair value of $0.5 million and liabilities at fair value of $0.7 million relating to all outstanding foreign currency contracts designated as cash flow hedges. The Company assesses hedge effectiveness at least quarterly and the hedges remained effective as of June 30, 2019 and December 31, 2018. As of June 30, 2019 and December 31, 2018, the majority of the Company’s outstanding foreign currency forward contracts had maturity dates of less than twelve months with the majority of freestanding derivatives expiring within one month as of June 30, 2019 and December 31, 2018. As of June 30, 2019, the Company had aggregate notional amounts of approximately $373.7 million of foreign currency contracts, inclusive of freestanding contracts and contracts designated as cash flow hedges. The following tables summarize the derivative activity during the three and six months ended June 30, 2019 and 2018 relating to all the Company’s derivatives. Gains and Losses on Derivative Instruments The following table summarizes gains (losses) relating to derivative instruments recorded in other comprehensive (loss) income during the three and six months ended June 30, 2019 and 2018: Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ — $ 4.5 $ (1.0 ) $ 0.5 As of June 30, 2019, the estimated amount of existing net losses related to cash flow hedges recorded in accumulated other comprehensive loss that are expected to be reclassified into earnings over the next twelve months was $0.2 million. The effect of cash flow hedging relationships on the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018 was as follows: Location and Amount of Gain (Loss) Recognized in Income on Cash Flow Hedging Relationships Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses (in millions) Total amounts presented in the condensed consolidated statements of income $ 243.2 $ 477.0 $ 235.4 $ 510.2 $ 484.8 $ 912.4 $ 475.3 $ 970.3 Foreign exchange currency contracts relating to inventory hedges: Amount of gain reclassified from accumulated other comprehensive loss to income 0.1 — 1.5 — 0.1 — 2.0 — Amount of (loss) gain excluded from assessment of effectiveness recognized in income(1) (0.6 ) — — (0.8 ) (1.3 ) — — (3.1 ) Foreign exchange currency contracts relating to intercompany management fee hedges: Amount of gain (loss) reclassified from accumulated other comprehensive loss to income — 0.4 — (1.6 ) — 0.8 — (4.0 ) Amount of gain excluded from assessment of effectiveness recognized in income — 0.1 — 0.6 — 0.1 — 0.9 (1) As a result of adopting ASU 2017-12 during the first quarter of 2019, for the three and six months ended June 30, 2019, the Company recognized gains (losses) excluded from the assessment of effectiveness on foreign exchange currency contracts relating to inventory hedges in cost of sales within its condensed consolidated statements of income. Prior to the adoption of ASU 2017-12, for the three and six months ended June 30, 2018, the Company recognized gains (losses) excluded from the assessment of effectiveness on foreign exchange currency contracts relating to inventory hedges in selling, general, and administrative expenses within its condensed consolidated statements of income. The following table summarizes gains (losses) recorded to income relating to derivative instruments not designated as hedging instruments during the three and six months ended June 30, 2019 and 2018: Amount of (Loss) Gain Recognized in Income Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Location of (Loss) Gain Recognized in Income (in millions) Derivatives not designated as hedging instruments: Foreign exchange currency contracts $ (2.5 ) $ 1.1 $ (0.2 ) $ (1.6 ) Selling, general, and administrative expenses The Company reports its derivatives at fair value as either assets or liabilities within its condensed consolidated balance sheets. See Note 13, Fair Value Measurements, |
Shareholders' Deficit
Shareholders' Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Deficit | 11. Shareholders’ Deficit Changes in shareholders’ deficit for the three months ended June 30, 2019 and 2018 were as follows: Three Months Ended June 30, 2019 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 333.8 $ (204.1 ) $ (430.0 ) $ (629.1 ) Issuance of 0.2 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 0.9 0.9 Additional capital from share-based compensation 9.9 9.9 Repurchases of 0.1 common shares — (1.4 ) (1.4 ) Reclassification from temporary equity 11.3 11.3 Net income 76.5 76.5 Foreign currency translation adjustment, net of income taxes of $(1.5) (1.8 ) (1.8 ) Unrealized loss on derivatives, net of income taxes of $— (0.5 ) (0.5 ) Ending balance $ 0.1 $ (328.9 ) $ 354.5 $ (206.4 ) $ (353.5 ) $ (534.2 ) Three Months Ended June 30, 2018 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 425.4 $ (147.3 ) $ (168.3 ) $ (219.0 ) Issuance of 1.2 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 0.7 0.7 Additional capital from share-based compensation 10.4 10.4 Repurchases of 12.0 common shares — (59.0 ) (572.5 ) (631.5 ) Forward Counterparties' delivery of 8.4 common shares to the Company — — — Unwind of capped call transactions 11.9 11.9 Net income 94.4 94.4 Foreign currency translation adjustment, net of income taxes of $(3.1) (50.8 ) (50.8 ) Unrealized loss on derivatives, net of income taxes of $— 4.5 4.5 Ending balance $ 0.1 $ (328.9 ) $ 389.4 $ (193.6 ) $ (646.4 ) $ (779.4 ) Changes in shareholders’ deficit for the six months ended June 30, 2019 and 2018 were as follows: Six Months Ended June 30, 2019 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 341.5 $ (209.8 ) $ (526.3 ) $ (723.4 ) Issuance of 0.6 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 1.5 1.5 Additional capital from share-based compensation 20.5 20.5 Repurchases of 0.2 common shares — (9.0 ) (9.0 ) Forward Counterparties' delivery of 2.0 common shares to the Company — — — Net income 172.8 172.8 Foreign currency translation adjustment, net of income taxes of $(1.0) 5.3 5.3 Unrealized loss on derivatives, net of income taxes of $— (1.9 ) (1.9 ) Ending balance $ 0.1 $ (328.9 ) $ 354.5 $ (206.4 ) $ (353.5 ) $ (534.2 ) Six Months Ended June 30, 2018 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.6 ) $ 407.3 $ (165.4 ) $ (248.1 ) $ (334.7 ) Issuance of 3.9 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 1.2 1.2 Additional capital from share-based compensation 20.2 20.2 Repurchases of 13.1 common shares — (0.3 ) (108.7 ) (572.4 ) (681.4 ) Forward Counterparties' delivery of 8.4 common shares to the Company — — — Issuance of convertible senior notes 136.5 136.5 Repurchase of convertible senior notes (123.0 ) (123.0 ) Unwind of capped call transactions 55.9 55.9 Net income 176.5 176.5 Foreign currency translation adjustment, net of income taxes of $(2.0) (29.6 ) (29.6 ) Unrealized loss on derivatives, net of income taxes of $— 1.4 1.4 Cumulative effect of accounting change (2.4 ) (2.4 ) Ending balance $ 0.1 $ (328.9 ) $ 389.4 $ (193.6 ) $ (646.4 ) $ (779.4 ) Dividends The declaration of future dividends is subject to the discretion of the Company’s board of directors and will depend upon various factors, including its earnings, financial condition, Herbalife Nutrition Ltd.’s available distributable reserves under Cayman Islands law, restrictions imposed by the 2018 Credit Facility and the terms of any other indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by its board of directors. Share Repurchases On October 30, 2018, the Company’s board of directors authorized a new five-year $1.5 billion share repurchase program that will expire on October 30, 2023, which replaced the Company’s prior share repurchase authorization that was set to expire on February 21, 2020 and had approximately $113.3 million of remaining authorized capacity when it was replaced. This share repurchase program allows the Company, which includes an indirect wholly-owned subsidiary of Herbalife Nutrition Ltd., to repurchase the Company’s common shares at such times and prices as determined by management, as market conditions warrant, and to the extent Herbalife Nutrition Ltd.’s distributable reserves are available under Cayman Islands law. The 2018 Credit Facility permits the Company to repurchase its common shares as long as no default or event of default exists and other conditions, such as specified consolidated leverage ratios, are met. . In conjunction with the issuance of the 2019 Convertible Notes during February 2014, the Company paid approximately $685.8 million to enter into Forward Transactions with certain financial institutions, or the Forward Counterparties, pursuant to which the Company purchased approximately 19.9 million common shares, at an average cost of $34.51 per share, for settlement on or around the August 15, 2019 maturity date for the 2019 Convertible Notes, subject to the ability of each Forward Counterparty to elect to settle all or a portion of its Forward Transactions early. The Forward Transactions were generally expected to facilitate privately negotiated derivative transactions between the Forward Counterparties and holders of the 2019 Convertible Notes, including swaps, relating to the common shares by which holders of the 2019 Convertible Notes establish short positions relating to the common shares and otherwise hedge their investments in the 2019 Convertible Notes concurrently with, or shortly after, the pricing of the 2019 Convertible Notes. The approximate 19.9 million common shares effectively repurchased through the Forward Transactions are treated as retired shares for basic and diluted EPS purposes. During the three months ended June 30, 2019, the Forward Counterparties did not deliver any shares to the Company. During the three months ended June 30, 2018, the Forward Counterparties delivered approximately 8.4 million shares to the Company, which were subsequently retired by the Company, and as a result, the Company expensed $3.1 million of unamortized non-cash issuance costs relating to these shares, which is included in the non-cash interest expense amount disclosed below. During the six months ended June 30, 2019 and 2018, the Forward Counterparties delivered approximately 2.0 million and 8.4 million shares, respectively, to the Company, which were subsequently retired by the Company, and as a result, the Company expensed $0.2 million and $3.1 million, respectively, of unamortized non-cash issuance costs relating to these shares, which is included in the non-cash interest expense amounts disclosed below. As of June 30, 2019, approximately 4.0 million shares still remained legally outstanding. As a result of the Forward Transactions, the Company’s total shareholders’ equity within its condensed consolidated balance sheet was reduced by approximately $685.8 million during the first quarter of 2014, with amounts of $653.9 million and $31.9 million being allocated between accumulated deficit and additional paid-in capital, respectively, within total shareholders’ equity. Also, upon executing the Forward Transactions, the Company recorded, at fair value, $35.8 million in non-cash issuance costs to other assets and a corresponding amount to additional paid-in capital within its condensed consolidated balance sheet. These non-cash issuance costs will be amortized to interest expense over the contractual term of the Forward Transactions. The Company recognized $0.3 million and $4.7 million for the three months ended June 30, 2019 and 2018, respectively, and $1.0 million and $6.3 million for the six months ended June 30, 2019 and 2018, respectively, of non-cash interest expense within its condensed consolidated statements of income relating to amortization of these non-cash issuance costs. During the three months ended June 30, 2019 and 2018, the Company did not repurchase any of its common shares through open market purchases. During the six months ended June 30, 2019, the Company did not repurchase any of its common shares through open market purchases. During the six months ended June 30, 2018, an indirect wholly-owned subsidiary of the Company purchased 8,400 of Herbalife Nutrition Ltd.’s common shares through open market purchases at an aggregate cost of approximately $0.3 million, or an average cost of $33.90 per share. These share repurchases increased the Company’s total shareholders’ deficit and are reflected at cost within the Company’s accompanying condensed consolidated balance sheets. Although these shares are owned by an indirect wholly-owned subsidiary of the Company and remain legally outstanding, they are reflected as treasury shares under U.S. GAAP and therefore reduce the number of common shares outstanding within the Company’s condensed consolidated financial statements and the weighted-average number of common shares outstanding used in calculating earnings per share. The common shares of Herbalife Nutrition Ltd. held by the indirect wholly-owned subsidiary, however, remain outstanding on the books and records of the Company’s transfer agent and therefore still carry voting and other share rights related to ownership of the Company’s common shares, which may be exercised. So long as it is consistent with applicable laws, such shares will be voted by such subsidiary in the same manner, and to the maximum extent possible in the same proportion, as all other votes cast with respect to any matter properly submitted to a vote of Herbalife Nutrition Ltd.’s shareholders. As of both June 30, 2019 and December 31, 2018, the Company held approximately 10.0 million of treasury shares for U.S. GAAP purposes. In connection with the Company’s October 2017 modified Dutch auction tender offer, the Company incurred $1.6 million in transaction costs and also provided a non-transferable CVR for each share tendered, allowing participants in the tender offer to receive a contingent cash payment in the event Herbalife is acquired in a going-private transaction (as defined in the CVR Agreement) within two years of the commencement of the tender offer. The initial fair value of the CVR was $7.3 million, which was recorded as a liability in the fourth quarter of 2017 with a corresponding decrease to shareholders’ equity. In determining the initial fair value of the CVR, the Company used a lattice model, which included inputs such as the underlying stock price, strike price, time to expiration, and dividend yield. Subsequent changes in the fair value of the CVR liability, using a similar valuation approach as the initial fair value determination, are recognized within the Company's condensed consolidated balance sheets with corresponding gains or losses being recognized in other (income) expense, net within the Company's condensed consolidated statements of income during each reporting period until the CVR expires in August 2019 or is terminated due to a going-private transaction, which is also incorporated in the valuation of the CVR; this going-private probability input is considered to be a Level 3 input in the fair value hierarchy and any increase or decrease in this input could have significantly impacted the fair value of the CVR as of the reporting date. Any subsequent increase or decrease in this input or other inputs described above in subsequent valuations could significantly impact the fair value of the CVR. During the three months ended June 30, 2019, t he Company recognized a $ 5.9 million gain in other (income) expense, net within its condensed consolidated statement of income due to the change in the fair value of the CVR, which was primarily driven by a decrease in the market price of the Company’s common shares and a decrease in the probability of a going-private transaction as a result of the shortening term of the CVR before it expires pursuant to its terms . During the three months ended June 30, 2018, t he Company recognized a $ 4.7 million loss in other (income) expense, net within its condensed consolidated statement of income due to the change in the fair value of the CVR, which was primarily driven by an increase in the market price of the Company’s common shares . During the six months ended June 30, 2019, the Company recognized a $14.4 million gain in other (income) expense, net within its condensed consolidated statement of income due to the change in the fair value of the CVR, which was primarily driven by a decrease in the market price of the Company’s common shares and a decrease in the probability of a going-private transaction as a result of the shortening term of the CVR before it expires pursuant to its terms. During the six months ended June 30, 2018, the Company recognized a $16.0 million loss in other (income) expense, net within its condensed consolidated statement of income due to the change in the fair value of the CVR, which was primarily driven by an increase in the market price of the Company’s common shares. As of June 30, 2019 and December 31, 2018, the fair value of the CVR was $1.3 million and $15.7 million, respectively. The number of shares issued upon vesting or exercise for certain restricted stock units and SARs granted pursuant to the Company’s share-based compensation plans is net of the statutory withholding requirements that the Company pays on behalf of its employees. