Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 10, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TEMPUR SEALY INTERNATIONAL, INC. | ||
Entity Central Index Key | 1206264 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $3,547,874,167 | ||
Entity Common Stock, Shares Outstanding | 60,922,491 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Net sales | $2,989.80 | $2,464.30 | $1,402.90 |
Cost of sales | 1,839.40 | 1,449.40 | 688.3 |
Gross profit | 1,150.40 | 1,014.90 | 714.6 |
Selling and marketing expenses | 619.9 | 522.9 | 319.1 |
General, administrative and other expenses | 280.6 | 266.3 | 147.2 |
Equity income in earnings of unconsolidated affiliates | -8.3 | -4.4 | 0 |
Royalty income, net of royalty expense | -18.1 | -13.7 | 0 |
Operating income | 276.3 | 243.8 | 248.3 |
Other expense, net: | |||
Interest expense, net | 91.9 | 110.8 | 18.8 |
Loss on disposal, net | 23.2 | 0 | 0 |
Other (income) expense, net | -13.7 | 5 | 0.3 |
Total other expense | 101.4 | 115.8 | 19.1 |
Income before income taxes | 174.9 | 128 | 229.2 |
Income tax provision | -64.9 | -49.1 | -122.4 |
Net income before non-controlling interest | 110 | 78.9 | 106.8 |
Less: net income attributable to non-controlling interest | 1.1 | 0.3 | 0 |
Net income attributable to Tempur Sealy International, Inc. | $108.90 | $78.60 | $106.80 |
Earnings per common share: | |||
Basic (in dollars per share) | $1.79 | $1.30 | $1.74 |
Diluted (in dollars per share) | $1.75 | $1.28 | $1.70 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 60.8 | 60.3 | 61.5 |
Diluted (in shares) | 62.1 | 61.6 | 62.9 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interest | $110 | $78.90 | $106.80 |
Other comprehensive (loss) income before tax, net of tax: | |||
Foreign currency translation adjustments, net of tax | -38.4 | -10.6 | 8.2 |
Net change in unrecognized (loss) on interest rate swap, net of tax | 0.7 | 1.3 | -1.1 |
Pension and other post retirement benefits | -5.6 | 3.2 | 0 |
Unrealized loss on cash flow hedging derivatives | 1.3 | 0 | 0 |
Other comprehensive (loss) income, net of tax | -42 | -6.1 | 7.1 |
Comprehensive income | 68 | 72.8 | 113.9 |
Less: Comprehensive income attributable to non-controlling interest | 1.1 | 0.3 | 0 |
Comprehensive income attributable to Tempur Sealy International, Inc. | $66.90 | $72.50 | $113.90 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $62.50 | $81 |
Accounts receivable, net | 385.8 | 349.2 |
Inventories | 217.2 | 199.2 |
Prepaid expenses and other current assets | 56.5 | 53.7 |
Deferred income taxes | 44.4 | 44.4 |
Total Current Assets | 766.4 | 727.5 |
Property, plant and equipment, net | 355.6 | 411.6 |
Goodwill | 736.5 | 759.6 |
Other intangible assets, net | 727.1 | 750.1 |
Deferred income taxes | 8.6 | 10.9 |
Other non-current assets | 68.4 | 70.2 |
Total Assets | 2,662.60 | 2,729.90 |
Current Liabilities: | ||
Accounts payable | 226.4 | 191.2 |
Accrued expenses and other current liabilities | 233.3 | 208.4 |
Deferred income taxes | 0.2 | 0.8 |
Income taxes payable | 12 | 1.5 |
Current portion of long-term debt | 66.4 | 39.6 |
Total Current Liabilities | 538.3 | 441.5 |
Long-term debt | 1,535.90 | 1,796.90 |
Deferred income taxes | 258.8 | 286.1 |
Other non-current liabilities | 114.3 | 75.3 |
Total Liabilities | 2,447.30 | 2,599.80 |
Redeemable non-controlling interest | 12.6 | 11.5 |
Stockholders' Equity | ||
Common stock, $0.01 par value, 300.0 shares authorized; 99.2 million shares issued as of December 31, 2014 and 2013 | 1 | 1 |
Additional paid in capital | 411.9 | 396.5 |
Retained earnings | 1,036.80 | 927.9 |
Accumulated other comprehensive loss | -55.7 | -13.7 |
Treasury stock at cost; 38.3 and 38.6 shares as of December 31, 2014 and 2013, respectively | -1,191.30 | -1,193.10 |
Total Stockholders’ Equity | 202.7 | 118.6 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | $2,662.60 | $2,729.90 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' Equity: | ||
Common stock, par value per share (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 99,200,000 | 99,200,000 |
Treasury stock, shares (in shares) | 38,300,000 | 38,600,000 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Redeemable non-controlling interest | Common Shares | Treasury Shares | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
In Millions, unless otherwise specified | |||||||
Balance at beginning of period at Dec. 31, 2011 | $30.80 | $1 | ($1,059.80) | $361.80 | $742.50 | ($14.70) | |
Balance at beginning of period at Dec. 31, 2011 | 0 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2011 | 99.2 | 35.4 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 106.8 | 106.8 | |||||
Net income attributable to non-controlling interest | 0 | ||||||
Adjustment to pension liability, net of tax of | 0 | ||||||
Derivative instruments accounted for as hedges, net of tax | -1.1 | -1.1 | |||||
Foreign currency adjustments | 8.2 | 8.2 | |||||
Exercise of stock options (in shares) | -0.9 | ||||||
Exercise of stock options | 11.4 | 10.4 | 1 | ||||
Tax adjustments related to stock compensation | 10.5 | 10.5 | |||||
Treasury stock repurchased (in shares) | 5 | ||||||
Treasury stock repurchased | -150 | -150 | |||||
Amortization of unearned stock-based compensation | 5.7 | 5.7 | |||||
Balance at end of period at Dec. 31, 2012 | 22.3 | 1 | -1,199.40 | 379 | 849.3 | -7.6 | |
Balance at end of period (in shares) at Dec. 31, 2012 | 99.2 | 39.5 | |||||
Balance at beginning of period at Dec. 31, 2012 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Acquisition of redeemable non-controlling interest | 11.2 | ||||||
Net income | 78.6 | 78.6 | |||||
Net income attributable to non-controlling interest | 0.3 | 0.3 | |||||
Adjustment to pension liability, net of tax of | 3.2 | 3.2 | |||||
Derivative instruments accounted for as hedges, net of tax | 1.3 | 1.3 | |||||
Foreign currency adjustments | -10.6 | -10.6 | |||||
Exercise of stock options (in shares) | -0.6 | ||||||
Exercise of stock options | 8.7 | 6.9 | 1.8 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | -0.3 | ||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | 6.4 | -6.4 | ||||
Tax adjustments related to stock compensation | 5.2 | 5.2 | |||||
Treasury stock repurchased | -7 | -7 | |||||
Amortization of unearned stock-based compensation | 16.9 | 16.9 | |||||
Balance at end of period at Dec. 31, 2013 | 118.6 | 1 | -1,193.10 | 396.5 | 927.9 | -13.7 | |
Balance at end of period at Dec. 31, 2013 | 11.5 | 11.5 | |||||
Balance at end of period (in shares) at Dec. 31, 2013 | 99.2 | 38.6 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 108.9 | 108.9 | |||||
Net income attributable to non-controlling interest | 1.1 | 1.1 | |||||
Adjustment to pension liability, net of tax of | -5.6 | -5.6 | |||||
Derivative instruments accounted for as hedges, net of tax | 2 | 2 | |||||
Foreign currency adjustments | -38.4 | -38.4 | |||||
Exercise of stock options (in shares) | -0.2 | ||||||
Exercise of stock options | 4.3 | 2.5 | 1.8 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | -0.1 | ||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | 1.5 | -1.5 | ||||
Tax adjustments related to stock compensation | 1.7 | 1.7 | |||||
Treasury stock repurchased | -2.2 | -2.2 | |||||
Amortization of unearned stock-based compensation | 13.4 | 13.4 | |||||
Balance at end of period at Dec. 31, 2014 | 202.7 | 1 | -1,191.30 | 411.9 | 1,036.80 | -55.7 | |
Balance at end of period at Dec. 31, 2014 | $12.60 | $12.60 | |||||
Balance at end of period (in shares) at Dec. 31, 2014 | 99.2 | 38.3 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Stockholders' Equity [Abstract] | |||
Pension tax effect | ($3.40) | ($2) | |
Derivative instruments, tax effect | -0.9 | -0.8 | -0.7 |
Foreign currency adjustments, tax effect | ($2.70) |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income before non-controlling interest | $110 | $78.90 | $106.80 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 76.3 | 74.6 | 36.3 |
Amortization of stock-based compensation | 13.4 | 16.9 | 5.7 |
Amortization of deferred financing costs | 12.5 | 7.4 | 1.4 |
Write-off of deferred financing costs | 0 | 4.7 | 0 |
Bad debt expense | 4.9 | 1.3 | 2.5 |
Deferred income taxes | -27.2 | -49.1 | 38.4 |
Dividends received from unconsolidated affiliates | 2 | 2.5 | 0 |
Equity income in earnings of unconsolidated affiliates | -8.3 | -4.4 | 0 |
Non-cash interest expense on 8.0% Sealy Notes | 5.1 | 3.7 | 0 |
Loss on sale of assets | 3.9 | 0.8 | 0.3 |
Loss on disposal of business | 23.2 | 0 | 0 |
Foreign currency adjustments and other | 1.8 | 0.1 | 1.8 |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | -58.8 | -30.1 | 5.3 |
Inventories | -34 | -34.5 | 0.1 |
Prepaid expenses and other current assets | -14.9 | 27.9 | -29.4 |
Accounts payable | 47.8 | 28.1 | 14.3 |
Accrued expenses and other | 56.7 | 4.4 | 11.6 |
Income taxes payable | 10.8 | -34.7 | -5.2 |
Net cash provided by operating activities | 225.2 | 98.5 | 189.9 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | -8.5 | -1,172.90 | -4.5 |
Proceeds from disposition of business | 43.5 | 0 | 0 |
Purchases of property, plant and equipment | -47.5 | -40 | -50.5 |
Other | 2.1 | -0.1 | 0 |
Net cash used in investing activities | -10.4 | -1,213 | -55 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 271.5 | 2,992.60 | 0 |
Repayments of 2012 credit agreement | -510.9 | -1,658.30 | 0 |
Proceeds from issuance of senior notes | 0 | 375 | 0 |
Proceeds from 2011 credit facility | 0 | 46.5 | 352 |
Repayments of 2011 credit facility | 0 | -696.5 | -287 |
Proceeds from exercise of stock options | 4.3 | 8.7 | 11.4 |
Excess tax benefit from stock based compensation | 1.7 | 5.4 | 10.5 |
Treasury shares repurchased | -2.2 | -7 | -152.6 |
Payments of deferred financing costs | -3.1 | -52 | -2.3 |
Other | 0.6 | -1 | -2.8 |
Net cash (used in) provided by financing activities | -238.1 | 1,013.40 | -70.8 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 4.8 | 2.8 | 3.8 |
(Decrease) increase in cash and cash equivalents | -18.5 | -98.3 | 67.9 |
CASH AND CASH EQUIVALENTS, beginning of period | 81 | 179.3 | 111.4 |
CASH AND CASH EQUIVALENTS, end of period | 62.5 | 81 | 179.3 |
Cash paid during the period for: | |||
Interest | 73.5 | 92.1 | 37.1 |
Income taxes, net of refunds | $56.30 | $96.40 | $80.10 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (Sealy Notes) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 12, 2013 | Mar. 19, 2013 |
Sealy Notes | ||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||||
(a) Basis of Presentation and Description of Business. Tempur Sealy International, Inc., a Delaware corporation, together with its subsidiaries, is a U.S. based, multinational company. The term “Tempur Sealy International” refers to Tempur Sealy International, Inc. only, and the term “Company” refers to Tempur Sealy International, Inc. and its consolidated subsidiaries. | ||||||||
The Company develops, manufactures, markets and sells bedding products, which include mattresses, foundations and adjustable bases, and other products, which include pillows and other accessories. The Company also derives income from royalties by licensing the Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. Additionally, the Company participates in several joint ventures in the Asia-Pacific region, as well as a joint venture in the U.S. with Comfort Revolution International, LLC (“Comfort Revolution”). The Company sells its products through three sales channels: Retail, Direct and Other. | ||||||||
On March 18, 2013, the Company completed the acquisition of Sealy Corporation and its historical subsidiaries (“Sealy”), which manufactures and markets a broad range of mattresses and foundations under the Sealy®, Sealy Posturepedic®, OptimumTM and Stearns & Foster® brands. The Company’s acquisition of Sealy (“Sealy Acquisition”) is more fully described in Note 3, “Acquisitions and Divestitures”. The 2014 and 2013 results of operations for Sealy are reported within the Company’s Sealy reportable segment and include results for the year ended December 31, 2014 and the period of March 18, 2013 to December 31, 2013, respectively. | ||||||||
As a result of the Sealy Acquisition, the Company’s Consolidated Financial Statements include the results of Comfort Revolution, a 45.0% owned joint venture. Comfort Revolution constitutes a variable interest entity (“VIE”) for which the Company is considered to be the primary beneficiary due to the Company's disproportionate share of the economic risk associated with its equity contribution, debt financing and other factors that were considered in the related-party analysis surrounding the identification of the primary beneficiary. The operations of Comfort Revolution are not material to the Company’s Consolidated Financial Statements. Refer to Note 16, “Redeemable Non-controlling Interest” for further discussion. | ||||||||
(b) Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International and its 100.0% owned subsidiary companies and Comfort Revolution. Intercompany balances and transactions have been eliminated. The equity method of accounting is used for joint ventures and investments in associated companies over which the Company has significant influence, but does not have effective control and consolidation is not otherwise required under the Financial Accounting Standards Board’s (“FASB”) authoritative guidance surrounding the consolidation of VIEs. The Company’s equity in the net income and losses of these investments is reported in equity income in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Income. | ||||||||
(c) Use of Estimates. The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. | ||||||||
(d) Fair Value Measurements. The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | ||||||||
The Company estimates fair value of its financial instruments utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: | ||||||||
• | Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets. | |||||||
• | Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |||||||
• | Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements. | |||||||
(e) Foreign Currency. Assets and liabilities of non-U.S. subsidiaries, whose functional currency is the local currency, are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the financial statements of foreign subsidiaries are included in accumulated other comprehensive loss (“OCL”), a component of stockholders’ equity, and included in net earnings only upon sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchanges rates on the transaction date and on the settlement date. | ||||||||
(f) Derivative Financial Instruments. The Company records derivative financial instruments on the consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e., unrealized gains or losses) are recorded each period in earnings or other comprehensive loss ("OCL"), depending on whether the derivative is designated and is effective as a hedged transaction, and on the type of hedging relationship. | ||||||||
For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of accumulated OCL in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. | ||||||||
Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. In order to manage risks related to borrowings under its credit facilities, the Company entered into an interest rate swap agreement. The Company designated this interest rate swap as a cash flow hedge of floating rate borrowings. The Company manages the risk associated with fluctuations in foreign currencies related to intercompany and third party inventory purchases denominated in foreign currencies through foreign exchange forward contracts designated as cash flow hedges. The Company does not apply hedge accounting to the foreign currency forward contracts used to offset currency-related changes in foreign currency denominated assets and liabilities. These contracts are adjusted to their fair value through earnings. Refer to Note 8, “Derivative Financial Instruments” for further discussion. | ||||||||
(g) Cash and Cash Equivalents. Cash and cash equivalents consist of all highly liquid investments with initial maturities of three months or less. | ||||||||
(h) Inventories. Inventories are stated at the lower of cost or market, determined by the first-in, first-out method and consist of the following: | ||||||||
December 31, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Finished goods | $ | 134 | $ | 126.7 | ||||
Work-in-process | 11.4 | 10 | ||||||
Raw materials and supplies | 71.8 | 62.5 | ||||||
$ | 217.2 | $ | 199.2 | |||||
(i) Property, Plant and Equipment. Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: | ||||||||
Estimated | ||||||||
Useful Lives | ||||||||
(in years) | ||||||||
Buildings | 25-30 | |||||||
Computer equipment and software | 5-Mar | |||||||
Leasehold improvements | 7-Apr | |||||||
Machinery and equipment | 7-Mar | |||||||
Office furniture and fixtures | 7-May | |||||||
The Company records depreciation and amortization in cost of sales, for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or seven years. | ||||||||
Property, plant and equipment, net consisted of the following: | ||||||||
December 31, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Machinery and equipment | $ | 243.5 | $ | 270.8 | ||||
Land and buildings | 247.1 | 261.9 | ||||||
Computer equipment and software | 69.2 | 72.3 | ||||||
Furniture and fixtures | 54.9 | 56.7 | ||||||
Construction in progress | 39.4 | 28.9 | ||||||
$ | 654.1 | $ | 690.6 | |||||
Accumulated depreciation | (298.5 | ) | (279.0 | ) | ||||
$ | 355.6 | $ | 411.6 | |||||
Depreciation expense, which includes depreciation expense for capital lease assets, for the Company was $57.7 million, $59.4 million and $30.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
(j) Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value generally is determined from estimated discounted future net cash flows (for assets held for use) or net realizable value (for assets held for sale). | ||||||||
(k) Goodwill and Other Intangible Assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate an impairment may have occurred. The Company performs an annual impairment test on all existing goodwill and other indefinite lived assets on October 1 of each year and whenever events or circumstances make it more likely than not that impairment may have occurred. The Company reviewed goodwill for impairment based on its identified reporting units, which are the Company’s Tempur North America, Tempur International and Sealy operating segments. In conducting the impairment test for the Tempur North America, Tempur International and Sealy operating segments, the fair value of each of the Company’s reporting units is compared to its respective carrying amount including goodwill. If the fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the fair value, further analysis is performed to assess impairment. The Company’s determination of fair value of the reporting units is based on a discounted cash flow approach, with an appropriate risk adjusted discount rate, and a market approach. Any identified impairment would result in an adjustment to the Company’s results of operations. | ||||||||
The Company also tests its indefinite-lived intangible assets, principally the Tempur and Sealy trade names. The Company tested its Sealy trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company tested its Tempur trade name through a qualitative analysis which considered indicators of impairment to evaluate whether the fair value was more likely than not in excess of its carrying value. | ||||||||
The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2014, 2013 and 2012, none of which resulted in the recognition of impairment charges. For further information on goodwill and other intangible assets refer to Note 4, “Goodwill and Other Intangible Assets”. | ||||||||
(l) Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. Accrued sales returns are included in accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets. | ||||||||
The Company had the following activity for accrued sales returns from December 31, 2012 to December 31, 2014: | ||||||||
(in millions) | ||||||||
Balance as of December 31, 2012 | 5.1 | |||||||
Amounts accrued | 104.8 | |||||||
Liabilities assumed as a result of Sealy Acquisition | 19.9 | |||||||
Returns charged to accrual | (101.1 | ) | ||||||
Balance as of December 31, 2013 | $ | 28.7 | ||||||
Amounts accrued | 127.4 | |||||||
Returns charged to accrual | (123.8 | ) | ||||||
Balance as of December 31, 2014 | $ | 32.3 | ||||||
(m) Warranties. The Company provides warranties on certain products, which vary based by segment, product and brand. Estimates of warranty expenses are based primarily on historical claims experience and product testing. Estimated future obligations related to these products are charged to cost of sales in the period in which the related revenue is recognized. In estimating its warranty obligations, the Company considers the impact of recoverable salvage value on warranty costs by segment in determining its estimate of future warranty obligations. | ||||||||
The following summarizes the Company’s warranty terms for mattresses and pillows: | ||||||||
Segment | Product/Brand | Warranty Term (in years) | ||||||
Tempur North America | Mattresses | 10 - 25, prorated (1) | ||||||
Tempur North America | Pillows | 3 | ||||||
Tempur International | Mattresses | 5 - 15, prorated (2) | ||||||
Tempur International | Pillows | 3 | ||||||
Sealy | Mattresses | 10 - 25, prorated (1) | ||||||
-1 | Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. | |||||||
-2 | The last 10 years of warranty period are prorated on a straight-line basis | |||||||
The Company had the following activity for warranties from December 31, 2012 to December 31, 2014: | ||||||||
(in millions) | ||||||||
Balance as of December 31, 2012 | $ | 4.8 | ||||||
Amounts accrued | 22.7 | |||||||
Liabilities assumed as a result of Sealy Acquisition | 21.4 | |||||||
Warranties charged to accrual | (22.8 | ) | ||||||
Balance as of December 31, 2013 | 26.1 | |||||||
Amounts accrued | 34.2 | |||||||
Warranties charged to accrual | (29.0 | ) | ||||||
Balance as of December 31, 2014 | $ | 31.3 | ||||||
As of December 31, 2014 and 2013, $16.1 million and $14.9 million, respectively, are included as a component of accrued expenses and other current liabilities and $15.2 million and $11.2 million are included in other non-current liabilities on the Company’s accompanying Consolidated Balance Sheets, respectively. | ||||||||
(n) Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carry forwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain foreign and domestic tax positions utilizing a proscribed recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. | ||||||||
(o) Revenue Recognition. Sales of products are recognized as revenue when persuasive evidence of an arrangement exists, title passes to customers and the risks and rewards of ownership are transferred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company extends volume discounts to certain customers, as well as promotional allowances, floor sample discounts, commissions paid to retail associates and slotting fees, and reflects these amounts as a reduction of sales at the time revenue is recognized based on historical experience. The Company also reports sales net of tax assessed by qualifying governmental authorities. The Company extends credit based on the creditworthiness of its customers. No collateral is required on sales made in the normal course of business. | ||||||||
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience and current economic conditions and also considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a customer receivable is reasonably assured. Account balances are charged off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts included in accounts receivable, net in the accompanying Consolidated Balance Sheets was $19.5 million and $19.3 million as of December 31, 2014 and 2013, respectively. | ||||||||
The Company reflects all amounts billed to customers for shipping and handling in net sales and the costs incurred from shipping and handling product in cost of sales. Amounts included in net sales for shipping and handling were approximately $14.7 million, $12.5 million and $4.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Amounts included in cost of sales for shipping and handling were $169.2 million, $142.5 million and $99.7 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
During the period ended December 31, 2014, the Company recognized other income, net of expense, of $15.6 million from certain other non-recurring items, including the partial settlement of a legal dispute. | ||||||||
(p) Cost of Sales. Costs associated with net sales are recorded in cost of sales. Cost of sales includes the costs of receiving, producing, inspecting, warehousing, insuring, and shipping goods during the period, as well as depreciation and amortization of long-lived assets used in these processes. Cost of sales also include shipping and handling costs associated with the delivery of goods to customers and costs associated with internal transfers between plant locations. | ||||||||
(q) Cooperative Advertising, Rebate and Other Promotional Programs. The Company enters into agreements with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these agreements. The Company periodically assesses these liabilities based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer or whether the customer will meet the requirements to receive rebate funds. The Company generally negotiates these agreements on a customer-by-customer basis. Some of these agreements extend over several periods. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to such estimates are recorded and charged to earnings in the period in which they are identified. Rebates and cooperative advertising are classified as a reduction of revenue and presented within net sales on the accompanying Consolidated Statements of Income. Certain cooperative advertising expenses are reported as components of selling and marketing expenses in the accompanying Consolidated Statements of Income because the Company receives an identifiable benefit and the fair value of the advertising benefit can be reasonably estimated. | ||||||||
(r) Advertising Costs. The Company expenses advertising costs as incurred except for production costs and advance payments, which are deferred and expensed when advertisements run for the first time. Direct response advance payments are deferred and amortized over the life of the program. Advertising costs are included in selling and marketing expenses in the accompanying Consolidated Statements of Income. Advertising costs charged to expense were $326.7 million, $274.2 million and $164.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. Advertising costs include expenditures for shared advertising costs that the Company reimburses to customers under its integrated and cooperative advertising programs. Cooperative advertising costs paid to customers are recorded as a component of selling and marketing expenses within the Consolidated Statements of Income to the extent of the estimated fair value when the customer provides proof of advertising. The Company periodically assesses the liabilities recorded for cooperative advertising based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer. Advertising costs deferred and included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets were $9.7 million and $8.5 million as of December 31, 2014 and 2013, respectively. | ||||||||
(s) Research and Development Expenses. Research and development expenses for new products are expensed as they are incurred and are included in general, administrative and other expenses in the accompanying Consolidated Statements of Income. Research and development costs charged to expense were $21.6 million, $21.0 million and $15.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
(t) Deferred Financing Costs. The Company capitalizes costs associated with the issuance of debt and amortizes these costs as additional interest expense over the lives of the debt instruments using the effective interest method. These costs are recorded as deferred financing costs within other non-current assets in the accompanying Consolidated Balance Sheets and interest expense, net in the accompanying Consolidated Statements of Income. Upon the prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs. | ||||||||
(u) Royalty Income and Expense. The Company recognizes royalty income based on sales of Sealy® and Stearns & Foster® branded products by various licensees. The Company also pays royalties to other entities for the use of their names on products produced by the Company. Royalty income, net of royalty expense, was $18.1 million and $13.7 million for the years ended December 31, 2014 and 2013, respectively. The Company did not record royalty income or expense for the year ended December 31, 2012. | ||||||||
(v) Stock-Based Compensation. The Company accounts for stock-based payment transactions in which the Company receives employee services in exchange for equity instruments of the Company. Stock-based compensation cost for restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and deferred stock units (“DSUs”) is measured based on the closing fair market value of the Company’s common stock on the date of grant. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes option-pricing model. The Company recognizes stock-based compensation cost as expense for awards other than its PRSUs ratably on a straight-line basis over the requisite service period. The Company recognizes stock-based compensation cost associated with its PRSUs over the requisite service period if it is probable that the performance conditions will be satisfied. The Company will recognize a benefit from stock-based compensation in additional paid in capital if an incremental tax benefit is realized by following the ordering provisions of the tax law. Further information regarding stock-based compensation can be found in Note 12, “Stock-based Compensation.” | ||||||||
(w) Treasury Stock. Subject to Delaware law, and the limitations in the Company's 2012 Credit Agreement, the Board of Directors may authorize share repurchases of the Company’s common stock (“Share Repurchase Authorizations”). Share Repurchase Authorizations may be made through open market transactions, negotiated purchase or otherwise, at times and in such amounts as the Company, and a committee of the Board, deem appropriate. Shares repurchased under Share Repurchase Authorizations are held in treasury for general corporate purposes, including issuances under various employee share-based award plans. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity. Share Repurchase Authorizations may be suspended, limited or terminated at any time without notice. | ||||||||
(x) Self-Insurance. The Company is self-insured for certain losses related to medical claims with excess loss coverage of $0.4 million per claim per year. The Company also utilizes large deductible policies to insure claims related to general liability, product liability, automobile, and workers’ compensation. The Company’s recorded liability for workers’ compensation represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated workers' compensation liability is undiscounted and is established based upon analysis of historical and actuarial estimates, and is reviewed by the Company and third party actuaries on a quarterly basis to ensure that the liability is appropriate. As of December 31, 2014 and 2013, $4.8 million and $5.4 million, respectively, of the recorded undiscounted liability is included in accrued expenses and other current liabilities and $10.0 million and $9.5 million are included in other non-current liabilities within the accompanying Consolidated Balance Sheets. | ||||||||
(y) Environmental Cost. Environmental expenditures that relate to current operations are expensed or capitalized, as appropriate, under the FASB’s authoritative guidance on environmental remediation liabilities. Expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made or the requirement for remedial efforts is probable, and the costs can be reasonably estimated. The timing of accruing for these remediation liabilities is generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to the known exposures, are progressing against the accrued cost estimates, as well as to identify other potential remediation sites that are presently unknown. | ||||||||
(z) Pension Obligations. The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at four of its active Sealy plants and eight previously closed Sealy U.S. facilities. Sealy Canada, Ltd. (a 100.0% owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities. Both plans provide retirement and survivorship benefits based on the employees' credited years of service. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date. The benefit obligation is the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. | ||||||||
(aa) Supply Agreements. The Company from time to time enters into long term supply agreements with its customers to sell its branded products to customers in exchange for minimum sales volume or a minimum percentage of the customer's sales or space on the retail floor. Such agreements generally cover a period of two to five years. Initial cash outlays by the Company for such agreements are capitalized and amortized generally as a reduction of sales over the life of the contract. The majority of these cash outlays are ratably recoverable upon contract termination. Such capitalized amounts are included in prepaid expenses and other current assets and non-current assets in the Company's Consolidated Balance Sheets. |
Recently_Issued_Accounting_Pro
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This ASU is based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating this ASU to determine the Company's adoption method and the impact it will have on the Company's Consolidated Financial Statements. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern). This ASU addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, with early adoption permitted. The Company does not expect to early adopt this ASU and does not believe that the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Business Combinations [Abstract] | |||||
Acquisitions and Divestitures | Acquisitions and Divestitures | ||||
Sealy Acquisition | |||||
On March 18, 2013, the Company completed the Sealy Acquisition. Pursuant to the merger agreement, each share of common stock of Sealy issued and outstanding immediately prior to the effective time of the Sealy Acquisition was cancelled and (other than shares held by Sealy or Tempur Sealy International or their subsidiaries or Sealy stockholders who properly exercised their appraisal rights) converted into the right to receive $2.20 in cash. The total purchase price was $1,172.9 million, which was funded using available cash and financing consisting of the Company’s 2012 Credit Agreement and Senior Notes (see Note 6, “Debt” for the definition of these terms and further discussion). The purchase price of Sealy consisted of the following items: | |||||
