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Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended
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Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract] |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On April 1, 2018, the Company adopted ASU 2014-09-Revenue from Contracts with Customers (Topic 606) and all related amendments (“New Revenue Standard”) using the modified retrospective method. The Company has applied the new revenue standard to all contracts that were entered into after adoption and to all contracts that were open as of the initial date of adoption. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the adoption of the new standard to impact net sales on an ongoing basis depending on the relative amount of revenue sold through distributors, the change in inventory held by distributors, and the changes in price concessions granted to distributors. Previously, the Company deferred revenue and cost of sales on shipments to distributors until the distributor sold the product to their end customer. As required by the new revenue standard, the Company no longer defers revenue and cost of sales, but rather, estimates the effects of returns and allowances provided to distributors and records revenue at the time of sale to the distributor. Sales to non-distributor customers, under both the previous and new revenue standards, are generally recognized upon the Company’s shipment of the product. The cumulative effect of the changes made to our condensed consolidated April 1, 2018 balance sheet for the adoption of the new revenue standard is summarized in the table of opening balance sheet adjustments below. In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our condensed consolidated income statement and balance sheet for the period ended June 30, 2018 was as follows (in millions):
Income Statement |  | For the three months ended June 30, 2018
| As reported |  | Balances without adoption of New Revenue Standard |  | Effect of Change Higher / (Lower)
Net Sales |  | $ | 1,212.5 |  |  | $ | 1,210.0 |  |  | $ | 2.5 |
Cost of Sales |  | $ | 570.5 |  |  | $ | 571.7 |  |  | $ | (1.2 | )
Gross Profit |  | $ | 642.0 |  |  | $ | 638.3 |  |  | $ | 3.7 |
Income tax provision (benefit) |  | $ | 2.0 |  |  | $ | (0.3 | ) |  | $ | 2.3 |
Net Income |  | $ | 35.7 |  |  | $ | 34.3 |  |  | $ | 1.4 |
Balance Sheet |  | As of June 30, 2018
| As reported |  | Balances without adoption of New Revenue Standard |  | Effect of Change Higher / (Lower)
ASSETS |  |  |  |  |  |
Accounts receivable, net |  | $ | 789.4 |  |  | $ | 845.7 |  |  | $ | (56.3 | )
Inventories |  | $ | 1,104.8 |  |  | $ | 1,109.9 |  |  | $ | (5.1 | )
Other current assets |  | $ | 274.5 |  |  | $ | 256.8 |  |  | $ | 17.7 |
Long-term deferred tax assets |  | $ | 1,675.8 |  |  | $ | 1,700.5 |  |  | $ | (24.7 | )
LIABILITIES |  |  |  |  |  |
Accrued liabilities |  | $ | 491.3 |  |  | $ | 471.2 |  |  | $ | 20.1 |
Deferred income on shipments to distributors |  | $ | — |  |  | $ | 349.5 |  |  | $ | (349.5 | )
Long-term deferred tax liability |  | $ | 854.2 |  |  | $ | 837.4 |  |  | $ | 16.8 |
STOCKHOLDERS' EQUITY |  |  |  |  |  |
Retained Earnings |  | $ | 3,149.2 |  |  | $ | 2,905.0 |  |  | $ | 244.2 |
The significant changes in our financial statements noted in the table above are primarily due to the transition from sell-through revenue recognition to sell-in revenue recognition as required by the New Revenue Standard, which eliminated the balance of deferred income on shipments to distributors, significantly reduced accounts receivable, and significantly increased retained earnings. During the three months ended June 30, 2018, the Company adopted ASU 2016-01-Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This standard requires available-for-sale equity investments to be measured at fair value with changes in fair value recognized in net income. The adoption of this standard did not have a material impact on the Company's financial statements. During the three months ended June 30, 2018, the Company adopted ASU 2016-16-Intra-Entity Transfers of Assets Other Than Inventory. This standard addresses the recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset other than inventory. This standard has been applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings. The adoption of this standard resulted in a cumulative-effect increase in the Company's deferred tax assets of approximately $1.58 billion, a decrease to the Company's deferred tax liabilities of $1.1 million, a decrease to other assets of $24.1 million, and a decrease of $1.7 million to other long-term liabilities. During