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s condensed consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the Company’s share repurchase program described above. During the three and six months ended June 30, 2019 and 2018, the Company withheld shares on its vested restricted stock units and exercised SARs relating to its share-based compensation plans. The Company reflects the aggregate purchase price of its common shares repurchased as an increase to shareholders’ deficit. The Company allocated the purchase price of the repurchased shares to accumulated deficit, common shares, and additional paid-in capital, with the exception of treasury shares, which are recorded separately on the Company’s condensed consolidated balance sheets. For the six months ended June 30, 2019 and 2018, the Company’s share repurchases, inclusive of transaction costs, were none and $600.7 million, respectively, under the Company’s share repurchase programs, and $9.0 million and $80.7 million, respectively, due to shares withheld for tax purposes related to the Company’s share-based compensation plans. For the six months ended June 30, 2019 and 2018, the Company’s total share repurchases, including shares withheld for tax purposes, were $9.0 million and $681.4 million, respectively, and have been recorded as an increase to shareholders’ deficit within the Company’s condensed consolidated balance sheets. The Company recorded $685.6 million of total share repurchases within financing activities on its condensed consolidated statement of cash flows for the six months ended June 30, 2018, which includes $4.2 million of share repurchases that were reflected as an increase to shareholders’ deficit within the Company’s condensed consolidated balance sheet as of December 31, 2017 but were subsequently paid during the six months ended June 30, 2018. Capped Call Transactions In February 2014, in connection with the issuance of the 2019 Convertible Notes, the Company paid approximately $123.8 million to enter into Capped Call Transactions with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the 2019 Convertible Notes in the event that the market price of the common shares is greater than the strike price of the Capped Call Transactions, initially set at $43.14 per common share, with such reduction of potential dilution subject to a cap based on the cap price initially set at $60.39 per common share. The strike price and cap price are subject to certain adjustments under the terms of the Capped Call Transactions. Therefore, as a result of executing the Capped Call Transactions, the Company in effect will only be exposed to potential net dilution once the market price of its common shares exceeds the adjusted cap price. As of June 30, 2019, the weighted-average adjusted cap price was approximately $53.37 per common share. As a result of the Capped Call Transactions, the Company’s additional paid-in capital within shareholders’ equity on its condensed consolidated balance sheet was reduced by $123.8 million during the first quarter of 2014. During March 2018, in connection with the Company’s repurchase of a portion of the 2019 Convertible Notes, the Company entered into partial settlement agreements with the option counterparties to the Capped Call Transactions to terminate a portion of such existing transactions, in each case, in a notional amount corresponding to the aggregate principal amount of 2019 Convertible Notes that were repurchased. As a result of terminating a portion of the Capped Call Transactions, which were in a favorable position, the Company received $55.9 million in cash and recognized an offsetting increase to additional paid-in capital during 2018. Temporary Equity During the fourth quarter of 2018, the last reported sale price of the Company’s common shares exceeded 130% of the conversion price for the 2019 Convertible Notes for at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the quarter. As such, the 2019 Convertible Notes were convertible at the holders’ option during the first quarter of 2019. The Company reclassified the difference between the aggregate principal amount and the carrying value of the 2019 Convertible Notes of approximately $11.3 million from additional paid-in capital to temporary equity on its condensed consolidated balance sheet as of March 31, 2019. As of June 30, 2019, the 2019 Convertible Notes were not contractually required to be settled until the maturity date of August 15, 2019, and as such, the Company reclassified the temporary equity to additional paid-in capital on its condensed consolidated balance sheet. Accumulated Other Comprehensive Loss The following table summarizes changes in accumulated other comprehensive loss by component during the three months ended June 30, 2019 and 2018: Changes in Accumulated Other Comprehensive Loss by Component Three Months Ended June 30, 2019 June 30, 2018 Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total (in millions) Beginning balance $ (204.5 ) $ 0.4 $ (204.1 ) $ (149.4 ) $ 2.1 $ (147.3 ) Other comprehensive (loss) income before reclassifications, net of tax (1.8 ) — (1.8 ) (50.8 ) 4.4 (46.4 ) Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) — (0.5 ) (0.5 ) — 0.1 0.1 Total other comprehensive (loss) income, net of reclassifications (1.8 ) (0.5 ) (2.3 ) (50.8 ) 4.5 (46.3 ) Ending balance $ (206.3 ) $ (0.1 ) $ (206.4 ) $ (200.2 ) $ 6.6 $ (193.6 ) (1) See Note 10, Derivative Instruments and Hedging Activities Other comprehensive (loss) income before reclassifications was net of tax benefit of $1.5 million for foreign currency translation adjustments for the three months ended June 30, 2019. Other comprehensive (loss) income before reclassifications was net of tax benefit of $3.1 million for foreign currency translation adjustments for the three months ended June 30, 2018 The following table summarizes changes in accumulated other comprehensive loss by component during the six months ended June 30, 2019 and 2018: Changes in Accumulated Other Comprehensive Loss by Component Six Months Ended June 30, 2019 June 30, 2018 Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total (in millions) Beginning balance $ (211.6 ) $ 1.8 $ (209.8 ) $ (170.6 ) $ 5.2 $ (165.4 ) Other comprehensive income (loss) before reclassifications, net of tax 5.3 (1.0 ) 4.3 (29.6 ) 0.5 (29.1 ) Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) — (0.9 ) (0.9 ) — 0.9 0.9 Total other comprehensive income (loss), net of reclassifications 5.3 (1.9 ) 3.4 (29.6 ) 1.4 (28.2 ) Ending balance $ (206.3 ) $ (0.1 ) $ (206.4 ) $ (200.2 ) $ 6.6 $ (193.6 ) (1) See Note 10, Derivative Instruments and Hedging Activities Other comprehensive income (loss) before reclassifications was net of tax benefit of $1.0 million for foreign currency translation adjustments for the six months ended June 30, 2019. Other comprehensive income (loss) before reclassifications was net of tax benefit of $2.0 million for foreign currency translation adjustments for the six months ended June 30, 2018. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 12. Earnings Per Share Basic earnings per share represents net income divided by the weighted-average number of common shares outstanding for the period. Diluted earnings per share represents net income divided by the weighted-average number of common shares outstanding, inclusive of the effect of dilutive securities, such as outstanding SARs, stock units, and convertible notes. The following are the common share amounts used to compute the basic and diluted earnings per share for each period: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Weighted-average shares used in basic computations 137.4 142.3 137.2 144.0 Dilutive effect of exercise of equity grants outstanding 3.6 6.8 4.2 7.1 Dilutive effect of 2019 Convertible Notes 1.4 2.8 2.8 1.9 Weighted-average shares used in diluted computations 142.4 151.9 144.2 153.0 There were an aggregate of 1.0 million and 1.7 million of equity grants, consisting of SARs and stock units, that were outstanding during the three months ended June 30, 2019 and 2018, respectively , and an aggregate of 1.0 million and 2.1 million of equity grants, consisting of SARs and stock units, that were outstanding during the six months ended June 30, 2019 and 2018, respectively, Since the Company will settle the principal amount of its 2019 Convertible Notes in cash and settle the conversion feature for the amount above the conversion price in common shares, or the conversion spread, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted earnings per share, if applicable. The conversion spread will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common shares for a given period exceeds the conversion price of the 2019 Convertible Notes . The dilutive impact s for the three and six months ended June 30 , 201 9 and 2018 are disclosed in the table above. The initial conversion rate and conversion price for the 2019 Convertible Notes are described further in Note 5 , Long-Term Debt . For the 2024 Convertible Notes, the Company has the intent and ability to settle the principal amount in cash and intends to settle the conversion feature for the amount above the conversion price, or the conversion spread, in common shares. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted earnings per share, if applicable. The conversion spread will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common shares for a given period exceeds the conversion price of the 2024 Convertible Notes. For the three and six months ended June 30, 2019 and 2018, the 2024 Convertible Notes have been excluded from the computation of diluted earnings per share, as the effect would be anti-dilutive since the conversion price of the 2024 Convertible Notes exceeded the average market price of the Company’s common shares for the three and six months ended June 30, 2019 and 2018. The initial conversion rate and conversion price for the 2024 Convertible Notes are described further in Note 5, Long-Term Debt The Capped Call Transactions are excluded from the calculation of diluted earnings per share because their impact is always anti-dilutive. Additionally, the Forward Transactions are treated as retired shares for basic and diluted EPS purposes. See Note 11, Shareholders’ Deficit See Note 11, Shareholders’ Deficit |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 13. Fair Value Measurements The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the asset or liability. The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its condensed consolidated financial statements. Foreign exchange currency contracts are valued using standard calculations and models primarily based on inputs such as observable forward rates, spot rates and foreign currency exchange rates at the reporting period ended date. The Company’s derivative assets and liabilities are measured at fair value and consisted of Level 2 inputs and their amounts are shown below at their gross values as of June 30, 2019 and December 31, 2018: Significant Other Observable Inputs (Level 2) Fair Value as of June 30, 2019 Significant Other Observable Inputs (Level 2) Fair Value as of December 31, 2018 Balance Sheet Location (in millions) ASSETS: Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ 0.3 $ 0.5 Prepaid expenses and other current assets Derivatives not designated as hedging instruments: Foreign exchange currency contracts 0.8 2.8 Prepaid expenses and other current assets $ 1.1 $ 3.3 LIABILITIES: Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ 0.8 $ 0.7 Other current liabilities Derivatives not designated as hedging instruments: Foreign exchange currency contracts 3.2 1.0 Other current liabilities $ 4.0 $ 1.7 The Company’s CVR liability is measured at fair value and consisted of Level 3 inputs. See Note 11, Shareholders’ Deficit Contingent Value Right (in millions) Fair value as of December 31, 2018 $ 15.7 Net unrealized gain(1) (14.4 ) Fair value as of June 30, 2019 $ 1.3 (1) Unrealized gains and losses related to the revaluation of the CVR are recorded in other (income) expense, net within the Company’s condensed consolidated statements of income. The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised of money market funds and foreign and domestic bank accounts. These cash and cash equivalents are valued based on Level 1 inputs which consist of quoted prices in active markets. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents. The Company’s deferred compensation plan assets consist of Company owned life insurance policies. As these policies are recorded at their cash surrender value, they are not required to be included in the fair value table above. See Note 6, Employee Compensation Plans The following tables summarize the offsetting of the fair values of the Company’s derivative assets and derivative liabilities for presentation in the Company’s condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018: Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance Sheet (in millions) June 30, 2019 Foreign exchange currency contracts $ 1.1 $ (1.1 ) $ — Total $ 1.1 $ (1.1 ) $ — December 31, 2018 Foreign exchange currency contracts $ 3.3 $ (1.2 ) $ 2.1 Total $ 3.3 $ (1.2 ) $ 2.1 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance Sheet (in millions) June 30, 2019 Foreign exchange currency contracts $ 4.0 $ (1.1 ) $ 2.9 Total $ 4.0 $ (1.1 ) $ 2.9 December 31, 2018 Foreign exchange currency contracts $ 1.7 $ (1.2 ) $ 0.5 Total $ 1.7 $ (1.2 ) $ 0.5 The Company offsets all of its derivative assets and derivative liabilities in its condensed consolidated balance sheets to the extent it maintains master netting arrangements with related financial institutions. As of June 30, 2019 and December 31, 2018, all of the Company’s derivatives were subject to master netting arrangements and no collateralization was required for the Company’s derivative assets and derivative liabilities. |
Detail of Certain Balance Sheet
Detail of Certain Balance Sheet Accounts | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Detail of Certain Balance Sheet Accounts | 14. Detail of Certain Balance Sheet Accounts Other Assets The Other assets on the Company’s accompanying condensed consolidated balance sheets include deferred compensation plan assets of $35.3 million and $31.2 million and deferred tax assets of $77.4 million and $79.1 million as of June 30, 2019 and December 31, 2018, respectively. Other Current Liabilities Other current liabilities consist of the following: June 30, 2019 December 31, 2018 (in millions) Accrued compensation $ 84.4 $ 137.9 Accrued service fees to China independent service providers 61.3 67.6 Accrued advertising, events, and promotion expenses 50.6 55.1 Current operating lease liabilities 32.9 — Advance sales deposits 59.7 65.6 Income taxes payable 6.0 40.0 Other accrued liabilities 190.7 181.2 Total $ 485.6 $ 547.4 Other Non-Current Liabilities The Other non-current liabilities on the Company’s accompanying condensed consolidated balance sheets include deferred compensation plan liabilities of $59.0 million and $51.3 million and deferred income tax liabilities of $7.2 million and $7.5 million as of June 30, 2019 and December 31, 2018, respectively. See Note 6, Employee Compensation Plans |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. Accordingly, as permitted by Article 10 of the SEC’s Regulation S-X, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The condensed consolidated balance sheet as of December 31, 2018 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP, as permitted by Article 10 of the SEC’s Regulation S-X. The Company’s unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 include Herbalife Nutrition Ltd. and all of its direct and indirect subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s unaudited condensed consolidated financial statements as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, or the 2018 10-K. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. |