(in millions) | |||||
Cash consideration for stock | $ | 231.2 | (1) | ||
Cash consideration for share-based awards | 14.2 | (2) | |||
Cash consideration for 8.0% Sealy Notes | 442.1 | (3) | |||
Cash consideration for repayment of Sealy Senior Notes | 260.7 | (4) | |||
Cash consideration for repayment of Sealy 2014 Notes | 276.9 | (5) | |||
Total consideration | 1,225.10 | ||||
Cash acquired | (52.2 | ) | (6) | ||
Net consideration transferred | $ | 1,172.90 | |||
-1 | The cash consideration for outstanding shares of Sealy common stock is the product of the agreed-upon cash per share price of $2.20 and total Sealy shares of 105.1 million. | ||||
-2 | The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $2.20 and the total number of RSUs and DSUs outstanding and the “in the money” stock options net of the weighted average exercise price. | ||||
-3 | The cash consideration for Sealy’s 8.0% Senior Secured Third Lien Convertible Notes due 2016 (“8.0% Sealy Notes”) is the result of applying the adjusted equity conversion rate to the 8.0% Sealy Notes tendered for conversion and multiplying the result by the agreed-upon cash per share price of $2.20. The 8.0% Sealy Notes that were converted represented the right to receive the same merger consideration that would have been payable to a holder of 201.0 million shares of Sealy common stock, subject to adjustment in accordance with the terms of the supplemental indenture governing the 8.0% Sealy Notes. | ||||
-4 | The cash consideration for Sealy’s 10.875% Senior Notes due 2016 (“Sealy Senior Notes”) reflects the repayment of the outstanding obligation. | ||||
-5 | The cash consideration for Sealy’s 8.25% Senior Subordinated Notes due 2014 (“Sealy 2014 Notes”) reflects the repayment of the outstanding obligation. | ||||
-6 | Represents the Sealy cash balance acquired at acquisition. | ||||
The Company incurred $18.7 million and $8.9 million of transaction costs for the years ended December 31, 2013 and 2012, respectively. There were no transaction expenses incurred in 2014. These costs are included in general, administrative and other expenses in the accompanying Consolidated Statements of Income. In addition, the Company incurred $19.9 million of incremental interest expense for the year ended December 31, 2013. This includes interest and other fees on the Senior Notes and the 2012 Credit Agreement for the period prior to March 18, 2013. The incremental interest expense also included commitment fees associated with financing for the closing of the Sealy Acquisition, and the write off of deferred financing costs associated with the 2011 Credit Facility. | |||||
The Company accounted for the Sealy Acquisition using the acquisition method. The allocation of the purchase price is based on estimates of the fair value of assets acquired and liabilities assumed as of March 18, 2013. The components of the final purchase price allocation are as follows: | |||||
(in millions) | |||||
Accounts receivable | $ | 185 | |||
Inventory | 75.1 | ||||
Prepaid expenses and other current assets | 22.8 | ||||
Accounts payable | (77.9 | ) | |||
Accrued expenses | (137.2 | ) | |||
Property, plant and equipment | 242.9 | ||||
Other assets | 32.6 | ||||
Identifiable intangible assets: | |||||
Indefinite-lived trade names | 521.2 | ||||
Contractual retailer/distributor relationships | 91.1 | ||||
Developed technology, including patents | 87.1 | ||||
Customer databases | 3.9 | ||||
Optimum™ trade name | 2.3 | ||||
Deferred income taxes, net | (232.8 | ) | |||
8.0% Sealy Notes | (96.2 | ) | |||
Redeemable non-controlling interest | (11.3 | ) | |||
Other liabilities | (77.5 | ) | |||
Goodwill | 541.8 | ||||
Net consideration transferred | $ | 1,172.90 | |||
The excess of the purchase price over the estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Sealy Acquisition. These benefits include a comprehensive portfolio of iconic brands, complementary product offerings, enhanced global footprint, and attractive synergy opportunities and value creation. None of the goodwill is expected to be deductible for income tax purposes and is entirely allocated to the Sealy reportable segment. | |||||
The following unaudited pro forma information presents the combined financial results for the Company as if the Sealy Acquisition had been completed at the beginning of the Company’s prior year, January 1, 2013. Prior to the Sealy Acquisition, Sealy used a 52-53 week fiscal year ending on the closest Sunday to November 30, but no later than December 2. The pro forma financial information set forth below for the year ended December 31, 2013 includes Sealy’s pro forma information for the combined twelve month period from December 3, 2012 through March 3, 2013 and April 1, 2013 through December 29, 2013. | |||||
Year Ended | |||||
December 31, | |||||
(in millions, except earnings per common share) | 2013 | ||||
Net sales | $ | 2,757.20 | |||
Net income | $ | 90.9 | |||
Earnings per common share – Diluted | $ | 1.49 | |||
The information above does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, and does not reflect future events that may occur after December 31, 2013 or any operating efficiencies or inefficiencies that may result from the Sealy Acquisition and related financing. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that the Company will experience going forward. | |||||
Other Acquisitions and Divestitures | |||||
Effective June 30, 2014, the Company completed the sale of its three U.S. innerspring component production facilities and equipment, along with associated working capital, to L&P for total consideration of approximately $47.8 million. The working capital adjustment period ended in the quarter ended September 30, 2014, which resulted in a cash payment to L&P of $2.8 million, reduced the total consideration received to $45.0 million. The carrying amount of the net assets sold in this transaction, including an allocation of reporting unit goodwill determined using the relative fair value method, was approximately $66.8 million. As a result, a loss on disposal of business was recorded for $23.2 million for the year ended December 31, 2014, which included $1.4 million of transaction costs and the $2.8 million working capital adjustment. | |||||
Effective July 1, 2014, the Company acquired certain assets from a third-party licensee relating to its business in Japan. The total purchase price was $8.5 million, subject to customary working capital adjustments. The Company accounted for this business combination using the acquisition method. The preliminary allocation of the purchase price is based on estimates of the fair value of assets acquired as of July 1, 2014. The excess of the purchase price over the estimated fair value of the tangible net assets and identifiable intangible assets acquired was recorded as goodwill, which is non-deductible for income tax purposes and is entirely allocated to the Tempur International reportable segment. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||||||||||||||||||||||
The following summarizes changes to the Company’s goodwill, by reportable segment: | ||||||||||||||||||||||||||
(in millions) | Total | Tempur | Tempur | Sealy | ||||||||||||||||||||||
North America | International | |||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 216.1 | $ | 108.9 | $ | 107.2 | $ | — | ||||||||||||||||||
Goodwill resulting from Sealy Acquisition | 541.8 | — | — | 541.8 | ||||||||||||||||||||||
Foreign currency translation adjustments | 1.7 | (1.2 | ) | 0.1 | 2.8 | |||||||||||||||||||||
Balance as of December 31, 2013 | 759.6 | 107.7 | 107.3 | 544.6 | ||||||||||||||||||||||
Disposal of business | (21.4 | ) | — | — | (21.4 | ) | ||||||||||||||||||||
Goodwill resulting from acquisitions | 2.3 | — | 2.3 | — | ||||||||||||||||||||||
Foreign currency translation adjustments | (4.0 | ) | (1.5 | ) | (1.2 | ) | (1.3 | ) | ||||||||||||||||||
Balance as of December 31, 2014 | $ | 736.5 | $ | 106.2 | $ | 108.4 | $ | 521.9 | ||||||||||||||||||
The following table summarizes information relating to the Company’s other intangible assets, net: | ||||||||||||||||||||||||||
($ in millions) | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||||
Useful | Gross | Accumulated | Net | Carrying | Accumulated | Net | ||||||||||||||||||||
Lives | Carrying | Amortization | Carrying | Amount | Amortization | Carrying | ||||||||||||||||||||
(Years) | Amount | Amount | Amount | |||||||||||||||||||||||
Unamortized indefinite life intangible assets: | ||||||||||||||||||||||||||
Trade names | $ | 569 | $ | — | $ | 569 | $ | 575.3 | $ | — | $ | 575.3 | ||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||||
Contractual distributor relationships | 15 | $ | 88.2 | $ | 10.4 | $ | 77.8 | $ | 90 | $ | 4.7 | $ | 85.3 | |||||||||||||
Technology and other | 10-Apr | 92.6 | 32.6 | 60 | 93.2 | 25.5 | 67.7 | |||||||||||||||||||
Patents, other trademarks, and other trade names | 20-May | 27.3 | 14.6 | 12.7 | 27.4 | 12.2 | 15.2 | |||||||||||||||||||
Customer databases, relationships and reacquired rights | 5-Feb | 24.1 | 16.5 | 7.6 | 21 | 14.4 | 6.6 | |||||||||||||||||||
Total | $ | 801.2 | $ | 74.1 | $ | 727.1 | $ | 806.9 | $ | 56.8 | $ | 750.1 | ||||||||||||||
Amortization expense relating to intangible assets for the Company was $18.5 million, $15.2 million and $5.4 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is recorded in general, administrative and other expenses in the Company's Consolidated Statements of Income. No impairments of goodwill or other intangible assets have adjusted the gross carrying amount of these assets in any period. | ||||||||||||||||||||||||||
Estimated annual amortization of intangible assets is expected to be as follows: | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
2015 | $ | 18.3 | ||||||||||||||||||||||||
2016 | 17.9 | |||||||||||||||||||||||||
2017 | 16.6 | |||||||||||||||||||||||||
2018 | 15.6 | |||||||||||||||||||||||||
2019 | 15.4 | |||||||||||||||||||||||||
Unconsolidated_Affiliate_Compa
Unconsolidated Affiliate Companies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||
Unconsolidated Affiliate Companies | Unconsolidated Affiliate Companies | |||||||
The Company has ownership interests in a group of Asia-Pacific joint ventures, as a result of the Sealy Acquisition, to develop markets for Sealy® branded products in those regions. The Company’s ownership interest in these joint ventures is 50.0% and is accounted for under the equity method. The Company’s net investment of $12.9 million and $7.8 million at December 31, 2014 and 2013, respectively, is recorded in other non-current assets within the accompanying Consolidated Balance Sheets. The Company’s share of earnings for the year ended December 31, 2014 and 2013 is recorded in equity income in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Income. | ||||||||
The tables below present summarized financial information for joint ventures as of and for the years ended December 31: | ||||||||
(in millions) | 2014 | 2013 | ||||||
Current assets | $ | 49.7 | $ | 39.1 | ||||
Non-current assets | 5.1 | 5.7 | ||||||
Current liabilities | 29.7 | 31.7 | ||||||
Equity | 25.1 | 13.1 | ||||||
(in millions) | 2014 | 2013 | ||||||
Revenues | $ | 99.2 | $ | 67.9 | ||||
Gross profit | 62.1 | 45 | ||||||
Income from operations | 16.8 | 10.9 | ||||||
Net income | 13.1 | 8.9 | ||||||
Debt
Debt | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Debt | Debt | |||||||
Debt for the Company consists of the following: | ||||||||
(in millions) | December 31, 2014 | 31-Dec-13 | ||||||
$375.0 million Senior Notes, interest at 6.875%, due December 15, 2020 | $ | 375 | $ | 375 | ||||
Revolving credit facility, interest at Base Rate plus applicable margin of 2.25% or LIBOR plus applicable margin of 3.00% as of December 31, 2014 and 3.25% as of December 31, 2013, commitment through and due March 18, 2018 | 16 | 74.5 | ||||||
Term A Facility, interest at LIBOR plus applicable margin of 2.25% as of December 31, 2014 and 2.50% as of December 31, 2013, commitment through and due March 18, 2018 | 484.5 | 522.5 | ||||||
Term B Facility, interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2014 and December 31, 2013, commitment through and due March 18, 2020 | 594.4 | 737.3 | ||||||
8.0% Sealy Notes, due July 15, 2016 | 104.7 | 99.6 | ||||||
Capital lease obligations and other | 27.7 | 27.6 | ||||||
1,602.30 | 1,836.50 | |||||||
Less current portion | (66.4 | ) | (39.6 | ) | ||||
$ | 1,535.90 | $ | 1,796.90 | |||||
2012 Credit Agreement | ||||||||
On December 12, 2012, Tempur Sealy International and certain subsidiaries of Tempur Sealy International as borrowers and guarantors, entered into a credit agreement (as amended, the “2012 Credit Agreement”) with a syndicate of banks. The 2012 Credit Agreement initially provided for (i) a revolving credit facility of $350.0 million (the “Revolver”), (ii) a term A facility of $550.0 million (the “Term A Facility”) and (iii) a term B facility of $870.0 million (the “Term B Facility”). The Revolver includes a sublimit for letters of credit and swingline loans, subject to certain conditions and limits. The Revolver and the Term A Facility will mature on March 18, 2018 and the Term B Facility will mature on March 18, 2020. The Revolver, the Term A Facility and the Term B Facility closed and funded in connection with the Sealy Acquisition on March 18, 2013. | ||||||||
Borrowings under the 2012 Credit Agreement will generally bear interest, at the election of Tempur Sealy International and the other subsidiary borrowers, at either (i) LIBOR plus the applicable margin or (ii) Base Rate plus the applicable margin. For the Revolver and the Term A Facility, (a) the initial applicable margin for LIBOR advances was 3.00% per annum and the initial applicable margin for Base Rate advances was 2.00% per annum, and (b) thereafter following the delivery of financial statements for the first full fiscal quarter after closing, such applicable margins are determined by a pricing grid based on the consolidated total net leverage ratio of the Company. The Term B Facility was initially subject to a LIBOR floor of 1.00%. The applicable margin for the Term B facility was initially 4.00% per annum for LIBOR advances and 3.00% per annum for Base Rate advances. On May 16, 2013, the applicable margin on the Term B Facility was reduced to 2.75% per annum for LIBOR advances and 1.75% per annum for Base Rate advances, and the LIBOR floor was reduced to 0.75% until maturity. On July 11, 2013, the applicable margin on the Term A Facility was reduced by 0.75% for each pricing level on the pricing grid based on the consolidated total net leverage ratio of the Company. | ||||||||
Obligations under the 2012 Credit Agreement are guaranteed by Tempur Sealy International’s existing and future direct and indirect wholly-owned domestic subsidiaries, subject to certain exceptions; and the 2012 Credit Agreement is secured by a security interest in substantially all Tempur Sealy International’s and the other subsidiary borrowers’ domestic assets and the domestic assets of each subsidiary guarantor, whether owned as of the closing or thereafter acquired, including a pledge of 100.0% of the equity interests of each subsidiary guarantor that is a domestic entity (subject to certain limited exceptions) and 65.0% of the voting equity interests of any direct first tier foreign entity owned by a subsidiary guarantor. The 2012 Credit Agreement requires compliance with certain financial covenants providing for maintenance of a minimum consolidated interest coverage ratio and maintenance of a maximum consolidated total net leverage ratio. The consolidated total net leverage ratio is calculated using consolidated funded debt less qualified cash. Consolidated funded debt includes debt recorded on the Consolidated Balance Sheets as of the reporting date, plus letters of credit outstanding and short-term other debt. The Company is allowed to exclude from consolidated funded debt 100.0% of the domestic qualified cash and 60.0% of foreign qualified cash, the aggregate of which cannot exceed $150.0 million at the end of the reporting period. As of December 31, 2014, domestic qualified cash was $25.9 million and foreign qualified cash was $21.9 million. | ||||||||
The 2012 Credit Agreement contains certain customary negative covenants, which include limitations on liens, investments, indebtedness, dispositions, mergers and acquisitions, the making of restricted payments, changes in the nature of business, changes in fiscal year, transactions with affiliates, use of proceeds, prepayments of certain indebtedness, entry into burdensome agreements and changes to governing documents and other junior financing documents. The 2012 Credit Agreement also contains certain customary affirmative covenants and events of default, including upon a change of control. | ||||||||
Tempur Sealy International is required to pay a commitment fee on the unused portion of the Revolver, which initially was 0.50% per annum and which steps down to 0.375% per annum if the consolidated total net leverage ratio is less than or equal to 3.50:1.00. This unused commitment fee is payable quarterly in arrears and on the date of termination or expiration of the commitments under the Revolver. Tempur Sealy International and the other borrowers also pay customary letter of credit issuance and other fees under the 2012 Credit Agreement. | ||||||||
On October 17, 2014, the Company entered into an amendment to its existing 2012 Credit Agreement. The amendment provides the Company with flexibility in the acquisition of existing and future licensees, distributors and joint ventures as well as the potential acquisition of other strategic international brands in existing Company markets by, among other things, providing for increased acquisition baskets and certain exceptions from such acquisition baskets and greater flexibility with respect to the requirements for guarantying the obligations under the 2012 Credit Agreement by certain existing joint ventures. In addition, the amendment provides for flexibility under the maximum consolidated total net leverage ratio going forward as well as additional flexibility in the making of certain investments and restricted payments and the payment of junior indebtedness through, among other things, an available amount basket that includes a $50.0 million starter portion. | ||||||||
As of December 31, 2014, the Revolver total LIBOR plus applicable margin interest rate was 3.16%. As of December 31, 2014, the Revolver total Base Rate plus applicable margin interest rate was 5.25%. During the year ended December 31, 2014, borrowings were $271.5 million and repayments were $330.0 million. Total outstanding borrowings under the Revolver were $16.0 million at December 31, 2014 with letters of credit outstanding of $18.2 million, and total availability under the Revolver was $315.8 million as of December 31, 2014. | ||||||||
As of December 31, 2014, the Term A Facility total LIBOR plus applicable margin interest rate was 2.42%. The Term A Facility is subject to scheduled quarterly payments in accordance with the 2012 Credit Agreement. The scheduled quarterly payments are $13.5 million from March 31, 2015 through December 31, 2017. Upon maturity, the principal payment due is $323.0 million. During the year ended December 31, 2014, repayments with respect to the Term A Facility were $38.0 million, which includes $9.1 million of prepayments made as a result of the excess cash flow covenant in the 2012 Credit Agreement. | ||||||||
As of December 31, 2014, the Term B Facility total LIBOR plus applicable margin was 3.50%. The Term B Facility is subject to scheduled quarterly payments in accordance with the 2012 Credit Agreement. The scheduled quarterly payments are $1.5 million through December 31, 2019. Upon maturity, the principal payment due is $564.1 million. During the year ended December 31, 2014, repayments with respect to the Term B Facility were $142.9 million, which includes $12.8 million of prepayments made as a result of the excess cash flow covenant in the 2012 Credit Agreement. | ||||||||
On September 30, 2014, the Company voluntarily prepaid $123.1 million on the Term B Facility and $1.9 million on the Term A Facility. In conjunction with the voluntary prepayment, the Company recorded accelerated amortization of $3.3 million of the associated deferred financing costs, which is recorded in interest expense in the Consolidated Statements of Income. | ||||||||
The Company is in compliance with all applicable covenants at December 31, 2014. | ||||||||
Senior Notes | ||||||||
On December 19, 2012, Tempur Sealy International issued $375.0 million aggregate principal amount of 6.875% senior notes due 2020 (the “Senior Notes”) to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933 ("Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Senior Notes were issued pursuant to an indenture, dated as of December 19, 2012 (the “Indenture”), among the Company, certain subsidiaries of Tempur Sealy International as guarantors (the “Guarantors”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Senior Notes are general unsecured senior obligations of Tempur Sealy International and are guaranteed on a senior unsecured basis by the Guarantors. The Senior Notes mature on December 15, 2020, and interest is payable semi-annually in arrears on each June 15 and December 15, beginning on June 15, 2013. The gross proceeds from the Senior Notes, were funded into escrow and these funds were released from escrow on March 18, 2013 and used as part of the funding of the Sealy Acquisition. Following the completion of the Sealy Acquisition, Sealy and certain of its subsidiaries became Guarantors of the Senior Notes. | ||||||||
Tempur Sealy International has the option to redeem all or a portion of the Senior Notes at any time on or after December 15, 2016. Starting on this date the initial redemption price is 103.438% of the principal amount, plus accrued and unpaid interest, if any. The redemption price will decline to 101.719% on December 15, 2017 and to 100.0% of the principal amount beginning on December 15, 2018. In addition, Tempur Sealy International has the option at any time prior to December 15, 2016 to redeem some or all of the Senior Notes at 100.0% of the original principal amount plus a “make-whole” premium and accrued and unpaid interest, if any. Tempur Sealy International may also redeem up to 35.0% of the Senior Notes prior to December 15, 2015, under certain circumstances with the net cash proceeds from certain equity offerings, at 106.875% of the principal amount plus accrued and unpaid interest, if any. Tempur Sealy International may make such redemptions only if, after any such redemption, at least 65.0% of the original aggregate principal amount of the Senior Notes issued remains outstanding. | ||||||||
The Indenture restricts the ability of Tempur Sealy International and the ability of certain of its subsidiaries to, among other things: (i) incur, directly or indirectly, debt; (ii) make, directly or indirectly, certain investments and restricted payments; (iii) incur or suffer to exist, directly or indirectly, liens on its properties or assets; (iv) sell or otherwise dispose of, directly or indirectly, assets; (v) create or otherwise cause or suffer to exist any consensual restriction on the right of certain of the subsidiaries of Tempur Sealy International to pay dividends or make any other distributions on or in respect of their capital stock; (vi) enter into transactions with affiliates; (vii) engage in sale-leaseback transactions; (viii) purchase or redeem capital stock or subordinated indebtedness; (ix) issue or sell stock of restricted subsidiaries; and (x) effect a consolidation or merger. These covenants are subject to a number of exceptions and qualifications. | ||||||||
Also in conjunction with the issuance and sale of the Senior Notes, Tempur Sealy International and the Guarantors agreed through a Registration Rights Agreement to exchange the Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act. Tempur Sealy International and the Guarantors would have been required to pay additional interest if the Senior Notes were not registered within the time periods specified within the Registration Rights Agreement. Tempur Sealy International filed a registration statement on Form S-4 on July 12, 2013 in connection with the registration of the Senior Notes, and the registration statement was declared effective by the Securities and Exchange Commission on July 26, 2013, which was within the specified time period. | ||||||||
8.0% Sealy Notes | ||||||||
In conjunction with the Sealy Acquisition, Sealy’s obligations under its 8.0% Sealy Notes were amended. As a result of the Sealy Acquisition, the 8.0% Sealy Notes became convertible solely into cash, in an amount that declined slightly every day during the Make-Whole Period (as defined under the Supplemental Indenture governing the 8.0% Sealy Notes) that followed the Sealy Acquisition, and then became fixed thereafter. The Make-Whole Period effectively expired on April 12, 2013. As of April 12, 2013, approximately 83.0% of all the 8.0% Sealy Notes outstanding prior to the Sealy Acquisition were converted into cash and paid to the holders. Holders of the 8.0% Sealy Notes who converted on March 19, 2013 received approximately $2,325.43 per $1,000 Accreted Principal Amount of the 8.0% Sealy Notes being converted. The holders of the 8.0% Sealy Notes who convert after April 12, 2013 will receive $2,200 per $1,000 Accreted Principal Amount of the 8.0% Sealy Notes being converted. The Company calculated the fair value of the remaining 8.0% Sealy Notes as part of its purchase price allocation by first calculating the future payout of the remaining 17.0% aggregate principal amount of the 8.0% Sealy Notes still outstanding and the cumulative semi-annual interest payments at the July 15, 2016 maturity, and then calculated the present value using a market discount rate, which resulted in a fair value of $96.2 million at March 18, 2013, the date the Sealy Acquisition closed. As of December 31, 2014, the carrying value of the 8.0% Sealy Notes is $104.7 million, which includes $8.7 million of accreted discount. The discount is accreted through non-cash interest expense over the life of the 8.0% Sealy Notes using the effective interest method. As of December 31, 2013, the 8.0% Sealy Notes had a carrying value of $99.6 million, which includes $3.7 million of accreted discount less conversion payments made to holders of certain 8.0% Sealy Notes that were tendered for conversion. | ||||||||
The 8.0% Sealy Notes mature on July 15, 2016 and bear interest at 8.0% per annum accruing semi-annually in arrears on January 15 and July 15 of each year. Sealy does not pay interest in cash to the holders of the 8.0% Sealy Notes, but instead increases the principal amount of the 8.0% Sealy Notes by an amount equal to the accrued interest for the interest period then ended (“Paid-In-Kind” or “PIK interest”). The amount of the accrued interest for each interest period is calculated on the basis of the accreted principal amount as of the first day of such interest period. PIK interest accrued on the most recent interest period then ended on the 8.0% Sealy Notes converted between interest payment dates is forfeited. | ||||||||
All material negative covenants (apart from the lien covenant and related collateral requirements) were eliminated from the supplemental indenture governing the 8.0% Sealy Notes, as well as certain events of default and certain other provisions. In addition, Tempur Sealy International and its non-Sealy subsidiaries do not provide any guarantees of any obligations with respect to the 8.0% Sealy Notes. | ||||||||
Capital Leases | ||||||||
The Company is party to capital leases as of December 31, 2014 and 2013. The approximate remaining life of the leases is 10 years as of December 31, 2014. | ||||||||
Deferred Financing Costs | ||||||||
As a result of the Company’s issuance of the Senior Notes and in conjunction with entering into the 2012 Credit Agreement, $54.3 million of deferred financing costs were capitalized in 2013 and 2012 and will be amortized as interest expense over the respective debt instrument period, ranging from 5 to 8 years, using the effective interest method. In conjunction with the voluntary prepayment on September 30, 2014 on amounts outstanding under the 2012 Credit Agreement, the Company recorded accelerated amortization of $3.3 million of the associated deferred financing costs. On October 17, 2014, the Company capitalized $3.1 million of deferred financing costs in connection with the amendment to the existing 2012 Credit Agreement. These deferred financing costs will be amortized as interest expense over the remaining 4 to 6 years of the debt instrument period, in conjunction with the initial deferred financing costs capitalized in 2013 and discussed above. | ||||||||
In conjunction with the repayment of all outstanding borrowings on the 2011 Credit Facility, the Company wrote off the associated $4.7 million of deferred financing costs in 2013. | ||||||||
Interest Rate Swap Agreement | ||||||||
On August 8, 2011, the Company entered into a four-year interest rate swap agreement to manage interest costs and the risk associated with changing interest rates associated with variable portions of the Company’s debt outstanding. Refer to Note 8, “Derivative Financial Instruments,” for additional information regarding the Company’s interest rate swap agreement. | ||||||||
Future Obligations | ||||||||
As of December 31, 2014, the scheduled maturities of long-term debt outstanding, including capital lease obligations, for each of the next five years and thereafter are as follows: | ||||||||
(in millions) | Amount | |||||||
2015 | $ | 66.4 | ||||||
2016 | 166.6 | |||||||
2017 | 62.2 | |||||||
2018 | 347.7 | |||||||
2019 | 8.9 | |||||||
Thereafter | 950.5 | |||||||
Total | $ | 1,602.30 | ||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements |
The classification of fair value measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to the measurement. There were no transfers between levels for the year ended December 31, 2014 and 2013. At December 31, 2014 and 2013, the Company had an interest rate swap agreement and foreign exchange forward contracts recorded at fair value. The fair value of the interest rate swap agreement is calculated using standard industry models based on observable forward yield curves. The Company also utilizes foreign currency forward contracts to manage the risk associated with exposures to foreign currency risk related to intercompany debt and associated interest payments. The fair value of the foreign exchange contracts is calculated using standard industry models based on observable forward points and discount curves. The fair values of all derivative instruments are adjusted for credit risk and restrictions and other terms specific to the contracts. The fair value of the interest rate swap and the foreign exchange forward contract were not material for the years ended December 31, 2014 or 2013. | |
The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term maturity of those instruments. Borrowings under the 2012 Credit Agreement are at variable interest rates and accordingly their carrying amounts approximate fair value. The fair value of the Senior Notes was approximately $398.4 million and $405.0 million at December 31, 2014 and 2013, respectively. The fair value of the 8.0% Sealy Notes was approximately $110.7 million and $99.9 million at December 31, 2014 and 2013, respectively. The fair value of the Senior Notes and the 8.0% Sealy Notes were based on Level 2 inputs such as quoted market prices or estimated using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt instruments. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments |
In the normal course of business, the Company is exposed to certain risks related to fluctuations in interest rates. The Company uses interest rate swaps to manage risks from these market fluctuations. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. The Company also utilizes foreign exchange spot and forward contracts to manage the risk associated with exposures to foreign currency risk. In addition, certain foreign exchange forward contracts related to risks associated with intercompany inventory purchases and are designated as cash flow hedging instruments. Certain forward exchange forward contracts relate to intercompany debt and associated interest payments and certain accounts receivable and accounts payable and are considered to be economic hedges. The fair value of the interest rate swap and foreign exchange forward contracts is calculated as described in Note 7, "Fair Value Measurements," taking into consideration foreign currency rates and the current creditworthiness of the counterparties or the Company, as applicable. | |
Interest Rate Swap Agreement | |
The Company is exposed to changes in interest rates on its variable rate debt. In order to manage this risk, on August 8, 2011, the Company entered into a four-year interest rate swap agreement to manage interest costs and the risk associated with changing interest rates. The Company designated this interest rate swap agreement as a cash flow hedge of floating rate borrowings and expects the hedge to be highly effective in offsetting fluctuations in the designated interest payments resulting from changes in the benchmark interest rate. The gains and losses on the designated interest rate swap agreement will offset losses and gains on the transactions being hedged. The Company formally documented the effectiveness of this qualifying hedge instrument (both at the inception of the interest rate swap agreement and on an ongoing basis) in offsetting changes in cash flows of the hedged transaction. The fair value of the interest rate swap agreement is calculated as described in Note 7, “Fair Value Measurements”, taking into consideration current interest rates and the current creditworthiness of the counterparties or the Company, as applicable. | |
As a result of this interest rate swap agreement, the Company pays interest at a fixed rate and receives payments at a variable rate which began on December 30, 2011. As of this date, the interest rate swap agreement effectively fixed the floating LIBOR-based interest rate to 1.25% plus the applicable margin on $250.0 million of the outstanding balance under the Company’s variable rate debt. On December 30, 2013, the outstanding notional principal amount of the interest rate swap agreement reduced to $150.0 million. The interest rate swap agreement expires on December 30, 2015. The Company has selected the LIBOR-based rate on the hedged portion of the Company’s variable rate debt during the term of the interest rate swap agreement. The effective portion of the change in value of the interest rate swap agreement is reflected as a component of comprehensive income and recognized as interest expense, net as payments are paid or accrued. The remaining gain or loss in excess of the cumulative change in the present value of the future cash flows of the hedged item, if any (i.e., the ineffective portion) or hedge components excluded from the assessment of effectiveness are recognized as interest expense, net during the current period. These amounts are immaterial to the Consolidated Financial Statements. | |
