Revenue Recognition and Accounts Receivable

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue Recognition and Accounts Receivable

The Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes net revenue for product sales when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenues are recorded net of provisions for variable consideration, including discounts, rebates, governmental rebate programs, price adjustments, returns, chargebacks, promotional programs and other sales allowances. Accruals for these provisions are presented in the condensed consolidated financial statements as reductions in determining net sales and as a contra asset in accounts receivable, net (if settled via credit) and other current liabilities (if paid in cash).

Wholesaler and distributor inventory levels of our products can fluctuate throughout the year due to the seasonality of certain products, the timing of product demand and other factors. Such fluctuations may impact the comparability of our net sales between periods.

Consideration received from licenses of intellectual property is recorded as other revenues. Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other revenue in the condensed consolidated statements of operations.

Revenue Disaggregation

The following table presents the Company’s net sales by therapeutic franchise for each of our reportable segments for the three and nine months ended September 30, 2019 and 2018, respectively:



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended September 30, 2019
Central Nervous System & Anesthesia	$	155.5	$	214.3	$	87.0	$	456.8
Infectious Disease	28.7		179.0		270.3		478.0
Respiratory & Allergy	308.5		98.2		66.6		473.3
Cardiovascular	63.3		126.2		41.3		230.8
Gastroenterology	30.0		147.9		95.9		273.8
Diabetes & Metabolism	91.3		68.9		34.2		194.4
Dermatology	38.2		75.8		29.3		143.3
Women’s Healthcare	100.4		60.5		26.1		187.0
Oncology	196.1		22.0		42.8		260.9
Immunology	12.3		20.3		10.3		42.9
Other ⁽¹⁾	64.3		32.8		89.9		187.0
Total	$	1,088.6	$	1,045.9	$	793.7	$	2,928.2

Nine Months Ended September 30, 2019
Central Nervous System & Anesthesia	$	426.4	$	619.3	$	243.9	$	1,289.6
Infectious Disease	77.3		299.7		783.0		1,160.0
Respiratory & Allergy	805.3		327.9		166.5		1,299.7
Cardiovascular	159.1		358.6		116.1		633.8
Gastroenterology	94.9		434.9		276.3		806.1
Diabetes & Metabolism	326.1		208.0		110.4		644.5
Dermatology	77.6		217.7		70.7		366.0
Women’s Healthcare	269.5		165.3		65.4		500.2
Oncology	567.8		59.9		107.0		734.7
Immunology	31.4		41.3		27.6		100.3
Other ⁽¹⁾	199.6		198.1		274.4		672.1
Total	$	3,035.0	$	2,930.7	$	2,241.3	$	8,207.0



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended September 30, 2018
Central Nervous System & Anesthesia	$	154.7	$	219.6	$	92.4	$	466.7
Infectious Disease	63.1		157.8		223.2		444.1
Respiratory & Allergy	161.8		94.8		47.4		304.0
Cardiovascular	95.9		147.3		40.9		284.1
Gastroenterology	24.5		150.0		91.1		265.6
Diabetes & Metabolism	94.9		73.9		43.8		212.6
Dermatology	86.7		62.8		18.0		167.5
Women’s Healthcare	83.1		61.3		28.1		172.5
Oncology	171.0		18.2		31.9		221.1
Immunology	8.0		2.3		10.0		20.3
Other ⁽¹⁾	68.6		53.3		146.9		268.8
Total	$	1,012.3	$	1,041.3	$	773.7	$	2,827.3

Nine Months Ended September 30, 2018
Central Nervous System & Anesthesia	$	554.2	$	665.7	$	251.7	$	1,471.6
Infectious Disease	172.1		280.5		643.8		1,096.4
Respiratory & Allergy	457.3		351.8		147.7		956.8
Cardiovascular	262.4		443.2		126.6		832.2
Gastroenterology	102.5		448.3		249.3		800.1
Diabetes & Metabolism	318.6		227.9		102.1		648.6
Dermatology	265.7		217.4		70.1		553.2
Women’s Healthcare	261.4		198.1		69.5		529.0
Oncology	382.5		55.4		95.6		533.5
Immunology	36.1		7.3		29.1		72.5
Other ⁽¹⁾	185.6		174.7		379.0		739.3
Total	$	2,998.4	$	3,070.3	$	2,164.5	$	8,233.2

____________


⁽¹⁾	Other consists of numerous therapeutic franchises, none of which individually exceeds 5% of consolidated net sales.

Variable Consideration and Accounts Receivable

The following table presents a reconciliation of gross sales to net sales by each significant category of variable consideration during the three and nine months ended September 30, 2019 and 2018, respectively:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2019			2018			2019			2018
Gross sales	$	5,051.5		$	4,861.4		$	13,841.0		$	14,419.0
Gross to net adjustments:
Chargebacks	(913.5		)	(835.7		)	(2,368.8		)	(2,524.2		)
Rebates, promotional programs and other sales allowances	(979.2		)	(1,025.6		)	(2,709.9		)	(3,144.2		)
Returns	(82.3		)	(59.4		)	(203.3		)	(160.5		)
Governmental rebate programs	(148.3		)	(113.4		)	(352.0		)	(356.9		)
Total gross to net adjustments	$	(2,123.3	)	$	(2,034.1	)	$	(5,634.0	)	$	(6,185.8	)
Net sales	$	2,928.2		$	2,827.3		$	8,207.0		$	8,233.2

No significant revisions were made to the methodology used in determining these provisions or the nature of the provisions during the three and nine months ended September 30, 2019. Such allowances were comprised of the following at September 30, 2019 and December 31, 2018, respectively:



(In millions)	September 30, 2019		December 31, 2018
Accounts receivable, net	$	1,539.4	$	1,715.6
Other current liabilities	720.3		626.7
Total	$	2,259.7	$	2,342.3

Accounts receivable, net was comprised of the following at September 30, 2019 and December 31, 2018, respectively:



(In millions)	September 30, 2019		December 31, 2018
Trade receivables, net	$	2,546.6	$	2,416.5
Other receivables	401.4		464.5
Accounts receivable, net	$	2,948.0	$	2,881.0

Through its wholly owned subsidiary Mylan Pharmaceuticals Inc. (“MPI”), the Company has access to a $400 million accounts receivable securitization facility (the “Receivables Facility”) and a $200 million note securitization facility (the “Note Securitization Facility”). The receivables underlying any borrowings are included in accounts receivable, net, in the condensed consolidated balance sheets. There were $414.2 million and $322.0 million of securitized accounts receivable at September 30, 2019 and December 31, 2018, respectively.