Reclassification | Reclassifications Certain reclassifications were made to the prior period condensed consolidated statement of cash flows to conform to the current period presentation. |
Recently Adopted Pronouncements | Recently Adopted Pronouncements In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842) $189.1 million and total operating lease right-of-use assets of $176.9 million, net of certain deferred rent liabilities and prepaid rent, which had no impact to the Company’s condensed consolidated statements of cash flows. See Note 4, Leases , for additional information. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities . This ASU improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and makes certain targeted improvements to simplify the application of existing hedge accounting guidance. The Company has elected to record changes in the fair value of amounts excluded from the assessment of effectiveness currently in earnings. The adoption of this guidance during the first quarter of 2019 did not have a material impact on the Company’s condensed consolidated financial statements . In February 2018, the FASB issued ASU No. 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220) . This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for tax effects of items within accumulated other comprehensive income, or stranded tax effects, resulting from the Tax Cuts and Jobs Act and requires certain disclosures about those stranded tax effects. The Company has elected to not reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings . In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. . In November 2018, SEC Release No. 33-10532, Disclosure Update and Simplification , which amended and simplified certain disclosure requirements including the requirement to present an analysis of changes in shareholders’ equity for interim periods, became effective. The Company has included a reconciliation of the changes in its shareholders' deficit in Note 11, Shareholders’ Deficit . |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU changes the impairment model for most financial assets, requiring the use of an expected loss model which requires entities to estimate the lifetime expected credit loss on financial assets measured at amortized cost. Such credit losses will be recorded as an allowance to offset the amortized cost of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In addition, The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment condensed In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements on fair value measurements in Topic 820 based on the consideration of costs and benefits to promote the appropriate exercise and discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In August 2018, the FASB issued 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 ASU removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant. The amendments in this update are effective for reporting periods beginning after December 15, 2020, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 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 ASU clarifies the accounting for implementation costs of a hosting arrangement that is a service contract and aligns that accounting, regardless of whether the arrangement conveys a license to the hosted software. The amendments in this update are effective for reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. |
Revenue Recognition | Revenue Recognition The Company’s net sales consist of product sales. In general, the Company's performance obligation is to transfer its products to its Members. The Company generally recognizes revenue when product is delivered to its Members. For China independent service providers and for third-party importers utilized in certain other countries where sales historically have not been material, the Company recognizes revenue based on the Company’s estimate of when the service provider or third-party importer sells the products because the Company is deemed to be the principal party of these product sales due to the additional selling and operating requirements relating to pricing of products, conducting business with physical locations, and other selling and marketing activities required of the service providers and third-party importers. The Company’s Members, excluding its China independent service providers, may receive distributor allowances, which are comprised of discounts, rebates, and wholesale commission payments from the Company. Distributor allowances resulting from the Company’s sales of its products to its Members are recorded against net sales because the distributor allowances represent discounts from the suggested retail price. The Company compensates its sales leader Members with royalty overrides for services rendered, relating to the development, retention, and management of their sales organizations. Royalty overrides are payable based on achieved sales volume. Royalty overrides are classified as an operating expense reflecting the services provided to the Company. The Company compensates its China independent service providers and third-party importers utilized in certain other countries for providing marketing, selling, and customer support services. As the Company is the principal party of the product sales as described above, the service fees payable to China independent service providers and the compensation received by third-party importers for the services they provide are recorded in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income. The Company recognizes revenue when it delivers products to its United States Members; distributor allowances, inclusive of discounts and wholesale commissions, are recorded as a reduction to net sales; and royalty overrides are classified as an operating expense. Shipping and handling services relating to product sales are recognized as fulfillment activities on the Company’s performance obligation to transfer products and are therefore recorded within net sales as part of product sales and are not considered as separate revenues. Shipping and handling costs paid by the Company are included in cost of sales. The Company presents sales taxes collected from customers on a net basis. The Company generally receives the net sales price in cash or through credit card payments at the point of sale. Accounts receivable consist principally of credit card receivables arising from the sale of products to the Company’s Members, and its collection risk is reduced due to geographic dispersion. Credit card receivables were $72.4 million and $52.7 million as of June 30, 2019 and December 31, 2018, respectively. Substantially all credit card receivables were current as of June 30, 2019 and December 31, 2018. The Company recorded $0.5 million and $0.4 million during the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $0.5 million during the six months ended June 30, 2019 and 2018, respectively, in bad-debt expense related to allowances for the Company’s receivables. As of June 30, 2019 and December 31, 2018, the Company’s allowance for doubtful accounts was $1.6 million and $1.5 million, respectively. As of June 30, 2019 and December 31, 2018, the majority of the Company’s total outstanding accounts receivable were current. The Company records advance sales deposits when payment is received but revenue has not yet been recognized. In the majority of the Company’s markets, advance sales deposits are generally recorded to income when the product is delivered to its Members. Additionally, advance sales deposits also include deferred revenues due to the timing of revenue recognition for products sold through China independent service providers. The estimated deferral period for advance sales deposits is generally within one week. During the six months ended June 30, 2019, the Company recognized substantially all of the revenues that were included within advance sales deposits as of December 31, 2018 and any remaining such balance was not material as of June 30, 2019. Advance sales deposits are included in Other current liabilities on the Company’s condensed consolidated balance sheets. See Note 14, Detail of Certain Balance Sheet Accounts In general, if a Member returns product to the Company on a timely basis, they may obtain replacement product from the Company for such returned products. In addition, in general the Company maintains a buyback program pursuant to which it will repurchase products sold to a Member who has decided to leave the business. Allowances for product returns, primarily in connection with the Company’s buyback program, are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Allowances for product returns were $4.8 million and $4.9 million as of June 30, 2019 and December 31, 2018, respectively. The Company’s products are grouped in five principal categories: weight management; targeted nutrition; energy, sports, and fitness; outer nutrition; and literature and promotional items. However, the effect of economic factors on the nature, amount, timing, and uncertainty of revenue recognition and cash flows are similar among all five product categories. The Company defines its operating segments through six geographic regions. The effect of economic factors on the nature, amount, timing, and uncertainty of revenue recognition and cash flows are similar among the regions with the Company’s Primary Reporting Segment. See Note 7, Segment Information |
Distributor Compensation - U.S. | Distributor Compensation – U.S. In the U.S., distributor compensation, including Royalty overrides, is capped if the Company does not meet an annual requirement as described in the consent order discussed in more detail in Note 6, Contingencies |
Other Operating Income | Other Operating Income To encourage local investment and operations, governments in various China provinces conduct grant programs. The Company applied for and received several such grants in China. Government grants are recorded into income when a legal right to the grant exists, there is a reasonable assurance that the grant proceeds will be received, and the substantive conditions under which the grants were provided have been met. Generally, these substantive conditions are the Company maintaining operations and paying certain taxes in the relevant province and obtaining government approval by completing an annual application process. The Company believes the continuing obligation with respect to the funds is a general requirement that they are used only for its business in China. The Company did not recognize any government grant income related to its regional headquarters and distribution centers within China during the three months ended June 30, 2019. The Company recognized government grant income related to its regional headquarters and distribution centers within China of approximately $1.7 million during the three months ended June 30, 2018 and $21.3 million and $17.9 million during the six months ended June 30, 2019 and 2018, respectively, in other operating income within its condensed consolidated statements of income. The Company intends to continue applying for government grants in China when programs are available; however, there is no assurance that the Company will receive grants in future periods. During the six months ended June 30, 2019, the Company also recognized $6.0 million in other operating income related to the finalization of insurance recoveries in connection with the flooding at one of its warehouses in Mexico during September 2017, which damaged certain of the Company’s inventory stored within the warehouse. See Note 7, Contingencies |
Other (Income) Expense, Net | Other (Income) Expense, Net During the three months ended June 30, 2019, the Company recognized a gain of $5.9 million on the revaluation of the non-transferable contractual contingent value right, or CVR, provided for each share tendered in the October 2017 modified Dutch auction tender offer (See Note 11, Shareholders’ Deficit During the six months ended June 30, 2019, the Company recognized a gain of $14.4 million on the revaluation of the CVR in other (income) expense, net within its condensed consolidated statements of income. During the six months ended June 30, 2018, the Company recognized a loss of $16.0 million on the revaluation of the CVR and a $13.1 million loss on extinguishment of $475.0 million aggregate principal amount of the Company’s convertible senior notes due 2019 (See Note 5, Long-Term Debt These non-cash expenses are included as non-cash adjustments to net income in the Company’s cash flows from operating activities within its condensed consolidated statements of cash flows. |
Restricted Cash | Restricted The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets that sum to the total of the same such amounts shown in the Company’s condensed consolidated statements of cash flows: June 30, 2019 December 31, 2018 (in millions) Cash and cash equivalents $ 1,254.9 $ 1,198.9 Restricted cash included in Prepaid expenses and other current assets 1.7 3.3 Restricted cash included in Other assets 5.7 12.8 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 1,262.3 $ 1,215.0 The majority of the Company’s consolidated restricted cash is held by certain of its foreign entities and consists of cash deposits that are required due to the business operating requirements in those jurisdictions. |
Segment Reporting | The Company is a nutrition company that sells a wide range of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition products. The Company’s products are manufactured by the Company in its Changsha, Hunan, China extraction facility; Suzhou, China facility; Nanjing, China facility; Lake Forest, California facility; and Winston-Salem, North Carolina facility, as well as by third-party providers, and then are sold to Members who consume and sell Herbalife products to retail consumers or other Members. Revenues reflect sales of products by the Company to its Members and are categorized based on geographic location. As of June 30, 2019, the Company sold products in 94 countries throughout the world and was organized and managed by six geographic regions: North America, Mexico, South and Central America, EMEA, Asia Pacific, and China The Company defines its operating segments as those geographical operations. |
Derivatives and Hedging Policies | Foreign Currency Instruments The Company designates certain foreign currency derivatives, primarily comprised of foreign currency forward contracts, as freestanding derivatives for which hedge accounting does not apply. The changes in the fair market value of these freestanding derivatives are included in selling, general, and administrative expenses in the Company’s condensed consolidated statements of income. The Company primarily uses freestanding foreign currency derivatives to hedge foreign currency-denominated intercompany transactions and to partially mitigate the impact of foreign currency fluctuations. The fair value of the freestanding foreign currency derivatives is based on third-party quotes. The Company’s foreign currency derivative contracts are generally executed on a monthly basis. The Company designates as cash flow hedges those foreign currency forward contracts it enters into to hedge forecasted inventory purchases and intercompany management fees that are subject to foreign currency exposures. Forward contracts are used to hedge forecasted inventory purchases over specific months. Changes in the fair value of these forward contracts, excluding forward points, designated as cash flow hedges are recorded as a component of accumulated other comprehensive loss within shareholders’ deficit, and are recognized in cost of sales in the condensed consolidated statement of income during the period which approximates the time the hedged inventory is sold. The Company also hedges forecasted intercompany management fees over specific months. These contracts allow the Company to sell Euros in exchange for U.S. dollars at specified contract rates. Changes in the fair value of these forward contracts, excluding forward points, designated as cash flow hedges are recorded as a component of accumulated other comprehensive loss within shareholders’ deficit, and are recognized in selling, general, and administrative expenses within the Company’s condensed consolidated statement of income during the period when the hedged item and underlying transaction affect earnings. |