Foreign Exchange Forward Contracts | |
Cash Flow Hedges | |
The Company is exposed to foreign currency risk related to intercompany and third party inventory purchases denominated in foreign currencies. To manage the risk associated with fluctuations in foreign currencies related to these transactions, the Company enters into foreign exchange forward contracts. As of December 31, 2014, the Company had foreign exchange forward contracts designated as cash flow hedges to buy U.S dollars and to sell Canadian dollars with a notional amount outstanding of $46.5 million. These foreign exchange forward contracts have maturities ranging from January 2015 to December 2015. The Company designates certain foreign exchange forward contracts as hedging instruments, and the contracts qualify as cash flow hedges. The effectiveness of the cash flow hedge contracts, excluding time value, is assessed prospectively and retrospectively on a monthly basis using regression analysis, as well as using other timing and probability criteria. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows on hedged transactions. The effective portion of the cash flow hedge contracts' gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of accumulated other comprehensive income until the underlying hedged item is reflected in the Company's accompanying Consolidated Statements of Income, at which time the effective amount in accumulated other comprehensive income is reclassified to cost of sales in the accompanying Consolidated Statements of Income. The Company expects to reclassify a gain of approximately $1.4 million, net of tax, over the next 12 months based on December 31, 2014 exchange rates. | |
In the event that the gains or losses in accumulated other comprehensive income are deemed to be ineffective, the ineffective portion of gains or losses resulting from changes in fair value, if any, is reclassified to other expense, net on the accompanying Consolidated Statements of Income. During the current reporting period, all forecasted transactions occurred and, therefore, there were no such gains or losses reclassified to other expense, net. These amounts are immaterial to the Consolidated Financial Statements. | |
Economic Hedges | |
The Company is also exposed to foreign currency risk related to intercompany debt and associated interest payments and certain accounts receivable and accounts payable. To manage the risk associated with fluctuations in foreign currencies related to these assets and liabilities, the Company enters into foreign exchange forward contracts. The Company considers these contracts to be economic hedges. Accordingly, changes in the fair value of these instruments affect earnings during the current period. These foreign exchange forward contracts protect against the reduction in value of forecasted foreign currency cash flows resulting from payments in foreign currencies. The fair value of foreign exchange forward contracts are estimated as described in Note 7, “Fair Value Measurements,” taking into consideration foreign currency rates and the current creditworthiness of the counterparties or the Company, as applicable. These amounts are immaterial to the Consolidated Financial Statements. |
Retirement_Plans
Retirement Plans | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||
Retirement Plans | Retirement Plans | ||||||||||||||||||
401(k) Plan | |||||||||||||||||||
The Company has a defined contribution plan (“the 401(k) Plan”) whereby eligible employees may contribute up to 15.0% of their pay subject to certain limitations as defined by the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan after 90 days and are eligible to receive matching contributions upon one year of employment with the Company. The 401(k) Plan provides a 100.0% match of the first 3.0% and 50.0% of the next 2.0% of eligible employee contributions. All matching contributions vest immediately. The Company incurred $5.0 million, $1.7 million and $1.5 million of expenses associated with the 401(k) Plan for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||
Defined Contribution Plans | |||||||||||||||||||
Substantially all employees in the Company's Sealy and Tempur North America reportable segments are covered by defined contribution profit sharing plans, where specific amounts (as annually established by the Company) are set aside in trust for retirement benefits. Profit sharing expense was $1.7 million and $4.0 million for the year ended December 31, 2014 and 2013, respectively. | |||||||||||||||||||
Company Defined Benefit Pension Plans | |||||||||||||||||||
The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at four of its active Sealy plants and eight previously closed Sealy U.S. facilities. Sealy Canada, Ltd. (a 100.0% owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities. Both plans provide retirement and survivorship benefits based on the employees’ credited years of service. The Company’s funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. | |||||||||||||||||||
Pension plan assets consist of investments in various common/collective trusts with equity investment strategies diversified across multiple industry sectors and company market capitalization within specific geographical investment strategies, fixed income common/collective trusts, which invest primarily in investment-grade and high-yield corporate bonds and U.S. treasury securities, as well as money market mutual funds. The fixed income investments are diversified as to ratings, maturities, industries and other factors. The plan assets contain no significant concentrations of risk related to individual securities or industry sectors. The plan has no direct investment in the Company's common stock. | |||||||||||||||||||
The long-term rate of return for the plans is based on the weighted average of the plans’ investment allocation and the historical returns for those asset categories. Because future compensation levels are not a factor in these plans’ benefit formula, the accumulated benefit obligation is equal to the projected benefit obligation as reported below. The discount rate is based on the returns on long-term bonds in the private sector and incorporates a long-term inflation rate. Summarized information for the plans follows: | |||||||||||||||||||
Expenses and Status | |||||||||||||||||||
Components of net periodic pension cost included in the accompanying Consolidated Statements of Income for the years ended December 31 were as follows: | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Service cost | $ | 0.9 | $ | 0.9 | |||||||||||||||
Interest cost | 1.8 | 1.3 | |||||||||||||||||
Expected return on assets | (2.1 | ) | (1.5 | ) | |||||||||||||||
Curtailment loss | 0.1 | — | |||||||||||||||||
Amortization of net gain | (0.1 | ) | — | ||||||||||||||||
Net periodic pension cost | $ | 0.6 | $ | 0.7 | |||||||||||||||
The other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss for the years ended December 31 were: | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Net loss (gain) | $ | 9 | $ | (6.2 | ) | ||||||||||||||
Amortization of prior service cost | (0.2 | ) | 1 | ||||||||||||||||
Amortization of net gain | 0.1 | — | |||||||||||||||||
New prior service cost | 0.1 | — | |||||||||||||||||
Total recognized in other comprehensive income | $ | 9 | $ | (5.2 | ) | ||||||||||||||
The following assumptions, calculated on a weighted‑average basis, were used to determine net periodic pension cost for the Company’s defined benefit pension plans for the years ended December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Discount rate (a) | 4.01 | % | 4.23 | % | |||||||||||||||
Expected long term return on plan assets | 7 | % | 6.92 | % | |||||||||||||||
(a) | Due to current economic differences in the interest rates in the jurisdictions of the retirement plans, the discount rates used in 2014 to determine the expenses for the United States retirement plan and Canadian retirement plan were 3.94% and 5.00%, respectively. The discount rates used in 2013 to determine the expenses for the United States retirement plan and Canadian retirement plan were 4.25% and 4.00%, respectively. | ||||||||||||||||||
Obligations and Funded Status | |||||||||||||||||||
The measurement date for all of the Company’s defined benefit pension plans is December 31. The funded status of the defined benefit pension plans as of December 31 were as follows: | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Change in Benefit Obligation: | |||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 36.4 | $ | 39.9 | |||||||||||||||
Service cost | 0.9 | 0.9 | |||||||||||||||||
Interest cost | 1.8 | 1.3 | |||||||||||||||||
Plan changes | 0.2 | 0.5 | |||||||||||||||||
Actuarial loss (gain) | 9.2 | (4.8 | ) | ||||||||||||||||
Curtailments | (0.1 | ) | — | ||||||||||||||||
Benefits paid | (0.7 | ) | (0.5 | ) | |||||||||||||||
Expenses paid | (0.2 | ) | (0.3 | ) | |||||||||||||||
Foreign currency exchange rate changes | (0.4 | ) | (0.6 | ) | |||||||||||||||
Projected benefit obligation at end of year | $ | 47.1 | $ | 36.4 | |||||||||||||||
Change in Plan Assets: | |||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 30.5 | $ | 26.2 | |||||||||||||||
Actual return on assets | 2.2 | 2.9 | |||||||||||||||||
Employer contribution | 1 | 2.8 | |||||||||||||||||
Plan settlements | — | (0.4 | ) | ||||||||||||||||
Benefits paid | (0.7 | ) | (0.5 | ) | |||||||||||||||
Expenses paid | (0.2 | ) | (0.3 | ) | |||||||||||||||
Foreign currency exchange rate changes | (0.3 | ) | (0.2 | ) | |||||||||||||||
Fair value of plan assets at end of year | $ | 32.5 | $ | 30.5 | |||||||||||||||
Funded status | $ | (14.6 | ) | $ | (5.9 | ) | |||||||||||||
The Company’s defined benefit pension plan for U.S. Sealy employees is underfunded. As of December 31, 2014, the projected benefit obligation and fair value of plan assets were $43.7 million and $28.8 million, respectively. As of December 31, 2013, the projected benefit obligation and fair value of plan assets were $33.3 million and $26.7 million, respectively. The Company’s defined benefit pension plan for employees of Sealy Canada, Ltd. is overfunded. As of December 31, 2014, the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $3.4 million and $3.7 million, respectively. As of December 31, 2013, the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $3.1 million and $3.8 million, respectively. | |||||||||||||||||||
The following table represents amounts recorded in the Consolidated Balance Sheet: | |||||||||||||||||||
December 31, | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||
Non-current portion of benefit liability | $ | 14.9 | $ | 6.7 | |||||||||||||||
Non-current benefit asset | 0.3 | 0.8 | |||||||||||||||||
Accumulated other comprehensive income | 9 | (5.2 | ) | ||||||||||||||||
The following assumptions, calculated on a weighted‑average basis, were used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Discount rate(a) | 5 | % | 5 | % | |||||||||||||||
(a) | The discount rates used in 2014 and 2013 to determine the benefit obligations for the United States defined benefit pension plan and Canadian defined benefit pension plan were both 5.00%. | ||||||||||||||||||
No material amounts are expected to be reclassified from accumulated other comprehensive loss to be recognized as components of net income during 2015. | |||||||||||||||||||
Plan Contributions and Expected Benefit Payments | |||||||||||||||||||
During 2015, the Company expects to contribute $1.6 million to the Company's pension plans from available cash and equivalents. | |||||||||||||||||||
The following table presents estimated future benefit payments: | |||||||||||||||||||
(in millions) | |||||||||||||||||||
Fiscal 2015 | $ | 0.9 | |||||||||||||||||
Fiscal 2016 | 1 | ||||||||||||||||||
Fiscal 2017 | 1 | ||||||||||||||||||
Fiscal 2018 | 1.1 | ||||||||||||||||||
Fiscal 2019 | 1.2 | ||||||||||||||||||
Fiscal 2020 ‑ Fiscal 2024 | 8.4 | ||||||||||||||||||
Pension Plan Asset Information | |||||||||||||||||||
Investment Objective and Strategies. The Company's investment objectives are to minimize the volatility of the value of the Company's pension assets relative to pension liabilities and to ensure assets are sufficient to pay plan benefits. Target and actual asset allocations are as follows: | |||||||||||||||||||
2014 | 2014 | ||||||||||||||||||
Target | Actual | ||||||||||||||||||
Common/collective trust consisting primarily of: | |||||||||||||||||||
Equity securities | 60 | % | 76.86 | % | |||||||||||||||
Debt securities | 40 | % | 21.77 | % | |||||||||||||||
Other | — | % | 1.37 | % | |||||||||||||||
Total plan assets | 100 | % | 100 | % | |||||||||||||||
Investment strategies and policies reflect a balance of risk-reducing and return‑seeking considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset diversification. Assets are broadly diversified across many asset classes to achieve risk-adjusted returns that, in total, lower asset volatility relative to liabilities. The Company's policy to rebalance the Company's investment regularly ensures that actual allocations are in line with target allocations as appropriate. | |||||||||||||||||||
Strategies to address the goal of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes that provide return, diversification and liquidity. | |||||||||||||||||||
The plan investment fiduciaries are responsible for setting asset allocation targets, and monitoring asset allocation and investment performance. The Company’s pension investment manager has discretion to manage assets to ensure compliance with the asset allocations approved by the plan fiduciaries. | |||||||||||||||||||
Significant Concentrations of Risk | |||||||||||||||||||
Significant concentrations of risk in the Company's plan assets relate to equity, interest rate, and operating risk. In order to ensure assets are sufficient to pay benefits, a portion of plan assets is allocated to equity investments that are expected, over time, to earn higher returns with more volatility than fixed income investments which more closely match pension liabilities. Within the common/collective trusts, the plan assets contain no significant concentrations of risk related to individual securities or industry sectors. | |||||||||||||||||||
In order to minimize asset volatility relative to the liabilities, a portion of plan assets are allocated to fixed income investments that are exposed to interest rate risk. Rate increases will generally result in a decline in fixed income assets while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. | |||||||||||||||||||
Operating risks primarily include the risks of inadequate diversification and insufficient oversight. To mitigate this risk, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing oversight, plan and asset class investment guidelines, and periodic reviews to these guidelines to ensure adherence. | |||||||||||||||||||
Expected Long-Term Return on Plan Assets | |||||||||||||||||||
The expected long-term return assumption at December 31, 2014 was 7.00% for the United States defined benefit pension plan and 6.00% for the Canadian defined benefit pension plan. The expected long-term return assumption is based on historical and projected rates of return for current and planned asset classes in the plan’s investment portfolio. The assumption considers various sources, primarily inputs from advisors for long-term capital market returns, inflation, bond yields, and other variables, adjusted for specific aspects of our investment strategy by plan. | |||||||||||||||||||
The investments in plan assets primarily consist of mutual funds and money market funds. Investments in mutual funds and money market funds are valued at the net asset value per share or unit multiplied by the number of shares or units held as of the measurement date. The fair value of the Company’s pension benefit plan assets at December 31 by asset category was as follows: | |||||||||||||||||||
(in millions) | 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||
for Identical | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||
Assets (Level 1) | |||||||||||||||||||
Asset Category | |||||||||||||||||||
Common/collective trust | |||||||||||||||||||
U.S. equity | $ | 19.6 | $ | — | $ | 19.6 | $ | — | |||||||||||
International equity | 5.2 | — | 5.2 | — | |||||||||||||||
Total equity based funds | 24.8 | — | 24.8 | — | |||||||||||||||
Common/collective trust - fixed income | 7 | — | 7 | — | |||||||||||||||
Money market funds | 0.7 | — | 0.7 | — | |||||||||||||||
Total | $ | 32.5 | $ | — | $ | 32.5 | $ | — | |||||||||||
(in millions) | 2013 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||
for Identical | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||
Assets (Level 1) | |||||||||||||||||||
Asset Category | |||||||||||||||||||
Equity | |||||||||||||||||||
Mutual funds—U.S. companies | $ | 13.1 | $ | 13.1 | $ | — | $ | — | |||||||||||
Mutual funds—International companies | 5.9 | 5.9 | — | — | |||||||||||||||
Total equity funds | 19 | 19 | — | — | |||||||||||||||
Mutual funds—fixed income | 10.5 | 10.5 | — | — | |||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||
Total | $ | 30.5 | $ | 30.5 | $ | — | $ | — | |||||||||||
Common/collective trusts are valued at the net asset value ("NAV") per share multiplied by the number of shares held as of the measurement date. The determination of net asset value for the common/collective trusts includes market pricing of the underlying assets as well as broker quotes and other valuation techniques that represent fair value as determined by the respective administrator of the common/collective trust. Management has determined that the NAV is an appropriate estimate of the fair value of the commingled investments funds at December 31, 2014 and 2013, based on the fact that the common/collective trusts are audited and accounted for at fair value by the administrators of the respective common/collective trusts. If the Company has the ability to redeem its investment in the respective alternative investment at the net asset value with no significant restrictions on the redemption at the consolidated balance sheet date, the Company has categorized the alternative investment as a Level 2 measurement in the fair value hierarchy. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair value. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated balance sheet dates. | |||||||||||||||||||
Multi‑Employer Benefit Plans | |||||||||||||||||||
Approximately 68.0% of the Company’s domestic employees are represented by various labor unions with separate collective bargaining agreements. Hourly employees working at eight of the Company’s domestic manufacturing facilities are covered by union sponsored retirement plans. Further, employees working at three of the Company’s domestic manufacturing facilities are covered by union sponsored health and welfare plans. These plans cover both active employees and retirees. Through the health and welfare plans, employees received medical, dental, vision, prescription and disability coverage. The Company’s cost associated with these plans consists of periodic contributions to these plans based upon employee participation. The expense recognized by the Company for such contributions for the years ended December 31 were as follows: | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Multi‑employer retirement plan expense | $ | 4.7 | $ | 3.9 | |||||||||||||||
Multi‑employer health and welfare plan expense | 2.2 | 2.2 | |||||||||||||||||
The risks of participating in multi‑employer pension plans are different from the risks of participating in single‑employer pension plans in the following respects: 1) Assets contributed to the multi‑employer plan by one employer may be used to provide benefits to employees of other participating employers; 2) If a participating employer ceases its contributions to the plan, the unfunded obligations of the plan allocable to the withdrawing employer may be borne by the remaining participant employers and 3) If the Company withdraws from the multi‑employer pension plans in which it participates, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan. | |||||||||||||||||||
The following table presents information regarding the multi‑employer pension plans that are significant to the Company for the year ended December 31, 2014 and 2013, respectively: | |||||||||||||||||||
(in millions) | |||||||||||||||||||
Pension Fund | EIN/Pension Plan Number | Pension Protection Act | FIP/RP Status | Contributions of the Company 2014 | Surcharge Imposed(3) | Expiration Date | Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions | ||||||||||||
Zone Status(1) 2014 | Pending/Implemented(2) | of Collective | |||||||||||||||||
Bargaining Agreement | |||||||||||||||||||
United Furniture Workers Pension Fund A(4) | 13-5511877-001 | Red | Implemented | $ | 0.9 | Yes, 10.0% | 2016 and 2017 | 2013, 2014 | |||||||||||
Pension Plan of the National Retirement Fund | 13-6130178-001 | Red | Implemented | $ | 1.1 | Yes, 10.0% | 2016 | N/A | |||||||||||
Central States, Southeast & Southwest Areas Pension Plan | 36-6044243-001 | Red | Implemented | $ | 0.4 | Yes, 10.0% | 2015 | N/A | |||||||||||
(in millions) | |||||||||||||||||||
Pension Fund | EIN/Pension Plan Number | Pension Protection Act | FIP/RP Status | Contributions of the Company 2013 | Surcharge Imposed(3) | Expiration Date | Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions | ||||||||||||
Zone Status(1) 2013 | Pending/Implemented(2) | of Collective | |||||||||||||||||
Bargaining Agreement | |||||||||||||||||||
United Furniture Workers Pension Fund A(4) | 13-5511877-001 | Red | Implemented | $ | 0.7 | Yes, 10.0% | 2014 and 2016 | 2013 | |||||||||||
Pension Plan of the National Retirement Fund | 13-6130178-001 | Red | Implemented | $ | 0.7 | Yes, 10.0% | 2014 | N/A | |||||||||||
-1 | The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage less than 65.0%. A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80.0%, or projects a credit balance deficit within seven years. A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80.0% and does not have a projected credit balance deficit within seven years. The zone status is based on the plan’s year end rather than the Company’s. The zone status listed above is based on information that the Company received from the plan and is certified by the plan’s actuary for the most recent year available. | ||||||||||||||||||
-2 | Funding Improvement Plan or Rehabilitation Plan as defined in the Employment Retirement Security Act of 1974 has been implemented or is pending. | ||||||||||||||||||
-3 | Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge. | ||||||||||||||||||
-4 | The Company represented more than 5.0% of the total contributions for the most recent plan year available. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity |
Tempur Sealy International has 300.0 million authorized shares of common stock with $0.01 per share par value and 0.01 million authorized shares of preferred stock with $0.01 per share par value. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared from time to time by the Board of Directors out of funds legally available for that purpose. In the event of liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. | |
The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders, to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as determined by the Board of Directors, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. |
Other_Items
Other Items | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Other Items [Abstract] | ||||||||||||
Other Items | Other Items | |||||||||||
(a) Accrued expenses and other current liabilities. | ||||||||||||
Accrued expenses and other current liabilities consisted of the following: | ||||||||||||
December 31, | December 31, | |||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Wages and benefits | $ | 60 | $ | 59.3 | ||||||||
Advertising | 41.6 | 29.7 | ||||||||||
Sales returns | 32.3 | 28.7 | ||||||||||
Rebates | 22.8 | 23 | ||||||||||
Warranty | 16.1 | 14.9 | ||||||||||
Other | 60.5 | 52.8 | ||||||||||
$ | 233.3 | $ | 208.4 | |||||||||
(b) Accumulated other comprehensive loss. | ||||||||||||
Accumulated other comprehensive loss consisted of the following: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Foreign Currency Translation | ||||||||||||
Balance at beginning of period | $ | (15.6 | ) | $ | (5.0 | ) | $ | (13.2 | ) | |||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments (1) | (38.4 | ) | (13.3 | ) | 10.9 | |||||||
Tax benefit (expense) (1) | — | 2.7 | (2.7 | ) | ||||||||
Balance at end of period | $ | (54.0 | ) | $ | (15.6 | ) | $ | (5.0 | ) | |||
Interest Rate Swap Agreement | ||||||||||||
Balance at beginning of period | $ | (1.4 | ) | $ | (2.7 | ) | $ | (1.6 | ) | |||
Other comprehensive income: | ||||||||||||
Net change from period revaluations: | 3 | 5.2 | 2.7 | |||||||||
Tax expense | (1.2 | ) | (1.5 | ) | (0.5 | ) | ||||||
Total other comprehensive income before reclassifications, net of tax | 1.8 | 3.7 | 2.2 | |||||||||
Net amount reclassified to earnings (3) | (1.9 | ) | (3.2 | ) | (4.0 | ) | ||||||
Tax benefit (2) | 0.8 | 0.8 | 0.7 | |||||||||
Total amount reclassified from accumulated other comprehensive loss, net of tax | (1.1 | ) | (2.4 | ) | (3.3 | ) | ||||||
Total other comprehensive income (loss) | 0.7 | 1.3 | (1.1 | ) | ||||||||
Balance at end of period | $ | (0.7 | ) | $ | (1.4 | ) | $ | (2.7 | ) | |||
Pension Benefits | ||||||||||||
Balance at beginning of period | $ | 3.2 | $ | — | $ | — | ||||||
Other comprehensive (loss) income: | ||||||||||||
Net change from period revaluations: | (9.0 | ) | 5.2 | — | ||||||||
Tax benefit (expense) | 3.4 | (2.0 | ) | — | ||||||||
Total other comprehensive income before reclassifications, net of tax | $ | (5.6 | ) | $ | 3.2 | $ | — | |||||
Net amount reclassified to earnings | — | — | — | |||||||||
Tax benefit(2) | — | — | — | |||||||||
Total amount reclassified from accumulated other comprehensive income, net of tax | $ | — | $ | — | $ | — | ||||||
Total other comprehensive income | (5.6 | ) | (3.2 | ) | — | |||||||
Balance at end of period | $ | (2.4 | ) | $ | 3.2 | $ | — | |||||
Foreign Exchange Forward Contracts | ||||||||||||
Balance at beginning of period | $ | — | $ | — | $ | — | ||||||
Other comprehensive income: | ||||||||||||
Net change from period revaluations: | 3.4 | — | — | |||||||||
Tax expense | (0.9 | ) | — | — | ||||||||
Total other comprehensive income before reclassifications, net of tax | $ | 2.5 | $ | — | $ | — | ||||||
Net amount reclassified to earnings | (1.6 | ) | — | — | ||||||||
Tax benefit (2) | 0.4 | — | — | |||||||||
Total amount reclassified from accumulated other comprehensive income, net of tax | $ | (1.2 | ) | $ | — | $ | — | |||||
Total other comprehensive income | 1.3 | — | — | |||||||||
Balance at end of period | $ | 1.3 | $ | — | $ | — | ||||||
-1 | In 2014 and 2013, there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. In 2012, a $2.7 million tax impact was recorded which reversed in 2013. | |||||||||||
-2 | These amounts were included in the income tax provision on the accompanying Consolidated Statements of Income. | |||||||||||
-3 | This amount was included in interest expense, net on the accompanying Consolidated Statements of Income. |
Stockbased_Compensation
Stock-based Compensation | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based Compensation | Stock-based Compensation | ||||||||||||
Tempur Sealy International has two stock-based compensation plans which provide for grants of non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock unit awards, performance shares, stock grants and performance based awards to employees, non-employee directors, consultants and Company advisors. The plan under which equity awards may be granted in the future is the 2013 Equity Incentive Plan (the "2013 Plan"). It is the policy of the Company to issue stock out of treasury shares upon issuance or exercise of share-based awards. The Company believes that awards and purchases made under these plans better align the interests of the plan participants with those of its stockholders. | |||||||||||||
The 2013 Plan was adopted on May 22, 2013 by the Company’s Board of Directors, and provides for grants of stock options to purchase shares of common stock to employees and directors of the company. The 2013 Plan may be administered by the Compensation Committee of the Board of Directors, by the Board directly, or, in certain cases, by an executive officer or officers of the Company designated by the Compensation Committee. The shares issued or to be issued under the 2013 Plan may be either authorized but unissued shares of the Company’s common stock or shares held by the Company in its treasury. Tempur Sealy International will issue a maximum of 5.1 million shares of common stock under the 2013 Plan, subject to certain adjustment provisions. | |||||||||||||
The Amended and Restated 2003 Equity Incentive Plan, as amended (the “2003 Plan”) was administered by the Compensation Committee of the Board of Directors, which, together with the Board of Directors, had the exclusive authority to administer the 2003 Plan, including the power to determine eligibility to receive awards, the types and number of shares of stock subject to the awards, the price and timing of awards and the acceleration or waiver of any vesting and performance of forfeiture restrictions, in each case subject to the terms of the 2003 Plan. Any of the Company’s employees, non-employee directors, consultants and Company advisors, as determined by the Compensation Committee, were eligible to be selected to participate in the 2003 Plan. Tempur Sealy International allowed a maximum of 11.5 million shares of its common stock under the 2003 Plan to be issued. In May 2013 the Company's Board of Directors adopted a resolution that prohibited further grants under the 2003 Plan. | |||||||||||||
In 2010, the Board of Directors approved the terms of a Long-Term Incentive Plan ("LTIP") established under the 2003 Plan. In 2013, the Board of Directors approved the terms of another Long-Term Incentive Plan established under the 2013 Plan. Awards under both Long-Term Incentive Plans have typically consisted of a mix of stock options and PRSUs. Shares with respect to the PRSUs will be granted and vest following the end of the applicable performance period and achievement of applicable performance metrics as determined by the Compensation Committee of the Board of Directors. | |||||||||||||
The Company’s stock-based compensation expense for the year ended December 31, 2014 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: | |||||||||||||
December 31, | |||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
PRSU expense (benefit) | $ | 3.5 | $ | 3 | $ | (0.9 | ) | ||||||
Stock option expense | 7 | 8.3 | 4.4 | ||||||||||
RSU/DSU expense | 2.9 | 5.6 | 2.2 | ||||||||||
Total stock-based compensation expense | $ | 13.4 | $ | 16.9 | $ | 5.7 | |||||||
The Company granted PRSUs during the years ended December 31, 2014, 2013 and 2012. Actual payout under the PRSUs is dependent upon the achievement of certain financial goals. The Company recorded a benefit in the accompanying Consolidated Statements of Income of $3.0 million and $10.3 million, for the years ended December 31, 2014 and 2012, respectively, after re-evaluation of the probability of meeting certain required performance goals and determining that the performance goals would not be met. | |||||||||||||
The following table shows the PRSUs granted under the 2013 Plan and LTIP during the year ended December 31, 2014: | |||||||||||||
(shares in millions) | Performance period | Target shares granted | Weighted-average fair value per share | ||||||||||
Year ended 2015(1) | January 1, 2014 – December 31, 2015 | 0.15 | $ | 51.87 | |||||||||
Year ended 2016(2) | January 1, 2014 - December 31, 2016 | 0.15 | $ | 51.87 | |||||||||
-1 | At the end of the performance period, the actual number of shares issuable can range from zero to 200.0% of the target shares granted, which is assumed to be 100.0%. | ||||||||||||
-2 | At the end of the performance period, the actual number of shares issuable can range from zero to 300.0% of the target shares granted, which is assumed to be 100.0%. | ||||||||||||
A summary of the Company’s PRSU activity and related information for the years ended December 31, 2014 and 2013 is presented below: | |||||||||||||
(shares in millions) | Shares | Weighted Average Grant Date Fair Value | |||||||||||
Awards unvested at December 31, 2012 | 0.3 | $ | 58.52 | ||||||||||
Granted | 0.3 | 39.34 | |||||||||||
Vested | — | — | |||||||||||
Forfeited | (0.3 | ) | 56.92 | ||||||||||
Awards unvested at December 31, 2013 | 0.3 | $ | 39.04 | ||||||||||
Granted | 0.3 | 51.87 | |||||||||||
Vested | 0 | 37.05 | |||||||||||
Forfeited | (0.3 | ) | 39.38 | ||||||||||
Awards unvested at December 31, 2014 | 0.3 | $ | 53.45 | ||||||||||
During the year ended December 31, 2014, PRSUs with an aggregate intrinsic value of $1.4 million were issued from treasury stock following the satisfaction of certain financial metrics over the one year performance period. The PRSUs were issued from treasury stock at 100.0% of the target award, the maximum payout. During the year ended December 31, 2013, PRSUs granted in 2010 with an aggregate intrinsic value of $14.9 million were issued from treasury stock following the satisfaction of certain financial metrics over the performance period. The PRSUs were issued from treasury stock at 282.0% of the target award, out of a maximum payout of 300.0%. The aggregate intrinsic value of PRSUs outstanding as of December 31, 2014 was $13.9 million. | |||||||||||||
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options granted. The assumptions used in the Black-Scholes pricing model for the years ended December 31, 2014, 2013 and 2012 are set forth in the following table. Expected volatility is based on the unbiased standard deviation of Tempur Sealy International’s common stock over the option term. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. The dividend yield reflects an estimate of dividend payouts over the term of the award. The Company uses historical data to determine these assumptions. | |||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Expected volatility range of stock | 56.7% - 66.5% | 63.0% - 72.8% | 49.0% - 73.0% | ||||||||||
Expected life of option, range in years | 4-Feb | 3-Feb | 4-Feb | ||||||||||
Risk-free interest range rate | 0.4% - 1.4% | 0.3% - 0.6% | 0.3% - 0.7% | ||||||||||
