Herbalife Ltd. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Significant Accounting Policies (Tables)

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Summary of Impact on Balance Sheet and Statement of Income due to Adoption of Topic 606

Revenue Recognition

As a result of applying Topic 606, the impact to the Company’s condensed consolidated balance sheet as of March 31, 2018 was as follows:

	March 31, 2018
	As reported			Impact due to ASC 606			Without adoption
	(in millions)
Assets:
Receivables, net of allowance for doubtful accounts	$	103.3		$	4.8		$	108.1
Inventories		333.0			(0.9	)		332.1
Total assets		2,968.7			3.9			2,972.6
Liabilities:
Royalty overrides		264.7			2.3			267.0
Total liabilities		3,187.7			2.3			3,190.0
Shareholders’ deficit:
Accumulated deficit		(168.3	)		1.6			(166.7	)
Total shareholders’ deficit		(219.0	)		1.6			(217.4	)
Total liabilities and shareholders’ deficit		2,968.7			3.9			2,972.6

As a result of applying Topic 606, the impact to the Company’s condensed consolidated statement of income for the three months ended March 31, 2018 was as follows:

	March 31, 2018
	As reported			Impact due to ASC 606			Without adoption
	(in millions)
Net sales	$	1,176.9		$	(8.0	)	$	1,168.9
Cost of sales		239.9			(0.5	)		239.4
Gross profit		937.0			(7.5	)		929.5
Royalty overrides		337.3			(1.2	)		336.1
Selling, general, and administrative expenses		460.1			(5.6	)		454.5
Other operating income		(16.2	)		—			(16.2	)
Operating income		155.8			(0.7	)		155.1
Interest expense, net		39.9			—			39.9
Other expense, net		24.4			—			24.4
Income before income taxes		91.5			(0.7	)		90.8
Income taxes		9.4			(0.1	)		9.3
Net income	$	82.1		$	(0.6	)	$	81.5

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:

	March 31, 2018		December 31, 2017
	(in millions)
Cash and cash equivalents	$	1,330.2	$	1,278.8
Restricted cash included in Prepaid expenses and other current assets		3.9		4.0
Restricted cash included in Other assets		12.9		12.7
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	1,347.0	$	1,295.5