Fair Value Measurement | The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the asset or liability. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash for Balance Sheets and Cash Flows | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company’s condensed consolidated balance sheets that sum to the total of the same such amounts shown in the Company’s condensed consolidated statements of cash flows: June 30, 2019 December 31, 2018 (in millions) Cash and cash equivalents $ 1,254.9 $ 1,198.9 Restricted cash included in Prepaid expenses and other current assets 1.7 3.3 Restricted cash included in Other assets 5.7 12.8 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 1,262.3 $ 1,215.0 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Classes of Inventory | The following are the major classes of inventory: June 30, 2019 December 31, 2018 (in millions) Raw materials $ 56.2 $ 51.9 Work in process 6.9 7.1 Finished goods 363.5 322.8 Total $ 426.6 $ 381.8 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Summary of Lease Assets and Liabilities Recognized Within Condensed Consolidated Balance Sheets | Leases with an initial term of twelve months or less are not recorded on the Company’s condensed consolidated balance sheets, and the Company does not separate nonlease components from lease components. The Company’s lease assets and liabilities recognized within its condensed consolidated balance sheets were as follows: June 30, 2019 Balance Sheet Location (in millions) ASSETS: Operating lease right-of-use assets $ 180.0 Operating lease right-of-use assets Finance lease right-of-use assets 0.6 Property, plant, and equipment, at cost, net of accumulated depreciation and amortization(1) Total lease assets $ 180.6 LIABILITIES: Current: Operating lease liabilities $ 32.9 Other current liabilities Finance lease liabilities 0.4 Current portion of long-term debt Non-current: Operating lease liabilities 161.0 Non-current operating lease liabilities Finance lease liabilities 0.3 Long-term debt, net of current portion Total lease liabilities $ 194.6 (1) Finance lease assets are recorded net of accumulated amortization of $1.1 million as of June 30, 2019. |
Summary of Lease Cost Recognized Over the Lease Term | Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost are as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 (in millions) Operating lease cost(1)(2) $ 16.5 $ 32.3 Finance lease cost Amortization of right-of-use assets 0.1 0.2 Interest on lease liabilities — — Net lease cost $ 16.6 $ 32.5 (1) Includes short-term leases and variable lease costs, which were $3.2 million and $0.3 million, respectively, for the three months ended June 30, 2019 and $5.9 million and $0.6 million, respectively, for the six months ended June 30, 2019. Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. (2) Amounts include $15.6 million and $30.6 million for the three and six months ended June 30, 2019, respectively, recorded to selling, general, and administrative expenses within the Company’s condensed consolidated statements of income and $0.9 million and $1.7 million for the three and six months ended June 30, 2019, respectively, capitalized as part of the cost of another asset, which includes inventories. During the three and six months ended June 30, 2018, the Company recognized rental expense of $16.2 million and $30.9 million, respectively, in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income pursuant to FASB ASC Topic 840, Leases |
Summary of Annual Scheduled Lease Payments | As of June 30, 2019, annual scheduled lease payments were as follows: Operating Leases(1) Finance Leases(2) (in millions) 2019 $ 15.3 $ 0.2 2020 42.3 0.4 2021 32.9 0.1 2022 26.6 — 2023 15.6 — Thereafter 127.4 — Total lease payments 260.1 0.7 Less: imputed interest 66.2 — Present value of lease liabilities $ 193.9 $ 0.7 (1) Operating lease payments exclude $0.3 million of legally binding minimum lease payments for leases signed but not yet commenced. (2) Finance lease payments exclude $0.6 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Future Minimum Rental Commitments for Non-Cancelable Operating Leases | As of December 31, 2018, future minimum rental commitments for non-cancelable operating leases were as follows: Operating Leases (in millions) 2019 $ 43.1 2020 36.3 2021 27.4 2022 23.0 2023 12.5 Thereafter 111.4 Total $ 253.7 |
Summary of Weighted-average Remaining Lease Term and Weighted-average Discount Rate | The weighted-average remaining lease term and weighted-average discount rate used to calculate the present value of lease liabilities are as follows: June 30, 2019 Weighted-average remaining lease term: Operating leases 9.0 years Finance leases 1.7 years Weighted-average discount rate: Operating leases 5.8 % Finance leases 5.7 % |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases is as follows: Six Months Ended June 30, 2019 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 23.2 Operating cash flows for finance leases — Financing cash flows for finance leases 0.2 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 24.2 Finance leases — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following: June 30, 2019 December 31, 2018 (in millions) Borrowings under senior secured credit facility, carrying value $ 974.5 $ 983.6 2.00% convertible senior notes due 2019, carrying value of liability component 671.2 656.4 2.625% convertible senior notes due 2024, carrying value of liability component 426.4 416.0 7.250% senior notes due 2026, carrying value 395.0 394.8 Other 2.8 3.0 Total 2,469.9 2,453.8 Less: current portion 693.7 678.9 Long-term portion $ 1,776.2 $ 1,774.9 |
Schedule of Redemption Prices Express as a Percentage of Principal Amount | Furthermore, at any time on or after August 15, 2021, the Company may redeem all or part of the 2026 Notes at the following redemption prices, expressed as percentages of principal amount, plus accrued and unpaid interest thereon to the redemption date, if redeemed during the twelve-month period beginning on August 15 of the years indicated below Percentage 2021 103.625 % 2022 101.813 % 2023 and thereafter 100.000 % |
Annual Scheduled Principal Payments of Debt | As of June 30, 2019, annual scheduled principal payments of debt were as follows: Principal Payments (in millions) 2019 $ 687.3 2020 22.0 2021 26.3 2022 27.8 2023 188.7 Thereafter 1,660.6 Total $ 2,612.7 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The operating information for the two reportable segments is as follows: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Net sales: Primary Reporting Segment $ 1,053.1 $ 998.7 $ 2,074.9 $ 1,963.4 China 187.0 286.8 337.4 499.0 Total net sales $ 1,240.1 $ 1,285.5 $ 2,412.3 $ 2,462.4 Contribution margin(1): Primary Reporting Segment $ 461.5 $ 440.7 $ 899.5 $ 855.0 China(2) 168.6 259.6 301.7 445.0 Total contribution margin $ 630.1 $ 700.3 $ 1,201.2 $ 1,300.0 Selling, general, and administrative expenses(2) 477.0 510.2 912.4 970.3 Other operating income — (1.7 ) (27.3 ) (17.9 ) Interest expense, net 36.3 44.3 72.4 84.2 Other (income) expense, net (5.9 ) 4.7 (14.4 ) 29.1 Income before income taxes 122.7 142.8 258.1 234.3 Income taxes 46.2 48.4 85.3 57.8 Net income $ 76.5 $ 94.4 $ 172.8 $ 176.5 (1) Contribution margin consists of net sales less cost of sales and Royalty overrides. For the China segment, contribution margin does not include service fees to China independent service providers. (2) Service fees to China independent service providers totaling $108.2 million and $151.7 million for the three months ended June 30, 2019 and 2018, respectively, and $184.7 million and $262.6 million for the six months ended June 30, 2019 and 2018, respectively, are included in selling, general, and administrative expenses. |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | The following table sets forth net sales by geographic area: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Net sales: United States $ 272.0 $ 256.4 $ 522.7 $ 481.9 China 187.0 286.8 337.4 499.0 Mexico 121.2 118.2 240.5 232.2 Others 659.9 624.1 1,311.7 1,249.3 Total net sales $ 1,240.1 $ 1,285.5 $ 2,412.3 $ 2,462.4 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity Under Share-Based Compensation Plans | The following table summarizes the activity for stock appreciation rights, or SARs, under all share-based compensation plans for the six months ended June 30, 2019: Number of Awards Weighted-Average Exercise Price Per Award Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value(1) (in thousands) (in millions) Outstanding as of December 31, 2018(2)(3) 8,470 $ 26.82 6.1 years $ 272.1 Granted — $ — Exercised(4) (594 ) $ 24.21 Forfeited(5) (238 ) $ 29.67 Outstanding as of June 30, 2019(2)(3) 7,638 $ 26.94 5.6 years $ 120.9 Exercisable as of June 30, 2019(6) 6,338 $ 26.57 5.2 years $ 102.6 Vested and expected to vest as of June 30, 2019 7,633 $ 26.94 5.6 years $ 120.8 (1) The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards. (2) Includes less than 0.1 million market condition SARs as of both June 30, 2019 and December 31, 2018. (3) Includes 2.9 million and 3.1 million performance condition SARs as of June 30, 2019 and December 31, 2018, respectively, which represent the maximum amount that can vest. (4) Includes less than 0.1 million performance condition SARs. ( 5 ) Includes 0.2 million performance condition SARs. ( 6 ) Includes less than 0.1 million market condition and 2.4 million performance condition SARs. The following table summarizes the activities for stock units under all share-based compensation plans for the six months ended June 30, 2019: Number of Shares Weighted-Average Grant Date Fair Value Per Share (in thousands) Outstanding and nonvested as of December 31, 2018(1) 1,611 $ 42.09 Granted(2) 947 $ 55.71 Vested (195 ) $ 45.60 Forfeited(3) (442 ) $ 40.28 Outstanding and nonvested as of June 30, 2019(1) 1,921 $ 48.87 Expected to vest as of June 30, 2019(4) 1,668 $ 48.98 (1) Includes 560,986 and 708,836 performance-based stock unit awards as of June 30, 2019 and December 31, 2018, respectively, which represents the maximum amount that can vest. (2) Includes 209,182 performance-based stock unit awards, which represents the maximum amount that can vest. (3) Includes 357,032 performance-based stock unit awards. ( 4 ) Includes 353,562 performance-based stock unit awards. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Gains (Losses) Relating to Derivative Instruments Recorded in Other Comprehensive (loss) Income | The following table summarizes gains (losses) relating to derivative instruments recorded in other comprehensive (loss) income during the three and six months ended June 30, 2019 and 2018: Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ — $ 4.5 $ (1.0 ) $ 0.5 |
Effect of Cash Flow Hedging Relationships on Condensed Consolidated Statements of Income | The effect of cash flow hedging relationships on the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018 was as follows: Location and Amount of Gain (Loss) Recognized in Income on Cash Flow Hedging Relationships Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses Cost of sales Selling, general, and administrative expenses (in millions) Total amounts presented in the condensed consolidated statements of income $ 243.2 $ 477.0 $ 235.4 $ 510.2 $ 484.8 $ 912.4 $ 475.3 $ 970.3 Foreign exchange currency contracts relating to inventory hedges: Amount of gain reclassified from accumulated other comprehensive loss to income 0.1 — 1.5 — 0.1 — 2.0 — Amount of (loss) gain excluded from assessment of effectiveness recognized in income(1) (0.6 ) — — (0.8 ) (1.3 ) — — (3.1 ) Foreign exchange currency contracts relating to intercompany management fee hedges: Amount of gain (loss) reclassified from accumulated other comprehensive loss to income — 0.4 — (1.6 ) — 0.8 — (4.0 ) Amount of gain excluded from assessment of effectiveness recognized in income — 0.1 — 0.6 — 0.1 — 0.9 (1) As a result of adopting ASU 2017-12 during the first quarter of 2019, for the three and six months ended June 30, 2019, the Company recognized gains (losses) excluded from the assessment of effectiveness on foreign exchange currency contracts relating to inventory hedges in cost of sales within its condensed consolidated statements of income. Prior to the adoption of ASU 2017-12, for the three and six months ended June 30, 2018, the Company recognized gains (losses) excluded from the assessment of effectiveness on foreign exchange currency contracts relating to inventory hedges in selling, general, and administrative expenses within its condensed consolidated statements of income. |
Gains (Losses) Relating to Derivative Instruments Not Designated As Hedging Instruments Recorded to Income | The following table summarizes gains (losses) recorded to income relating to derivative instruments not designated as hedging instruments during the three and six months ended June 30, 2019 and 2018: Amount of (Loss) Gain Recognized in Income Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Location of (Loss) Gain Recognized in Income (in millions) Derivatives not designated as hedging instruments: Foreign exchange currency contracts $ (2.5 ) $ 1.1 $ (0.2 ) $ (1.6 ) Selling, general, and administrative expenses |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Summary of Changes in Shareholders' Deficit | Changes in shareholders’ deficit for the three months ended June 30, 2019 and 2018 were as follows: Three Months Ended June 30, 2019 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 333.8 $ (204.1 ) $ (430.0 ) $ (629.1 ) Issuance of 0.2 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 0.9 0.9 Additional capital from share-based compensation 9.9 9.9 Repurchases of 0.1 common shares — (1.4 ) (1.4 ) Reclassification from temporary equity 11.3 11.3 Net income 76.5 76.5 Foreign currency translation adjustment, net of income taxes of $(1.5) (1.8 ) (1.8 ) Unrealized loss on derivatives, net of income taxes of $— (0.5 ) (0.5 ) Ending balance $ 0.1 $ (328.9 ) $ 354.5 $ (206.4 ) $ (353.5 ) $ (534.2 ) Three Months Ended June 30, 2018 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 425.4 $ (147.3 ) $ (168.3 ) $ (219.0 ) Issuance of 1.2 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 0.7 0.7 Additional capital from share-based compensation 10.4 10.4 Repurchases of 12.0 common shares — (59.0 ) (572.5 ) (631.5 ) Forward Counterparties' delivery of 8.4 common shares to the Company — — — Unwind of capped call transactions 11.9 11.9 Net income 94.4 94.4 Foreign currency translation adjustment, net of income taxes of $(3.1) (50.8 ) (50.8 ) Unrealized loss on derivatives, net of income taxes of $— 4.5 4.5 Ending balance $ 0.1 $ (328.9 ) $ 389.4 $ (193.6 ) $ (646.4 ) $ (779.4 ) Changes in shareholders’ deficit for the six months ended June 30, 2019 and 2018 were as follows: Six Months Ended June 30, 2019 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.9 ) $ 341.5 $ (209.8 ) $ (526.3 ) $ (723.4 ) Issuance of 0.6 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 1.5 1.5 Additional capital from share-based compensation 20.5 20.5 Repurchases of 0.2 common shares — (9.0 ) (9.0 ) Forward Counterparties' delivery of 2.0 common shares to the Company — — — Net income 172.8 172.8 Foreign currency translation adjustment, net of income taxes of $(1.0) 5.3 5.3 Unrealized loss on derivatives, net of income taxes of $— (1.9 ) (1.9 ) Ending balance $ 0.1 $ (328.9 ) $ 354.5 $ (206.4 ) $ (353.5 ) $ (534.2 ) Six Months Ended June 30, 2018 Common Shares Treasury Stock Paid-in Capital in Excess of Par Value Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Deficit (in millions) Beginning balance $ 0.1 $ (328.6 ) $ 407.3 $ (165.4 ) $ (248.1 ) $ (334.7 ) Issuance of 3.9 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other — 1.2 1.2 Additional capital from share-based compensation 20.2 20.2 Repurchases of 13.1 common shares — (0.3 ) (108.7 ) (572.4 ) (681.4 ) Forward Counterparties' delivery of 8.4 common shares to the Company — — — Issuance of convertible senior notes 136.5 136.5 Repurchase of convertible senior notes (123.0 ) (123.0 ) Unwind of capped call transactions 55.9 55.9 Net income 176.5 176.5 Foreign currency translation adjustment, net of income taxes of $(2.0) (29.6 ) (29.6 ) Unrealized loss on derivatives, net of income taxes of $— 1.4 1.4 Cumulative effect of accounting change (2.4 ) (2.4 ) Ending balance $ 0.1 $ (328.9 ) $ 389.4 $ (193.6 ) $ (646.4 ) $ (779.4 ) |