Expected dividend yield on stock | 0.6% - 0.7% | 0.6% - 0.9% | 0.0% - 1.3% | ||||||||||
A summary of the Company’s unvested shares relating to stock options as of December 31, 2014 and 2013, and changes during the years ended December 31, 2014 and 2013, are presented below: | |||||||||||||
(shares in millions) | Shares | Weighted Average Grant Date Fair Value | |||||||||||
Options unvested at December 31, 2012 | 0.9 | $ | 23.49 | ||||||||||
Granted | 0.6 | 39.77 | |||||||||||
Vested | (0.8 | ) | 19.71 | ||||||||||
Forfeited | (0.1 | ) | 39.62 | ||||||||||
Options unvested at December 31, 2013 | 0.6 | $ | 42.16 | ||||||||||
Granted | 0.2 | 52.08 | |||||||||||
Vested | (0.3 | ) | 42.46 | ||||||||||
Forfeited | 0 | 50.53 | |||||||||||
Options unvested at December 31, 2014 | 0.5 | $ | 46.23 | ||||||||||
A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2014 and 2013, is presented below: | |||||||||||||
(shares in millions) | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||
Options outstanding at December 31, 2012 | 2.9 | $ | 17 | ||||||||||
Granted | 0.6 | 39.77 | |||||||||||
Exercised | (0.6 | ) | 14.54 | ||||||||||
Terminated | (0.1 | ) | 39.62 | ||||||||||
Options outstanding at December 31, 2013 | 2.8 | $ | 21.73 | ||||||||||
Granted | 0.2 | 52.08 | |||||||||||
Exercised | (0.2 | ) | 20.82 | ||||||||||
Terminated | 0 | 50.53 | |||||||||||
Options outstanding at December 31, 2014 | 2.8 | $ | 24.18 | 5.13 | $ | 84.3 | |||||||
Options exercisable at December 31, 2014 | 2.3 | $ | 19.2 | 4.35 | $ | 82.9 | |||||||
The aggregate intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was $6.7 million, $17.1 million and $29.8 million, respectively. | |||||||||||||
A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2014 and 2013 is presented below: | |||||||||||||
(in millions, except release price and years) | Shares | Weighted Average Release Price | Aggregate Intrinsic Value | ||||||||||
Awards outstanding at December 31, 2012 | 0.2 | $ | 32.03 | ||||||||||
Granted | 0.2 | 45.56 | |||||||||||
Vested | (0.2 | ) | 30.49 | ||||||||||
Terminated | — | — | |||||||||||
Awards outstanding at December 31, 2013 | 0.2 | $ | 47 | ||||||||||
Granted | 0 | 54.56 | |||||||||||
Vested | (0.1 | ) | 44.47 | ||||||||||
Terminated | 0 | 46.77 | |||||||||||
Awards outstanding at December 31, 2014 | 0.1 | $ | 50.41 | $ | 5.8 | ||||||||
The Company granted 0.02 million DSUs and 0.01 million RSUs during the year ended December 31, 2014. At December 31, 2014, the Company had 0.1 million of unvested DSUs/RSUs. The aggregate intrinsic value of RSU and DSUs vested during the year ended December 31, 2014 was $5.5 million. | |||||||||||||
A summary of total unrecognized stock-based compensation expense based on current performance estimates related to the options, DSUs, RSUs and PRSUs granted during the year ended December 31, 2014 is presented below: | |||||||||||||
(in millions, except years) | December 31, 2014 | Weighted Average Remaining Vesting Period (Years) | |||||||||||
Unrecognized stock option expense | $ | 3.5 | 2.17 | ||||||||||
Unrecognized DSU/RSU expense | 0.8 | 2.11 | |||||||||||
Unrecognized PRSU expense | 9.2 | 1.56 | |||||||||||
Total unrecognized stock-based compensation expense | $ | 13.5 | 1.76 | ||||||||||
Cash received from options exercised under all stock-based compensation plans, including cash received from options issued from treasury shares for the years ended December 31, 2014, 2013 and 2012 was $4.3 million, $8.7 million, and $11.4 million, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
(a) Lease Commitments. The Company has various operating leases that call for annual rental payments due in equal monthly installments and a lease with a rent free occupancy period. The Company’s policy is to recognize expense for lease payment, including those with escalating provisions and rent free periods, on a straight-line basis over the lease term. Operating lease expenses were $32.3 million, $25.5 million, and $9.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Future minimum lease payments at December 31, 2014 under these non-cancelable leases are as follows: | ||||
(in millions) | ||||
Year Ended December 31, | ||||
2015 | $ | 29.1 | ||
2016 | 27 | |||
2017 | 24.4 | |||
2018 | 21.3 | |||
2019 | 15 | |||
Thereafter | 44.4 | |||
$ | 161.2 | |||
The Company has the option to renew certain plant operating leases, with the longest renewal period extending through 2043. Certain of the operating leases provide for increased rent through increases in general price levels. The Company recognizes rent expense in these situations on a straight-line basis over the lease term. | ||||
(b) Purchase Commitments. The Company will, from time to time, enter into limited purchase commitments for the purchase of certain raw materials. Amounts committed under these programs are not significant to the Company as of December 31, 2014 and December 31, 2013. | ||||
(c) Norfolk County Retirement System, Individually and on behalf of all others similarly situated, Plaintiff v. Tempur-Pedic International Inc., Mark A. Sarvary and Dale E. Williams; filed June 20, 2012 | ||||
Arthur Benning, Jr., Individually and on behalf of all others similarly situated, Plaintiff v. Tempur-Pedic International Inc., Mark A. Sarvary and Dale E. Williams; filed June 25, 2012 | ||||
On June 20 and 25, 2012, the above suits were filed against the Company and two named executive officers in the United States District Court for the Eastern District of Kentucky, purportedly on behalf of a proposed class of stockholders who purchased the Company’s stock between January 25, 2012 and June 5, 2012. The complaints assert claims under Sections 10(b) and 20(a) of the Exchange Act, alleging, among other things, false and misleading statements and concealment of material information concerning the Company’s competitive position, projected net sales, earnings per diluted share and related financial performance for the Company’s 2012 fiscal year. The plaintiffs seek damages, interest, costs, attorney’s fees, expert fees and unspecified equitable/injunctive relief. On November 2, 2012, the Court consolidated the two lawsuits and on March 6, 2013, plaintiffs filed a consolidated complaint. On March 31, 2014, the Court issued an Order granting the Company’s motion to dismiss with prejudice the consolidated complaint. The Court issued its memorandum of opinion and entered final judgment on May 23, 2014. On June 6, 2014, the plaintiffs filed a notice of appeal. The Company intends to vigorously defend against the claims. The outcome of these matters is uncertain, however, and although the Company does not currently expect to incur a loss with respect to these matters, the Company cannot currently predict the manner and timing of the resolution of the suits, an estimate of a range of losses or any minimum loss that could result in the event of an adverse judgment in this suit, or whether the Company’s applicable insurance policies will provide sufficient coverage for these claims. Accordingly, the Company can give no assurance that these matters will not have a material adverse effect on the Company’s financial position or results of operations. | ||||
(d) Sealy Mattress Company of NJ, Inc., David Hertz, individually, as trustee of, respectively, the Allison Lindsay Hertz Trust, the Samuel Douglas Hertz Trust, the Sydney Lauren Hertz Trust, the U/A DTD 08/21/97 Andrew Michael Marcus Trust, the U/A DTD 08/21/97 Julia Robyn Marcus Trust, and the U/A DTD 08/21/97 James Daniel Marcus Trust, and as executor of the Estate of Walter Hertz, Lisa Marcus, Rose Naiman, Michael Shoobs, and Diane Shoobs, individually and as custodian of the Robert S. Shoobs UTMA NJ v. Sealy Corporation, filed June 27, 2013. With respect to the Sealy Acquisition, holders of approximately 3.1 million shares of Sealy common stock sent notices to Sealy purporting to exercise their appraisal rights in accordance with the Merger Agreement executed on September 26, 2012. In order to preserve these appraisal rights, any such former stockholder was required to commence an appraisal proceeding in the Delaware courts within 120 days after March 18, 2013. Sealy has expressly reserved its rights to contest that any or all of such notices were not delivered timely or otherwise not in the form required under Delaware law. On June 27, 2013, an appraisal proceeding was commenced in the Delaware Court of Chancery (the “Appraisal Action”). Sealy will be required to pay the court-determined fair value of the Sealy common stock formerly held by the former Sealy stockholders seeking the appraisal, plus interest at the statutory rate. This could impact the Company’s financial condition and liquidity. The Company believes that the merger consideration was fair and the appraised value should be equal to or less than the merger consideration and, therefore, the case lacks merit. The Company intends to defend against the claims vigorously. This matter is at a very preliminary stage, and the outcome is uncertain. As a result, the Company is unable to reasonably estimate the possible loss or range of losses, if any, arising from this litigation, or whether the Company’s applicable insurance policies will provide sufficient coverage for these claims | ||||
(e) Alvin Todd, and Henry and Mary Thompson, individually and on behalf of all others similarly situated, Plaintiffs v. Tempur Sealy International, Inc., formerly known as Tempur-Pedic International, Inc. and Tempur-Pedic North America, LLC, Defendants; filed October 25, 2013 | ||||
On October 25, 2013, a suit was filed against Tempur Sealy International and one of its domestic subsidiaries in the United States District Court for the Northern District of California, purportedly on behalf of a proposed class of “consumers” as defined by Cal. Civ. Code § 1761(d) who purchased, not for resale, a Tempur-Pedic mattress or pillow in the State of California. On November 19, 2013, the Company was served for the first time in the case but with an amended petition adding additional class representatives for additional states. The purported classes seek certification of claims under applicable state laws. | ||||
The complaint alleges that the Company engaged in unfair business practices, false advertising, and misrepresentations or omissions related to the sale of certain products. The plaintiffs seek restitution, injunctive relief and all other relief allowed under applicable state laws, interest, attorneys’ fees and costs. The purported classes do not seek damages for physical injuries. The Company believes the case lacks merit and intends to defend against the claims vigorously. This matter is at a very preliminary stage, and the outcome is uncertain. As a result, the Company is unable to reasonably estimate the possible loss or range of losses, if any, arising from this litigation, or whether the Company’s applicable insurance policies will provide sufficient coverage for these claims. Accordingly, the Company can give no assurance that this matter will not have a material adverse effect on the Company’s financial position or results of operations. | ||||
(f) German Regulatory Investigation. The German Federal Cartel Office (FCO) has conducted unannounced inspections of the premises of several mattress wholesaler/manufacturers including the Company's German subsidiary. The order permitting the inspection and collection of records alleged “vertical price fixing”. The FCO's review is ongoing but the Company has yet to receive any statement of objections regarding any alleged claims against the Company. If claims are asserted by the FCO, the Company intends to defend against the claims vigorously. The outcome of the FCO's review is uncertain; however, given the inherent uncertainties involved, the outcome of this matter cannot be predicted and the amount of any potential loss cannot be reasonably estimated. A negative outcome in this case could have a material adverse effect on the Company. | ||||
(g) Environmental. The Company is currently conducting an environmental cleanup at a formerly owned facility in South Brunswick, New Jersey pursuant to the New Jersey Industrial Site Recovery Act. Sealy and one of its subsidiaries are parties to an Administrative Consent Order issued by the New Jersey Department of Environmental Protection. Pursuant to that order, Sealy and its subsidiary agreed to conduct soil and groundwater remediation at the property. The Company does not believe that its manufacturing processes were the source of contamination. The Company sold the property in 1997. The Company retained primary responsibility for the required remediation. Previously, the Company removed and disposed of contaminated soil from the site with the New Jersey Department of Environmental Protection approval, and the Company has installed a groundwater remediation system on the site. During 2005, with the approval of the New Jersey Department of Environmental Protection, the Company removed and disposed of sediment in Oakeys Brook adjoining the site. The Company continues to monitor ground water at the site. During 2012, with the approval of the New Jersey Department of Environmental Protection, the Company commenced the removal and disposal of additional contaminated soil from the site. The Company has recorded a reserve as a component of other accrued expenses and other noncurrent liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2014 for $2.5 million associated with this remediation project. | ||||
The Company has also undertaken a remediation of soil and groundwater contamination at an inactive facility located in Oakville, Connecticut. Although the Company is conducting the remediation voluntarily, it obtained Connecticut Department of Energy and Environmental Protection (“DEEP”) approval of the remediation plan. In 2012, the Company submitted separate closure reports to the Connecticut DEEP for the lower portion of the site and the upper portion of the site. The Connecticut DEEP approved the Company’s closure report for the upper portion of the site and also gave conditional approval to the Company’s closure report for the lower portion of the site. The Company is continuing to work with the Connecticut DEEP and is performing additional testing to obtain closure for the lower portion of the site. The Company has recorded a liability of approximately $0.1 million associated with the completion of the closure of its remediation efforts at the site. The Company does not believe the contamination on this site is attributable to the Company’s operations. | ||||
The Company cannot predict the ultimate timing or costs of the South Brunswick and Oakville environmental matters. Based on facts currently known, the Company believes that the accruals recorded are adequate and does not believe the resolution of these matters will have a material effect on the financial position or future operations of the Company. However, in the event of an adverse decision by the agencies involved, or an unfavorable result in the New Jersey natural resources damages matter, these matters could have a material effect on the Company’s financial position or results of operations. | ||||
In 1998, the Company sold an inactive facility located in Putnam, Connecticut. In 2012, the Company received a letter from the attorney for the current owner of that property claiming that the Company may have some responsibility for an environmental condition on the property. The Company continues to investigate this matter, but intends to vigorously defend the claim of the current owner against the Company. | ||||
(h) Income Tax Assessments. The Company has received income tax assessments from the Danish Tax Authority (“SKAT”). The Company believes it has meritorious defenses to the proposed adjustments and will oppose the assessments, as necessary in the appropriate Danish venue. The Company believes the litigation process to reach a final resolution of this matter could potentially extend over the next five years. If the Company is not successful in defending our position that the Company owes no additional taxes, the Company could be required to pay a significant amount to SKAT, which could impair or reduce our liquidity and profitability. For a description of these assessments and additional information with respect to these assessments and the various related legal proceedings, see Note 14, “Income Taxes” in our Consolidated Financial Statements included in Part II, ITEM 8 of this Report. | ||||
(i) Other. The Company is involved in various other legal proceedings incidental to the operations of its business. The Company believes that the outcome of all such pending legal proceedings in the aggregate will not have a material adverse effect on its business, financial condition, liquidity, or operating results. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||
The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(dollars in millions) | Amount | Percentage of Income | Amount | Percentage of Income | Amount | Percentage of Income | |||||||||||||||
Before Income Taxes | Before Income Taxes | Before Income Taxes | |||||||||||||||||||
Statutory U.S. federal income tax | $ | 61.2 | 35 | % | $ | 44.8 | 35 | % | $ | 80.2 | 35 | % | |||||||||
State income taxes, net of federal benefit | 1.1 | 0.6 | % | 1.7 | 1.3 | % | 4.5 | 2 | % | ||||||||||||
Foreign repatriation, net of foreign tax credits | 13.5 | 7.7 | % | (16.0 | ) | (12.6 | )% | 48.1 | 21 | % | |||||||||||
Foreign tax differential | (12.6 | ) | (7.2 | )% | (12.3 | ) | (9.6 | )% | (9.7 | ) | (4.2 | )% | |||||||||
Change in valuation allowances | (17.7 | ) | (10.0 | )% | 20.4 | 15.9 | % | (2.8 | ) | (1.2 | )% | ||||||||||
Uncertain tax positions | 10.9 | 6.1 | % | 4.7 | 3.7 | % | 2.6 | 1.1 | % | ||||||||||||
Subpart F income | 1.9 | 1.1 | % | 1.5 | 1.2 | % | 4.1 | 1.8 | % | ||||||||||||
Manufacturing deduction | (3.7 | ) | (2.1 | )% | 0.1 | — | % | (3.8 | ) | (1.7 | )% | ||||||||||
Goodwill on disposal of business | 7.5 | 4.2 | % | — | — | % | — | — | % | ||||||||||||
Permanent and other | 2.8 | 1.7 | % | 4.2 | 3.5 | % | (0.8 | ) | (0.4 | )% | |||||||||||
Effective income tax provision | $ | 64.9 | 37.1 | % | $ | 49.1 | 38.4 | % | $ | 122.4 | 53.4 | % | |||||||||
Subpart F income represents interest and royalties earned by a foreign subsidiary as well as sales made by certain foreign subsidiaries outside of their country of incorporation. Under the Internal Revenue Code of 1986, as amended (the "Code"), such income is taxable to Tempur Sealy International as if earned directly by Tempur Sealy International. | |||||||||||||||||||||
In conjunction with the Sealy Acquisition, the Company repatriated substantially all of its current and accumulated foreign earnings associated with the legacy Tempur foreign subsidiaries in a taxable transaction. The Company had previously tax effected those earnings and at December 31, 2012 had recorded a $48.1 million deferred tax liability on such earnings. As a result of the Sealy Acquisition, the Company recognized the benefit of certain foreign tax credit attributes associated with Sealy’s foreign subsidiaries’ earnings. These foreign tax credits could not be taken into account in calculating the Company’s tax on the book to tax basis difference of its foreign subsidiaries until the Sealy Acquisition closed. As a result of the taxable transaction and taking into consideration the application of these foreign tax credits, as of December 31, 2014 the Company has recognized cumulative tax on the repatriation transaction of approximately $63.9 million. At December 31, 2014, the Company’s tax basis in its top tier foreign subsidiary exceeds the Company’s book basis. Accordingly, no deferred tax has been recorded related to this basis difference as it is not apparent that the difference will reverse in the foreseeable future. As it relates to the book to tax basis difference with respect of the stock of each of the Company’s lower tier foreign subsidiaries, as a general matter, the book basis exceeds the tax basis in the hands of the foreign subsidiary shareholder. By operation of the tax laws of the various countries in which such subsidiaries are domiciled, earnings of lower tier foreign subsidiaries are not subject to tax, in all material respects, when distributed to the foreign shareholder. It is the Company’s intent that the earnings of each lower tier foreign subsidiary, with the exception of its Danish subsidiary, will be permanently reinvested in its own operations. As it relates to the Danish subsidiary, its earnings may be distributed without any income tax impact in any case. Thus, no tax is provided for with respect to the book to tax basis difference of its stock. | |||||||||||||||||||||
The Company has received income tax assessments from SKAT with respect to the tax years 2001 through 2008 relating to the royalty paid by one of Tempur Sealy International’s U.S. subsidiaries to a Danish subsidiary. The royalty is paid by the U.S. subsidiary for the right to utilize certain intangible assets owned by the Danish subsidiary in the U.S. production processes. In its assessment, SKAT asserts that the amount of royalty rate paid by the U.S. subsidiary to the Danish subsidiary is not reflective of an arms-length transaction. Accordingly, the tax assessment received from SKAT is based, in part, on a 20% royalty rate which is substantially higher than that historically used or deemed appropriate by the Company. | |||||||||||||||||||||
The 2008 income tax assessment was received in March 2014. The cumulative tax assessment for all years through 2008 is approximately $215.1 million including interest and penalties. The Company filed timely protests with the Danish National Tax Tribunal (the “Tribunal”) challenging the tax assessments. The Tribunal formally agreed to place the Danish tax litigation on hold pending the outcome of a Bilateral Advance Pricing Agreement (“Bilateral APA”) between the United States and SKAT. A Bilateral APA involves an agreement between the Internal Revenue Service (“IRS”) and the taxpayer, as well as a negotiated agreement with one or more foreign competent authorities under applicable income tax treaties. During the third quarter of 2008, the Company filed the Bilateral APA with the IRS and SKAT. SKAT and the IRS met several times since 2011, most recently in February 2013, to discuss the matter. At the conclusion of the February 2013 meeting, the IRS and SKAT concluded that a mutually acceptable agreement on the matter could not be reached and, as a result, the Bilateral APA process was terminated. The matter is now before the Tribunal. The Tribunal is a branch of SKAT that is independent of the discussions and negotiations that have taken place to date. If the Tribunal does not rule to the satisfaction of one or both parties, the party seeking redress may choose to litigate the issue in the Danish court system. In 2013, the Company was notified by SKAT that SKAT granted the deferral to 2017 of the requirement to post a cash deposit or other form of security for taxes that have been assessed for the period 2001 through 2007. During the quarter ended June 30, 2014, the Company was granted a deferral to 2018 of the requirement to post a cash deposit or other form of security for taxes that have been assessed for 2008. The Company believes it has meritorious defenses to the proposed adjustments and will oppose the assessments before the Tribunal and in the Danish courts, as necessary. The impact of terminating the Bilateral APA program has been considered by the Company in its December 31, 2014 estimate of unrecognized tax benefits. | |||||||||||||||||||||
The Company maintains an uncertain tax position associated with this matter, the amount of which is based on a royalty methodology and royalty rates that the Company considers to be reflective of arm’s length transactions. It is reasonably possible the amount of the recognized tax benefits may change in the next twelve months. An estimate of the amount of such change cannot be made at this time. If the Company is not successful in defending its position before the Tribunal or in the Danish courts, the Company could be required to pay significant amounts to SKAT, which could impair or reduce its liquidity and profitability. In conjunction with the tax examination discussed below, during the year ended December 31, 2013 the Company received correspondence from SKAT requesting information regarding the royalty for the years 2009 through 2011. The correspondence indicated that SKAT would be evaluating the royalty paid for each of the years under examination in addition to other issues normally evaluated in a tax examination. The Company has responded to SKAT’s request for information. During the three months ended December 31, 2013, the Company and SKAT agreed that the examination of the royalty issue for the years 2009 - 2011 would be placed on hold pending the outcome of the Tribunal process relating to the years 2001 through 2008. As it relates to SKAT's examination of other items, particularly transactions between the Company’s Danish subsidiary and its foreign distribution subsidiaries, the Company believes it has meritorious defenses for all items reported in the Danish income tax returns. Through December 31, 2014, the Company has not been contacted by SKAT in response to the information provided by the Company. | |||||||||||||||||||||
The aggregate amount of uncertain tax benefits for all matters as of December 31, 2014 and 2013 were $47.6 million and $26.1 million, respectively. The unrecognized tax benefits as of December 31, 2014 and 2013 were $44.6 million and $22.2 million, respectively, which would impact the effective rate if recognized. The Company had approximately $10.3 million and $11.0 of accrued interest and penalties at December 31, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||
The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. During the twelve months ended December 31, 2013, the Company concluded the tax examination of the U.S. federal income tax return for the years 2008 and 2009. During 2014 the Company was advised by the IRS that the years 2010 and 2011 would not be examined but that 2012 would be examined. That examination is in progress. With few exceptions, the Company is no longer subject to tax examinations by the U.S. state and local municipalities for periods prior to 2006, and in non-U.S. jurisdictions for periods prior to 2001. As it relates to Sealy for years prior to the Sealy Acquisition, Sealy or one of its subsidiaries was required to file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Sealy’s U.S. federal income tax returns and with few exceptions its foreign income tax returns are no longer subject to examination for years prior to 2006. Generally Sealy’s state and local jurisdiction income tax returns are no longer subject to examination for years prior to 2010. | |||||||||||||||||||||
Additionally, the Company is currently under examination by various tax authorities around the world. The Company anticipates it is reasonably possible an increase or decrease in the amount of unrecognized tax benefits could be made in the next twelve months as a result of the statute of limitations expiring and/or the examinations being concluded on these returns. However, the Company does not presently anticipate that any increase or decrease in unrecognized tax benefits will be material to the consolidated financial statements. | |||||||||||||||||||||
The following sets forth the amount of income or (loss) before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||||||||||
Income before income taxes: | |||||||||||||||||||||
United States | $ | 46.9 | $ | (4.5 | ) | $ | 126.2 | ||||||||||||||
Rest of the world | 128 | 132.5 | 103 | ||||||||||||||||||
$ | 174.9 | $ | 128 | $ | 229.2 | ||||||||||||||||
U.S. GAAP prescribes a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires the Company to recognize in the financial statements each tax position that meets the more likely than not criteria, measured at the largest amount of benefit that has a greater than 50.0% likelihood of being realized. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 12.9 | |||||||||||||||||||
Additions attributable to Sealy on date of acquisition | 9.2 | ||||||||||||||||||||
Additions based on tax positions related to 2013 | 2.3 | ||||||||||||||||||||
Additions for tax positions of prior years | 7.2 | ||||||||||||||||||||
Settlements of uncertain tax positions with tax authorities | (5.5 | ) | |||||||||||||||||||
Balance as of December 31, 2013 | 26.1 | ||||||||||||||||||||
Additions based on tax positions related to 2014 | 24.3 | ||||||||||||||||||||
Additions for tax positions of prior years | 0.5 | ||||||||||||||||||||
Expiration of statutes of limitations | (3.2 | ) | |||||||||||||||||||
Settlements of uncertain tax positions with tax authorities | (0.1 | ) | |||||||||||||||||||
Balance as of December 31, 2014 | $ | 47.6 | |||||||||||||||||||
The amount of unrecognized tax benefits that would impact the effective tax rate if recognized would be approximately $47.6 million. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. During the years ended December 31, 2014, 2013 and 2012, the Company recognized approximately $1.9 million, $1.8 million, and $3.0 million in interest and penalties, respectively, in income tax expense. The Company had approximately $10.3 million, $11.0 million, and $5.8 million of accrued interest and penalties at December 31, 2014, 2013, and 2012, respectively. | |||||||||||||||||||||
The Company has the following gross income tax attributes available at December 31, 2014 and 2013 respectively (in millions): | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
U.S. federal net operating loss (“FedNOLs”) | $ | — | $ | 19.6 | |||||||||||||||||
State net operating losses (“SNOLs”) | 145.3 | 135.6 | |||||||||||||||||||
U.S. federal foreign tax credits (“FTCs”) | 7.8 | 20.4 | |||||||||||||||||||
U.S. state income tax credits ("SITCs") | 1.6 | 0.7 | |||||||||||||||||||
Foreign net operating losses (“FNOLs”) | 44.2 | 67.1 | |||||||||||||||||||
Charitable contribution carryover ("CCCs") | 8.4 | — | |||||||||||||||||||
The SNOLs, FTCs, FNOLs, SITCs and CCCs generally expire in 2021, 2023, 2023, 2023 and 2019, respectively. | |||||||||||||||||||||
Management believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of certain of the SNOLs, FTCs, SITCs, FNOLs, CCCs and certain other deferred tax assets related to certain foreign operations (together, the “Tax Attributes”). In assessing the realizability of deferred tax assets (including the Tax Attributes), management considers whether it is more likely than not that some portion of all of such deferred tax assets will not be realized. Accordingly, the Company has established a valuation allowance for Tax Attributes. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible or creditable. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income, management believes it is more likely than not the Company will realize the benefits of the deferred tax assets, other than those related to some or all of the Tax Attributes as discussed above. However, there can be no assurance that such assets will be realized if circumstances change. | |||||||||||||||||||||
The income tax provision includes federal, state, and foreign income taxes currently payable and those deferred or prepaid because of temporary differences between financial statement and tax bases of assets and liabilities. The Company records income taxes under the liability method. Under this method, deferred income taxes are recognized for the estimated future tax effects of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws. | |||||||||||||||||||||
The income tax provision consisted of the following: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||||||||||
Current provision | |||||||||||||||||||||
Federal | $ | 50.7 | $ | 48.6 | $ | 49.9 | |||||||||||||||
State | 4.5 | 7.3 | 7.8 | ||||||||||||||||||
Foreign | 36.9 | 42.3 | 26.3 | ||||||||||||||||||
Total current | $ | 92.1 | $ | 98.2 | $ | 84 | |||||||||||||||
Deferred provision | |||||||||||||||||||||
Federal | $ | (25.2 | ) | $ | (47.0 | ) | $ | 37.1 | |||||||||||||
State | (1.2 | ) | 0.4 | 4.2 | |||||||||||||||||
Foreign | (0.8 | ) | (2.5 | ) | (2.9 | ) | |||||||||||||||
Total deferred | (27.2 | ) | (49.1 | ) | 38.4 | ||||||||||||||||
Total income tax provision | $ | 64.9 | $ | 49.1 | $ | 122.4 | |||||||||||||||
The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets consisted of the following: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||
Stock-based compensation | $ | 12.4 | $ | 10 | |||||||||||||||||
Accrued expenses and other | 57.9 | 53.7 | |||||||||||||||||||
Net operating losses, foreign tax credits and charitable contribution carryforward | 30.6 | 55.3 | |||||||||||||||||||
Inventories | 4.5 | 4.6 | |||||||||||||||||||
Intangible assets | 14.5 | 9 | |||||||||||||||||||
Property, plant and equipment | 4 | 3.9 | |||||||||||||||||||
Total deferred tax assets | 123.9 | 136.5 | |||||||||||||||||||
Valuation allowances | (21.7 | ) | (39.4 | ) | |||||||||||||||||
Total net deferred tax assets | $ | 102.2 | $ | 97.1 | |||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||
Transaction costs | $ | (258.1 | ) | $ | (261.9 | ) | |||||||||||||||
Property, plant and equipment | (45.7 | ) | (62.5 | ) | |||||||||||||||||
Accrued expenses and other | (4.5 | ) | (4.3 | ) | |||||||||||||||||
Total deferred tax liabilities | (308.3 | ) | (328.7 | ) | |||||||||||||||||
Net deferred tax liabilities | $ | (206.1 | ) | $ | (231.6 | ) |
Major_Customers
Major Customers | 12 Months Ended |
Dec. 31, 2014 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers |
The top five customers accounted for approximately 34.9%, 27.5% and 24.0% of the Company’s net sales for the years ended December 31, 2014, 2013 and 2012, respectively. Net sales from one customer (Mattress Firm Holding Corp.) represented more than 10.0% of net sales for the year ended December 31, 2014, which are recognized in the Tempur North America and Sealy segments. The top five customers also accounted for approximately 32.0% and 26.4% of accounts receivable as of December 31, 2014 and 2013, respectively. |
Redeemable_Noncontrolling_Inte
Redeemable Non-controlling Interest | 12 Months Ended |
Dec. 31, 2014 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-controlling Interest | Redeemable Non-controlling Interest |