the three months ended June 30, 2018, the Company adopted ASU 2016-18-Statement of Cash Flows: Restricted Cash. This standard requires that the statement of cash flows explain the change during the period in total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard has been applied using a retrospective transition method to each period presented. The adoption of this standard did not have a material impact on the Company's financial statements. The following table summarizes the opening balance sheet adjustments related to the adoption of the New Revenue Standard, ASU 2016-01-Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and ASU 2016-16-Intra-Entity Transfers of Assets Other Than Inventory (in millions):
|  | Balance as of |  | Adjustments from |  | Balance as of
|  | March 31, 2018 |  | ASC Topic 606 |  | ASU 2016-01 |  | ASU 2016-16 |  | April 1, 2018
ASSETS |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 563.7 |  |  | $ | (45.6 | ) |  | $ | — |  |  | $ | — |  |  | $ | 518.1 |
Inventories |  | $ | 476.2 |  |  | $ | (5.1 | ) |  | $ | — |  |  | $ | — |  |  | $ | 471.1 |
Other current assets |  | $ | 55.9 |  |  | $ | 17.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 73.1 |
Long-term deferred tax assets |  | $ | 100.2 |  |  | $ | (23.1 | ) |  | $ | — |  |  | $ | 1,579.4 |  |  | $ | 1,656.5 |
Other assets |  | $ | 71.8 |  |  | $ | — |  |  | $ | — |  |  | $ | (24.1 | ) |  | $ | 47.7 |
LIABILITIES |  |  |  |  |  |  |  |  |  |
Accrued liabilities |  | $ | 229.6 |  |  | $ | 18.5 |  |  | $ | — |  |  | $ | — |  |  | $ | 248.1 |
Deferred income on shipments to distributors |  | $ | 333.8 |  |  | $ | (333.8 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |
Long-term deferred tax liability |  | $ | 205.8 |  |  | $ | 16.8 |  |  | $ | — |  |  | $ | (1.1 | ) |  | $ | 221.5 |
Other long-term liabilities |  | $ | 240.9 |  |  | $ | — |  |  | $ | — |  |  | $ | (1.7 | ) |  | $ | 239.2 |
STOCKHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |
Accumulated other comprehensive loss |  | $ | (17.6 | ) |  | $ | — |  |  | $ | (1.7 | ) |  | $ | — |  |  | $ | (19.3 | )
Retained earnings |  | $ | 1,397.3 |  |  | $ | 241.9 |  |  | $ | 1.7 |  |  | $ | 1,558.1 |  |  | $ | 3,199.0 |
Recently Issued Accounting Pronouncements Not Yet Adopted In August 2017, the FASB issued ASU 2017-12-Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The update expands an entity's ability to apply hedge accounting for nonfinancial and financial risk components and allows for a simplified approach for fair value hedging of interest rate risk. The update eliminates the need to separately measure and report hedge ineffectiveness and generally requires the entire change in fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Additionally, the update simplifies the hedge documentation and effectiveness assessment requirements under the previous guidance. The effective date of this standard is for fiscal years beginning after December 15, 2018 and early adoption is permitted. Adoption will be applied through a cumulative-effect adjustment for cash flow and net investment hedges existing at the date of adoption and prospectively for presentation and disclosure. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04-Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendment is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect this standard to have an impact on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13-Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. This standard requires entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets. Using this methodology will result in earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable of having been incurred. The amendments in ASU 2016-13 broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually and can include forecasted information. There are other provisions within the standard affecting how impairments of other financial assets may be recorded and presented, as well as expanded disclosures. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019, and permits early adoption, but not before December 15, 2018. The standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02-Leases. This standard requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet and aligns many of the underlying principles of the new lessor model with those in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. ASU 2016-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. The standard is to be applied using the modified retrospective approach to all periods presented. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements.

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