Summary of Changes in Accumulated Other Comprehensive Loss | The following table summarizes changes in accumulated other comprehensive loss by component during the three months ended June 30, 2019 and 2018: Changes in Accumulated Other Comprehensive Loss by Component Three Months Ended June 30, 2019 June 30, 2018 Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total (in millions) Beginning balance $ (204.5 ) $ 0.4 $ (204.1 ) $ (149.4 ) $ 2.1 $ (147.3 ) Other comprehensive (loss) income before reclassifications, net of tax (1.8 ) — (1.8 ) (50.8 ) 4.4 (46.4 ) Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) — (0.5 ) (0.5 ) — 0.1 0.1 Total other comprehensive (loss) income, net of reclassifications (1.8 ) (0.5 ) (2.3 ) (50.8 ) 4.5 (46.3 ) Ending balance $ (206.3 ) $ (0.1 ) $ (206.4 ) $ (200.2 ) $ 6.6 $ (193.6 ) (1) See Note 10, Derivative Instruments and Hedging Activities The following table summarizes changes in accumulated other comprehensive loss by component during the six months ended June 30, 2019 and 2018: Changes in Accumulated Other Comprehensive Loss by Component Six Months Ended June 30, 2019 June 30, 2018 Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total Foreign Currency Translation Adjustments Unrealized Gain (Loss) on Derivatives Total (in millions) Beginning balance $ (211.6 ) $ 1.8 $ (209.8 ) $ (170.6 ) $ 5.2 $ (165.4 ) Other comprehensive income (loss) before reclassifications, net of tax 5.3 (1.0 ) 4.3 (29.6 ) 0.5 (29.1 ) Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) — (0.9 ) (0.9 ) — 0.9 0.9 Total other comprehensive income (loss), net of reclassifications 5.3 (1.9 ) 3.4 (29.6 ) 1.4 (28.2 ) Ending balance $ (206.3 ) $ (0.1 ) $ (206.4 ) $ (200.2 ) $ 6.6 $ (193.6 ) (1) See Note 10, Derivative Instruments and Hedging Activities |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following are the common share amounts used to compute the basic and diluted earnings per share for each period: Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (in millions) Weighted-average shares used in basic computations 137.4 142.3 137.2 144.0 Dilutive effect of exercise of equity grants outstanding 3.6 6.8 4.2 7.1 Dilutive effect of 2019 Convertible Notes 1.4 2.8 2.8 1.9 Weighted-average shares used in diluted computations 142.4 151.9 144.2 153.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Derivative Assets and Liabilities Measured at Fair Value | The Company’s derivative assets and liabilities are measured at fair value and consisted of Level 2 inputs and their amounts are shown below at their gross values as of June 30, 2019 and December 31, 2018: Significant Other Observable Inputs (Level 2) Fair Value as of June 30, 2019 Significant Other Observable Inputs (Level 2) Fair Value as of December 31, 2018 Balance Sheet Location (in millions) ASSETS: Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ 0.3 $ 0.5 Prepaid expenses and other current assets Derivatives not designated as hedging instruments: Foreign exchange currency contracts 0.8 2.8 Prepaid expenses and other current assets $ 1.1 $ 3.3 LIABILITIES: Derivatives designated as hedging instruments: Foreign exchange currency contracts relating to inventory and intercompany management fee hedges $ 0.8 $ 0.7 Other current liabilities Derivatives not designated as hedging instruments: Foreign exchange currency contracts 3.2 1.0 Other current liabilities $ 4.0 $ 1.7 |
Schedule of Reconciliation of CVR Liability | The following is a reconciliation of the CVR liability reported in Other current liabilities within the Company’s condensed consolidated balance sheet as of June 30, 2019: Contingent Value Right (in millions) Fair value as of December 31, 2018 $ 15.7 Net unrealized gain(1) (14.4 ) Fair value as of June 30, 2019 $ 1.3 (1) Unrealized gains and losses related to the revaluation of the CVR are recorded in other (income) expense, net within the Company’s condensed consolidated statements of income. |
Offsetting of Derivative Assets | The following tables summarize the offsetting of the fair values of the Company’s derivative assets and derivative liabilities for presentation in the Company’s condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018: Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Balance Sheet Net Amounts of Assets Presented in the Balance Sheet (in millions) June 30, 2019 Foreign exchange currency contracts $ 1.1 $ (1.1 ) $ — Total $ 1.1 $ (1.1 ) $ — December 31, 2018 Foreign exchange currency contracts $ 3.3 $ (1.2 ) $ 2.1 Total $ 3.3 $ (1.2 ) $ 2.1 |
Offsetting of Derivative Liabilities | Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Liabilities Presented in the Balance Sheet (in millions) June 30, 2019 Foreign exchange currency contracts $ 4.0 $ (1.1 ) $ 2.9 Total $ 4.0 $ (1.1 ) $ 2.9 December 31, 2018 Foreign exchange currency contracts $ 1.7 $ (1.2 ) $ 0.5 Total $ 1.7 $ (1.2 ) $ 0.5 |
Detail of Certain Balance She_2
Detail of Certain Balance Sheet Accounts (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following: June 30, 2019 December 31, 2018 (in millions) Accrued compensation $ 84.4 $ 137.9 Accrued service fees to China independent service providers 61.3 67.6 Accrued advertising, events, and promotion expenses 50.6 55.1 Current operating lease liabilities 32.9 — Advance sales deposits 59.7 65.6 Income taxes payable 6.0 40.0 Other accrued liabilities 190.7 181.2 Total $ 485.6 $ 547.4 |
Organization - Additional Infor
Organization - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019Segment | |
Organization And Description Of Business [Abstract] | |
Number of geographic regions | 6 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)SegmentProduct | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | ||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Total operating lease liabilities | [1] | $ 193,900,000 | $ 193,900,000 | |||||
Total operating lease right-of-use assets | 180,000,000 | 180,000,000 | ||||||
Credit card receivables | 72,400,000 | 72,400,000 | $ 52,700,000 | |||||
Bad-debt expense | 500,000 | $ 400,000 | 1,100,000 | $ 500,000 | ||||
Allowance for doubtful accounts | 1,600,000 | 1,600,000 | 1,500,000 | |||||
Allowances for product returns | $ 4,800,000 | $ 4,900,000 | ||||||
Number of geographic regions | Segment | 6 | |||||||
Number of product categories | Product | 5 | |||||||
Other operating income | 0 | 1,700,000 | $ 27,300,000 | 17,900,000 | ||||
Loss on extinguishment of debt | 13,100,000 | |||||||
October 2017 Dutch Auction Tender Offer [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Gain (loss) recognized in other expense | 5,900,000 | (4,700,000) | 14,400,000 | (16,000,000) | ||||
Convertible Senior Notes Due 2019 [Member] | Repurchase of 2019 Convertible Notes [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Loss on extinguishment of debt | $ 13,100,000 | 13,100,000 | ||||||
Repurchase of convertible notes | $ 475,000,000 | 475,000,000 | ||||||
China [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Other operating income | $ 0 | $ 1,700,000 | 21,300,000 | $ 17,900,000 | ||||
Mexico [Member] | Other Operating Income [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Insurance recoveries | $ 6,000,000 | |||||||
Accounting Standards Update 2016-02 [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Total operating lease liabilities | $ 189,100,000 | |||||||
Total operating lease right-of-use assets | $ 176,900,000 | |||||||
[1] | Operating lease payments exclude $0.3 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash for Balance Sheets and Cash Flows (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Cash, Cash Equivalents and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 1,254.9 | $ 1,198.9 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 1,262.3 | 1,215 | $ 855.1 | $ 1,295.5 |
Prepaid expenses and other current assets [Member] | ||||
Cash, Cash Equivalents and Restricted Cash [Line Items] | ||||
Restricted cash | 1.7 | 3.3 | ||
Other Assets [Member] | ||||
Cash, Cash Equivalents and Restricted Cash [Line Items] | ||||
Restricted cash | $ 5.7 | $ 12.8 |
Inventories - Classes of Invent
Inventories - Classes of Inventory (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 56.2 | $ 51.9 |
Work in process | 6.9 | 7.1 |
Finished goods | 363.5 | 322.8 |
Total | $ 426.6 | $ 381.8 |
Leases - Additional Information
Leases - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease option to extend, description | In general, the Company’s leases include one or more options to renew, with renewal terms that generally vary from one to ten years. |
Leases - Summary of Lease Asset
Leases - Summary of Lease Assets and Liabilities Recognized Within Condensed Consolidated Balance Sheets (Detail) $ in Millions | Jun. 30, 2019USD ($) |
ASSETS | |
Operating lease right-of-use assets | $ 180 |
Finance lease right-of-use assets | $ 0.6 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Total lease assets | $ 180.6 |
Current liabilities: | |
Operating lease liabilities | $ 32.9 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent |
Finance lease liabilities | $ 0.4 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtCurrent |
Non-current: | |
Non-current operating lease liabilities | $ 161 |
Finance lease liabilities | $ 0.3 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtNoncurrent |
Total lease liabilities | $ 194.6 |
Leases - Summary of Lease Ass_2
Leases - Summary of Lease Assets and Liabilities Recognized Within Condensed Consolidated Balance Sheets (Parenthetical) (Detail) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Finance lease, accumulated amortization | $ 1.1 |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost Recognized Over the Lease Term (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | ||
Leases [Abstract] | |||
Operating lease cost | [1],[2] | $ 16.5 | $ 32.3 |
Finance lease cost | |||
Amortization of right-of-use assets | 0.1 | 0.2 | |
Net lease cost | $ 16.6 | $ 32.5 | |
[1] | Amounts include $15.6 million and $30.6 million for the three and six months ended June 30, 2019, respectively, recorded to selling, general, and administrative expenses within the Company’s condensed consolidated statements of income and $0.9 million and $1.7 million for the three and six months ended June 30, 2019, respectively, capitalized as part of the cost of another asset, which includes inventories. During the three and six months ended June 30, 2018, the Company recognized rental expense of $16.2 million and $30.9 million, respectively, in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income pursuant to FASB ASC Topic 840, Leases | ||
[2] | Includes short-term leases and variable lease costs, which were $3.2 million and $0.3 million, respectively, for the three months ended June 30, 2019 and $5.9 million and $0.6 million, respectively, for the six months ended June 30, 2019. Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. |
Leases - Summary of Lease Cos_2
Leases - Summary of Lease Cost Recognized Over the Lease Term (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Leased Assets [Line Items] | |||||
Short-term lease payments | $ 3.2 | $ 5.9 | |||
Variable lease costs | 0.3 | 0.6 | |||
Operating lease cost | [1],[2] | 16.5 | 32.3 | ||
Capitalized cost of another asset included in inventories | 0.9 | 1.7 | |||
Selling, General and Administrative Expenses [Member] | |||||
Leased Assets [Line Items] | |||||
Operating lease cost | $ 15.6 | $ 30.6 | |||
Rental expense | $ 16.2 | $ 30.9 | |||
[1] | Amounts include $15.6 million and $30.6 million for the three and six months ended June 30, 2019, respectively, recorded to selling, general, and administrative expenses within the Company’s condensed consolidated statements of income and $0.9 million and $1.7 million for the three and six months ended June 30, 2019, respectively, capitalized as part of the cost of another asset, which includes inventories. During the three and six months ended June 30, 2018, the Company recognized rental expense of $16.2 million and $30.9 million, respectively, in selling, general, and administrative expenses within the Company’s condensed consolidated statements of income pursuant to FASB ASC Topic 840, Leases | ||||
[2] | Includes short-term leases and variable lease costs, which were $3.2 million and $0.3 million, respectively, for the three months ended June 30, 2019 and $5.9 million and $0.6 million, respectively, for the six months ended June 30, 2019. Variable lease costs, which include items such as real estate taxes, common area maintenance, and changes based on an index or rate, are not included in the calculation of the right-of-use assets and are recognized as incurred. |
Leases - Summary of Annual Sche
Leases - Summary of Annual Scheduled Lease Payments (Detail) $ in Millions | Jun. 30, 2019USD ($) | |
Leases [Abstract] | ||
2019 | $ 15.3 | [1] |
2020 | 42.3 | [1] |
2021 | 32.9 | [1] |
2022 | 26.6 | [1] |
2023 | 15.6 | [1] |
Thereafter | 127.4 | [1] |
Total lease payments | 260.1 | [1] |
Less: imputed interest | 66.2 | [1] |
Present value of lease liabilities | 193.9 | [1] |
2019 | 0.2 | [2] |
2020 | 0.4 | [2] |
2021 | 0.1 | [2] |
Total lease payments | 0.7 | [2] |
Present value of lease liabilities | $ 0.7 | [2] |
[1] | Operating lease payments exclude $0.3 million of legally binding minimum lease payments for leases signed but not yet commenced. | |
[2] | Finance lease payments exclude $0.6 million of legally binding minimum lease payments for leases signed but not yet commenced. |
Leases - Summary of Annual Sc_2
Leases - Summary of Annual Scheduled Lease Payments (Parenthetical) (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease legally binding minimum payments for leases not yet commenced | $ 0.3 |
Finance lease legally binding minimum payments for leases not yet commenced | $ 0.6 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Commitments for Non-Cancelable Operating Leases (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 43.1 |
2020 | 36.3 |
2021 | 27.4 |
2022 | 23 |
2023 | 12.5 |
Thereafter | 111.4 |
Total | $ 253.7 |
Leases - Summary of Weighted-av
Leases - Summary of Weighted-average Remaining Lease Term and Weighted-average Discount Rate (Detail) | Jun. 30, 2019 |
Weighted-average remaining lease term: | |
Operating leases | 9 years |
Finance leases | 1 year 8 months 12 days |
Weighted-average discount rate: | |
Operating leases | 5.80% |
Finance leases | 5.70% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows for operating leases | $ 23.2 |
Financing cash flows for finance leases | 0.2 |
Right-of-use assets obtained in exchange for new lease liabilities: | |
Operating leases | $ 24.2 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Feb. 28, 2014 |
Debt Instrument [Line Items] | ||||
Borrowings under senior secured credit facility, carrying value | $ 974.5 | $ 983.6 | ||
Other | 2.8 | 3 | ||
Total | 2,469.9 | 2,453.8 | ||
Less: current portion | 693.7 | 678.9 | ||
Long-term portion | 1,776.2 | 1,774.9 | ||
2.00% Convertible Senior Notes Due 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible senior notes, carrying value of liability component | 671.2 | 656.4 | ||
Total | $ 930.9 | |||
2.625% Convertible Senior Notes Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible senior notes, carrying value of liability component | 426.4 | 416 | ||
Total | $ 410.1 | |||
7.250% Senior Notes Due 2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior notes, carrying value | $ 395 | $ 394.8 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Long-Term Debt (Parenthetical) (Detail) | 1 Months Ended | 6 Months Ended | ||
Aug. 31, 2018 | Mar. 31, 2018 | Feb. 28, 2014 | Jun. 30, 2019 | |
2.00% Convertible Senior Notes Due 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate | 2.00% | 2.00% | ||
Debt instrument maturity date | Aug. 15, 2019 | Aug. 15, 2019 | ||