The Company is party to a put and call arrangement with respect to the common securities that represent the 55.0% non-controlling interest in Comfort Revolution. The call arrangement may be exercised by the Company on June 12, 2017. Likewise, the put arrangement may be exercised by Comfort Revolution on June 12, 2018. The redemption value for both the put and the call arrangement is equal to 7.5 times EBITDA, as defined in the related LLC agreement, of Comfort Revolution for the preceding 12 months, adjusted for net debt outstanding and multiplied by the 55.0% ownership interest not held by the Company. Due to the existing put and call arrangements, the non-controlling interest is considered to be redeemable in accordance with the related authoritative accounting guidance and is recorded on the balance sheet as a redeemable non-controlling interest outside of permanent equity. The redeemable non-controlling interest is recognized at the higher of 1) the accumulated earnings associated with the non-controlling interest or 2) the redemption value as of the balance sheet date. The Company recorded redeemable non-controlling interest using the accumulated earnings basis associated with the non-controlling interest as of December 31, 2014 and 2013. |
Earnings_Per_Common_Share
Earnings Per Common Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Common Share | Earnings Per Common Share | |||||||||||
Year Ended December 31, | ||||||||||||
(in millions, except per common share amounts) | 2014 | 2013 | 2012 | |||||||||
Numerator: | ||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 108.9 | $ | 78.6 | $ | 106.8 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per common share—weighted average shares | 60.8 | 60.3 | 61.5 | |||||||||
Effect of dilutive securities: | ||||||||||||
Employee stock based compensation | 1.3 | 1.3 | 1.4 | |||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares | 62.1 | 61.6 | 62.9 | |||||||||
Basic earnings per common share | $ | 1.79 | $ | 1.3 | $ | 1.74 | ||||||
Diluted earnings per common share | $ | 1.75 | $ | 1.28 | $ | 1.7 | ||||||
The Company excluded 0.3 million, 0.3 million and 0.2 million shares issuable upon exercise of outstanding stock options for the years ended December 31, 2014, 2013, and 2012, respectively, from the diluted earnings per common share computation because their exercise price was greater than the average market price of Tempur Sealy International’s common stock or they were otherwise anti-dilutive. Holders of non-vested stock-based compensation awards do not have voting rights or rights to receive any dividends on the shares covered by the awards. |
Business_Segment_Information
Business Segment Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Business Segment Information | Business Segment Information | |||||||||||
The Company operates in three business segments: Tempur North America, Tempur International and Sealy. These reportable segments are strategic business units that are managed separately. The Tempur North America reportable segment consists of the two U.S. manufacturing facilities and the Tempur North America distribution subsidiaries. The Tempur International reportable segment consists of the manufacturing facility in Denmark, whose customers include all of the distribution subsidiaries and third party distributors outside the Tempur North America reportable segment. The Sealy reportable segment consists of company-owned and operated bedding and component manufacturing facilities located around the world, along with distribution subsidiaries, joint ventures, and licensees. The Sealy reportable segment became a new reportable segment in 2013 as a result of the Sealy Acquisition. The Company evaluates segment performance based on net sales and operating income. | ||||||||||||
The Company has historically included in its Tempur North America reportable segment certain corporate operating expenses. Immediately following the Sealy acquisition in March 2013, the Company began to transfer oversight of certain Sealy reportable segment corporate functions to personnel within the Tempur North America reportable segment. The transition has continued throughout 2014. As a result, the majority of corporate operating expenses are included in the Tempur North America reportable segment and a portion of corporate operating expenses are included in the Sealy segment. | ||||||||||||
The transition of the Company's corporate functions has increased operating expenses in the Tempur North America reportable segment and decreased operating expenses in the Sealy reportable segment. Corporate operating expenses included in the Tempur North America reportable segment for the year ended December 31, 2014, 2013 and 2012 were $75.5 million, $83.0 million and $58.0 million, respectively. Corporate operating expenses included in the Sealy reportable segment for the year ended December 31, 2014 and 2013 were $22.0 million and $26.9 million, respectively. There were no material allocations of corporate operating expenses from the Tempur North America reportable segment to the Tempur International or Sealy reportable segments during the years ended December 31, 2014, 2013 and 2012. | ||||||||||||
Effective January 1, 2015, the Company realigned its organizational structure. As a result of these changes, information that our chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance changed. Therefore, beginning in fiscal year 2015, the Company will report its financial reporting based on new reportable segments: North America and International. Corporate operating expenses will not be included in either of the reportable segments and will be presented separately as a reconciling item to consolidated results. | ||||||||||||
The Company’s Tempur North America, Tempur International and Sealy reportable segment assets include investments in subsidiaries which are appropriately eliminated in the Company’s accompanying Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable. The effect of the elimination of the investments in subsidiaries is included in the inter-segment eliminations as shown below. | ||||||||||||
The following table summarizes total assets by reportable segment: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Tempur North America | $ | 2,431.40 | $ | 2,110.70 | ||||||||
Tempur International | 463.1 | 477.7 | ||||||||||
Sealy | 2,000.60 | 1,956.60 | ||||||||||
Inter-segment eliminations | (2,232.5 | ) | (1,815.1 | ) | ||||||||
Total assets | $ | 2,662.60 | $ | 2,729.90 | ||||||||
The following table summarizes long-lived assets by reportable segment: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Tempur North America | $ | 137.1 | $ | 132.8 | ||||||||
Tempur International | 49.2 | 53.2 | ||||||||||
Sealy | 169.3 | 225.6 | ||||||||||
Total long lived assets | $ | 355.6 | $ | 411.6 | ||||||||
The following table summarizes long-lived assets by geographic region: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
United States | $ | 287.3 | $ | 335.9 | ||||||||
Canada | 8 | 9.3 | ||||||||||
Other International | 60.3 | 66.4 | ||||||||||
$ | 355.6 | $ | 411.6 | |||||||||
Total International | $ | 68.3 | $ | 75.7 | ||||||||
The following table summarizes net sales by geographic region: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
United States | $ | 2,188.70 | $ | 1,736.80 | $ | 923.4 | ||||||
Canada | 216.4 | 190.2 | 40.8 | |||||||||
Other International | 584.7 | 537.3 | 438.7 | |||||||||
$ | 2,989.80 | $ | 2,464.30 | $ | 1,402.90 | |||||||
Total International | $ | 801.1 | $ | 727.5 | $ | 479.5 | ||||||
The following table summarizes reportable segment information: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Net sales to external customers: | ||||||||||||
Tempur North America | ||||||||||||
Bedding | $ | 930.5 | $ | 830.4 | $ | 882.3 | ||||||
Other products | 62.7 | 79.6 | 82 | |||||||||
$ | 993.2 | $ | 910 | $ | 964.3 | |||||||
Tempur International | ||||||||||||
Bedding | $ | 354.7 | $ | 327.7 | $ | 332.4 | ||||||
Other products | 117.3 | 111.9 | 106.2 | |||||||||
$ | 472 | $ | 439.6 | $ | 438.6 | |||||||
Sealy | ||||||||||||
Bedding | $ | 1,441.30 | $ | 1,040.30 | $ | — | ||||||
Other products | 83.3 | 74.4 | — | |||||||||
$ | 1,524.60 | $ | 1,114.70 | $ | — | |||||||
$ | 2,989.80 | $ | 2,464.30 | $ | 1,402.90 | |||||||
Inter-segment sales: | ||||||||||||
Tempur North America | $ | 3.8 | $ | 0.2 | $ | 0.9 | ||||||
Tempur International | 0.6 | 0.6 | 1.5 | |||||||||
Sealy | 22.8 | 5.9 | — | |||||||||
Intercompany eliminations | (27.2 | ) | (6.7 | ) | (2.4 | ) | ||||||
$ | — | $ | — | $ | — | |||||||
Gross profit: | ||||||||||||
Tempur North America | $ | 413.9 | $ | 392.7 | $ | 449.3 | ||||||
Tempur International | 274.9 | 269.8 | 265.3 | |||||||||
Sealy | 461.6 | 352.4 | — | |||||||||
$ | 1,150.40 | $ | 1,014.90 | $ | 714.6 | |||||||
Operating income: | ||||||||||||
Tempur North America | $ | 84.9 | $ | 67.6 | $ | 144.4 | ||||||
Tempur International | 91.6 | 107.5 | 103.9 | |||||||||
Sealy | 99.8 | 68.7 | — | |||||||||
$ | 276.3 | $ | 243.8 | $ | 248.3 | |||||||
Income (loss) before income taxes: | ||||||||||||
Tempur North America | $ | 19.8 | $ | (33.8 | ) | $ | 126.2 | |||||
Tempur International | 88.5 | 102.6 | 103 | |||||||||
Sealy | 66.6 | 59.2 | — | |||||||||
$ | 174.9 | $ | 128 | $ | 229.2 | |||||||
Depreciation and amortization (including stock-based compensation amortization): | ||||||||||||
Tempur North America | $ | 31.7 | $ | 42 | $ | 30.6 | ||||||
Tempur International | 13.7 | 12.8 | 11.4 | |||||||||
Sealy | 44.3 | 36.7 | — | |||||||||
$ | 89.7 | $ | 91.5 | $ | 42 | |||||||
Intercompany royalties: | ||||||||||||
Tempur North America | $ | 6.1 | $ | 5.8 | $ | 12.7 | ||||||
Tempur International | (6.1 | ) | (5.8 | ) | (12.7 | ) | ||||||
Sealy | — | — | — | |||||||||
$ | — | $ | — | $ | — | |||||||
Capital expenditures: | ||||||||||||
Tempur North America | $ | 20.2 | $ | 20.7 | $ | 36.8 | ||||||
Tempur International | 14.4 | 10.1 | 13.7 | |||||||||
Sealy | 12.9 | 9.2 | — | |||||||||
$ | 47.5 | $ | 40 | $ | 50.5 | |||||||
Quarterly_Financial_Data_unaud
Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) | |||||||||||||||
Quarterly results of operations for the years ended December 31, 2014 and 2013, which include Sealy's results of operations from March 18, 2013 through December 31, 2013, are summarized below: | ||||||||||||||||
(in millions, except per share amounts) | First | Second | Third | Fourth | ||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
2014 | ||||||||||||||||
Net sales | $ | 701.9 | $ | 715 | $ | 827.4 | $ | 745.5 | ||||||||
Gross profit | 269.5 | 268.3 | 318.5 | 294.1 | ||||||||||||
Operating income | 62.4 | 50.3 | 87.1 | 76.5 | ||||||||||||
Net income (loss) | 27.4 | (2.2 | ) | 37.1 | 46.6 | |||||||||||
Basic earnings (loss) per common share | $ | 0.45 | $ | (0.04 | ) | $ | 0.61 | $ | 0.77 | |||||||
Diluted earnings (loss) per common share | $ | 0.44 | $ | (0.04 | ) | $ | 0.6 | $ | 0.75 | |||||||
2013 | ||||||||||||||||
Net sales | $ | 390.1 | $ | 660.6 | $ | 735.5 | $ | 678.1 | ||||||||
Gross profit | 188.4 | 254.9 | 298.7 | 272.9 | ||||||||||||
Operating income | 44.5 | 44 | 81.2 | 74.1 | ||||||||||||
Net income | 12.5 | (1.6 | ) | 40.2 | 27.5 | |||||||||||
Basic earnings (loss) per common share | $ | 0.21 | $ | (0.03 | ) | $ | 0.66 | $ | 0.45 | |||||||
Diluted earnings (loss) per common share | $ | 0.2 | $ | (0.03 | ) | $ | 0.65 | $ | 0.45 | |||||||
The Company's earnings were negatively impacted in the second quarter of 2014 due to the sale of its three U.S. innerspring component production facilities and equipment, along with associated working capital, which resulted in a loss on disposal of business. In the fourth quarter of 2014, the Company recognized other income from certain other non recurring items, including the partial settlement of a legal dispute. Additionally, the Company's earnings were negatively impacted in the second quarter of 2013, primarily due to the Sealy Acquisition and associated transaction fees. The sum of the quarterly earnings per common share amounts may not equal the annual amount reported because per share amounts are computed independently for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares. The Company’s quarterly operating results fluctuate as a result of seasonal variations in the Company’s business. |
GuarantorNonGuarantor_Financia
Guarantor/Non-Guarantor Financial Information | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Guarantor/Non-Guarantor Financial Information | ||||||||||||||||||||
Guarantor/Non-Guarantor Financial Information | Guarantor/Non-Guarantor Financial Information | |||||||||||||||||||
The Senior Notes are general unsecured senior obligations of Tempur Sealy International and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by all of Tempur Sealy International’s 100% directly or indirectly owned current and future domestic subsidiaries (the “Combined Guarantor Subsidiaries”). The foreign subsidiaries (the “Combined Non-Guarantor Subsidiaries”) represent the foreign operations of the Company and do not guarantee the Senior Notes. A subsidiary guarantor will be released from its obligations under the indenture governing the Senior Notes when: (a) the subsidiary guarantor is sold or sells all or substantially all of its assets; (b) the subsidiary is declared “unrestricted” under the indenture governing the Senior Notes; (c) the subsidiary’s guarantee of indebtedness under the 2012 Credit Agreement (as it may be amended, refinanced or replaced) is released (other than a discharge through repayment); or (d) the requirements for legal or covenant defeasance or discharge of the indenture have been satisfied. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly-owned subsidiary guarantors and non-guarantor subsidiaries. The Company has accounted for its investments in its subsidiaries under the equity method. | ||||||||||||||||||||
The following financial information presents Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013, and the related Consolidated Statements of Income and Comprehensive Income and Cash Flows for the years ended December 31, 2014, 2013 and 2012 for Tempur Sealy International, Combined Guarantor Subsidiaries and Combined Non-Guarantor Subsidiaries. Sealy financial information are included from March 18, 2013 through December 31, 2014 and are not included in financial information for 2012. | ||||||||||||||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 2,229.50 | $ | 802.9 | $ | (42.6 | ) | $ | 2,989.80 | |||||||||
Cost of sales | — | 1,465.30 | 416.7 | (42.6 | ) | 1,839.40 | ||||||||||||||
Gross profit | — | 764.2 | 386.2 | — | 1,150.40 | |||||||||||||||
Selling and marketing expenses | 2.4 | 431.2 | 186.3 | — | 619.9 | |||||||||||||||
General, administrative and other expenses | 13.4 | 200.5 | 66.7 | — | 280.6 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | (8.3 | ) | — | (8.3 | ) | |||||||||||||
Royalty income, net of royalty expense | — | (18.1 | ) | — | — | (18.1 | ) | |||||||||||||
Operating (loss) income | (15.8 | ) | 150.6 | 141.5 | — | 276.3 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | 27 | 62.4 | 2.5 | — | 91.9 | |||||||||||||||
Intercompany interest expense (income), net | 32.7 | (34.6 | ) | 1.9 | — | — | ||||||||||||||
Interest expense, net | 59.7 | 27.8 | 4.4 | — | 91.9 | |||||||||||||||
Loss on dispsoal, net | — | 23.2 | — | — | 23.2 | |||||||||||||||
Other (income) expense, net | — | (17.2 | ) | 3.5 | — | (13.7 | ) | |||||||||||||
Total other expense | 59.7 | 33.8 | 7.9 | — | 101.4 | |||||||||||||||
Income from equity investees | 159.2 | 98.7 | — | (257.9 | ) | — | ||||||||||||||
Income before income taxes | 83.7 | 215.5 | 133.6 | (257.9 | ) | 174.9 | ||||||||||||||
Income tax benefit (provision) | 26.3 | (56.3 | ) | (34.9 | ) | — | (64.9 | ) | ||||||||||||
Net income | 110 | 159.2 | 98.7 | (257.9 | ) | 110 | ||||||||||||||
Less: net income attributable to non-controlling interest | 1.1 | 1.1 | — | (1.1 | ) | 1.1 | ||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 108.9 | $ | 158.1 | $ | 98.7 | $ | (256.8 | ) | $ | 108.9 | |||||||||
Comprehensive income | $ | 66.9 | $ | 163.3 | $ | 60.3 | $ | (223.6 | ) | $ | 66.9 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 1,758.20 | $ | 728.1 | $ | (22.0 | ) | $ | 2,464.30 | |||||||||
Cost of sales | — | 1,110.50 | 360.9 | (22.0 | ) | 1,449.40 | ||||||||||||||
Gross profit | — | 647.7 | 367.2 | — | 1,014.90 | |||||||||||||||
Selling and marketing expenses | 2.4 | 358.1 | 162.4 | — | 522.9 | |||||||||||||||
General, administrative and other expenses | 17.1 | 181.6 | 67.6 | — | 266.3 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | (4.4 | ) | — | (4.4 | ) | |||||||||||||
Royalty income, net of royalty expense | — | (13.7 | ) | — | — | (13.7 | ) | |||||||||||||
Operating (loss) income | (19.5 | ) | 121.7 | 141.6 | — | 243.8 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | 27.5 | 81.5 | 1.8 | — | 110.8 | |||||||||||||||
Intercompany interest expense (income), net | 32.7 | (34.1 | ) | 1.4 | — | — | ||||||||||||||
Interest expense (income), net | 60.2 | 47.4 | 3.2 | — | 110.8 | |||||||||||||||
Other (income) expense, net | — | (0.9 | ) | 5.9 | — | 5 | ||||||||||||||
Total other expense | 60.2 | 46.5 | 9.1 | — | 115.8 | |||||||||||||||
Income from equity investees | 133.4 | 93.6 | — | (227.0 | ) | — | ||||||||||||||
Income before income taxes | 53.7 | 168.8 | 132.5 | (227.0 | ) | 128 | ||||||||||||||
Income tax benefit (provision) | 25.2 | (35.4 | ) | (38.9 | ) | — | (49.1 | ) | ||||||||||||
Net income | 78.9 | 133.4 | 93.6 | (227.0 | ) | 78.9 | ||||||||||||||
Less: net income attributable to non-controlling interest | 0.3 | 0.3 | — | (0.3 | ) | 0.3 | ||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 78.6 | $ | 133.1 | $ | 93.6 | $ | (226.7 | ) | $ | 78.6 | |||||||||
Comprehensive income | $ | 72.5 | $ | 133.8 | $ | 86.2 | $ | (220.0 | ) | $ | 72.5 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 947.8 | $ | 481 | $ | (25.9 | ) | $ | 1,402.90 | |||||||||
Cost of sales | — | 509 | 205.2 | (25.9 | ) | 688.3 | ||||||||||||||
Gross profit | — | 438.8 | 275.8 | — | 714.6 | |||||||||||||||
Selling and marketing expenses | 2.5 | 191.9 | 124.7 | — | 319.1 | |||||||||||||||
General, administrative and other expenses | 4.9 | 96.4 | 45.9 | — | 147.2 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | — | — | — | |||||||||||||||
Royalty income, net of royalty expense | — | — | — | — | — | |||||||||||||||
Operating (loss) income | (7.4 | ) | 150.5 | 105.2 | — | 248.3 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | — | 18.3 | 0.5 | — | 18.8 | |||||||||||||||
Intercompany interest expense (income), net | 31.5 | (31.5 | ) | — | — | — | ||||||||||||||
Interest expense (income), net | 31.5 | (13.2 | ) | 0.5 | — | 18.8 | ||||||||||||||
Other expense, net | — | — | 0.3 | — | 0.3 | |||||||||||||||
Total other expense (income) | 31.5 | (13.2 | ) | 0.8 | — | 19.1 | ||||||||||||||
Income from equity investees | 134.8 | 81 | — | (215.8 | ) | — | ||||||||||||||
Income before income taxes | 95.9 | 244.7 | 104.4 | (215.8 | ) | 229.2 | ||||||||||||||
Income tax benefit (provision) | 10.9 | (109.9 | ) | (23.4 | ) | — | (122.4 | ) | ||||||||||||
Net income | 106.8 | 134.8 | 81 | (215.8 | ) | 106.8 | ||||||||||||||
Less: net income attributable to non-controlling interest | — | — | — | — | — | |||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 106.8 | $ | 134.8 | $ | 81 | $ | (215.8 | ) | $ | 106.8 | |||||||||
Comprehensive income | $ | 113.9 | $ | 136.9 | $ | 86 | $ | (222.9 | ) | $ | 113.9 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Balance Sheets | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 0.4 | $ | 25.5 | $ | 36.6 | $ | — | $ | 62.5 | ||||||||||
Accounts receivable, net | — | 241.2 | 144.6 | — | 385.8 | |||||||||||||||
Inventories | — | 158.3 | 58.9 | — | 217.2 | |||||||||||||||
Income taxes payable | 144.1 | — | — | (144.1 | ) | — | ||||||||||||||
Prepaid expenses and other current assets | — | 28.2 | 28.3 | — | 56.5 | |||||||||||||||
Deferred income taxes | 12.4 | 26.8 | 5.2 | — | 44.4 | |||||||||||||||
Total Current Assets | 156.9 | 480 | 273.6 | (144.1 | ) | 766.4 | ||||||||||||||
Property, plant and equipment, net | — | 287.3 | 68.3 | — | 355.6 | |||||||||||||||
Goodwill | — | 557.2 | 179.3 | — | 736.5 | |||||||||||||||
Other intangible assets, net | — | 611.9 | 115.2 | — | 727.1 | |||||||||||||||
Deferred tax asset | — | — | 8.6 | — | 8.6 | |||||||||||||||
Other non-current assets | 6.3 | 46.4 | 15.7 | — | 68.4 | |||||||||||||||
Net investment in subsidiaries | 1,808.40 | — | — | (1,808.4 | ) | — | ||||||||||||||
Due from affiliates | 51.4 | 2,226.00 | 5.3 | (2,282.7 | ) | — | ||||||||||||||
Total Assets | $ | 2,023.00 | $ | 4,208.80 | $ | 666 | $ | (4,235.2 | ) | $ | 2,662.60 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 170.4 | $ | 56 | $ | — | $ | 226.4 | ||||||||||
Accrued expenses and other current liabilities | 1.4 | 166.1 | 65.8 | — | 233.3 | |||||||||||||||
Deferred income taxes | — | — | 0.2 | — | 0.2 | |||||||||||||||
Income taxes payable | — | 163 | (6.9 | ) | (144.1 | ) | 12 | |||||||||||||
Current portion of long-term debt | — | 61.8 | 4.6 | — | 66.4 | |||||||||||||||
Total Current Liabilities | 1.4 | 561.3 | 119.7 | (144.1 | ) | 538.3 | ||||||||||||||
Long-term debt | 375 | 1,160.90 | — | — | 1,535.90 | |||||||||||||||
Deferred income taxes | — | 229.1 | 29.7 | — | 258.8 | |||||||||||||||
Other non-current liabilities | — | 109.3 | 5 | — | 114.3 | |||||||||||||||
Due to affiliates | 1,431.30 | 340.2 | 849.4 | (2,620.9 | ) | — | ||||||||||||||
Total Liabilities | 1,807.70 | 2,400.80 | 1,003.80 | (2,765.0 | ) | 2,447.30 | ||||||||||||||
Redeemable non-controlling interest | 12.6 | 12.6 | — | (12.6 | ) | 12.6 | ||||||||||||||
Total Stockholders’ Equity | 202.7 | 1,795.40 | (337.8 | ) | (1,457.6 | ) | 202.7 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,023.00 | $ | 4,208.80 | $ | 666 | $ | (4,235.2 | ) | $ | 2,662.60 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Balance Sheets | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 30.9 | $ | 50.1 | $ | — | $ | 81 | ||||||||||
Accounts receivable, net | — | 192.6 | 156.6 | — | 349.2 | |||||||||||||||
Inventories | — | 147.5 | 51.7 | — | 199.2 | |||||||||||||||
Income tax receivable | 118.4 | — | — | (118.4 | ) | — | ||||||||||||||
Prepaid expenses and other current assets | — | 26.3 | 27.4 | — | 53.7 | |||||||||||||||
Deferred income taxes | 10 | 29.3 | 5.1 | — | 44.4 | |||||||||||||||
Total Current Assets | 128.4 | 426.6 | 290.9 | (118.4 | ) | 727.5 | ||||||||||||||
Property, plant and equipment, net | — | 335.9 | 75.7 | — | 411.6 | |||||||||||||||
Goodwill | — | 577.2 | 182.4 | — | 759.6 | |||||||||||||||
Other intangible assets, net | — | 624.6 | 125.5 | — | 750.1 | |||||||||||||||
Deferred tax asset | — | — | 10.9 | — | 10.9 | |||||||||||||||
Other non-current assets | 7.6 | 47 | 15.6 | — | 70.2 | |||||||||||||||
Net investment in subsidiaries | 756 | — | — | (756.0 | ) | — | ||||||||||||||
Due from affiliates | 1,299.90 | 2,306.50 | 0.9 | (3,607.3 | ) | — | ||||||||||||||
Total Assets | $ | 2,191.90 | $ | 4,317.80 | $ | 701.9 | $ | (4,481.7 | ) | $ | 2,729.90 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 140.5 | $ | 50.7 | $ | — | $ | 191.2 | ||||||||||
Accrued expenses and other current liabilities | 1.4 | 144.2 | 62.8 | — | 208.4 | |||||||||||||||
Deferred income taxes | — | — | 0.8 | — | 0.8 | |||||||||||||||
Income taxes payable | — | 115.2 | 4.7 | (118.4 | ) | 1.5 | ||||||||||||||
Current portion of long-term debt | — | 36.6 | 3 | 39.6 | ||||||||||||||||
Total Current Liabilities | 1.4 | 436.5 | 122 | (118.4 | ) | 441.5 | ||||||||||||||
Long-term debt | 375 | 1,421.90 | — | — | 1,796.90 | |||||||||||||||
Deferred income taxes | — | 252.8 | 33.3 | — | 286.1 | |||||||||||||||
Other non-current liabilities | — | 69.1 | 6.2 | — | 75.3 | |||||||||||||||
Due to affiliates | 1,685.40 | 1,381.50 | 940.5 | (4,007.4 | ) | — | ||||||||||||||
Total Liabilities | 2,061.80 | 3,561.80 | 1,102.00 | (4,125.8 | ) | 2,599.80 | ||||||||||||||
Redeemable non-controlling interest | 11.5 | 11.5 | — | (11.5 | ) | 11.5 | ||||||||||||||
Total Stockholders’ Equity | 118.6 | 744.5 | (400.1 | ) | (344.4 | ) | 118.6 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,191.90 | $ | 4,317.80 | $ | 701.9 | $ | (4,481.7 | ) | $ | 2,729.90 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (62.7 | ) | $ | 191.5 | $ | 96.4 | $ | — | $ | 225.2 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | $ | — | $ | — | $ | (8.5 | ) | $ | — | $ | (8.5 | ) | ||||||||
Proceeds from disposition of business | — | 43.5 | — | — | 43.5 | |||||||||||||||
Purchases of property, plant and equipment | — | (31.3 | ) | (16.2 | ) | (47.5 | ) | |||||||||||||
Other | — | 3 | (0.9 | ) | — | 2.1 | ||||||||||||||
Net cash used in investing activities | — | 15.2 | (25.6 | ) | — | (10.4 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | — | 271.5 | — | — | 271.5 | |||||||||||||||
Repayments 2012 Credit Agreement | — | (510.9 | ) | — | — | (510.9 | ) | |||||||||||||
Net activity in investment in and advances (to) from subsidiaries and affiliates | 59.3 | 32.1 | (91.4 | ) | — | — | ||||||||||||||
Payment of deferred financing costs | — | (3.1 | ) | — | — | (3.1 | ) | |||||||||||||
Proceeds from exercise of stock options | 4.3 | — | — | — | 4.3 | |||||||||||||||
Excess tax benefit from stock based compensation | 1.7 | — | — | — | 1.7 | |||||||||||||||
Treasury stock repurchased | (2.2 | ) | — | — | — | (2.2 | ) | |||||||||||||
Other | — | (1.7 | ) | 2.3 | — | 0.6 | ||||||||||||||
Net cash provided by (used in) financing activities | 63.1 | (212.1 | ) | (89.1 | ) | — | (238.1 | ) | ||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 4.8 | — | 4.8 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | 0.4 | (5.4 | ) | (13.5 | ) | — | (18.5 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 30.9 | 50.1 | — | 81 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 0.4 | $ | 25.5 | $ | 36.6 | $ | — | $ | 62.5 | ||||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (66.1 | ) | $ | 80.9 | $ | 83.7 | $ | — | $ | 98.5 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | — | (1,035.3 | ) | (137.6 | ) | — | (1,172.9 | ) | ||||||||||||
Purchase of property, plant and equipment | — | (28.3 | ) | (11.7 | ) | — | (40.0 | ) | ||||||||||||
Other | — | (54.7 | ) | 54.6 | — | (0.1 | ) | |||||||||||||
Net cash used in investing activities | — | (1,118.3 | ) | (94.7 | ) | — | (1,213.0 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | $ | — | $ | 2,992.60 | $ | — | $ | — | $ | 2,992.60 | ||||||||||
Repayments of the 2012 Credit Agreement | — | (1,658.3 | ) | — | — | (1,658.3 | ) | |||||||||||||
Proceeds from issuance of Senior Notes | 375 | — | — | — | 375 | |||||||||||||||
Proceeds from the 2011 Credit Facility | — | 46.5 | — | — | 46.5 | |||||||||||||||
Repayments of the 2011 Credit Facility | — | (696.5 | ) | — | — | (696.5 | ) | |||||||||||||
Net activity in investment in and advances from (to) subsidiaries and affiliates | (772.8 | ) | 874.9 | (102.1 | ) | — | — | |||||||||||||
Payment of deferred financing costs | (8.4 | ) | (43.6 | ) | — | — | (52.0 | ) | ||||||||||||
Proceeds from exercise of stock options | 8.7 | — | — | — | 8.7 | |||||||||||||||
Excess tax benefit from stock based compensation | 5.4 | — | — | — | 5.4 | |||||||||||||||
Treasury stock repurchased | 458.2 | (465.2 | ) | — | — | (7.0 | ) | |||||||||||||
Other | — | (1.3 | ) | 0.3 | — | (1.0 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 66.1 | 1,049.10 | (101.8 | ) | — | 1,013.40 | ||||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 2.8 | — | 2.8 | |||||||||||||||
Increase in cash and cash equivalents | — | 11.7 | (110.0 | ) | — | (98.3 | ) | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD | — | 19.2 | 160.1 | — | 179.3 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 30.9 | $ | 50.1 | $ | — | $ | 81 | ||||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (43.6 | ) | $ | 140.5 | $ | 93 | $ | — | $ | 189.9 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | — | — | (4.5 | ) | — | (4.5 | ) | |||||||||||||
Purchase of property, plant and equipment | — | (36.7 | ) | (13.8 | ) | — | (50.5 | ) | ||||||||||||
Other | — | (0.1 | ) | 0.1 | — | — | ||||||||||||||
Net cash used in investing activities | — | (36.8 | ) | (18.2 | ) | — | (55.0 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Repayments of the 2012 Credit Agreement | — | — | — | — | — | |||||||||||||||
Proceeds from the 2011 Credit Facility | — | 352 | — | — | 352 | |||||||||||||||
Repayments of the 2011 Credit Facility | — | (287.0 | ) | — | — | (287.0 | ) | |||||||||||||
Net activity in investment in and advances from (to) subsidiaries and affiliates | 187 | (170.8 | ) | (16.2 | ) | — | — | |||||||||||||
Payment of deferred financing costs | (2.2 | ) | — | (0.1 | ) | — | (2.3 | ) | ||||||||||||
Proceeds from exercise of stock options | 11.4 | — | — | — | 11.4 | |||||||||||||||
Excess tax benefit from stock based compensation | — | 10.5 | — | — | 10.5 | |||||||||||||||
Treasury stock repurchased | (152.6 | ) | — | — | — | (152.6 | ) | |||||||||||||
Other | — | — | (2.8 | ) | — | (2.8 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 43.6 | (95.3 | ) | (19.1 | ) | — | (70.8 | ) | ||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 3.8 | — | 3.8 | |||||||||||||||
(Decrease) increase in cash and cash equivalents | — | 8.4 | 59.5 | — | 67.9 | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD | — | 10.8 | 100.6 | — | 111.4 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 19.2 | $ | 160.1 | $ | — | $ | 179.3 | ||||||||||
VALUATION_AND_QUALIFYING_ACCOU
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012 | ||||||||||||||||||
SCHEDULE II | ||||||||||||||||||
(in millions) | ||||||||||||||||||
Additions | ||||||||||||||||||
Description | Balance at | Charges to | Charged to Other | Deductions | Balance at | |||||||||||||
Beginning of | Costs and | Accounts | End of | |||||||||||||||
Period | Expenses | Period | ||||||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||||
Year Ended December 31, 2012 | $ | 6.8 | 2.5 | — | (1.1 | ) | $ | 8.2 | ||||||||||
Year Ended December 31, 2013 | $ | 8.2 | 1.3 | — | 9.8 | $ | 19.3 | |||||||||||
Year Ended December 31, 2014 | $ | 19.3 | 4.9 | — | (4.7 | ) | $ | 19.5 | ||||||||||
Additions | ||||||||||||||||||
Description | Balance at | Charges to | Charged to Other | Deductions | Balance at | |||||||||||||
Beginning of | Costs and | Accounts | End of | |||||||||||||||
Period | Expenses | Period | ||||||||||||||||
Valuation allowance deferred tax assets: | ||||||||||||||||||
Year Ended December 31, 2012 | $ | 2.9 | — | — | (2.8 | ) | $ | 0.1 | ||||||||||
Year Ended December 31, 2013 | $ | 0.1 | 20.4 | 18.9 | — | $ | 39.4 | |||||||||||
Year Ended December 31, 2014 | $ | 39.4 | 2.2 | — | (19.9 | ) | $ | 21.7 | ||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Basis of Presentation and Description of Business | Basis of Presentation and Description of Business. Tempur Sealy International, Inc., a Delaware corporation, together with its subsidiaries, is a U.S. based, multinational company. The term “Tempur Sealy International” refers to Tempur Sealy International, Inc. only, and the term “Company” refers to Tempur Sealy International, Inc. and its consolidated subsidiaries. | ||||
The Company develops, manufactures, markets and sells bedding products, which include mattresses, foundations and adjustable bases, and other products, which include pillows and other accessories. The Company also derives income from royalties by licensing the Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. Additionally, the Company participates in several joint ventures in the Asia-Pacific region, as well as a joint venture in the U.S. with Comfort Revolution International, LLC (“Comfort Revolution”). The Company sells its products through three sales channels: Retail, Direct and Other. | |||||
Basis of Consolidation | Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International and its 100.0% owned subsidiary companies and Comfort Revolution. Intercompany balances and transactions have been eliminated. The equity method of accounting is used for joint ventures and investments in associated companies over which the Company has significant influence, but does not have effective control and consolidation is not otherwise required under the Financial Accounting Standards Board’s (“FASB”) authoritative guidance surrounding the consolidation of VIEs. The Company’s equity in the net income and losses of these investments is reported in equity income in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Income. | ||||
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. | ||||
Fair Value Measurements | Fair Value Measurements. The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. | ||||
The Company estimates fair value of its financial instruments utilizing an established three-level hierarchy. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows: | |||||
• | Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets. | ||||
• | Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. | ||||
• | Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements. | ||||
Foreign Currency | Foreign Currency. Assets and liabilities of non-U.S. subsidiaries, whose functional currency is the local currency, are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the financial statements of foreign subsidiaries are included in accumulated other comprehensive loss (“OCL”), a component of stockholders’ equity, and included in net earnings only upon sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchanges rates on the transaction date and on the settlement date. | ||||
Derivative Financial Instruments | Derivative Financial Instruments. The Company records derivative financial instruments on the consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e., unrealized gains or losses) are recorded each period in earnings or other comprehensive loss ("OCL"), depending on whether the derivative is designated and is effective as a hedged transaction, and on the type of hedging relationship. | ||||
For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of accumulated OCL in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. | |||||
Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. In order to manage risks related to borrowings under its credit facilities, the Company entered into an interest rate swap agreement. The Company designated this interest rate swap as a cash flow hedge of floating rate borrowings. The Company manages the risk associated with fluctuations in foreign currencies related to intercompany and third party inventory purchases denominated in foreign currencies through foreign exchange forward contracts designated as cash flow hedges. The Company does not apply hedge accounting to the foreign currency forward contracts used to offset currency-related changes in foreign currency denominated assets and liabilities. These contracts are adjusted to their fair value through earnings. | |||||
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents consist of all highly liquid investments with initial maturities of three months or less. | ||||
Inventories | Inventories. Inventories are stated at the lower of cost or market, determined by the first-in, first-out method | ||||
Property, Plant and Equipment | Property, Plant and Equipment. Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: | ||||
Estimated | |||||
Useful Lives | |||||
(in years) | |||||
Buildings | 25-30 | ||||
Computer equipment and software | 5-Mar | ||||
Leasehold improvements | 7-Apr | ||||