2.625% Convertible Senior Notes Due 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate | 2.625% | 2.625% | ||
Debt instrument maturity date | Mar. 15, 2024 | Mar. 15, 2024 | ||
7.250% Senior Notes Due 2026 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate | 7.25% | 7.25% | ||
Debt instrument maturity date | Aug. 15, 2026 | Aug. 15, 2026 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | Aug. 16, 2018USD ($) | Feb. 15, 2017USD ($) | Mar. 09, 2016USD ($) | May 04, 2015 | Aug. 31, 2018USD ($) | Mar. 31, 2018USD ($)$ / shares | Feb. 28, 2014USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)Day | Jun. 30, 2018USD ($) | Mar. 31, 2014USD ($) | Jun. 30, 2019USD ($)Dayd$ / shares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Mar. 09, 2011USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | $ 2,612,700,000 | $ 2,612,700,000 | ||||||||||||||
Loss on extinguishment of debt | $ 13,100,000 | |||||||||||||||
Borrowings under the senior secured credit facility | 974,500,000 | $ 983,600,000 | 974,500,000 | $ 983,600,000 | ||||||||||||
Interest expense | 42,400,000 | $ 49,100,000 | 84,800,000 | 93,700,000 | ||||||||||||
Paid-in-capital in excess of par value | 354,500,000 | 341,500,000 | 354,500,000 | 341,500,000 | ||||||||||||
Long-term debt | 2,469,900,000 | 2,453,800,000 | 2,469,900,000 | 2,453,800,000 | ||||||||||||
Convertible notes paid | 582,500,000 | |||||||||||||||
Letters of credit issued but undrawn | 38,000,000 | 38,000,000 | ||||||||||||||
Capped call transactions [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Capped call transactions with financial institutions | $ 123,800,000 | |||||||||||||||
Prepaid forward share repurchase transactions [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Forward share repurchase transactions amount | 685,800,000 | $ 685,800,000 | ||||||||||||||
Convertible Senior Notes Due 2019 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | 1,150,000,000 | 675,000,000 | $ 675,000,000 | 675,000,000 | 675,000,000 | |||||||||||
Deferred financing costs | 26,600,000 | |||||||||||||||
Aggregate principal amount of convertible senior notes issued | 1,000,000,000 | |||||||||||||||
Interest expense | 10,900,000 | 10,400,000 | 21,600,000 | 27,400,000 | ||||||||||||
Non-cash interest expense | 6,800,000 | 6,400,000 | 13,500,000 | 16,800,000 | ||||||||||||
Amortization of deferred financing costs | $ 600,000 | 600,000 | $ 1,300,000 | 1,600,000 | ||||||||||||
Additional principal amount of convertible notes | $ 150,000,000 | |||||||||||||||
Convertible notes, interest rate | 2.00% | 2.00% | 2.00% | |||||||||||||
Convertible notes maturity | Aug. 15, 2019 | Aug. 15, 2019 | ||||||||||||||
Convertible notes, conversion feature | Holders of the 2019 Convertible Notes may convert their notes at their option under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending March 31, 2014, if the last reported sale price of the Company’s common shares for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price for the 2019 Convertible Notes on each applicable trading day; (ii) during the five business-day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of 2019 Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Company’s common shares and the conversion rate for the 2019 Convertible Notes for each such day; or (iii) upon the occurrence of specified corporate events. On and after May 15, 2019, holders may convert their 2019 Convertible Notes at any time, regardless of the foregoing circumstances. | |||||||||||||||
Convertible notes, number of trading days of threshold limit (whether or not consecutive) | Day | 20 | 20 | ||||||||||||||
Convertible notes, number of trading days of threshold limit in consecutive days | Day | 30 | 30 | ||||||||||||||
Minimum percentage of common share price over conversion price for conversion | 130.00% | 130.00% | ||||||||||||||
Principal amount of convertible notes | $ 1,000 | $ 1,000 | ||||||||||||||
Minimum percentage of the product of common share price and conversion rate for convertible notes | 98.00% | |||||||||||||||
Convertible notes conversion rate | 23.1816 | 23.2245 | ||||||||||||||
Convertible notes conversion price | $ / shares | $ 43.14 | $ 43.06 | $ 43.06 | |||||||||||||
Paid-in-capital in excess of par value | $ 219,100,000 | 5,100,000 | ||||||||||||||
Long-term debt | $ 930,900,000 | |||||||||||||||
Effective interest rate on convertible notes | 6.20% | |||||||||||||||
Convertible notes paid | $ 583,500,000 | |||||||||||||||
Accrued interest | 1,000,000 | |||||||||||||||
Fair value of liability to convertible notes | $ 671,900,000 | $ 662,100,000 | $ 671,900,000 | 662,100,000 | ||||||||||||
Unamortized debt discount and debt issuance costs | 3,800,000 | 18,600,000 | 3,800,000 | 18,600,000 | ||||||||||||
Convertible senior notes, carrying value of liability component | 671,200,000 | 656,400,000 | 671,200,000 | 656,400,000 | ||||||||||||
Convertible Senior Notes Due 2019 [Member] | Repurchase of 2019 Convertible Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loss on extinguishment of debt | 13,100,000 | 13,100,000 | ||||||||||||||
Repurchase of convertible notes | 475,000,000 | 475,000,000 | ||||||||||||||
Fair value of liability to convertible notes | 459,400,000 | |||||||||||||||
Fair value of equity component to convertible notes | 123,000,000 | |||||||||||||||
Reduction to long-term debt representing liability component of convertible notes | 446,400,000 | |||||||||||||||
Reduction to additional paid-in capital representing equity component | 123,000,000 | |||||||||||||||
Convertible Senior Notes Due 2019 [Member] | Debt Issuance Costs [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Deferred financing costs | $ 21,500,000 | |||||||||||||||
Convertible Senior Notes Due 2024 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | 550,000,000 | 550,000,000 | 550,000,000 | 550,000,000 | ||||||||||||
Deferred financing costs | 12,900,000 | |||||||||||||||
Aggregate principal amount of convertible senior notes issued | $ 550,000,000 | |||||||||||||||
Interest expense | 8,900,000 | 8,500,000 | 17,700,000 | 9,300,000 | ||||||||||||
Non-cash interest expense | 4,900,000 | 4,500,000 | 9,800,000 | 5,000,000 | ||||||||||||
Amortization of deferred financing costs | $ 400,000 | 300,000 | $ 700,000 | 300,000 | ||||||||||||
Convertible notes, interest rate | 2.625% | 2.625% | 2.625% | |||||||||||||
Convertible notes maturity | Mar. 15, 2024 | Mar. 15, 2024 | ||||||||||||||
Convertible notes, conversion feature | Holders of the 2024 Convertible Notes may convert their notes at their option under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending June 30, 2018, if the last reported sale price of the Company’s common shares for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price for the 2024 Convertible Notes on each applicable trading day; (ii) during the five business-day period immediately after any five consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of 2024 Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Company’s common shares and the conversion rate for the 2024 Convertible Notes for each such day; (iii) if the Company calls the 2024 Convertible Notes for redemption; or (iv) upon the occurrence of specified corporate events. On and after December 15, 2023, holders may convert their 2024 Convertible Notes at any time, regardless of the foregoing circumstances. | |||||||||||||||
Convertible notes, number of trading days of threshold limit (whether or not consecutive) | d | 20 | |||||||||||||||
Convertible notes, number of trading days of threshold limit in consecutive days | d | 30 | |||||||||||||||
Minimum percentage of common share price over conversion price for conversion | 130.00% | |||||||||||||||
Principal amount of convertible notes | $ 1,000 | $ 1,000 | ||||||||||||||
Minimum percentage of the product of common share price and conversion rate for convertible notes | 98.00% | |||||||||||||||
Convertible notes conversion rate | 16.0056 | 16.0352 | ||||||||||||||
Convertible notes conversion price | $ / shares | $ 62.48 | $ 62.36 | $ 62.36 | |||||||||||||
Paid-in-capital in excess of par value | $ 139,900,000 | |||||||||||||||
Long-term debt | $ 410,100,000 | |||||||||||||||
Effective interest rate on convertible notes | 8.40% | |||||||||||||||
Fair value of liability to convertible notes | $ 464,100,000 | 448,100,000 | $ 464,100,000 | 448,100,000 | ||||||||||||
Unamortized debt discount and debt issuance costs | 123,600,000 | 134,000,000 | 123,600,000 | 134,000,000 | ||||||||||||
Convertible senior notes, carrying value of liability component | 426,400,000 | 416,000,000 | 426,400,000 | 416,000,000 | ||||||||||||
Deferred financing costs recorded as additional paid-in-capital in excess of par value | $ 3,300,000 | |||||||||||||||
Convertible Senior Notes Due 2024 [Member] | Debt Issuance Costs [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Deferred financing costs | $ 9,600,000 | |||||||||||||||
Senior Notes Due 2026 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | ||||||||||||
Deferred financing costs | 5,000,000 | 5,200,000 | 5,000,000 | 5,200,000 | $ 5,400,000 | |||||||||||
Aggregate principal amount of convertible senior notes issued | $ 400,000,000 | |||||||||||||||
Interest expense | 7,400,000 | 14,800,000 | ||||||||||||||
Amortization of deferred financing costs | $ 200,000 | $ 300,000 | ||||||||||||||
Convertible notes, interest rate | 7.25% | 7.25% | 7.25% | |||||||||||||
Convertible notes maturity | Aug. 15, 2026 | Aug. 15, 2026 | ||||||||||||||
Senior notes, redemption price, percentage | 100.00% | |||||||||||||||
Senior notes, redemption price percentage with equity offerings | 107.25% | |||||||||||||||
Carrying amount | $ 395,000,000 | 394,800,000 | $ 395,000,000 | 394,800,000 | ||||||||||||
Fair value of notes | $ 402,100,000 | $ 394,600,000 | $ 402,100,000 | 394,600,000 | ||||||||||||
Senior Notes Due 2026 [Member] | Debt Issuance Costs [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Deferred financing costs | $ 5,400,000 | |||||||||||||||
Maximum [Member] | Senior Notes Due 2026 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of aggregate pricipal amount of senior notes being redeemed | 40.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Revolving Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | $ 700,000,000 | |||||||||||||||
Credit facility amendment date | May 4, 2015 | |||||||||||||||
Line of credit facility extended maturity period | 1 year | |||||||||||||||
Amended maturity date of credit facility | Mar. 9, 2017 | |||||||||||||||
Repayment of prior senior secured credit facility | $ 410,000,000 | |||||||||||||||
Revolving credit facility termination date | Feb. 15, 2017 | |||||||||||||||
2011 Credit Facility [Member] | 2011 Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 4.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 5.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 4.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Term Loan [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | $ 500,000,000 | |||||||||||||||
Credit facility amendment date | Jul. 26, 2012 | |||||||||||||||
Credit facility, maturity date | Mar. 9, 2016 | |||||||||||||||
Repayment of prior senior secured credit facility | $ 229,700,000 | |||||||||||||||
2011 Credit Facility [Member] | 2011 Term Loan [Member] | LIBOR [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 2.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Term Loan [Member] | LIBOR [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Term Loan [Member] | Base Rate [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 1.00% | |||||||||||||||
2011 Credit Facility [Member] | 2011 Term Loan [Member] | Base Rate [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 2.00% | |||||||||||||||
2017 Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | 1,450,000,000 | |||||||||||||||
Credit Facility amended, effective date | Mar. 16, 2018 | |||||||||||||||
Deferred financing costs | $ 22,600,000 | |||||||||||||||
Credit facility, amount repaid | $ 1,178,100,000 | $ 48,800,000 | ||||||||||||||
2017 Credit Facility [Member] | Other Expense (Income), Net [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loss on extinguishment of debt | $ 35,400,000 | |||||||||||||||
2017 Credit Facility [Member] | LIBOR [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 1.00% | |||||||||||||||
2017 Credit Facility [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Base rate interest rate floor | 1.75% | |||||||||||||||
2017 Credit Facility [Member] | Federal Funds Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 0.50% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Revolving Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | $ 150,000,000 | |||||||||||||||
Credit facility, maturity date | Feb. 15, 2022 | |||||||||||||||
Repayment of prior senior secured credit facility | 1,178,100,000 | |||||||||||||||
Credit facility LIBOR minimum floor rate interest | 0.75% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Revolving Credit Facility [Member] | Base Rate [Member] | Scenario Leverage Ratio One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.50% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Revolving Credit Facility [Member] | Base Rate [Member] | Scenario Leverage Ratio Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.75% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Revolving Credit Facility [Member] | Eurodollar [Member] | Scenario Leverage Ratio One [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 4.50% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Revolving Credit Facility [Member] | Eurodollar [Member] | Scenario Leverage Ratio Two [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 4.75% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Term Loan B [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maturity date | Feb. 15, 2023 | |||||||||||||||
Outstanding principal amount | $ 1,300,000,000 | |||||||||||||||
Senior secured credit facility, discount percentage | 2.00% | |||||||||||||||
Senior secured credit facility, discount amount | $ 26,000,000 | |||||||||||||||
2017 Credit Facility [Member] | 2017 Term Loan B [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 4.50% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Term Loan B [Member] | Eurodollar [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 5.50% | |||||||||||||||
2017 Credit Facility [Member] | 2017 Term Loan B [Member] | 2017 Revolving Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Revolving credit facility termination date | Aug. 16, 2018 | |||||||||||||||
2018 Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | 1,250,000,000 | |||||||||||||||
Deferred financing costs | 11,700,000 | |||||||||||||||
Credit facility, amount repaid | $ 10,000,000 | |||||||||||||||
Line of credit facility, frequency of interest payments | quarterly | |||||||||||||||
Long-term debt, weighted average interest rate | 5.72% | 6.80% | 5.72% | 6.80% | ||||||||||||
Borrowings under the senior secured credit facility | $ 985,000,000 | $ 995,000,000 | $ 985,000,000 | $ 995,000,000 | ||||||||||||
Foreign currency borrowings, outstanding | 0 | 0 | 0 | 0 | ||||||||||||
2018 Credit Facility [Member] | Minimum [Member] | 2024 Convertible Notes Exceeds 350 Million [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | $ 350,000,000 | |||||||||||||||
2018 Credit Facility [Member] | LIBOR [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 1.00% | |||||||||||||||
2018 Credit Facility [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Base rate interest rate floor | 1.00% | |||||||||||||||
2018 Credit Facility [Member] | Federal Funds Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 0.50% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Revolving Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maximum amount | $ 250,000,000 | |||||||||||||||
Credit facility, maturity date | Aug. 16, 2023 | |||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | |||||||||||||||
Borrowings under the senior secured credit facility | 0 | 0 | 0 | 0 | ||||||||||||
2018 Credit Facility [Member] | 2018 Revolving Credit Facility [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 2.00% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Revolving Credit Facility [Member] | Eurodollar [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 2.00% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan A [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maturity date | Aug. 16, 2023 | |||||||||||||||