Machinery and equipment | 7-Mar | ||||
Office furniture and fixtures | 7-May | ||||
The Company records depreciation and amortization in cost of sales, for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or seven years. | |||||
Long-Lived Assets | Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value generally is determined from estimated discounted future net cash flows (for assets held for use) or net realizable value (for assets held for sale). | ||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate an impairment may have occurred. The Company performs an annual impairment test on all existing goodwill and other indefinite lived assets on October 1 of each year and whenever events or circumstances make it more likely than not that impairment may have occurred. The Company reviewed goodwill for impairment based on its identified reporting units, which are the Company’s Tempur North America, Tempur International and Sealy operating segments. In conducting the impairment test for the Tempur North America, Tempur International and Sealy operating segments, the fair value of each of the Company’s reporting units is compared to its respective carrying amount including goodwill. If the fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the fair value, further analysis is performed to assess impairment. The Company’s determination of fair value of the reporting units is based on a discounted cash flow approach, with an appropriate risk adjusted discount rate, and a market approach. Any identified impairment would result in an adjustment to the Company’s results of operations. | ||||
The Company also tests its indefinite-lived intangible assets, principally the Tempur and Sealy trade names. The Company tested its Sealy trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company tested its Tempur trade name through a qualitative analysis which considered indicators of impairment to evaluate whether the fair value was more likely than not in excess of its carrying value. | |||||
The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2014, 2013 and 2012, none of which resulted in the recognition of impairment charges. | |||||
Accrued Sales Returns | Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. Accrued sales returns are included in accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets. | ||||
Warranties | Warranties. The Company provides warranties on certain products, which vary based by segment, product and brand. Estimates of warranty expenses are based primarily on historical claims experience and product testing. Estimated future obligations related to these products are charged to cost of sales in the period in which the related revenue is recognized. In estimating its warranty obligations, the Company considers the impact of recoverable salvage value on warranty costs by segment in determining its estimate of future warranty obligations. | ||||
The following summarizes the Company’s warranty terms for mattresses and pillows: | |||||
Segment | Product/Brand | Warranty Term (in years) | |||
Tempur North America | Mattresses | 10 - 25, prorated (1) | |||
Tempur North America | Pillows | 3 | |||
Tempur International | Mattresses | 5 - 15, prorated (2) | |||
Tempur International | Pillows | 3 | |||
Sealy | Mattresses | 10 - 25, prorated (1) | |||
-1 | Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. | ||||
-2 | The last 10 years of warranty period are prorated on a straight-line basis | ||||
Income Taxes | Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carry forwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain foreign and domestic tax positions utilizing a proscribed recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. | ||||
Revenue Recognition | Revenue Recognition. Sales of products are recognized as revenue when persuasive evidence of an arrangement exists, title passes to customers and the risks and rewards of ownership are transferred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company extends volume discounts to certain customers, as well as promotional allowances, floor sample discounts, commissions paid to retail associates and slotting fees, and reflects these amounts as a reduction of sales at the time revenue is recognized based on historical experience. The Company also reports sales net of tax assessed by qualifying governmental authorities. The Company extends credit based on the creditworthiness of its customers. No collateral is required on sales made in the normal course of business. | ||||
Allowance for Doubtful Accounts | The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience and current economic conditions and also considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a customer receivable is reasonably assured. Account balances are charged off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. | ||||
Cost of Sales | Cost of Sales. Costs associated with net sales are recorded in cost of sales. Cost of sales includes the costs of receiving, producing, inspecting, warehousing, insuring, and shipping goods during the period, as well as depreciation and amortization of long-lived assets used in these processes. Cost of sales also include shipping and handling costs associated with the delivery of goods to customers and costs associated with internal transfers between plant locations. | ||||
Cooperative Advertising, Rebate and Other Promotional Programs | Cooperative Advertising, Rebate and Other Promotional Programs. The Company enters into agreements with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these agreements. The Company periodically assesses these liabilities based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer or whether the customer will meet the requirements to receive rebate funds. The Company generally negotiates these agreements on a customer-by-customer basis. Some of these agreements extend over several periods. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to such estimates are recorded and charged to earnings in the period in which they are identified. Rebates and cooperative advertising are classified as a reduction of revenue and presented within net sales on the accompanying Consolidated Statements of Income. Certain cooperative advertising expenses are reported as components of selling and marketing expenses in the accompanying Consolidated Statements of Income because the Company receives an identifiable benefit and the fair value of the advertising benefit can be reasonably estimated. | ||||
Advertising Costs | Advertising Costs. The Company expenses advertising costs as incurred except for production costs and advance payments, which are deferred and expensed when advertisements run for the first time. Direct response advance payments are deferred and amortized over the life of the program. Advertising costs are included in selling and marketing expenses in the accompanying Consolidated Statements of Income. | ||||
Research and Development Expenses | Research and Development Expenses. Research and development expenses for new products are expensed as they are incurred and are included in general, administrative and other expenses in the accompanying Consolidated Statements of Income. | ||||
Deferred Financing Costs | Deferred Financing Costs. The Company capitalizes costs associated with the issuance of debt and amortizes these costs as additional interest expense over the lives of the debt instruments using the effective interest method. These costs are recorded as deferred financing costs within other non-current assets in the accompanying Consolidated Balance Sheets and interest expense, net in the accompanying Consolidated Statements of Income. Upon the prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs. | ||||
Royalty Income and Expense | Royalty Income and Expense. The Company recognizes royalty income based on sales of Sealy® and Stearns & Foster® branded products by various licensees. The Company also pays royalties to other entities for the use of their names on products produced by the Company. | ||||
Stock-Based Compensation | Stock-Based Compensation. The Company accounts for stock-based payment transactions in which the Company receives employee services in exchange for equity instruments of the Company. Stock-based compensation cost for restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and deferred stock units (“DSUs”) is measured based on the closing fair market value of the Company’s common stock on the date of grant. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes option-pricing model. The Company recognizes stock-based compensation cost as expense for awards other than its PRSUs ratably on a straight-line basis over the requisite service period. The Company recognizes stock-based compensation cost associated with its PRSUs over the requisite service period if it is probable that the performance conditions will be satisfied. The Company will recognize a benefit from stock-based compensation in additional paid in capital if an incremental tax benefit is realized by following the ordering provisions of the tax law. | ||||
Treasury Stock | Treasury Stock. Subject to Delaware law, and the limitations in the Company's 2012 Credit Agreement, the Board of Directors may authorize share repurchases of the Company’s common stock (“Share Repurchase Authorizations”). Share Repurchase Authorizations may be made through open market transactions, negotiated purchase or otherwise, at times and in such amounts as the Company, and a committee of the Board, deem appropriate. Shares repurchased under Share Repurchase Authorizations are held in treasury for general corporate purposes, including issuances under various employee share-based award plans. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity. Share Repurchase Authorizations may be suspended, limited or terminated at any time without notice. | ||||
Self-Insurance | Self-Insurance. The Company is self-insured for certain losses related to medical claims with excess loss coverage of $0.4 million per claim per year. The Company also utilizes large deductible policies to insure claims related to general liability, product liability, automobile, and workers’ compensation. The Company’s recorded liability for workers’ compensation represents an estimate of the ultimate cost of claims incurred as of the balance sheet date. The estimated workers' compensation liability is undiscounted and is established based upon analysis of historical and actuarial estimates, and is reviewed by the Company and third party actuaries on a quarterly basis to ensure that the liability is appropriate. | ||||
Environmental Cost | Environmental Cost. Environmental expenditures that relate to current operations are expensed or capitalized, as appropriate, under the FASB’s authoritative guidance on environmental remediation liabilities. Expenditures that relate to an existing condition caused by past operations and that do not provide future benefits are expensed as incurred. Liabilities are recorded when environmental assessments are made or the requirement for remedial efforts is probable, and the costs can be reasonably estimated. The timing of accruing for these remediation liabilities is generally no later than the completion of feasibility studies. The Company has an ongoing monitoring and identification process to assess how the activities, with respect to the known exposures, are progressing against the accrued cost estimates, as well as to identify other potential remediation sites that are presently unknown. | ||||
Pension Obligations | Pension Obligations. The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at four of its active Sealy plants and eight previously closed Sealy U.S. facilities. Sealy Canada, Ltd. (a 100.0% owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities. Both plans provide retirement and survivorship benefits based on the employees' credited years of service. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date. The benefit obligation is the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. | ||||
Supply Agreements | Supply Agreements. The Company from time to time enters into long term supply agreements with its customers to sell its branded products to customers in exchange for minimum sales volume or a minimum percentage of the customer's sales or space on the retail floor. Such agreements generally cover a period of two to five years. Initial cash outlays by the Company for such agreements are capitalized and amortized generally as a reduction of sales over the life of the contract. The majority of these cash outlays are ratably recoverable upon contract termination. Such capitalized amounts are included in prepaid expenses and other current assets and non-current assets in the Company's Consolidated Balance Sheets. | ||||
Recently Issued Accounting Pronouncements | In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This ASU is based on the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating this ASU to determine the Company's adoption method and the impact it will have on the Company's Consolidated Financial Statements. | ||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40: Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern). This ASU addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, with early adoption permitted. The Company does not expect to early adopt this ASU and does not believe that the adoption of this ASU will have a material impact on the Company's Consolidated Financial Statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule of Inventory, Current | Inventories are stated at the lower of cost or market, determined by the first-in, first-out method and consist of the following: | |||||||
December 31, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Finished goods | $ | 134 | $ | 126.7 | ||||
Work-in-process | 11.4 | 10 | ||||||
Raw materials and supplies | 71.8 | 62.5 | ||||||
$ | 217.2 | $ | 199.2 | |||||
Schedule of Property, Plant and Equipment | Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: | |||||||
Estimated | ||||||||
Useful Lives | ||||||||
(in years) | ||||||||
Buildings | 25-30 | |||||||
Computer equipment and software | 5-Mar | |||||||
Leasehold improvements | 7-Apr | |||||||
Machinery and equipment | 7-Mar | |||||||
Office furniture and fixtures | 7-May | |||||||
Property, Plant and Equipment Summary | Property, plant and equipment, net consisted of the following: | |||||||
December 31, | ||||||||
(in millions) | 2014 | 2013 | ||||||
Machinery and equipment | $ | 243.5 | $ | 270.8 | ||||
Land and buildings | 247.1 | 261.9 | ||||||
Computer equipment and software | 69.2 | 72.3 | ||||||
Furniture and fixtures | 54.9 | 56.7 | ||||||
Construction in progress | 39.4 | 28.9 | ||||||
$ | 654.1 | $ | 690.6 | |||||
Accumulated depreciation | (298.5 | ) | (279.0 | ) | ||||
$ | 355.6 | $ | 411.6 | |||||
Changes in Accrued Sales Returns | The Company had the following activity for accrued sales returns from December 31, 2012 to December 31, 2014: | |||||||
(in millions) | ||||||||
Balance as of December 31, 2012 | 5.1 | |||||||
Amounts accrued | 104.8 | |||||||
Liabilities assumed as a result of Sealy Acquisition | 19.9 | |||||||
Returns charged to accrual | (101.1 | ) | ||||||
Balance as of December 31, 2013 | $ | 28.7 | ||||||
Amounts accrued | 127.4 | |||||||
Returns charged to accrual | (123.8 | ) | ||||||
Balance as of December 31, 2014 | $ | 32.3 | ||||||
Schedule of Warranty Terms | The following summarizes the Company’s warranty terms for mattresses and pillows: | |||||||
Segment | Product/Brand | Warranty Term (in years) | ||||||
Tempur North America | Mattresses | 10 - 25, prorated (1) | ||||||
Tempur North America | Pillows | 3 | ||||||
Tempur International | Mattresses | 5 - 15, prorated (2) | ||||||
Tempur International | Pillows | 3 | ||||||
Sealy | Mattresses | 10 - 25, prorated (1) | ||||||
-1 | Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. | |||||||
-2 | The last 10 years of warranty period are prorated on a straight-line basis | |||||||
Warranty Activity | The Company had the following activity for warranties from December 31, 2012 to December 31, 2014: | |||||||
(in millions) | ||||||||
Balance as of December 31, 2012 | $ | 4.8 | ||||||
Amounts accrued | 22.7 | |||||||
Liabilities assumed as a result of Sealy Acquisition | 21.4 | |||||||
Warranties charged to accrual | (22.8 | ) | ||||||
Balance as of December 31, 2013 | 26.1 | |||||||
Amounts accrued | 34.2 | |||||||
Warranties charged to accrual | (29.0 | ) | ||||||
Balance as of December 31, 2014 | $ | 31.3 | ||||||
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Business Combinations [Abstract] | |||||
Components of Consideration Transferred | The purchase price of Sealy consisted of the following items: | ||||
(in millions) | |||||
Cash consideration for stock | $ | 231.2 | (1) | ||
Cash consideration for share-based awards | 14.2 | (2) | |||
Cash consideration for 8.0% Sealy Notes | 442.1 | (3) | |||
Cash consideration for repayment of Sealy Senior Notes | 260.7 | (4) | |||
Cash consideration for repayment of Sealy 2014 Notes | 276.9 | (5) | |||
Total consideration | 1,225.10 | ||||
Cash acquired | (52.2 | ) | (6) | ||
Net consideration transferred | $ | 1,172.90 | |||
-1 | The cash consideration for outstanding shares of Sealy common stock is the product of the agreed-upon cash per share price of $2.20 and total Sealy shares of 105.1 million. | ||||
-2 | The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $2.20 and the total number of RSUs and DSUs outstanding and the “in the money” stock options net of the weighted average exercise price. | ||||
-3 | The cash consideration for Sealy’s 8.0% Senior Secured Third Lien Convertible Notes due 2016 (“8.0% Sealy Notes”) is the result of applying the adjusted equity conversion rate to the 8.0% Sealy Notes tendered for conversion and multiplying the result by the agreed-upon cash per share price of $2.20. The 8.0% Sealy Notes that were converted represented the right to receive the same merger consideration that would have been payable to a holder of 201.0 million shares of Sealy common stock, subject to adjustment in accordance with the terms of the supplemental indenture governing the 8.0% Sealy Notes. | ||||
-4 | The cash consideration for Sealy’s 10.875% Senior Notes due 2016 (“Sealy Senior Notes”) reflects the repayment of the outstanding obligation. | ||||
-5 | The cash consideration for Sealy’s 8.25% Senior Subordinated Notes due 2014 (“Sealy 2014 Notes”) reflects the repayment of the outstanding obligation. | ||||
-6 | Represents the Sealy cash balance acquired at acquisition. | ||||
Components of Preliminary Purchase Price Allocation | The components of the final purchase price allocation are as follows: | ||||
(in millions) | |||||
Accounts receivable | $ | 185 | |||
Inventory | 75.1 | ||||
Prepaid expenses and other current assets | 22.8 | ||||
Accounts payable | (77.9 | ) | |||
Accrued expenses | (137.2 | ) | |||
Property, plant and equipment | 242.9 | ||||
Other assets | 32.6 | ||||
Identifiable intangible assets: | |||||
Indefinite-lived trade names | 521.2 | ||||
Contractual retailer/distributor relationships | 91.1 | ||||
Developed technology, including patents | 87.1 | ||||
Customer databases | 3.9 | ||||
Optimum™ trade name | 2.3 | ||||
Deferred income taxes, net | (232.8 | ) | |||
8.0% Sealy Notes | (96.2 | ) | |||
Redeemable non-controlling interest | (11.3 | ) | |||
Other liabilities | (77.5 | ) | |||
Goodwill | 541.8 | ||||
Net consideration transferred | $ | 1,172.90 | |||
Pro Forma Information | The following unaudited pro forma information presents the combined financial results for the Company as if the Sealy Acquisition had been completed at the beginning of the Company’s prior year, January 1, 2013. Prior to the Sealy Acquisition, Sealy used a 52-53 week fiscal year ending on the closest Sunday to November 30, but no later than December 2. The pro forma financial information set forth below for the year ended December 31, 2013 includes Sealy’s pro forma information for the combined twelve month period from December 3, 2012 through March 3, 2013 and April 1, 2013 through December 29, 2013. | ||||
Year Ended | |||||
December 31, | |||||
(in millions, except earnings per common share) | 2013 | ||||
Net sales | $ | 2,757.20 | |||
Net income | $ | 90.9 | |||
Earnings per common share – Diluted | $ | 1.49 | |||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Goodwill by Reportable Business Segment | The following summarizes changes to the Company’s goodwill, by reportable segment: | |||||||||||||||||||||||||
(in millions) | Total | Tempur | Tempur | Sealy | ||||||||||||||||||||||
North America | International | |||||||||||||||||||||||||
Balance as of December 31, 2012 | $ | 216.1 | $ | 108.9 | $ | 107.2 | $ | — | ||||||||||||||||||
Goodwill resulting from Sealy Acquisition | 541.8 | — | — | 541.8 | ||||||||||||||||||||||
Foreign currency translation adjustments | 1.7 | (1.2 | ) | 0.1 | 2.8 | |||||||||||||||||||||
Balance as of December 31, 2013 | 759.6 | 107.7 | 107.3 | 544.6 | ||||||||||||||||||||||
Disposal of business | (21.4 | ) | — | — | (21.4 | ) | ||||||||||||||||||||
Goodwill resulting from acquisitions | 2.3 | — | 2.3 | — | ||||||||||||||||||||||
Foreign currency translation adjustments | (4.0 | ) | (1.5 | ) | (1.2 | ) | (1.3 | ) | ||||||||||||||||||
Balance as of December 31, 2014 | $ | 736.5 | $ | 106.2 | $ | 108.4 | $ | 521.9 | ||||||||||||||||||
Other Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: | |||||||||||||||||||||||||
($ in millions) | 31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||||||
Useful | Gross | Accumulated | Net | Carrying | Accumulated | Net | ||||||||||||||||||||
Lives | Carrying | Amortization | Carrying | Amount | Amortization | Carrying | ||||||||||||||||||||
(Years) | Amount | Amount | Amount | |||||||||||||||||||||||
Unamortized indefinite life intangible assets: | ||||||||||||||||||||||||||
Trade names | $ | 569 | $ | — | $ | 569 | $ | 575.3 | $ | — | $ | 575.3 | ||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||||
Contractual distributor relationships | 15 | $ | 88.2 | $ | 10.4 | $ | 77.8 | $ | 90 | $ | 4.7 | $ | 85.3 | |||||||||||||
Technology and other | 10-Apr | 92.6 | 32.6 | 60 | 93.2 | 25.5 | 67.7 | |||||||||||||||||||
Patents, other trademarks, and other trade names | 20-May | 27.3 | 14.6 | 12.7 | 27.4 | 12.2 | 15.2 | |||||||||||||||||||
Customer databases, relationships and reacquired rights | 5-Feb | 24.1 | 16.5 | 7.6 | 21 | 14.4 | 6.6 | |||||||||||||||||||
Total | $ | 801.2 | $ | 74.1 | $ | 727.1 | $ | 806.9 | $ | 56.8 | $ | 750.1 | ||||||||||||||
Expected Future Amortization Expense | amortization of intangible assets is expected to be as follows: | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
2015 | $ | 18.3 | ||||||||||||||||||||||||
2016 | 17.9 | |||||||||||||||||||||||||
2017 | 16.6 | |||||||||||||||||||||||||
2018 | 15.6 | |||||||||||||||||||||||||
2019 | 15.4 | |||||||||||||||||||||||||
Unconsolidated_Affiliate_Compa1
Unconsolidated Affiliate Companies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||
Summary of Financial Information for Joint Ventures | The tables below present summarized financial information for joint ventures as of and for the years ended December 31: | |||||||
(in millions) | 2014 | 2013 | ||||||
Current assets | $ | 49.7 | $ | 39.1 | ||||
Non-current assets | 5.1 | 5.7 | ||||||
Current liabilities | 29.7 | 31.7 | ||||||
Equity | 25.1 | 13.1 | ||||||
(in millions) | 2014 | 2013 | ||||||
Revenues | $ | 99.2 | $ | 67.9 | ||||
Gross profit | 62.1 | 45 | ||||||
Income from operations | 16.8 | 10.9 | ||||||
Net income | 13.1 | 8.9 | ||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Borrowings Outstanding | Debt for the Company consists of the following: | |||||||
(in millions) | December 31, 2014 | 31-Dec-13 | ||||||
$375.0 million Senior Notes, interest at 6.875%, due December 15, 2020 | $ | 375 | $ | 375 | ||||
Revolving credit facility, interest at Base Rate plus applicable margin of 2.25% or LIBOR plus applicable margin of 3.00% as of December 31, 2014 and 3.25% as of December 31, 2013, commitment through and due March 18, 2018 | 16 | 74.5 | ||||||
Term A Facility, interest at LIBOR plus applicable margin of 2.25% as of December 31, 2014 and 2.50% as of December 31, 2013, commitment through and due March 18, 2018 | 484.5 | 522.5 | ||||||
Term B Facility, interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2014 and December 31, 2013, commitment through and due March 18, 2020 | 594.4 | 737.3 | ||||||
8.0% Sealy Notes, due July 15, 2016 | 104.7 | 99.6 | ||||||
Capital lease obligations and other | 27.7 | 27.6 | ||||||
1,602.30 | 1,836.50 | |||||||
Less current portion | (66.4 | ) | (39.6 | ) | ||||
$ | 1,535.90 | $ | 1,796.90 | |||||
Schedule of Maturities of Long-term Debt | As of December 31, 2014, the scheduled maturities of long-term debt outstanding, including capital lease obligations, for each of the next five years and thereafter are as follows: | |||||||
(in millions) | Amount | |||||||
2015 | $ | 66.4 | ||||||
2016 | 166.6 | |||||||
2017 | 62.2 | |||||||
2018 | 347.7 | |||||||
2019 | 8.9 | |||||||
Thereafter | 950.5 | |||||||
Total | $ | 1,602.30 | ||||||
Retirement_Plans_Tables
Retirement Plans (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||
Schedule of Components of Net Periodic Cost for Employees | Components of net periodic pension cost included in the accompanying Consolidated Statements of Income for the years ended December 31 were as follows: | ||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Service cost | $ | 0.9 | $ | 0.9 | |||||||||||||||
Interest cost | 1.8 | 1.3 | |||||||||||||||||
Expected return on assets | (2.1 | ) | (1.5 | ) | |||||||||||||||
Curtailment loss | 0.1 | — | |||||||||||||||||
Amortization of net gain | (0.1 | ) | — | ||||||||||||||||
Net periodic pension cost | $ | 0.6 | $ | 0.7 | |||||||||||||||
Schedule of Other Changes in Plan Assets and Benefit Obligations Recognized in Accumulated Other Comprehensive Income | The other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss for the years ended December 31 were: | ||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Net loss (gain) | $ | 9 | $ | (6.2 | ) | ||||||||||||||
Amortization of prior service cost | (0.2 | ) | 1 | ||||||||||||||||
Amortization of net gain | 0.1 | — | |||||||||||||||||
New prior service cost | 0.1 | — | |||||||||||||||||
Total recognized in other comprehensive income | $ | 9 | $ | (5.2 | ) | ||||||||||||||
Schedule of Weighted-Average Assumptions Used in Calculating Net Periodic Benefit Costs | The following assumptions, calculated on a weighted‑average basis, were used to determine net periodic pension cost for the Company’s defined benefit pension plans for the years ended December 31: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Discount rate (a) | 4.01 | % | 4.23 | % | |||||||||||||||
Expected long term return on plan assets | 7 | % | 6.92 | % | |||||||||||||||
(a) | Due to current economic differences in the interest rates in the jurisdictions of the retirement plans, the discount rates used in 2014 to determine the expenses for the United States retirement plan and Canadian retirement plan were 3.94% and 5.00%, respectively. The discount rates used in 2013 to determine the expenses for the United States retirement plan and Canadian retirement plan were 4.25% and 4.00%, respectively. | ||||||||||||||||||
Schedule of Funded Status of the Pension Plans | The measurement date for all of the Company’s defined benefit pension plans is December 31. The funded status of the defined benefit pension plans as of December 31 were as follows: | ||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Change in Benefit Obligation: | |||||||||||||||||||
Projected benefit obligation at beginning of year | $ | 36.4 | $ | 39.9 | |||||||||||||||
Service cost | 0.9 | 0.9 | |||||||||||||||||
Interest cost | 1.8 | 1.3 | |||||||||||||||||
Plan changes | 0.2 | 0.5 | |||||||||||||||||
Actuarial loss (gain) | 9.2 | (4.8 | ) | ||||||||||||||||
Curtailments | (0.1 | ) | — | ||||||||||||||||
Benefits paid | (0.7 | ) | (0.5 | ) | |||||||||||||||
Expenses paid | (0.2 | ) | (0.3 | ) | |||||||||||||||
Foreign currency exchange rate changes | (0.4 | ) | (0.6 | ) | |||||||||||||||
Projected benefit obligation at end of year | $ | 47.1 | $ | 36.4 | |||||||||||||||
Change in Plan Assets: | |||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 30.5 | $ | 26.2 | |||||||||||||||
Actual return on assets | 2.2 | 2.9 | |||||||||||||||||
Employer contribution | 1 | 2.8 | |||||||||||||||||
Plan settlements | — | (0.4 | ) | ||||||||||||||||
Benefits paid | (0.7 | ) | (0.5 | ) | |||||||||||||||
Expenses paid | (0.2 | ) | (0.3 | ) | |||||||||||||||
Foreign currency exchange rate changes | (0.3 | ) | (0.2 | ) | |||||||||||||||
Fair value of plan assets at end of year | $ | 32.5 | $ | 30.5 | |||||||||||||||
Funded status | $ | (14.6 | ) | $ | (5.9 | ) | |||||||||||||
Schedule of Amounts Recognized in the Consolidated Balance Sheet and the Accumulated Benefit Obligation and Fair Value of Assets | The following table represents amounts recorded in the Consolidated Balance Sheet: | ||||||||||||||||||
December 31, | |||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||
Non-current portion of benefit liability | $ | 14.9 | $ | 6.7 | |||||||||||||||
Non-current benefit asset | 0.3 | 0.8 | |||||||||||||||||
Accumulated other comprehensive income | 9 | (5.2 | ) | ||||||||||||||||
Schedule of Weighted-Average Assumptions Used in Calculating Benefit Obligations | The following assumptions, calculated on a weighted‑average basis, were used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Discount rate(a) | 5 | % | 5 | % | |||||||||||||||
(a) | The discount rates used in 2014 and 2013 to determine the benefit obligations for the United States defined benefit pension plan and Canadian defined benefit pension plan were both 5.00%. | ||||||||||||||||||
Schedule of Estimated Future Benefit Payments | The following table presents estimated future benefit payments: | ||||||||||||||||||
(in millions) | |||||||||||||||||||
Fiscal 2015 | $ | 0.9 | |||||||||||||||||
Fiscal 2016 | 1 | ||||||||||||||||||
Fiscal 2017 | 1 | ||||||||||||||||||
Fiscal 2018 | 1.1 | ||||||||||||||||||
Fiscal 2019 | 1.2 | ||||||||||||||||||
Fiscal 2020 ‑ Fiscal 2024 | 8.4 | ||||||||||||||||||
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations are as follows: | ||||||||||||||||||
2014 | 2014 | ||||||||||||||||||
Target | Actual | ||||||||||||||||||
Common/collective trust consisting primarily of: | |||||||||||||||||||
Equity securities | 60 | % | 76.86 | % | |||||||||||||||
Debt securities | 40 | % | 21.77 | % | |||||||||||||||
Other | — | % | 1.37 | % | |||||||||||||||
Total plan assets | 100 | % | 100 | % | |||||||||||||||
Schedule of Fair Value of Pension Plan Assets by Asset Category | The fair value of the Company’s pension benefit plan assets at December 31 by asset category was as follows: | ||||||||||||||||||
(in millions) | 2014 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||
for Identical | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||
Assets (Level 1) | |||||||||||||||||||
Asset Category | |||||||||||||||||||
Common/collective trust | |||||||||||||||||||
U.S. equity | $ | 19.6 | $ | — | $ | 19.6 | $ | — | |||||||||||
International equity | 5.2 | — | 5.2 | — | |||||||||||||||
Total equity based funds | 24.8 | — | 24.8 | — | |||||||||||||||
Common/collective trust - fixed income | 7 | — | 7 | — | |||||||||||||||
Money market funds | 0.7 | — | 0.7 | — | |||||||||||||||
Total | $ | 32.5 | $ | — | $ | 32.5 | $ | — | |||||||||||
(in millions) | 2013 | Quoted Prices in | Significant Other | Significant | |||||||||||||||
Active Markets | Observable | Unobservable | |||||||||||||||||
for Identical | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||||||
Assets (Level 1) | |||||||||||||||||||
Asset Category | |||||||||||||||||||
Equity | |||||||||||||||||||
Mutual funds—U.S. companies | $ | 13.1 | $ | 13.1 | $ | — | $ | — | |||||||||||
Mutual funds—International companies | 5.9 | 5.9 | — | — | |||||||||||||||
Total equity funds | 19 | 19 | — | — | |||||||||||||||
Mutual funds—fixed income | 10.5 | 10.5 | — | — | |||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||
Total | $ | 30.5 | $ | 30.5 | $ | — | $ | — | |||||||||||
Schedule of Expenses Related to the Multi-employer Benefit Plans | The expense recognized by the Company for such contributions for the years ended December 31 were as follows: | ||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||
Multi‑employer retirement plan expense | $ | 4.7 | $ | 3.9 | |||||||||||||||
Multi‑employer health and welfare plan expense | 2.2 | 2.2 | |||||||||||||||||
Schedule of Information Regarding Multi-employer Pension Plans | The following table presents information regarding the multi‑employer pension plans that are significant to the Company for the year ended December 31, 2014 and 2013, respectively: | ||||||||||||||||||
(in millions) | |||||||||||||||||||
Pension Fund | EIN/Pension Plan Number | Pension Protection Act | FIP/RP Status | Contributions of the Company 2014 | Surcharge Imposed(3) | Expiration Date | Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions | ||||||||||||
Zone Status(1) 2014 | Pending/Implemented(2) | of Collective | |||||||||||||||||
Bargaining Agreement | |||||||||||||||||||
United Furniture Workers Pension Fund A(4) | 13-5511877-001 | Red | Implemented | $ | 0.9 | Yes, 10.0% | 2016 and 2017 | 2013, 2014 | |||||||||||
Pension Plan of the National Retirement Fund | 13-6130178-001 | Red | Implemented | $ | 1.1 | Yes, 10.0% | 2016 | N/A | |||||||||||
Central States, Southeast & Southwest Areas Pension Plan | 36-6044243-001 | Red | Implemented | $ | 0.4 | Yes, 10.0% | 2015 | N/A | |||||||||||
(in millions) | |||||||||||||||||||
Pension Fund | EIN/Pension Plan Number | Pension Protection Act | FIP/RP Status | Contributions of the Company 2013 | Surcharge Imposed(3) | Expiration Date | Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions | ||||||||||||
Zone Status(1) 2013 | Pending/Implemented(2) | of Collective | |||||||||||||||||
Bargaining Agreement | |||||||||||||||||||
United Furniture Workers Pension Fund A(4) | 13-5511877-001 | Red | Implemented | $ | 0.7 | Yes, 10.0% | 2014 and 2016 | 2013 | |||||||||||
Pension Plan of the National Retirement Fund | 13-6130178-001 | Red | Implemented | $ | 0.7 | Yes, 10.0% | 2014 | N/A | |||||||||||
-1 | The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage less than 65.0%. A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80.0%, or projects a credit balance deficit within seven years. A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80.0% and does not have a projected credit balance deficit within seven years. The zone status is based on the plan’s year end rather than the Company’s. The zone status listed above is based on information that the Company received from the plan and is certified by the plan’s actuary for the most recent year available. | ||||||||||||||||||
-2 | Funding Improvement Plan or Rehabilitation Plan as defined in the Employment Retirement Security Act of 1974 has been implemented or is pending. | ||||||||||||||||||
-3 | Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge. | ||||||||||||||||||
-4 | The Company represented more than 5.0% of the total contributions for the most recent plan year available. |
Other_Items_Tables
Other Items (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Other Items [Abstract] | ||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: | |||||||||||
December 31, | December 31, | |||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Wages and benefits | $ | 60 | $ | 59.3 | ||||||||
Advertising | 41.6 | 29.7 | ||||||||||
Sales returns | 32.3 | 28.7 | ||||||||||
Rebates | 22.8 | 23 | ||||||||||
Warranty | 16.1 | 14.9 | ||||||||||
Other | 60.5 | 52.8 | ||||||||||
$ | 233.3 | $ | 208.4 | |||||||||
Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consisted of the following: | |||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Foreign Currency Translation | ||||||||||||
Balance at beginning of period | $ | (15.6 | ) | $ | (5.0 | ) | $ | (13.2 | ) | |||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments (1) | (38.4 | ) | (13.3 | ) | 10.9 | |||||||
Tax benefit (expense) (1) | — | 2.7 | (2.7 | ) | ||||||||
Balance at end of period | $ | (54.0 | ) | $ | (15.6 | ) | $ | (5.0 | ) | |||
Interest Rate Swap Agreement | ||||||||||||
Balance at beginning of period | $ | (1.4 | ) | $ | (2.7 | ) | $ | (1.6 | ) | |||
Other comprehensive income: | ||||||||||||
Net change from period revaluations: | 3 | 5.2 | 2.7 | |||||||||
Tax expense | (1.2 | ) | (1.5 | ) | (0.5 | ) | ||||||
Total other comprehensive income before reclassifications, net of tax | 1.8 | 3.7 | 2.2 | |||||||||
Net amount reclassified to earnings (3) | (1.9 | ) | (3.2 | ) | (4.0 | ) | ||||||
Tax benefit (2) | 0.8 | 0.8 | 0.7 | |||||||||
Total amount reclassified from accumulated other comprehensive loss, net of tax | (1.1 | ) | (2.4 | ) | (3.3 | ) | ||||||
Total other comprehensive income (loss) | 0.7 | 1.3 | (1.1 | ) | ||||||||
Balance at end of period | $ | (0.7 | ) | $ | (1.4 | ) | $ | (2.7 | ) | |||
Pension Benefits | ||||||||||||
Balance at beginning of period | $ | 3.2 | $ | — | $ | — | ||||||
Other comprehensive (loss) income: | ||||||||||||
Net change from period revaluations: | (9.0 | ) | 5.2 | — | ||||||||
Tax benefit (expense) | 3.4 | (2.0 | ) | — | ||||||||
Total other comprehensive income before reclassifications, net of tax | $ | (5.6 | ) | $ | 3.2 | $ | — | |||||
Net amount reclassified to earnings | — | — | — | |||||||||
Tax benefit(2) | — | — | — | |||||||||
Total amount reclassified from accumulated other comprehensive income, net of tax | $ | — | $ | — | $ | — | ||||||
Total other comprehensive income | (5.6 | ) | (3.2 | ) | — | |||||||
Balance at end of period | $ | (2.4 | ) | $ | 3.2 | $ | — | |||||
Foreign Exchange Forward Contracts | ||||||||||||
Balance at beginning of period | $ | — | $ | — | $ | — | ||||||
Other comprehensive income: | ||||||||||||
Net change from period revaluations: | 3.4 | — | — | |||||||||
Tax expense | (0.9 | ) | — | — | ||||||||
Total other comprehensive income before reclassifications, net of tax | $ | 2.5 | $ | — | $ | — | ||||||
Net amount reclassified to earnings | (1.6 | ) | — | — | ||||||||
Tax benefit (2) | 0.4 | — | — | |||||||||
Total amount reclassified from accumulated other comprehensive income, net of tax | $ | (1.2 | ) | $ | — | $ | — | |||||
Total other comprehensive income | 1.3 | — | — | |||||||||
Balance at end of period | $ | 1.3 | $ | — | $ | — | ||||||
-1 | In 2014 and 2013, there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. In 2012, a $2.7 million tax impact was recorded which reversed in 2013. | |||||||||||
-2 | These amounts were included in the income tax provision on the accompanying Consolidated Statements of Income. | |||||||||||
-3 | This amount was included in interest expense, net on the accompanying Consolidated Statements of Income. |
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Schedule of Stock-based Compensation Expense | The Company’s stock-based compensation expense for the year ended December 31, 2014 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: | ||||||||||||
December 31, | |||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||
PRSU expense (benefit) | $ | 3.5 | $ | 3 | $ | (0.9 | ) | ||||||
Stock option expense | 7 | 8.3 | 4.4 | ||||||||||
RSU/DSU expense | 2.9 | 5.6 | 2.2 | ||||||||||
Total stock-based compensation expense | $ | 13.4 | $ | 16.9 | $ | 5.7 | |||||||
Summary of PRSU Activity and Related Information | The following table shows the PRSUs granted under the 2013 Plan and LTIP during the year ended December 31, 2014: | ||||||||||||
(shares in millions) | Performance period | Target shares granted | Weighted-average fair value per share | ||||||||||
Year ended 2015(1) | January 1, 2014 – December 31, 2015 | 0.15 | $ | 51.87 | |||||||||
Year ended 2016(2) | January 1, 2014 - December 31, 2016 | 0.15 | $ | 51.87 | |||||||||
-1 | At the end of the performance period, the actual number of shares issuable can range from zero to 200.0% of the target shares granted, which is assumed to be 100.0%. | ||||||||||||
-2 | At the end of the performance period, the actual number of shares issuable can range from zero to 300.0% of the target shares granted, which is assumed to be 100.0%. | ||||||||||||
A summary of the Company’s PRSU activity and related information for the years ended December 31, 2014 and 2013 is presented below: | |||||||||||||
(shares in millions) | Shares | Weighted Average Grant Date Fair Value | |||||||||||
Awards unvested at December 31, 2012 | 0.3 | $ | 58.52 | ||||||||||
Granted | 0.3 | 39.34 | |||||||||||
Vested | — | — | |||||||||||
Forfeited | (0.3 | ) | 56.92 | ||||||||||
Awards unvested at December 31, 2013 | 0.3 | $ | 39.04 | ||||||||||
Granted | 0.3 | 51.87 | |||||||||||
Vested | 0 | 37.05 | |||||||||||
Forfeited | (0.3 | ) | 39.38 | ||||||||||
Awards unvested at December 31, 2014 | 0.3 | $ | 53.45 | ||||||||||
Stock Options Valuation Assumptions | The Company uses the Black-Scholes option pricing model to calculate the fair value of stock options granted. The assumptions used in the Black-Scholes pricing model for the years ended December 31, 2014, 2013 and 2012 are set forth in the following table. Expected volatility is based on the unbiased standard deviation of Tempur Sealy International’s common stock over the option term. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. The dividend yield reflects an estimate of dividend payouts over the term of the award. The Company uses historical data to determine these assumptions. | ||||||||||||
Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Expected volatility range of stock | 56.7% - 66.5% | 63.0% - 72.8% | 49.0% - 73.0% | ||||||||||
Expected life of option, range in years | 4-Feb | 3-Feb | 4-Feb | ||||||||||
Risk-free interest range rate | 0.4% - 1.4% | 0.3% - 0.6% | 0.3% - 0.7% | ||||||||||
Expected dividend yield on stock | 0.6% - 0.7% | 0.6% - 0.9% | 0.0% - 1.3% | ||||||||||
Schedule of Stock Option Activity | A summary of the Company’s unvested shares relating to stock options as of December 31, 2014 and 2013, and changes during the years ended December 31, 2014 and 2013, are presented below: | ||||||||||||
(shares in millions) | Shares | Weighted Average Grant Date Fair Value | |||||||||||
Options unvested at December 31, 2012 | 0.9 | $ | 23.49 | ||||||||||
Granted | 0.6 | 39.77 | |||||||||||
Vested | (0.8 | ) | 19.71 | ||||||||||
Forfeited | (0.1 | ) | 39.62 | ||||||||||
Options unvested at December 31, 2013 | 0.6 | $ | 42.16 | ||||||||||
Granted | 0.2 | 52.08 | |||||||||||
Vested | (0.3 | ) | 42.46 | ||||||||||
Forfeited | 0 | 50.53 | |||||||||||
Options unvested at December 31, 2014 | 0.5 | $ | 46.23 | ||||||||||
A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2014 and 2013, is presented below: | |||||||||||||
(shares in millions) | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||
Options outstanding at December 31, 2012 | 2.9 | $ | 17 | ||||||||||
Granted | 0.6 | 39.77 | |||||||||||
Exercised | (0.6 | ) | 14.54 | ||||||||||
Terminated | (0.1 | ) | 39.62 | ||||||||||
Options outstanding at December 31, 2013 | 2.8 | $ | 21.73 | ||||||||||
Granted | 0.2 | 52.08 | |||||||||||
Exercised | (0.2 | ) | 20.82 | ||||||||||
Terminated | 0 | 50.53 | |||||||||||
Options outstanding at December 31, 2014 | 2.8 | $ | 24.18 | 5.13 | $ | 84.3 | |||||||
Options exercisable at December 31, 2014 | 2.3 | $ | 19.2 | 4.35 | $ | 82.9 | |||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2014 and 2013 is presented below: | ||||||||||||
(in millions, except release price and years) | Shares | Weighted Average Release Price | Aggregate Intrinsic Value | ||||||||||
Awards outstanding at December 31, 2012 | 0.2 | $ | 32.03 | ||||||||||
Granted | 0.2 | 45.56 | |||||||||||
Vested | (0.2 | ) | 30.49 | ||||||||||
Terminated | — | — | |||||||||||
Awards outstanding at December 31, 2013 | 0.2 | $ | 47 | ||||||||||
Granted | 0 | 54.56 | |||||||||||
Vested | (0.1 | ) | 44.47 | ||||||||||
Terminated | 0 | 46.77 | |||||||||||
Awards outstanding at December 31, 2014 | 0.1 | $ | 50.41 | $ | 5.8 | ||||||||
Schedule of Unrecognized Compensation Expense | A summary of total unrecognized stock-based compensation expense based on current performance estimates related to the options, DSUs, RSUs and PRSUs granted during the year ended December 31, 2014 is presented below: | ||||||||||||
(in millions, except years) | December 31, 2014 | Weighted Average Remaining Vesting Period (Years) | |||||||||||
Unrecognized stock option expense | $ | 3.5 | 2.17 | ||||||||||
Unrecognized DSU/RSU expense | 0.8 | 2.11 | |||||||||||
Unrecognized PRSU expense | 9.2 | 1.56 | |||||||||||
Total unrecognized stock-based compensation expense | $ | 13.5 | 1.76 | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Minimum Rental Payments for Operating Leases | Future minimum lease payments at December 31, 2014 under these non-cancelable leases are as follows: | |||
(in millions) | ||||
Year Ended December 31, | ||||
2015 | $ | 29.1 | ||
2016 | 27 | |||
2017 | 24.4 | |||
2018 | 21.3 | |||
2019 | 15 | |||
Thereafter | 44.4 | |||
$ | 161.2 | |||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||
Reconciliation of Statutory Tax Rate to Effective Tax Rate | The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(dollars in millions) | Amount | Percentage of Income | Amount | Percentage of Income | Amount | Percentage of Income | |||||||||||||||
Before Income Taxes | Before Income Taxes | Before Income Taxes | |||||||||||||||||||
Statutory U.S. federal income tax | $ | 61.2 | 35 | % | $ | 44.8 | 35 | % | $ | 80.2 | 35 | % | |||||||||
State income taxes, net of federal benefit | 1.1 | 0.6 | % | 1.7 | 1.3 | % | 4.5 | 2 | % | ||||||||||||
Foreign repatriation, net of foreign tax credits | 13.5 | 7.7 | % | (16.0 | ) | (12.6 | )% | 48.1 | 21 | % | |||||||||||
Foreign tax differential | (12.6 | ) | (7.2 | )% | (12.3 | ) | (9.6 | )% | (9.7 | ) | (4.2 | )% | |||||||||
Change in valuation allowances | (17.7 | ) | (10.0 | )% | 20.4 | 15.9 | % | (2.8 | ) | (1.2 | )% | ||||||||||
Uncertain tax positions | 10.9 | 6.1 | % | 4.7 | 3.7 | % | 2.6 | 1.1 | % | ||||||||||||
Subpart F income | 1.9 | 1.1 | % | 1.5 | 1.2 | % | 4.1 | 1.8 | % | ||||||||||||
Manufacturing deduction | (3.7 | ) | (2.1 | )% | 0.1 | — | % | (3.8 | ) | (1.7 | )% | ||||||||||
Goodwill on disposal of business | 7.5 | 4.2 | % | — | — | % | — | — | % | ||||||||||||
Permanent and other | 2.8 | 1.7 | % | 4.2 | 3.5 | % | (0.8 | ) | (0.4 | )% | |||||||||||
Effective income tax provision | $ | 64.9 | 37.1 | % | $ | 49.1 | 38.4 | % | $ | 122.4 | 53.4 | % | |||||||||
Pre-tax Income Attributable to Operating Segments | The following sets forth the amount of income or (loss) before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||||||||||
Income before income taxes: | |||||||||||||||||||||
United States | $ | 46.9 | $ | (4.5 | ) | $ | 126.2 | ||||||||||||||
Rest of the world | 128 | 132.5 | 103 | ||||||||||||||||||
$ | 174.9 | $ | 128 | $ | 229.2 | ||||||||||||||||
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 12.9 | |||||||||||||||||||
Additions attributable to Sealy on date of acquisition | 9.2 | ||||||||||||||||||||
Additions based on tax positions related to 2013 | 2.3 | ||||||||||||||||||||
Additions for tax positions of prior years | 7.2 | ||||||||||||||||||||
Settlements of uncertain tax positions with tax authorities | (5.5 | ) | |||||||||||||||||||
Balance as of December 31, 2013 | 26.1 | ||||||||||||||||||||
Additions based on tax positions related to 2014 | 24.3 | ||||||||||||||||||||
Additions for tax positions of prior years | 0.5 | ||||||||||||||||||||
Expiration of statutes of limitations | (3.2 | ) | |||||||||||||||||||
Settlements of uncertain tax positions with tax authorities | (0.1 | ) | |||||||||||||||||||
Balance as of December 31, 2014 | $ | 47.6 | |||||||||||||||||||
Operating Loss and Tax Credit Carryforwards | The Company has the following gross income tax attributes available at December 31, 2014 and 2013 respectively (in millions): | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
U.S. federal net operating loss (“FedNOLs”) | $ | — | $ | 19.6 | |||||||||||||||||
State net operating losses (“SNOLs”) | 145.3 | 135.6 | |||||||||||||||||||
U.S. federal foreign tax credits (“FTCs”) | 7.8 | 20.4 | |||||||||||||||||||
U.S. state income tax credits ("SITCs") | 1.6 | 0.7 | |||||||||||||||||||
Foreign net operating losses (“FNOLs”) | 44.2 | 67.1 | |||||||||||||||||||
Charitable contribution carryover ("CCCs") | 8.4 | — | |||||||||||||||||||
Tax Provision Summary | The income tax provision consisted of the following: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | 2012 | ||||||||||||||||||
Current provision | |||||||||||||||||||||
Federal | $ | 50.7 | $ | 48.6 | $ | 49.9 | |||||||||||||||
State | 4.5 | 7.3 | 7.8 | ||||||||||||||||||
Foreign | 36.9 | 42.3 | 26.3 | ||||||||||||||||||
Total current | $ | 92.1 | $ | 98.2 | $ | 84 | |||||||||||||||
Deferred provision | |||||||||||||||||||||
Federal | $ | (25.2 | ) | $ | (47.0 | ) | $ | 37.1 | |||||||||||||
State | (1.2 | ) | 0.4 | 4.2 | |||||||||||||||||
Foreign | (0.8 | ) | (2.5 | ) | (2.9 | ) | |||||||||||||||
Total deferred | (27.2 | ) | (49.1 | ) | 38.4 | ||||||||||||||||
Total income tax provision | $ | 64.9 | $ | 49.1 | $ | 122.4 | |||||||||||||||
Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets | The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets consisted of the following: | ||||||||||||||||||||
December 31, | |||||||||||||||||||||
(in millions) | 2014 | 2013 | |||||||||||||||||||
Deferred tax assets: | |||||||||||||||||||||
Stock-based compensation | $ | 12.4 | $ | 10 | |||||||||||||||||
Accrued expenses and other | 57.9 | 53.7 | |||||||||||||||||||
Net operating losses, foreign tax credits and charitable contribution carryforward | 30.6 | 55.3 | |||||||||||||||||||
Inventories | 4.5 | 4.6 | |||||||||||||||||||
Intangible assets | 14.5 | 9 | |||||||||||||||||||
Property, plant and equipment | 4 | 3.9 | |||||||||||||||||||
Total deferred tax assets | 123.9 | 136.5 | |||||||||||||||||||
Valuation allowances | (21.7 | ) | (39.4 | ) | |||||||||||||||||
Total net deferred tax assets | $ | 102.2 | $ | 97.1 | |||||||||||||||||
Deferred tax liabilities: | |||||||||||||||||||||
Transaction costs | $ | (258.1 | ) | $ | (261.9 | ) | |||||||||||||||
Property, plant and equipment | (45.7 | ) | (62.5 | ) | |||||||||||||||||
Accrued expenses and other | (4.5 | ) | (4.3 | ) | |||||||||||||||||
Total deferred tax liabilities | (308.3 | ) | (328.7 | ) | |||||||||||||||||
Net deferred tax liabilities | $ | (206.1 | ) | $ | (231.6 | ) |
Earnings_Per_Common_Share_Tabl
Earnings Per Common Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions, except per common share amounts) | 2014 | 2013 | 2012 | |||||||||
Numerator: | ||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 108.9 | $ | 78.6 | $ | 106.8 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per common share—weighted average shares | 60.8 | 60.3 | 61.5 | |||||||||
Effect of dilutive securities: | ||||||||||||
Employee stock based compensation | 1.3 | 1.3 | 1.4 | |||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares | 62.1 | 61.6 | 62.9 | |||||||||
Basic earnings per common share | $ | 1.79 | $ | 1.3 | $ | 1.74 | ||||||
Diluted earnings per common share | $ | 1.75 | $ | 1.28 | $ | 1.7 | ||||||
Business_Segment_Information_T
Business Segment Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Total Assets by Segment | The following table summarizes total assets by reportable segment: | |||||||||||
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Tempur North America | $ | 2,431.40 | $ | 2,110.70 | ||||||||
Tempur International | 463.1 | 477.7 | ||||||||||
Sealy | 2,000.60 | 1,956.60 | ||||||||||
Inter-segment eliminations | (2,232.5 | ) | (1,815.1 | ) | ||||||||
Total assets | $ | 2,662.60 | $ | 2,729.90 | ||||||||
The following table summarizes long-lived assets by reportable segment: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Tempur North America | $ | 137.1 | $ | 132.8 | ||||||||
Tempur International | 49.2 | 53.2 | ||||||||||
Sealy | 169.3 | 225.6 | ||||||||||
Total long lived assets | $ | 355.6 | $ | 411.6 | ||||||||
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country | The following table summarizes long-lived assets by geographic region: | |||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
United States | $ | 287.3 | $ | 335.9 | ||||||||
Canada | 8 | 9.3 | ||||||||||
Other International | 60.3 | 66.4 | ||||||||||
$ | 355.6 | $ | 411.6 | |||||||||
Total International | $ | 68.3 | $ | 75.7 | ||||||||
Long-lived Assets by Segment and Net Sales by Geographic Area | The following table summarizes long-lived assets by reportable segment: | |||||||||||
December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
Tempur North America | $ | 137.1 | $ | 132.8 | ||||||||
Tempur International | 49.2 | 53.2 | ||||||||||
Sealy | 169.3 | 225.6 | ||||||||||
Total long lived assets | $ | 355.6 | $ | 411.6 | ||||||||
The following table summarizes long-lived assets by geographic region: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | ||||||||||
United States | $ | 287.3 | $ | 335.9 | ||||||||
Canada | 8 | 9.3 | ||||||||||
Other International | 60.3 | 66.4 | ||||||||||
$ | 355.6 | $ | 411.6 | |||||||||
Total International | $ | 68.3 | $ | 75.7 | ||||||||
The following table summarizes net sales by geographic region: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
United States | $ | 2,188.70 | $ | 1,736.80 | $ | 923.4 | ||||||
Canada | 216.4 | 190.2 | 40.8 | |||||||||
Other International | 584.7 | 537.3 | 438.7 | |||||||||
$ | 2,989.80 | $ | 2,464.30 | $ | 1,402.90 | |||||||
Total International | $ | 801.1 | $ | 727.5 | $ | 479.5 | ||||||
Segment Financial Information | The following table summarizes reportable segment information: | |||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2014 | 2013 | 2012 | |||||||||
Net sales to external customers: | ||||||||||||
Tempur North America | ||||||||||||
Bedding | $ | 930.5 | $ | 830.4 | $ | 882.3 | ||||||
Other products | 62.7 | 79.6 | 82 | |||||||||
$ | 993.2 | $ | 910 | $ | 964.3 | |||||||
Tempur International | ||||||||||||
Bedding | $ | 354.7 | $ | 327.7 | $ | 332.4 | ||||||
Other products | 117.3 | 111.9 | 106.2 | |||||||||
$ | 472 | $ | 439.6 | $ | 438.6 | |||||||
Sealy | ||||||||||||
Bedding | $ | 1,441.30 | $ | 1,040.30 | $ | — | ||||||
Other products | 83.3 | 74.4 | — | |||||||||
$ | 1,524.60 | $ | 1,114.70 | $ | — | |||||||
$ | 2,989.80 | $ | 2,464.30 | $ | 1,402.90 | |||||||
Inter-segment sales: | ||||||||||||
Tempur North America | $ | 3.8 | $ | 0.2 | $ | 0.9 | ||||||
Tempur International | 0.6 | 0.6 | 1.5 | |||||||||
Sealy | 22.8 | 5.9 | — | |||||||||
Intercompany eliminations | (27.2 | ) | (6.7 | ) | (2.4 | ) | ||||||
$ | — | $ | — | $ | — | |||||||
Gross profit: | ||||||||||||
Tempur North America | $ | 413.9 | $ | 392.7 | $ | 449.3 | ||||||
Tempur International | 274.9 | 269.8 | 265.3 | |||||||||
Sealy | 461.6 | 352.4 | — | |||||||||
$ | 1,150.40 | $ | 1,014.90 | $ | 714.6 | |||||||
Operating income: | ||||||||||||
Tempur North America | $ | 84.9 | $ | 67.6 | $ | 144.4 | ||||||
Tempur International | 91.6 | 107.5 | 103.9 | |||||||||
Sealy | 99.8 | 68.7 | — | |||||||||
$ | 276.3 | $ | 243.8 | $ | 248.3 | |||||||
Income (loss) before income taxes: | ||||||||||||
Tempur North America | $ | 19.8 | $ | (33.8 | ) | $ | 126.2 | |||||
Tempur International | 88.5 | 102.6 | 103 | |||||||||
Sealy | 66.6 | 59.2 | — | |||||||||
$ | 174.9 | $ | 128 | $ | 229.2 | |||||||
Depreciation and amortization (including stock-based compensation amortization): | ||||||||||||
Tempur North America | $ | 31.7 | $ | 42 | $ | 30.6 | ||||||
Tempur International | 13.7 | 12.8 | 11.4 | |||||||||
Sealy | 44.3 | 36.7 | — | |||||||||
$ | 89.7 | $ | 91.5 | $ | 42 | |||||||
Intercompany royalties: | ||||||||||||
Tempur North America | $ | 6.1 | $ | 5.8 | $ | 12.7 | ||||||
Tempur International | (6.1 | ) | (5.8 | ) | (12.7 | ) | ||||||
Sealy | — | — | — | |||||||||
$ | — | $ | — | $ | — | |||||||
Capital expenditures: | ||||||||||||
Tempur North America | $ | 20.2 | $ | 20.7 | $ | 36.8 | ||||||
Tempur International | 14.4 | 10.1 | 13.7 | |||||||||
Sealy | 12.9 | 9.2 | — | |||||||||
$ | 47.5 | $ | 40 | $ | 50.5 | |||||||
Quarterly_Financial_Data_unaud1
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly Financial Data | Quarterly results of operations for the years ended December 31, 2014 and 2013, which include Sealy's results of operations from March 18, 2013 through December 31, 2013, are summarized below: | |||||||||||||||
(in millions, except per share amounts) | First | Second | Third | Fourth | ||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
2014 | ||||||||||||||||
Net sales | $ | 701.9 | $ | 715 | $ | 827.4 | $ | 745.5 | ||||||||
Gross profit | 269.5 | 268.3 | 318.5 | 294.1 | ||||||||||||
Operating income | 62.4 | 50.3 | 87.1 | 76.5 | ||||||||||||
Net income (loss) | 27.4 | (2.2 | ) | 37.1 | 46.6 | |||||||||||
Basic earnings (loss) per common share | $ | 0.45 | $ | (0.04 | ) | $ | 0.61 | $ | 0.77 | |||||||
Diluted earnings (loss) per common share | $ | 0.44 | $ | (0.04 | ) | $ | 0.6 | $ | 0.75 | |||||||
2013 | ||||||||||||||||
Net sales | $ | 390.1 | $ | 660.6 | $ | 735.5 | $ | 678.1 | ||||||||
Gross profit | 188.4 | 254.9 | 298.7 | 272.9 | ||||||||||||
Operating income | 44.5 | 44 | 81.2 | 74.1 | ||||||||||||
Net income | 12.5 | (1.6 | ) | 40.2 | 27.5 | |||||||||||
Basic earnings (loss) per common share | $ | 0.21 | $ | (0.03 | ) | $ | 0.66 | $ | 0.45 | |||||||
Diluted earnings (loss) per common share | $ | 0.2 | $ | (0.03 | ) | $ | 0.65 | $ | 0.45 | |||||||
GuarantorNonGuarantor_Financia1
Guarantor/Non-Guarantor Financial Information (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Guarantor/Non-Guarantor Financial Information | ||||||||||||||||||||
Schedule of Supplemental Condensed Consolidating Statements of Operations | TEMPUR SEALY INTERNATIONAL, INC. | |||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 2,229.50 | $ | 802.9 | $ | (42.6 | ) | $ | 2,989.80 | |||||||||
Cost of sales | — | 1,465.30 | 416.7 | (42.6 | ) | 1,839.40 | ||||||||||||||
Gross profit | — | 764.2 | 386.2 | — | 1,150.40 | |||||||||||||||
Selling and marketing expenses | 2.4 | 431.2 | 186.3 | — | 619.9 | |||||||||||||||
General, administrative and other expenses | 13.4 | 200.5 | 66.7 | — | 280.6 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | (8.3 | ) | — | (8.3 | ) | |||||||||||||
Royalty income, net of royalty expense | — | (18.1 | ) | — | — | (18.1 | ) | |||||||||||||
Operating (loss) income | (15.8 | ) | 150.6 | 141.5 | — | 276.3 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | 27 | 62.4 | 2.5 | — | 91.9 | |||||||||||||||
Intercompany interest expense (income), net | 32.7 | (34.6 | ) | 1.9 | — | — | ||||||||||||||
Interest expense, net | 59.7 | 27.8 | 4.4 | — | 91.9 | |||||||||||||||
Loss on dispsoal, net | — | 23.2 | — | — | 23.2 | |||||||||||||||
Other (income) expense, net | — | (17.2 | ) | 3.5 | — | (13.7 | ) | |||||||||||||
Total other expense | 59.7 | 33.8 | 7.9 | — | 101.4 | |||||||||||||||
Income from equity investees | 159.2 | 98.7 | — | (257.9 | ) | — | ||||||||||||||
Income before income taxes | 83.7 | 215.5 | 133.6 | (257.9 | ) | 174.9 | ||||||||||||||
Income tax benefit (provision) | 26.3 | (56.3 | ) | (34.9 | ) | — | (64.9 | ) | ||||||||||||
Net income | 110 | 159.2 | 98.7 | (257.9 | ) | 110 | ||||||||||||||
Less: net income attributable to non-controlling interest | 1.1 | 1.1 | — | (1.1 | ) | 1.1 | ||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 108.9 | $ | 158.1 | $ | 98.7 | $ | (256.8 | ) | $ | 108.9 | |||||||||
Comprehensive income | $ | 66.9 | $ | 163.3 | $ | 60.3 | $ | (223.6 | ) | $ | 66.9 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 1,758.20 | $ | 728.1 | $ | (22.0 | ) | $ | 2,464.30 | |||||||||
Cost of sales | — | 1,110.50 | 360.9 | (22.0 | ) | 1,449.40 | ||||||||||||||
Gross profit | — | 647.7 | 367.2 | — | 1,014.90 | |||||||||||||||
Selling and marketing expenses | 2.4 | 358.1 | 162.4 | — | 522.9 | |||||||||||||||
General, administrative and other expenses | 17.1 | 181.6 | 67.6 | — | 266.3 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | (4.4 | ) | — | (4.4 | ) | |||||||||||||
Royalty income, net of royalty expense | — | (13.7 | ) | — | — | (13.7 | ) | |||||||||||||
Operating (loss) income | (19.5 | ) | 121.7 | 141.6 | — | 243.8 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | 27.5 | 81.5 | 1.8 | — | 110.8 | |||||||||||||||
Intercompany interest expense (income), net | 32.7 | (34.1 | ) | 1.4 | — | — | ||||||||||||||
Interest expense (income), net | 60.2 | 47.4 | 3.2 | — | 110.8 | |||||||||||||||
Other (income) expense, net | — | (0.9 | ) | 5.9 | — | 5 | ||||||||||||||
Total other expense | 60.2 | 46.5 | 9.1 | — | 115.8 | |||||||||||||||
Income from equity investees | 133.4 | 93.6 | — | (227.0 | ) | — | ||||||||||||||
Income before income taxes | 53.7 | 168.8 | 132.5 | (227.0 | ) | 128 | ||||||||||||||
Income tax benefit (provision) | 25.2 | (35.4 | ) | (38.9 | ) | — | (49.1 | ) | ||||||||||||
Net income | 78.9 | 133.4 | 93.6 | (227.0 | ) | 78.9 | ||||||||||||||
Less: net income attributable to non-controlling interest | 0.3 | 0.3 | — | (0.3 | ) | 0.3 | ||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 78.6 | $ | 133.1 | $ | 93.6 | $ | (226.7 | ) | $ | 78.6 | |||||||||
Comprehensive income | $ | 72.5 | $ | 133.8 | $ | 86.2 | $ | (220.0 | ) | $ | 72.5 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net sales | $ | — | $ | 947.8 | $ | 481 | $ | (25.9 | ) | $ | 1,402.90 | |||||||||
Cost of sales | — | 509 | 205.2 | (25.9 | ) | 688.3 | ||||||||||||||
Gross profit | — | 438.8 | 275.8 | — | 714.6 | |||||||||||||||
Selling and marketing expenses | 2.5 | 191.9 | 124.7 | — | 319.1 | |||||||||||||||
General, administrative and other expenses | 4.9 | 96.4 | 45.9 | — | 147.2 | |||||||||||||||
Equity income in earnings of unconsolidated affiliates | — | — | — | — | — | |||||||||||||||
Royalty income, net of royalty expense | — | — | — | — | — | |||||||||||||||
Operating (loss) income | (7.4 | ) | 150.5 | 105.2 | — | 248.3 | ||||||||||||||
Other expense, net: | ||||||||||||||||||||
Third party interest expense, net | — | 18.3 | 0.5 | — | 18.8 | |||||||||||||||
Intercompany interest expense (income), net | 31.5 | (31.5 | ) | — | — | — | ||||||||||||||
Interest expense (income), net | 31.5 | (13.2 | ) | 0.5 | — | 18.8 | ||||||||||||||
Other expense, net | — | — | 0.3 | — | 0.3 | |||||||||||||||
Total other expense (income) | 31.5 | (13.2 | ) | 0.8 | — | 19.1 | ||||||||||||||
Income from equity investees | 134.8 | 81 | — | (215.8 | ) | — | ||||||||||||||
Income before income taxes | 95.9 | 244.7 | 104.4 | (215.8 | ) | 229.2 | ||||||||||||||
Income tax benefit (provision) | 10.9 | (109.9 | ) | (23.4 | ) | — | (122.4 | ) | ||||||||||||
Net income | 106.8 | 134.8 | 81 | (215.8 | ) | 106.8 | ||||||||||||||
Less: net income attributable to non-controlling interest | — | — | — | — | — | |||||||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ | 106.8 | $ | 134.8 | $ | 81 | $ | (215.8 | ) | $ | 106.8 | |||||||||
Comprehensive income | $ | 113.9 | $ | 136.9 | $ | 86 | $ | (222.9 | ) | $ | 113.9 | |||||||||
Schedule of Supplemental Condensed Consolidating Balance Sheets | TEMPUR SEALY INTERNATIONAL, INC. | |||||||||||||||||||
Supplemental Consolidated Balance Sheets | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 0.4 | $ | 25.5 | $ | 36.6 | $ | — | $ | 62.5 | ||||||||||
Accounts receivable, net | — | 241.2 | 144.6 | — | 385.8 | |||||||||||||||
Inventories | — | 158.3 | 58.9 | — | 217.2 | |||||||||||||||
Income taxes payable | 144.1 | — | — | (144.1 | ) | — | ||||||||||||||
Prepaid expenses and other current assets | — | 28.2 | 28.3 | — | 56.5 | |||||||||||||||
Deferred income taxes | 12.4 | 26.8 | 5.2 | — | 44.4 | |||||||||||||||
Total Current Assets | 156.9 | 480 | 273.6 | (144.1 | ) | 766.4 | ||||||||||||||
Property, plant and equipment, net | — | 287.3 | 68.3 | — | 355.6 | |||||||||||||||
Goodwill | — | 557.2 | 179.3 | — | 736.5 | |||||||||||||||
Other intangible assets, net | — | 611.9 | 115.2 | — | 727.1 | |||||||||||||||
Deferred tax asset | — | — | 8.6 | — | 8.6 | |||||||||||||||
Other non-current assets | 6.3 | 46.4 | 15.7 | — | 68.4 | |||||||||||||||
Net investment in subsidiaries | 1,808.40 | — | — | (1,808.4 | ) | — | ||||||||||||||
Due from affiliates | 51.4 | 2,226.00 | 5.3 | (2,282.7 | ) | — | ||||||||||||||
Total Assets | $ | 2,023.00 | $ | 4,208.80 | $ | 666 | $ | (4,235.2 | ) | $ | 2,662.60 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 170.4 | $ | 56 | $ | — | $ | 226.4 | ||||||||||
Accrued expenses and other current liabilities | 1.4 | 166.1 | 65.8 | — | 233.3 | |||||||||||||||
Deferred income taxes | — | — | 0.2 | — | 0.2 | |||||||||||||||
Income taxes payable | — | 163 | (6.9 | ) | (144.1 | ) | 12 | |||||||||||||
Current portion of long-term debt | — | 61.8 | 4.6 | — | 66.4 | |||||||||||||||
Total Current Liabilities | 1.4 | 561.3 | 119.7 | (144.1 | ) | 538.3 | ||||||||||||||
Long-term debt | 375 | 1,160.90 | — | — | 1,535.90 | |||||||||||||||
Deferred income taxes | — | 229.1 | 29.7 | — | 258.8 | |||||||||||||||
Other non-current liabilities | — | 109.3 | 5 | — | 114.3 | |||||||||||||||
Due to affiliates | 1,431.30 | 340.2 | 849.4 | (2,620.9 | ) | — | ||||||||||||||
Total Liabilities | 1,807.70 | 2,400.80 | 1,003.80 | (2,765.0 | ) | 2,447.30 | ||||||||||||||
Redeemable non-controlling interest | 12.6 | 12.6 | — | (12.6 | ) | 12.6 | ||||||||||||||
Total Stockholders’ Equity | 202.7 | 1,795.40 | (337.8 | ) | (1,457.6 | ) | 202.7 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,023.00 | $ | 4,208.80 | $ | 666 | $ | (4,235.2 | ) | $ | 2,662.60 | |||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Balance Sheets | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 30.9 | $ | 50.1 | $ | — | $ | 81 | ||||||||||
Accounts receivable, net | — | 192.6 | 156.6 | — | 349.2 | |||||||||||||||
Inventories | — | 147.5 | 51.7 | — | 199.2 | |||||||||||||||
Income tax receivable | 118.4 | — | — | (118.4 | ) | — | ||||||||||||||
Prepaid expenses and other current assets | — | 26.3 | 27.4 | — | 53.7 | |||||||||||||||
Deferred income taxes | 10 | 29.3 | 5.1 | — | 44.4 | |||||||||||||||
Total Current Assets | 128.4 | 426.6 | 290.9 | (118.4 | ) | 727.5 | ||||||||||||||
Property, plant and equipment, net | — | 335.9 | 75.7 | — | 411.6 | |||||||||||||||
Goodwill | — | 577.2 | 182.4 | — | 759.6 | |||||||||||||||
Other intangible assets, net | — | 624.6 | 125.5 | — | 750.1 | |||||||||||||||
Deferred tax asset | — | — | 10.9 | — | 10.9 | |||||||||||||||
Other non-current assets | 7.6 | 47 | 15.6 | — | 70.2 | |||||||||||||||
Net investment in subsidiaries | 756 | — | — | (756.0 | ) | — | ||||||||||||||
Due from affiliates | 1,299.90 | 2,306.50 | 0.9 | (3,607.3 | ) | — | ||||||||||||||
Total Assets | $ | 2,191.90 | $ | 4,317.80 | $ | 701.9 | $ | (4,481.7 | ) | $ | 2,729.90 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Current Liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 140.5 | $ | 50.7 | $ | — | $ | 191.2 | ||||||||||
Accrued expenses and other current liabilities | 1.4 | 144.2 | 62.8 | — | 208.4 | |||||||||||||||
Deferred income taxes | — | — | 0.8 | — | 0.8 | |||||||||||||||
Income taxes payable | — | 115.2 | 4.7 | (118.4 | ) | 1.5 | ||||||||||||||
Current portion of long-term debt | — | 36.6 | 3 | 39.6 | ||||||||||||||||
Total Current Liabilities | 1.4 | 436.5 | 122 | (118.4 | ) | 441.5 | ||||||||||||||
Long-term debt | 375 | 1,421.90 | — | — | 1,796.90 | |||||||||||||||
Deferred income taxes | — | 252.8 | 33.3 | — | 286.1 | |||||||||||||||
Other non-current liabilities | — | 69.1 | 6.2 | — | 75.3 | |||||||||||||||
Due to affiliates | 1,685.40 | 1,381.50 | 940.5 | (4,007.4 | ) | — | ||||||||||||||
Total Liabilities | 2,061.80 | 3,561.80 | 1,102.00 | (4,125.8 | ) | 2,599.80 | ||||||||||||||
Redeemable non-controlling interest | 11.5 | 11.5 | — | (11.5 | ) | 11.5 | ||||||||||||||
Total Stockholders’ Equity | 118.6 | 744.5 | (400.1 | ) | (344.4 | ) | 118.6 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 2,191.90 | $ | 4,317.80 | $ | 701.9 | $ | (4,481.7 | ) | $ | 2,729.90 | |||||||||
Schedule of Supplemental Condensed Consolidating Statements of Cash Flows | TEMPUR SEALY INTERNATIONAL, INC. | |||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (62.7 | ) | $ | 191.5 | $ | 96.4 | $ | — | $ | 225.2 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | $ | — | $ | — | $ | (8.5 | ) | $ | — | $ | (8.5 | ) | ||||||||
Proceeds from disposition of business | — | 43.5 | — | — | 43.5 | |||||||||||||||
Purchases of property, plant and equipment | — | (31.3 | ) | (16.2 | ) | (47.5 | ) | |||||||||||||
Other | — | 3 | (0.9 | ) | — | 2.1 | ||||||||||||||
Net cash used in investing activities | — | 15.2 | (25.6 | ) | — | (10.4 | ) | |||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | — | 271.5 | — | — | 271.5 | |||||||||||||||
Repayments 2012 Credit Agreement | — | (510.9 | ) | — | — | (510.9 | ) | |||||||||||||
Net activity in investment in and advances (to) from subsidiaries and affiliates | 59.3 | 32.1 | (91.4 | ) | — | — | ||||||||||||||
Payment of deferred financing costs | — | (3.1 | ) | — | — | (3.1 | ) | |||||||||||||
Proceeds from exercise of stock options | 4.3 | — | — | — | 4.3 | |||||||||||||||
Excess tax benefit from stock based compensation | 1.7 | — | — | — | 1.7 | |||||||||||||||
Treasury stock repurchased | (2.2 | ) | — | — | — | (2.2 | ) | |||||||||||||
Other | — | (1.7 | ) | 2.3 | — | 0.6 | ||||||||||||||
Net cash provided by (used in) financing activities | 63.1 | (212.1 | ) | (89.1 | ) | — | (238.1 | ) | ||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 4.8 | — | 4.8 | |||||||||||||||