Outstanding principal amount | $ 250,000,000 | |||||||||||||||
Borrowings under the senior secured credit facility | 240,600,000 | 246,900,000 | 240,600,000 | 246,900,000 | ||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan A [Member] | Level 2 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | 239,300,000 | 245,400,000 | 239,300,000 | 245,400,000 | ||||||||||||
Debt instrument, fair value | 240,900,000 | 240,700,000 | 240,900,000 | 240,700,000 | ||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan A [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.00% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan A [Member] | Eurodollar [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.00% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan B [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maturity date | Aug. 18, 2025 | |||||||||||||||
Outstanding principal amount | $ 750,000,000 | |||||||||||||||
Senior secured credit facility, discount percentage | 0.25% | |||||||||||||||
Senior secured credit facility, discount amount | $ 1,900,000 | |||||||||||||||
Borrowings under the senior secured credit facility | 744,400,000 | 748,100,000 | 744,400,000 | 748,100,000 | ||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan B [Member] | Level 2 [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding principal amount | 735,200,000 | 738,200,000 | 735,200,000 | 738,200,000 | ||||||||||||
Debt instrument, fair value | 745,300,000 | $ 729,300,000 | 745,300,000 | $ 729,300,000 | ||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan B [Member] | 2024 Convertible Notes Exceeds 350 Million [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, maturity date | Dec. 15, 2023 | |||||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan B [Member] | Base Rate [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 2.25% | |||||||||||||||
2018 Credit Facility [Member] | 2018 Term Loan B [Member] | Eurodollar [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest rate spread on variable rate | 3.25% | |||||||||||||||
Senior Unsecured Notes [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Aggregate principal amount of convertible senior notes issued | $ 400,000,000 | |||||||||||||||
2018 and 2017 Credit Facility [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Interest expense | 14,900,000 | 24,900,000 | 29,900,000 | 49,100,000 | ||||||||||||
Non-cash interest expense | 100,000 | 1,200,000 | 100,000 | 2,300,000 | ||||||||||||
Amortization of deferred financing costs | $ 400,000 | $ 1,100,000 | $ 800,000 | $ 2,100,000 |
Long-Term Debt - Schedule of Re
Long-Term Debt - Schedule of Redemption Prices expressed as Percentages of Principal Amount (Detail) - Senior Notes Due 2026 [Member] | 1 Months Ended | 6 Months Ended |
Aug. 31, 2018 | Jun. 30, 2019 | |
Debt Instrument Redemption [Line Items] | ||
Redemption prices, expressed as percentages of principal amount | 100.00% | |
2021 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Redemption prices, expressed as percentages of principal amount | 103.625% | |
2022 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Redemption prices, expressed as percentages of principal amount | 101.813% | |
2023 and Thereafter [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Redemption prices, expressed as percentages of principal amount | 100.00% |
Long-Term Debt - Annual Schedul
Long-Term Debt - Annual Scheduled Principal Payments of Debt (Detail) $ in Millions | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 687.3 |
2020 | 22 |
2021 | 26.3 |
2022 | 27.8 |
2023 | 188.7 |
Thereafter | 1,660.6 |
Total | $ 2,612.7 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) | Aug. 23, 2018Plaintiff | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Aug. 31, 2017USD ($) | Jul. 31, 2016USD ($) | May 10, 2013USD ($) |
Loss Contingencies [Line Items] | ||||||
Other assets | $ 217,300,000 | $ 221,800,000 | ||||
Prepaid expenses and other current assets | 140,500,000 | $ 153,800,000 | ||||
Deductible for product liability insurance | 12,500,000 | |||||
Putative Class Plaintiffs [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of plaintiffs | Plaintiff | 4 | |||||
Pending Litigation due to Plaintiffs Arbitration [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of plaintiffs | Plaintiff | 4 | |||||
China Marketing Plan SEC Investigation [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Civil penalty | 20,000,000 | |||||
Herbalife International of America, Inc., [Member] | U.S. Federal Trade Commission [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement amount paid for consent order | $ 200,000,000 | |||||
Third-party monitoring by independent compliance auditor, period | 7 years | |||||
Federal Revenue Office of Brazil [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | $ 15,900,000 | |||||
Mexican Tax Administration Service [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | $ 15,300,000 | |||||
Surety bond through insurance company to guarantee payment of tax assessment | 18,800,000 | |||||
Other assets current and non current | 31,300,000 | |||||
Other assets | 19,500,000 | |||||
Prepaid expenses and other current assets | 11,800,000 | |||||
Loss related to other assets | 0 | |||||
Brazilian ICMS [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | 6,400,000 | |||||
Surety bond through insurance company to guarantee payment of tax assessment | 11,300,000 | |||||
Brazilian ICMS [Member] | State of Sao Paulo [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | $ 15,500,000 | $ 41,700,000 | ||||
Brazilian ICMS [Member] | State of Rio de Janeiro [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | 9,200,000 | |||||
Indian VAT Authorities [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | 10,400,000 | |||||
South Korean Customs Authority [Member] | Other Noncurrent Assets [Member] | Audit Period January 2011 through May 2013 [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | 30,700,000 | |||||
South Korean Customs Authority [Member] | Other Noncurrent Assets [Member] | Audit Period May 2013 through December 2013 [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Assessment amount from tax administration service | $ 10,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019SegmentCountry | |
Segment Reporting [Abstract] | |
Number of countries in which the Company sells products | Country | 94 |
Number of reportable segments | Segment | 2 |
Segment Information - Reconcili
Segment Information - Reconciliation of Revenue from Segments to Consolidated (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 1,240.1 | $ 1,285.5 | $ 2,412.3 | $ 2,462.4 |
Primary Reporting Segment [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 1,053.1 | 998.7 | 2,074.9 | 1,963.4 |
China [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 187 | $ 286.8 | $ 337.4 | $ 499 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Contribution Margin | ||||
Total Contribution Margin | $ 630,100,000 | $ 700,300,000 | $ 1,201,200,000 | $ 1,300,000,000 |
Selling, general and administrative expenses | 477,000,000 | 510,200,000 | 912,400,000 | 970,300,000 |
Other operating income | 0 | (1,700,000) | (27,300,000) | (17,900,000) |
Interest expense, net | 36,300,000 | 44,300,000 | 72,400,000 | 84,200,000 |
Other (income) expense, net | (5,900,000) | 4,700,000 | (14,400,000) | 29,100,000 |
Income before income taxes | 122,700,000 | 142,800,000 | 258,100,000 | 234,300,000 |
Income taxes | 46,200,000 | 48,400,000 | 85,300,000 | 57,800,000 |
Net income | 76,500,000 | 94,400,000 | 172,800,000 | 176,500,000 |
Primary Reporting Segment [Member] | ||||
Contribution Margin | ||||
Total Contribution Margin | 461,500,000 | 440,700,000 | 899,500,000 | 855,000,000 |
China [Member] | ||||
Contribution Margin | ||||
Total Contribution Margin | 168,600,000 | 259,600,000 | 301,700,000 | 445,000,000 |
Other operating income | $ 0 | $ (1,700,000) | $ (21,300,000) | $ (17,900,000) |
Segment Information - Reconci_3
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Selling, General and Administrative Expenses [Member] | China [Member] | ||||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||||
Independent service providers service fees costs | $ 108.2 | $ 151.7 | $ 184.7 | $ 262.6 |
Segment Information - Schedule
Segment Information - Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 1,240.1 | $ 1,285.5 | $ 2,412.3 | $ 2,462.4 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 272 | 256.4 | 522.7 | 481.9 |
China [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 187 | 286.8 | 337.4 | 499 |
Mexico [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 121.2 | 118.2 | 240.5 | 232.2 |
Others [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 659.9 | $ 624.1 | $ 1,311.7 | $ 1,249.3 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 9,900,000 | $ 10,400,000 | $ 20,500,000 | $ 20,200,000 |
Unrecognized compensation cost on non-vested stock awards | 71,500,000 | $ 71,500,000 | ||
Unrecognized compensation cost on non-vested stock awards, weighted-average period of recognition | 1 year 7 months 6 days | |||
Total vesting date fair value of stock units | $ 1,900,000 | $ 2,100,000 | $ 10,900,000 | $ 2,100,000 |
SARs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
SARs granted | 0 | 0 | 0 | 0 |
Total intrinsic value of awards exercised for SARs | $ 5,300,000 | $ 64,800,000 | $ 17,200,000 | $ 187,000,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Activity Under Share-Based Compensation Plans (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding and nonvested as of December 31, 2018, Number of Shares | 1,611,000 | ||||
Granted, Number of Shares | 947,000 | ||||
Vested, Number of Shares | (195,000) | ||||
Forfeited, Number of Shares | (442,000) | ||||
Outstanding and nonvested as of June 30, 2019, Number of Shares | 1,921,000 | 1,921,000 | 1,611,000 | ||
Number of Shares, Expected to vest as of June 30, 2019 | 1,668,000 | 1,668,000 | |||
Outstanding and nonvested as of December 31, 2018, Weighted Average Grant Date Fair Value Per Share | $ 42.09 | ||||
Granted, Weighted Average Grant Date Fair Value Per Share | 55.71 | ||||
Vested, Weighted Average Grant Date Fair Value Per Share | 45.60 | ||||
Forfeited, Weighted Average Grant Date Fair Value Per Share | 40.28 | ||||
Outstanding and nonvested as of June 30, 2019, Weighted Average Grant Date Fair Value Per Share | $ 48.87 | 48.87 | $ 42.09 | ||
Expected to vest as of June 30, 2019, Weighted Average Grant Date Fair Value Per Share | $ 48.98 | $ 48.98 | |||
SARs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Awards Outstanding, Beginning Balance | 8,470,000 | ||||
Granted, Number of Awards | 0 | 0 | 0 | 0 | |
Exercised, Number of Awards | (594,000) | ||||
Forfeited, Number of Awards | (238,000) | ||||
Number of Awards Outstanding, Ending Balance | 7,638,000 | 7,638,000 | 8,470,000 | ||
Number of Awards Exercisable, Ending Balance | 6,338,000 | 6,338,000 | |||
Number of Awards Vested and expected to vest, Ending Balance | 7,633,000 | 7,633,000 | |||
Weighted Average Exercise Price Per Award Outstanding, Beginning Balance | $ 26.82 | ||||
Exercised, Weighted Average Exercise Price Per Award | 24.21 | ||||
Forfeited, Weighted Average Exercise Price Per Award | 29.67 | ||||
Weighted Average Exercise Price Per Award Outstanding, Ending Balance | $ 26.94 | 26.94 | $ 26.82 | ||
Exercisable, Weighted Average Exercise Price Per Award, Ending Balance | 26.57 | 26.57 | |||
Weighted Average Exercise Price Per Award, Vested and expected to vest, Ending Balance | $ 26.94 | $ 26.94 | |||
Weighted Average Remaining Contractual Term Outstanding | 5 years 7 months 6 days | 6 years 1 month 6 days | |||
Exercisable Weighted Average Remaining Contractual Term | 5 years 2 months 12 days | ||||
Weighted Average Remaining Contractual Term, Vested and expected to vest | 5 years 7 months 6 days | ||||
Aggregate Intrinsic Value Outstanding | $ 120.9 | $ 120.9 | $ 272.1 | ||
Exercisable, Aggregate Intrinsic Value | 102.6 | 102.6 | |||
Aggregate Intrinsic Value, Vested and expected to vest | $ 120.8 | $ 120.8 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Activity Under Share-Based Compensation Plans (Parenthetical) (Detail) - shares | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Forfeited | 442,000 | |
Number of Shares, Expected to vest | 1,668,000 | |
Market condition awards [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding SARs | 100,000 | 100,000 |
Exercisable SARs | 100,000 | |
Performance condition SARs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding SARs | 2,900,000 | 3,100,000 |
Forfeited SARs | 200,000 | |
Exercisable SARs | 2,400,000 | |
Performance condition SARs [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercised SARs | 100,000 | |
Performance Based Stock Unit Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Forfeited | 357,032 | |
Number of Shares, Expected to vest | 353,562 | |
Performance Based Stock Unit Awards [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of share based payment awards other than options outstanding and nonvested that can vest maximum | 560,986 | 708,836 |
Number of share based payment awards other than options that can vest maximum | 209,182 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes (benefit) expense | $ 46.2 | $ 48.4 | $ 85.3 | $ 57.8 |
Effective income tax rate | 37.70% | 33.90% | 33.00% | 24.70% |
Excess tax benefits on share-based compensation included in discrete events | $ 0.4 | $ 10.9 | $ 2.8 | $ 30.2 |
Total amount of unrecognized tax benefits, including related interest and penalties | 71.4 | 71.4 | ||
Unrecognized tax benefits excluding interest and penalties that if recognized would affect the effective tax rate | 49.3 | 49.3 | ||
Total accrued interest for tax contingencies | 11.3 | 11.3 | ||
Total accrued penalties for tax contingencies | 1.7 | 1.7 | ||
Amount of unrecognized tax benefits that could decrease within the next 12 months | 3.4 | 3.4 | ||
Decrease in unrecognized tax benefits due to the settlement of audits or resolution of administrative or judicial proceedings | 0.5 | 0.5 | ||
Decrease in unrecognized tax benefits expiration of statute of limitations | $ 2.9 | $ 2.9 | ||
Effective tax rate applied | 21.00% |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative asset fair value | $ 1.1 | $ 3.3 |
Derivative liability fair value | 4 | 1.7 |
Cash flow hedges reclassified into earnings over next twelve months | 0.2 | |
Foreign exchange currency contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative aggregate notional amounts | 373.7 | |
Derivative asset fair value | 1.1 | 3.3 |
Derivative liability fair value | 4 | 1.7 |
Foreign exchange currency contracts [Member] | Derivatives designated as cash flow hedging instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative aggregate notional amounts | 27.4 | 43.8 |
Derivative asset fair value | 0.3 | 0.5 |
Derivative liability fair value | $ 0.8 | $ 0.7 |
Freestanding derivatives [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative average remaining maturity period | 1 month | 1 month |
Maximum [Member] | Foreign exchange currency contracts [Member] | Derivatives designated as cash flow hedging instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative maximum remaining maturity period | 15 months | |
Maximum [Member] | Foreign exchange forward contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative maximum remaining maturity period | 12 months | 12 months |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Gains (Losses) Relating to Derivative Instruments Recorded in Other Comprehensive (loss) Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income | $ 4.5 | $ (1) | $ 0.5 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Effect of Cash Flow Hedging Relationships on Condensed Consolidated Statements of Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Cost of sales | $ 243.2 | $ 235.4 | $ 484.8 | $ 475.3 |
Selling, general, and administrative expenses | 477 | 510.2 | 912.4 | 970.3 |
Foreign Exchange Currency Contracts Relating To Inventory Hedges [Member] | Cost of sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain reclassified from accumulated other comprehensive loss to income | 0.1 | 1.5 | 0.1 | 2 |
Amount of (loss) gain excluded from assessment of effectiveness recognized in income | (0.6) | (1.3) | ||
Foreign Exchange Currency Contracts Relating To Inventory Hedges [Member] | Selling, general and administrative expenses [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (loss) gain excluded from assessment of effectiveness recognized in income | (0.8) | (3.1) | ||
Foreign Exchange Currency Contracts Relating To Intercompany Management Fee Hedges [Member] | Selling, general and administrative expenses [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain reclassified from accumulated other comprehensive loss to income | 0.4 | (1.6) | 0.8 | (4) |
Amount of (loss) gain excluded from assessment of effectiveness recognized in income | $ 0.1 | $ 0.6 | $ 0.1 | $ 0.9 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Gains (Losses) Relating to Derivative Instruments Not Designated As Hedging Instruments Recorded to Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign exchange currency contracts [Member] | Derivatives not designated as hedging instruments [Member] | Selling, general and administrative expenses [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Gain Recognized in Income | $ (2.5) | $ 1.1 | $ (0.2) | $ (1.6) |
Shareholders' Deficit - Summary
Shareholders' Deficit - Summary of Changes in Shareholders' Deficit (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Beginning balance | $ (629.1) | $ (219) | $ (723.4) | $ (334.7) |
Issuance of 0.2, 1.2, 0.6 and 3.9 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other | 0.9 | 0.7 | 1.5 | 1.2 |
Additional capital from share-based compensation | 9.9 | 10.4 | 20.5 | 20.2 |
Repurchases of 0.1, 12.0, 0.2 and 13.1 common shares | (1.4) | (631.5) | (9) | (681.4) |
Reclassification from temporary equity | 11.3 | |||
Issuance of convertible senior notes | 136.5 | |||
Repurchase of convertible senior notes | (123) | |||
Unwind of capped call transactions | 11.9 | 55.9 | ||
Net income | 76.5 | 94.4 | 172.8 | 176.5 |
Foreign currency translation adjustment, net of income taxes of (1.5), (3.1), (1.0) and (2.0) | (1.8) | (50.8) | 5.3 | (29.6) |
Unrealized loss on derivatives, net of income taxes of $—, $—, $— and $— | (0.5) | 4.5 | (1.9) | 1.4 |
Cumulative effect of accounting change | (2.4) | |||
Ending balance | (534.2) | (779.4) | (534.2) | (779.4) |
Common Shares [Member] | ||||
Beginning balance | 0.1 | 0.1 | 0.1 | 0.1 |
Ending balance | 0.1 | 0.1 | 0.1 | 0.1 |
Treasury Stock [Member] | ||||
Beginning balance | (328.9) | (328.9) | (328.9) | (328.6) |
Repurchases of 0.1, 12.0, 0.2 and 13.1 common shares | (0.3) | |||
Ending balance | (328.9) | (328.9) | (328.9) | (328.9) |
Paid-in Capital in Excess of par Value [Member] | ||||
Beginning balance | 333.8 | 425.4 | 341.5 | 407.3 |
Issuance of 0.2, 1.2, 0.6 and 3.9 common shares from exercise of stock options, SARs, restricted stock units, employee stock purchase plan, and other | 0.9 | 0.7 | 1.5 | 1.2 |
Additional capital from share-based compensation | 9.9 | 10.4 | 20.5 | 20.2 |
Repurchases of 0.1, 12.0, 0.2 and 13.1 common shares | (1.4) | (59) | (9) | (108.7) |
Reclassification from temporary equity | 11.3 | |||
Issuance of convertible senior notes | 136.5 | |||
Repurchase of convertible senior notes | (123) | |||
Unwind of capped call transactions | 11.9 | 55.9 | ||
Ending balance | 354.5 | 389.4 | 354.5 | 389.4 |
Accumulated Other Comprehensive Loss [Member] | ||||
Beginning balance | (204.1) | (147.3) | (209.8) | (165.4) |
Foreign currency translation adjustment, net of income taxes of (1.5), (3.1), (1.0) and (2.0) | (1.8) | (50.8) | 5.3 | (29.6) |
Unrealized loss on derivatives, net of income taxes of $—, $—, $— and $— | (0.5) | 4.5 | (1.9) | 1.4 |
Ending balance | (206.4) | (193.6) | (206.4) | (193.6) |
Accumulated Deficit [Member] | ||||
Beginning balance | (430) | (168.3) | (526.3) | (248.1) |
Repurchases of 0.1, 12.0, 0.2 and 13.1 common shares | (572.5) | (572.4) | ||
Net income | 76.5 | 94.4 | 172.8 | 176.5 |
Cumulative effect of accounting change | (2.4) | |||
Ending balance | $ (353.5) | $ (646.4) | $ (353.5) | $ (646.4) |
Shareholders' Deficit - Summa_2
Shareholders' Deficit - Summary of Changes in Shareholders' Deficit (Parenthetical) (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity [Abstract] | ||||
Issuance of common shares | 0.2 | 1.2 | 0.6 | 3.9 |
Repurchases of common shares | 0.1 | 12 | 0.2 | 13.1 |
Forward Counterparties' delivery of common shares to the Company | 8.4 | 2 | 8.4 | |
Foreign currency translation adjustment, tax | $ (1.5) | $ (3.1) | $ (1) | $ (2) |
Shareholders' Deficit - Additio
Shareholders' Deficit - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 30, 2018USD ($) | Feb. 28, 2014USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Dayshares | Jun. 30, 2018USD ($)shares | Mar. 31, 2014USD ($) | Jun. 30, 2019USD ($)Day$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Oct. 31, 2017USD ($) |
Stockholders Equity [Line Items] | ||||||||||
Share repurchase program authorized amount | $ 1,500 | $ 1,500 | $ 1,500 | |||||||
Share repurchase program, remaining authorized capacity | $ 113.3 | 1,500 | $ 1,500 | |||||||
Share repurchase program expiration date | Feb. 21, 2020 | Oct. 30, 2023 | ||||||||
Forward counterparties shares purchased and subsequently retired | shares | 8,400,000 | 2,000,000 | 8,400,000 | |||||||
Accumulated deficit | $ (353.5) | $ (526.3) | $ (353.5) | $ (526.3) | ||||||
Repurchase of common stock, shares | shares | 100,000 | 12,000,000 | 200,000 | 13,100,000 | ||||||
Treasury stock shares, at cost | shares | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||
Shares repurchases, inclusive of transaction costs and issuance of CVR value | $ 0 | $ 600.7 | ||||||||
Withheld for tax purpose for share-based compensation plans | 9 | 80.7 | ||||||||
Shares repurchases, value | $ 1.4 | $ 631.5 | 9 | 681.4 | ||||||
Payments for share repurchases | 9 | 685.6 | ||||||||
Payments for share repurchases from prior period liability | 4.2 | |||||||||
Terminating result of portion of capped call transactions cash received | 55.9 | |||||||||
Other comprehensive (loss) income before foreign currency translation adjustments reclassifications, tax expense (benefit) | $ (1.5) | $ (3.1) | $ (1) | $ (2) | ||||||
Convertible Senior Notes Due 2019 [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Convertible notes conversion price | $ / shares | $ 43.14 | $ 43.06 | $ 43.06 | |||||||
Minimum percentage of common share price over conversion price for conversion | 130.00% | 130.00% | ||||||||
Convertible notes, number of trading days of threshold limit (whether or not consecutive) | Day | 20 | 20 | ||||||||
Convertible notes, number of trading days of threshold limit in consecutive days | Day | 30 | 30 | ||||||||
Reclassification of difference between aggregate principal amount and carrying value from additional paid in capital to temporary equity | $ 11.3 | |||||||||
Convertible notes maturity | Aug. 15, 2019 | Aug. 15, 2019 | ||||||||
Capped call transactions [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Capped call transactions with financial institutions | $ 123.8 | |||||||||
Capped call transactions price per common share | $ / shares | $ 60.39 | |||||||||
Increase (decrease) in additional paid-in capital, other | $ (123.8) | |||||||||
Terminating result of portion of capped call transactions cash received | $ 55.9 | |||||||||
Capped call transactions [Member] | Convertible Senior Notes Due 2019 [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Convertible notes conversion price | $ / shares | $ 43.14 | |||||||||
Capped call transactions [Member] | Common Shares [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Weighted-average adjusted cap price per common share | $ / shares | 53.37 | 53.37 | ||||||||
Prepaid forward share repurchase transactions [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Forward share repurchase transactions amount | $ 685.8 | 685.8 | ||||||||
Forward transactions, shares to be purchased | shares | 19,900,000 | |||||||||
Average cost per share of shares repurchased | $ / shares | $ 34.51 | |||||||||
Settlement date of forward transactions | Aug. 15, 2019 | |||||||||
Forward counterparties shares purchased and subsequently retired | shares | 0 | 8,400,000 | 2,000,000 | 8,400,000 | ||||||
Non-cash interest expense relating to unamortized non-cash issuance costs | $ 3.1 | $ 0.2 | $ 3.1 | |||||||
Shares outstanding under forward purchasing transactions | shares | 4,000,000 | 4,000,000 | ||||||||
Accumulated deficit | (653.9) | |||||||||
Additional paid-in-capital | (31.9) | |||||||||
Non-cash forward transaction issuance costs | $ 35.8 | |||||||||
Non-cash interest expense relating to amortization of non-cash issuance costs | $ 0.3 | $ 4.7 | $ 1 | $ 6.3 | ||||||
Open market purchases [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Repurchase of common stock, shares | shares | 0 | 0 | 0 | 0 | ||||||
Open market purchases [Member] | Indirect wholly owned subsidiary [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Average cost per share of shares repurchased | $ / shares | $ 33.90 | |||||||||
Repurchase of common stock, shares | shares | 8,400 | |||||||||
Repurchase of common stock, value | $ 0.3 | |||||||||
October 2017 Dutch Auction Tender Offer [Member] | ||||||||||
Stockholders Equity [Line Items] | ||||||||||
Forward share repurchase transactions amount | $ 1.6 | |||||||||
Contingent value right agreement term | 2 years | |||||||||
Non-transferable contractual contingent value right agreement initial fair value | $ 7.3 | |||||||||
CVR expiration period | 2019-08 | |||||||||
Gain (loss) recognized in other (income) expense | $ 5.9 | $ (4.7) | $ 14.4 | $ (16) | ||||||
Non-transferable contractual contingent value right agreement change in fair value | $ 1.3 | $ 15.7 | $ 1.3 | $ 15.7 |
Shareholders' Deficit - Summa_3
Shareholders' Deficit - Summary of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | $ (629.1) | $ (219) | $ (723.4) | $ (334.7) | ||||
Other comprehensive (loss) income before reclassifications, net of tax | (1.8) | (46.4) | 4.3 | (29.1) | ||||
Amounts reclassified from accumulated other comprehensive loss to income, net of tax | (0.5) | [1] | 0.1 | [1] | (0.9) | [2] | 0.9 | [2] |
Total other comprehensive (loss) income | (2.3) | (46.3) | 3.4 | (28.2) | ||||
Ending balance | (534.2) | (779.4) | (534.2) | (779.4) | ||||
Foreign Currency Translation Adjustments [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | (204.5) | (149.4) | (211.6) | (170.6) | ||||
Other comprehensive (loss) income before reclassifications, net of tax | (1.8) | (50.8) | 5.3 | (29.6) | ||||
Total other comprehensive (loss) income | (1.8) | (50.8) | 5.3 | (29.6) | ||||
Ending balance | (206.3) | (200.2) | (206.3) | (200.2) | ||||
Unrealized Gain (Loss) on Derivatives [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | 0.4 | 2.1 | 1.8 | 5.2 | ||||
Other comprehensive (loss) income before reclassifications, net of tax | 4.4 | (1) | 0.5 | |||||
Amounts reclassified from accumulated other comprehensive loss to income, net of tax | (0.5) | [1] | 0.1 | [1] | (0.9) | [2] | 0.9 | [2] |
Total other comprehensive (loss) income | (0.5) | 4.5 | (1.9) | 1.4 | ||||
Ending balance | (0.1) | 6.6 | (0.1) | 6.6 | ||||
Accumulated Other Comprehensive Loss [Member] | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Beginning balance | (204.1) | (147.3) | (209.8) | (165.4) | ||||
Ending balance | $ (206.4) | $ (193.6) | $ (206.4) | $ (193.6) | ||||
[1] | See Note 10, Derivative Instruments and Hedging Activities | |||||||
[2] | See Note 10, Derivative Instruments and Hedging Activities |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted-average shares used in basic computations | 137.4 | 142.3 | 137.2 | 144 |
Dilutive effect of exercise of equity grants outstanding | 3.6 | 6.8 | 4.2 | 7.1 |
Dilutive effect of 2019 Convertible Notes | 1.4 | 2.8 | 2.8 | 1.9 |
Weighted-average shares used in diluted computations | 142.4 | 151.9 | 144.2 | 153 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Equity grants with anti-dilutive effect | 1 | 1.7 | 1 | 2.1 |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivative Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative assets | $ 1.1 | $ 3.3 |
Fair value derivative liabilities | 4 | 1.7 |
Foreign exchange currency contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative assets | 1.1 | 3.3 |
Fair value derivative liabilities | 4 | 1.7 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value measurements, assets total | 1.1 | 3.3 |
Fair value measurements, liabilities total | 4 | 1.7 |
Significant Other Observable Inputs (Level 2) [Member] | Derivatives designated as hedging instruments [Member] | Foreign exchange currency contracts relating to inventory and intercompany management fee hedges [Member] | Prepaid expenses and other current assets [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative assets | 0.3 | 0.5 |
Significant Other Observable Inputs (Level 2) [Member] | Derivatives designated as hedging instruments [Member] | Foreign exchange currency contracts relating to inventory and intercompany management fee hedges [Member] | Other current liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative liabilities | 0.8 | 0.7 |
Significant Other Observable Inputs (Level 2) [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange currency contracts [Member] | Prepaid expenses and other current assets [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative assets | 0.8 | 2.8 |
Significant Other Observable Inputs (Level 2) [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange currency contracts [Member] | Other current liabilities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value derivative liabilities | $ 3.2 | $ 1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Reconciliation of CVR Liability (Detail) - Level 3 Inputs [Member] - Contingent Value Right [Member] $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($) | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Fair value as of December 31, 2018 | $ 15.7 | |
Net unrealized gain | (14.4) | [1] |
Fair value as of June 30, 2019 | $ 1.3 | |
[1] | Unrealized gains and losses related to the revaluation of the CVR are recorded in other (income) expense, net within the Company’s condensed consolidated statements of income. |
Fair Value Measurements - Offse
Fair Value Measurements - Offsetting of Derivative Assets (Detail) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | $ 1,100,000 | $ 3,300,000 |
Gross Amounts Offset in the Balance Sheet, Derivative Assets | (1,100,000) | (1,200,000) |
Net Amounts of Assets Presented in the Balance Sheet | 0 | 2,100,000 |
Foreign exchange currency contracts [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 1,100,000 | 3,300,000 |
Gross Amounts Offset in the Balance Sheet, Derivative Assets | (1,100,000) | (1,200,000) |
Net Amounts of Assets Presented in the Balance Sheet | $ 0 | $ 2,100,000 |
Fair Value Measurements - Off_2
Fair Value Measurements - Offsetting of Derivative Liabilities (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 4 | $ 1.7 |
Gross Amounts Offset in the Balance Sheet, Derivative Liabilities | (1.1) | (1.2) |
Net Amounts of Liabilities Presented in the Balance Sheet | 2.9 | 0.5 |
Foreign exchange currency contracts [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Liabilities | 4 | 1.7 |
Gross Amounts Offset in the Balance Sheet, Derivative Liabilities | (1.1) | (1.2) |
Net Amounts of Liabilities Presented in the Balance Sheet | $ 2.9 | $ 0.5 |
Detail of Certain Balance She_3
Detail of Certain Balance Sheet Accounts - Additional Information (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Deferred compensation plan assets | $ 35.3 | $ 31.2 |
Deferred tax assets | 77.4 | 79.1 |
Deferred compensation plan liabilities | 59 | 51.3 |
Deferred income tax liabilities | $ 7.2 | $ 7.5 |
Detail of Certain Balance She_4
Detail of Certain Balance Sheet Accounts - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Current [Abstract] | ||
Accrued compensation | $ 84.4 | $ 137.9 |
Accrued service fees to China independent service providers | 61.3 | 67.6 |
Accrued advertising, events, and promotion expenses | 50.6 | 55.1 |
Current operating lease liabilities | 32.9 | |
Advance sales deposits | 59.7 | 65.6 |
Income taxes payable | 6 | 40 |
Other accrued liabilities | 190.7 | 181.2 |
Total | $ 485.6 | $ 547.4 |