Increase (decrease) in cash and cash equivalents | 0.4 | (5.4 | ) | (13.5 | ) | — | (18.5 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 30.9 | 50.1 | — | 81 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 0.4 | $ | 25.5 | $ | 36.6 | $ | — | $ | 62.5 | ||||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (66.1 | ) | $ | 80.9 | $ | 83.7 | $ | — | $ | 98.5 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | — | (1,035.3 | ) | (137.6 | ) | — | (1,172.9 | ) | ||||||||||||
Purchase of property, plant and equipment | — | (28.3 | ) | (11.7 | ) | — | (40.0 | ) | ||||||||||||
Other | — | (54.7 | ) | 54.6 | — | (0.1 | ) | |||||||||||||
Net cash used in investing activities | — | (1,118.3 | ) | (94.7 | ) | — | (1,213.0 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | $ | — | $ | 2,992.60 | $ | — | $ | — | $ | 2,992.60 | ||||||||||
Repayments of the 2012 Credit Agreement | — | (1,658.3 | ) | — | — | (1,658.3 | ) | |||||||||||||
Proceeds from issuance of Senior Notes | 375 | — | — | — | 375 | |||||||||||||||
Proceeds from the 2011 Credit Facility | — | 46.5 | — | — | 46.5 | |||||||||||||||
Repayments of the 2011 Credit Facility | — | (696.5 | ) | — | — | (696.5 | ) | |||||||||||||
Net activity in investment in and advances from (to) subsidiaries and affiliates | (772.8 | ) | 874.9 | (102.1 | ) | — | — | |||||||||||||
Payment of deferred financing costs | (8.4 | ) | (43.6 | ) | — | — | (52.0 | ) | ||||||||||||
Proceeds from exercise of stock options | 8.7 | — | — | — | 8.7 | |||||||||||||||
Excess tax benefit from stock based compensation | 5.4 | — | — | — | 5.4 | |||||||||||||||
Treasury stock repurchased | 458.2 | (465.2 | ) | — | — | (7.0 | ) | |||||||||||||
Other | — | (1.3 | ) | 0.3 | — | (1.0 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 66.1 | 1,049.10 | (101.8 | ) | — | 1,013.40 | ||||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 2.8 | — | 2.8 | |||||||||||||||
Increase in cash and cash equivalents | — | 11.7 | (110.0 | ) | — | (98.3 | ) | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD | — | 19.2 | 160.1 | — | 179.3 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 30.9 | $ | 50.1 | $ | — | $ | 81 | ||||||||||
TEMPUR SEALY INTERNATIONAL, INC. | ||||||||||||||||||||
Supplemental Consolidated Statements of Cash Flows | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
Net cash (used in) provided by operating activities | $ | (43.6 | ) | $ | 140.5 | $ | 93 | $ | — | $ | 189.9 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||
Acquisition of business, net of cash acquired | — | — | (4.5 | ) | — | (4.5 | ) | |||||||||||||
Purchase of property, plant and equipment | — | (36.7 | ) | (13.8 | ) | — | (50.5 | ) | ||||||||||||
Other | — | (0.1 | ) | 0.1 | — | — | ||||||||||||||
Net cash used in investing activities | — | (36.8 | ) | (18.2 | ) | — | (55.0 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||
Proceeds from 2012 Credit Agreement | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Repayments of the 2012 Credit Agreement | — | — | — | — | — | |||||||||||||||
Proceeds from the 2011 Credit Facility | — | 352 | — | — | 352 | |||||||||||||||
Repayments of the 2011 Credit Facility | — | (287.0 | ) | — | — | (287.0 | ) | |||||||||||||
Net activity in investment in and advances from (to) subsidiaries and affiliates | 187 | (170.8 | ) | (16.2 | ) | — | — | |||||||||||||
Payment of deferred financing costs | (2.2 | ) | — | (0.1 | ) | — | (2.3 | ) | ||||||||||||
Proceeds from exercise of stock options | 11.4 | — | — | — | 11.4 | |||||||||||||||
Excess tax benefit from stock based compensation | — | 10.5 | — | — | 10.5 | |||||||||||||||
Treasury stock repurchased | (152.6 | ) | — | — | — | (152.6 | ) | |||||||||||||
Other | — | — | (2.8 | ) | — | (2.8 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 43.6 | (95.3 | ) | (19.1 | ) | — | (70.8 | ) | ||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 3.8 | — | 3.8 | |||||||||||||||
(Decrease) increase in cash and cash equivalents | — | 8.4 | 59.5 | — | 67.9 | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD | — | 10.8 | 100.6 | — | 111.4 | |||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 19.2 | $ | 160.1 | $ | — | $ | 179.3 | ||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
facility | |||
Business Acquisition [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 100.00% | ||
Depreciation expense | $57.70 | $59.40 | $30.90 |
Product warranty accrual, current | 16.1 | 14.9 | |
Product warranty accrual, noncurrent | 15.2 | 11.2 | |
Allowance for doubtful accounts included in accounts receivable, net | 19.5 | 19.3 | |
Shipping and handling included in net sales | 14.7 | 12.5 | 4.9 |
Shipping and handling included in cost of sales | 169.2 | 142.5 | 99.7 |
Other income, net of expense | 15.6 | ||
Advertising costs charged to expense | 326.7 | 274.2 | 164.5 |
Advertising costs deferred and included in Prepaid expenses and other current assets | 9.7 | 8.5 | |
Research and development costs charged to expense | 21.6 | 21 | 15.6 |
Royalty revenue, net of royalty expense | 18.1 | 13.7 | |
Self insurance reserve, excess loss coverage per claim per year | 0.4 | ||
Self insurance reserve, current | 4.8 | 5.4 | |
Self insurance reserve, noncurrent | $10 | $9.50 | |
Number of active plants | 4 | ||
Number of previously closed US facilities | 8 | ||
Term of supply agreements, minimum | 2 years | ||
Term of supply agreements, maximum | 5 years | ||
Sealy Canada | |||
Business Acquisition [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 100.00% | ||
Variable Interest Entity, Primary Beneficiary | Comfort Revolution | |||
Business Acquisition [Line Items] | |||
Equity method investment, ownership percentage | 45.00% |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounting Policies [Abstract] | ||
Finished goods | $134 | $126.70 |
Work-in-process | 11.4 | 10 |
Raw materials and supplies | 71.8 | 62.5 |
Total | $217.20 | $199.20 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 30 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Office furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Office furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Property, Plant and Equipment Summary (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $654.10 | $690.60 |
Accumulated depreciation | -298.5 | -279 |
Property, plant and equipment, net | 355.6 | 411.6 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 243.5 | 270.8 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 247.1 | 261.9 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 69.2 | 72.3 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 54.9 | 56.7 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $39.40 | $28.90 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies - Changes in Accrued Sales Returns (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in Accrued Sales Returns [Roll Forward] | ||
Beginning balance | $28.70 | $5.10 |
Amounts accrued | 127.4 | 104.8 |
Liabilities assumed as a result of Sealy Acquisition | 19.9 | |
Returns charged to accrual | -123.8 | -101.1 |
Ending balance | $32.30 | $28.70 |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies - Schedule of Warranty Terms (Details) | 12 Months Ended | |
Dec. 31, 2014 | ||
Mattresses | Prorated | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 10 years | |
Mattresses | Minimum | Non-prorated | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 10 years | |
Mattresses | Maximum | Non-prorated | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 15 years | |
Tempur North America | Mattresses | Minimum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 10 years | [1] |
Tempur North America | Mattresses | Maximum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 25 years | [1] |
Tempur North America | Pillows | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 3 years | |
Tempur International | Mattresses | Minimum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 5 years | [1],[2] |
Tempur International | Mattresses | Maximum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 15 years | [1],[2] |
Tempur International | Pillows | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 3 years | |
Sealy | Mattresses | Minimum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 10 years | [2] |
Sealy | Mattresses | Maximum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Warranty term | 25 years | [2] |
[1] | Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. | |
[2] | The last 10 years of warranty period are prorated on a straight-line basis |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies - Warranty Activity (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Movement in Extended Product Warranty Accrual [Roll Forward] | ||
Liabilities assumed as a result of Sealy Acquisition | $19.90 | |
Warranty Reserves | ||
Movement in Extended Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | 26.1 | 4.8 |
Amounts accrued | 34.2 | 22.7 |
Liabilities assumed as a result of Sealy Acquisition | 21.4 | |
Warranties charged to accrual | -29 | -22.8 |
Balance at end of period | $31.30 | $26.10 |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures - Additional Information (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | ||
Mar. 18, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2014 | Dec. 31, 2011 | Jun. 30, 2014 | Sep. 30, 2014 | |
facility | ||||||||
Sealy | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash price per share (in dollars per share) | $2.20 | |||||||
Net consideration transferred | $1,172,900,000 | |||||||
Direct transaction costs | 0 | 18,700,000 | 8,900,000 | |||||
Incremental interest expense | 19,900,000 | |||||||
Total consideration | 1,225,100,000 | |||||||
Japanese Third Party Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Net consideration transferred | 8,500,000 | |||||||
Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Fiscal period duration | 364 days | |||||||
Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Fiscal period duration | 371 days | |||||||
U.S. Innerspring | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of divestitures | 3 | |||||||
Total consideration | 47,800,000 | 45,000,000 | ||||||
Discontinued Operation, Amount of Adjustment to Prior Period Gain (Loss) on Disposal, Working Capital Adjustment | 2,800,000 | |||||||
Assets of disposal group | 66,800,000 | |||||||
Loss on disposal | 23,200,000 | |||||||
Transaction costs | $1,400,000 |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures - Components of Consideration Transferred (Details) (USD $) | 0 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Mar. 18, 2013 | Dec. 31, 2014 | Dec. 19, 2012 | |
Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Stated percentage | 6.88% | 6.88% | ||
Sealy | ||||
Business Acquisition [Line Items] | ||||
Cash consideration for stock | $231.20 | [1] | ||
Cash consideration for share-based awards | 14.2 | [2] | ||
Cash consideration for 8.0% Sealy Notes | 442.1 | [3] | ||
Cash consideration for repayment of Sealy Senior Notes | 260.7 | [4] | ||
Cash consideration for repayment of Sealy 2014 Notes | 276.9 | [5] | ||
Total consideration | 1,225.10 | |||
Cash acquired | -52.2 | [6] | ||
Net consideration transferred | $1,172.90 | |||
Cash price per share (in dollars per share) | $2.20 | |||
Number of shares issued | 105.1 | |||
Consideration that would have been payable to a holder of common stock (shares) | 201 | |||
Sealy | Sealy Notes | ||||
Business Acquisition [Line Items] | ||||
Stated percentage | 8.00% | |||
Sealy | Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Stated percentage | 10.88% | |||
Sealy | Subordinated Debt | ||||
Business Acquisition [Line Items] | ||||
Stated percentage | 8.25% | |||
[1] | The cash consideration for outstanding shares of Sealy common stock is the product of the agreed-upon cash per share price of $2.20 and total Sealy shares of 105.1 million. | |||
[2] | The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $2.20 and the total number of RSUs and DSUs outstanding and the “in the money†stock options net of the weighted average exercise price. | |||
[3] | The cash consideration for Sealy’s 8.0% Senior Secured Third Lien Convertible Notes due 2016 (“8.0% Sealy Notesâ€) is the result of applying the adjusted equity conversion rate to the 8.0% Sealy Notes tendered for conversion and multiplying the result by the agreed-upon cash per share price of $2.20. The 8.0% Sealy Notes that were converted represented the right to receive the same merger consideration that would have been payable to a holder of 201.0 million shares of Sealy common stock, subject to adjustment in accordance with the terms of the supplemental indenture governing the 8.0% Sealy Notes. | |||
[4] | The cash consideration for Sealy’s 10.875% Senior Notes due 2016 (“Sealy Senior Notesâ€) reflects the repayment of the outstanding obligation. | |||
[5] | The cash consideration for Sealy’s 8.25% Senior Subordinated Notes due 2014 (“Sealy 2014 Notesâ€) reflects the repayment of the outstanding obligation. | |||
[6] | Represents the Sealy cash balance acquired at acquisition. |
Acquisitions_and_Divestitures_3
Acquisitions and Divestitures - Components of Preliminary Purchase Price Allocation (Details) (USD $) | 0 Months Ended | |||
In Millions, unless otherwise specified | Mar. 18, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Identifiable intangible assets: | ||||
Goodwill | $736.50 | $759.60 | $216.10 | |
Sealy | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | 185 | |||
Inventory | 75.1 | |||
Prepaid expenses and other current assets | 22.8 | |||
Accounts payable | -77.9 | |||
Accrued expenses | -137.2 | |||
Property, plant and equipment | 242.9 | |||
Other assets | 32.6 | |||
Identifiable intangible assets: | ||||
Deferred income taxes, net | -232.8 | |||
8.0% Sealy Notes | -96.2 | |||
Redeemable non-controlling interest | -11.3 | |||
Other liabilities | -77.5 | |||
Goodwill | 541.8 | |||
Net consideration transferred | 1,172.90 | |||
Sealy | Trade names | ||||
Identifiable intangible assets: | ||||
Intangible assets, amortizable | 2.3 | |||
Sealy | Contractual retailer/distributor relationships | ||||
Identifiable intangible assets: | ||||
Intangible assets, amortizable | 91.1 | |||
Sealy | Developed technology, including patents | ||||
Identifiable intangible assets: | ||||
Intangible assets, amortizable | 87.1 | |||
Sealy | Customer databases | ||||
Identifiable intangible assets: | ||||
Intangible assets, amortizable | 3.9 | |||
Sealy | Trade names | ||||
Identifiable intangible assets: | ||||
Intangible assets, not amortizable | $521.20 | |||
Sealy Notes | Sealy | ||||
Identifiable intangible assets: | ||||
Stated percentage | 8.00% |
Acquisitions_and_Divestitures_4
Acquisitions and Divestitures - Pro Forma Information (Details) (Sealy, USD $) | 12 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Sealy | |
Business Acquisition [Line Items] | |
Net sales | $2,757.20 |
Net income | $90.90 |
Earnings per common share – Diluted (in dollars per share) | $1.49 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Goodwill by Reportable Business Segment (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 |
Goodwill [Roll Forward] | |||
Beginning balance | $216.10 | $736.50 | |
Disposal of business | -21.4 | ||
Goodwill resulting from acquisitions | 2.3 | 541.8 | |
Foreign currency translation adjustments | -4 | 1.7 | |
Ending balance | 759.6 | 216.1 | 736.5 |
Tempur North America | |||
Goodwill [Roll Forward] | |||
Beginning balance | 108.9 | 106.2 | |
Disposal of business | 0 | ||
Goodwill resulting from acquisitions | 0 | 0 | |
Foreign currency translation adjustments | -1.5 | -1.2 | |
Ending balance | 107.7 | 108.9 | 106.2 |
Tempur International | |||
Goodwill [Roll Forward] | |||
Beginning balance | 107.2 | 108.4 | |
Disposal of business | 0 | ||
Goodwill resulting from acquisitions | 2.3 | 0 | |
Foreign currency translation adjustments | -1.2 | 0.1 | |
Ending balance | 107.3 | 107.2 | 108.4 |
Sealy | |||
Goodwill [Roll Forward] | |||
Beginning balance | 0 | 521.9 | |
Disposal of business | -21.4 | ||
Goodwill resulting from acquisitions | 0 | 541.8 | |
Foreign currency translation adjustments | -1.3 | 2.8 | |
Ending balance | $544.60 | $0 | $521.90 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Other Intangible Assets and Expected Future Amortization Expense (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount, total | $801.20 | $806.90 | |
Accumulated Amortization | 74.1 | 56.8 | |
Net Carrying Amount | 727.1 | 750.1 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense relating to intangible assets | 18.5 | 15.2 | 5.4 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2015 | 18.3 | ||
2016 | 17.9 | ||
2017 | 16.6 | ||
2018 | 15.6 | ||
2019 | 15.4 | ||
Trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - indefinite life intangible assets | 569 | 575.3 | |
Accumulated Amortization | 0 | 0 | |
Net Carrying Amount | 569 | 575.3 | |
Contractual distributor relationships | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 15 years | ||
Gross carrying amount - finite life intangible assets | 88.2 | 90 | |
Accumulated Amortization | 10.4 | 4.7 | |
Net Carrying Amount | 77.8 | 85.3 | |
Technology and other | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | 92.6 | 93.2 | |
Accumulated Amortization | 32.6 | 25.5 | |
Net Carrying Amount | 60 | 67.7 | |
Technology and other | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 4 years | ||
Technology and other | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 10 years | ||
Patents, other trademarks, and other trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | 27.3 | 27.4 | |
Accumulated Amortization | 14.6 | 12.2 | |
Net Carrying Amount | 12.7 | 15.2 | |
Patents, other trademarks, and other trade names | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years | ||
Patents, other trademarks, and other trade names | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 20 years | ||
Customer databases, relationships and reacquired rights | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | 24.1 | 21 | |
Accumulated Amortization | 16.5 | 14.4 | |
Net Carrying Amount | $7.60 | $6.60 | |
Customer databases, relationships and reacquired rights | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 2 years | ||
Customer databases, relationships and reacquired rights | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years |
Unconsolidated_Affiliate_Compa2
Unconsolidated Affiliate Companies (Details) (Joint Ventures, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Joint Ventures | ||
Unconsolidated Affiliate Companies | ||
Ownership percentage | 50.00% | |
Net investment | $12.90 | $7.80 |
Current assets | 49.7 | 39.1 |
Non-current assets | 5.1 | 5.7 |
Current liabilities | 29.7 | 31.7 |
Equity | 25.1 | 13.1 |
Revenues | 99.2 | 67.9 |
Gross profit | 62.1 | 45 |
Income from operations | 16.8 | 10.9 |
Net income | $13.10 | $8.90 |
Debt_Schedule_of_Borrowings_Ou
Debt - Schedule of Borrowings Outstanding (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 19, 2012 | Apr. 12, 2013 | Mar. 19, 2013 | Dec. 12, 2012 | |
Debt Instrument [Line Items] | ||||||
Capital lease obligations and other | 27,700,000 | 27,600,000 | ||||
Debt and Capital Lease Obligations | 1,602,300,000 | 1,836,500,000 | ||||
Less current portion | -66,400,000 | -39,600,000 | ||||
Long-term debt | 1,535,900,000 | 1,796,900,000 | ||||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
$375.0 million Senior Notes, interest at 6.875%, due December 15, 2020 | 375,000,000 | 375,000,000 | ||||
Principal borrowing capacity, maximum | 375,000,000 | |||||
Stated percentage | 6.88% | 6.88% | ||||
Sealy Notes | ||||||
Debt Instrument [Line Items] | ||||||
8.0% Sealy Notes, due July 15, 2016 | 104,700,000 | 99,600,000 | ||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||
Term A Facility | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | 484,500,000 | 522,500,000 | ||||
Term B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | 594,400,000 | 737,300,000 | ||||
2012 Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Principal borrowing capacity, maximum | 350,000,000 | |||||
2012 Credit Agreement | Term A Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal borrowing capacity, maximum | 550,000,000 | |||||
Index rate or LIBOR plus (percentage) | 2.25% | 2.50% | ||||
2012 Credit Agreement | Term B Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal borrowing capacity, maximum | 870,000,000 | |||||
Line of credit facility, interest rate at period end | 0.75% | |||||
Index rate or LIBOR plus (percentage) | 2.75% | 2.75% | ||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | 16,000,000 | 74,500,000 | ||||
Line of credit facility, interest rate at period end | 2.25% | |||||
Index rate or LIBOR plus (percentage) | 3.00% | 3.25% |
Debt_Credit_Facilities_and_Oth
Debt - Credit Facilities and Other Additional Information (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||||
Aug. 08, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 17, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 12, 2012 | Jul. 11, 2013 | 16-May-13 | |
Line of Credit Facility [Line Items] | ||||||||||
Debt basket | 50,000,000 | |||||||||
Remaining lease term (in years) | 10 years | |||||||||
Deferred financing costs | 54,300,000 | 54,300,000 | ||||||||
Write-off of deferred financing costs | 0 | 4,700,000 | 0 | |||||||
Interest rate swap period (in years) | 4 years | |||||||||
Minimum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt instrument amortization period deferred financing costs | 5 years | 4 years | ||||||||
Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt instrument amortization period deferred financing costs | 8 years | 6 years | ||||||||
Term A Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total outstanding borrowings | 484,500,000 | 522,500,000 | ||||||||
Term B Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total outstanding borrowings | 594,400,000 | 737,300,000 | ||||||||
Senior Notes | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Principal borrowing capacity, maximum | 375,000,000 | |||||||||
Debt issuance cost | 3,100,000 | |||||||||
Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 3.00% | 3.25% | ||||||||
Initial unused commitment fee (percentage) | 0.50% | |||||||||
Unused commitment fee (percentage) | 0.38% | |||||||||
Total net leverage ratio | 3.5 | |||||||||
Line of credit facility, interest rate at period end | 2.25% | |||||||||
Borrowings, line of credit | 271,500,000 | |||||||||
Repayments of debt | 330,000,000 | |||||||||
Total outstanding borrowings | 16,000,000 | 74,500,000 | ||||||||
Total availability | 315,800,000 | |||||||||
Revolving Credit Facility | Adjusted LIBOR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate at period end | 3.16% | |||||||||
Revolving Credit Facility | Base Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate at period end | 5.25% | |||||||||
Revolving Credit Facility | Term A Facility | Adjusted LIBOR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate at period end | 2.42% | |||||||||
Revolving Credit Facility | Term B Facility | Adjusted LIBOR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate at period end | 3.50% | |||||||||
Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total outstanding borrowings | 18,200,000 | |||||||||
2012 Credit Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Principal borrowing capacity, maximum | 350,000,000 | |||||||||
Equity interest of subsidiary guarantor (percentage) | 100.00% | |||||||||
Equity voting rights of subsidiary (percentage) | 65.00% | |||||||||
Domestic qualified cash, maximum percentage | 100.00% | |||||||||
Foreign qualified cash, maximum percentage | 60.00% | |||||||||
Domestic and foreign qualified cash, maximum | 150,000,000 | |||||||||
Domestic qualified cash | 25,900,000 | |||||||||
Foreign qualified cash, maximum | 21,900,000 | |||||||||
2012 Credit Agreement | Term A Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Principal borrowing capacity, maximum | 550,000,000 | |||||||||
Index rate or LIBOR plus (percentage) | 2.25% | 2.50% | ||||||||
Debt instrument, reduction in applicable margin (percentage) | 0.75% | |||||||||
Repayments of debt | 38,000,000 | |||||||||
Quarterly payments | 13,500,000 | |||||||||
Balloon payment | 323,000,000 | |||||||||
Prepayments of debt | 9,100,000 | |||||||||
Voluntary prepayments | 1,900,000 | |||||||||
2012 Credit Agreement | Term A Facility | Adjusted LIBOR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 3.00% | |||||||||
2012 Credit Agreement | Term A Facility | Base Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 2.00% | |||||||||
2012 Credit Agreement | Term B Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Principal borrowing capacity, maximum | 870,000,000 | |||||||||
Index rate or LIBOR plus (percentage) | 2.75% | 2.75% | ||||||||
Line of credit facility, interest rate at period end | 0.75% | |||||||||
Repayments of debt | 142,900,000 | |||||||||
Quarterly payments | 1,500,000 | |||||||||
Balloon payment | 564,100,000 | |||||||||
Prepayments of debt | 12,800,000 | |||||||||
Voluntary prepayments | 123,100,000 | |||||||||
2012 Credit Agreement | Term B Facility | Adjusted LIBOR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 4.00% | |||||||||
Debt instrument, reduction in applicable margin (percentage) | 2.75% | |||||||||
2012 Credit Agreement | Term B Facility | Adjusted LIBOR | Minimum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 1.00% | |||||||||
Debt instrument, reduction in applicable margin (percentage) | 0.75% | |||||||||
2012 Credit Agreement | Term B Facility | Base Rate | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Index rate or LIBOR plus (percentage) | 3.00% | |||||||||
Debt instrument, reduction in applicable margin (percentage) | 1.75% | |||||||||
2012 Credit Agreement | Senior Notes | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt issuance cost | 3,300,000 | |||||||||
2011 Credit Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Write-off of deferred financing costs | $4,700,000 |
Debt_Notes_Payable_Details
Debt - Notes Payable (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Mar. 19, 2013 | Dec. 31, 2013 | Dec. 19, 2012 | Apr. 12, 2013 | Mar. 18, 2013 | |
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, noncurrent | $375,000,000 | |||||
Stated percentage | 6.88% | 6.88% | ||||
Percentage of principal amount that may be redeemed | 106.88% | |||||
Minimum percentage of notes not eligible for early redemption | 65.00% | |||||
Notes, fair value | 398,400,000 | 405,000,000 | ||||
Sealy Notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||
Percentage of notes converted to cash | 83.00% | |||||
Debt instrument, convertible, conversion ratio, period I | 2,325.43 | |||||
Debt conversion ratio numerator | 1,000 | 1,000 | ||||
Debt instrument, convertible, conversion ratio, period II | 2,200 | |||||
Outstanding convertible notes percentage | 17.00% | |||||
Notes, fair value | 110,700,000 | 99,900,000 | 96,200,000 | |||
Notes, carrying value | 104,700,000 | |||||
Debt instrument, accreted discount | 8,700,000 | 3,700,000 | ||||
8.0% Sealy Notes, due July 15, 2016 | $104,700,000 | $99,600,000 | ||||
Any time on or after December 15, 2016 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price, percentage | 103.44% | |||||
Any time on or after December 15, 2017 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price, percentage | 101.72% | |||||
Any time on or after December 15, 2018 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price, percentage | 100.00% | |||||
Any time prior to December 15, 2016 with 'make-whole' premium and accrued and unpaid interest, if any | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of redemption on notes | 100.00% | |||||
Any time prior to December 15, 2016 with the net cash proceeds from certain equity offerings plus accrued and unpaid interest, if any | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of redemption on notes | 35.00% |
Debt_Schedule_of_Maturities_of
Debt - Schedule of Maturities of Long-term Debt (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 12, 2013 | Mar. 19, 2013 |
In Millions, unless otherwise specified | ||||
Debt Instrument [Line Items] | ||||
2015 | 66.4 | |||
2016 | 166.6 | |||
2017 | 62.2 | |||
2018 | 347.7 | |||
2019 | 8.9 | |||
Thereafter | 950.5 | |||
Total | 1,602.30 | |||
Sealy Notes | ||||
Debt Instrument [Line Items] | ||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 19, 2012 | Apr. 12, 2013 | Mar. 19, 2013 | Mar. 18, 2013 |
In Millions, unless otherwise specified | ||||||
Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Notes, fair value | $398.40 | $405 | ||||
Stated percentage | 6.88% | 6.88% | ||||
Sealy Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Notes, fair value | $110.70 | $99.90 | $96.20 | |||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Aug. 08, 2011 | Dec. 31, 2014 | Dec. 30, 2013 | Dec. 30, 2011 |
Derivatives, Fair Value [Line Items] | ||||
Term of interest rate swap (in years) | 4 years | |||
Variable interest rate (percentage) | 1.25% | |||
Senior credit facility balance covered under interest rate swap contracts | $150 | $250 | ||
Foreign Exchange Forward | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount | 46.5 | |||
Gain on derivative | $1.40 |
Retirement_Plans_Defined_Contr
Retirement Plans - Defined Contribution Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Profit Sharing | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, cost recognized | $1.70 | $4 | |
401k Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Eligible employee contribution maximum (percentage) | 15.00% | ||
Employment eligibility for plan participation minimum (in days) | 90 days | ||
Defined contribution plan, employment eligibility to receive matching contributions, minimum (in years) | 1 year | ||
Defined contribution plan, percentage of eligible employee contribution match, first tier | 100.00% | ||
Defined contribution plan, percentage of eligible employee contributions matched fully, first tier | 3.00% | ||
Defined contribution plan, eligible employee contribution match, second tier | 50.00% | ||
Defined contribution plan, eligible employee contribution matched by the company, second tier | 2.00% | ||
Defined contribution plan, cost recognized | $5 | $1.70 | $1.50 |
Retirement_Plans_Defined_Benef
Retirement Plans - Defined Benefit Plans (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
facility | ||||
Retirement plans | ||||
Number of active plants at which a defined benefit pension plan for current and former hourly employees is provided | 4 | |||
Number of previously closed U.S. facilities at which a defined benefit pension plan for current and former hourly employees was provided | 8 | |||
Components of net periodic pension cost for employees | ||||
Service cost | $0.90 | $0.90 | ||
Interest cost | 1.8 | 1.3 | ||
Expected return on assets | -2.1 | -1.5 | ||
Curtailment loss | 0.1 | 0 | ||
Amortization of net gain | -0.1 | 0 | ||
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income | ||||
Net loss (gain) | 9 | -6.2 | ||
Amortization of prior service cost | -0.2 | 1 | ||
Amortization of net gain | 0.1 | 0 | ||
New prior service cost | 0.1 | 0 | ||
Total recognized in other comprehensive income | 9 | -5.2 | ||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate | 4.01% | [1] | 4.23% | [1] |
Expected long term return on plan assets | 7.00% | 6.92% | ||
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | 36.4 | 39.9 | ||
Service cost | 0.9 | 0.9 | ||
Interest cost | 1.8 | 1.3 | ||
Plan changes | 0.2 | 0.5 | ||
Actuarial loss (gain) | 9.2 | -4.8 | ||
Curtailments | -0.1 | 0 | ||
Benefits paid | -0.7 | -0.5 | ||
Expenses paid | -0.2 | -0.3 | ||
Foreign currency exchange rate changes | -0.4 | -0.6 | ||
Projected benefit obligation at end of year | 47.1 | 36.4 | ||
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 30.5 | 26.2 | ||
Actual return on assets | 2.2 | 2.9 | ||
Employer contribution | 1 | 2.8 | ||
Plan settlements | 0 | -0.4 | ||
Benefits paid | -0.7 | -0.5 | ||
Expenses paid | -0.2 | -0.3 | ||
Foreign currency exchange rate changes | -0.3 | -0.2 | ||
Fair value of plan assets at end of year | 32.5 | 30.5 | ||
Funded status | -14.6 | -5.9 | ||
Amounts recognized in the Consolidated Balance Sheets: | ||||
Non-current portion of benefit liability | 14.9 | 6.7 | ||
Non-current benefit asset | 0.3 | 0.8 | ||
Accumulated other comprehensive income | 9 | -5.2 | ||
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 5.00% | [2] | 5.00% | [2] |
Continuing Operations | ||||
Components of net periodic pension cost for employees | ||||
Net periodic pension cost | 0.6 | 0.7 | ||
Sealy | ||||
Retirement plans | ||||
Ownership interest (percentage) | 100.00% | |||
Number of facilities where employees are covered by defined benefit pension plan | 1 | |||
United States Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate | 3.94% | 4.25% | ||
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 5.00% | |||
United States Retirement Plan | Sealy | ||||
Change in Benefit Obligation: | ||||
Projected benefit obligation at end of year | 43.7 | 33.3 | ||
Change in Plan Assets: | ||||
Fair value of plan assets at end of year | 28.8 | 26.7 | ||
Canadian Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate | 5.00% | 4.00% | ||
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 5.00% | |||
Canadian Retirement Plan | Sealy | ||||
Change in Benefit Obligation: | ||||
Projected benefit obligation at end of year | 3.4 | 3.1 | ||
Change in Plan Assets: | ||||
Fair value of plan assets at end of year | $3.70 | $3.80 | ||
[1] | Due to current economic differences in the interest rates in the jurisdictions of the retirement plans, the discount rates used in 2014 to determine the expenses for the United States retirement plan and Canadian retirement plan were 3.94% and 5.00%, respectively. The discount rates used in 2013 to determine the expenses for the United States retirement plan and Canadian retirement plan were 4.25% and 4.00%, respectively. | |||
[2] | The discount rates used in 2014 and 2013 to determine the benefit obligations for the United States defined benefit pension plan and Canadian defined benefit pension plan were both 5.00%. |
Retirement_Plans_Plan_Assets_a
Retirement Plans - Plan Assets and Estimated Future Benefit Payments (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Retirement plans | |||
Expected contribution in next fiscal year | $1.60 | ||
Estimated future benefit payments | |||
Fiscal 2015 | 0.9 | ||
Fiscal 2016 | 1 | ||
Fiscal 2017 | 1 | ||
Fiscal 2018 | 1.1 | ||
Fiscal 2019 | 1.2 | ||
Fiscal 2020 ‑ Fiscal 2024 | 8.4 | ||
Target and actual asset allocations | |||
Total target plan assets | 100.00% | ||
Total actual plan assets | 100.00% | ||
Total assets | 32.5 | 30.5 | 26.2 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 30.5 | |
Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 32.5 | 0 | |
Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Equity securities | |||
Target and actual asset allocations | |||
Total target plan assets | 60.00% | ||
Total actual plan assets | 76.86% | ||
Debt securities | |||
Target and actual asset allocations | |||
Total target plan assets | 40.00% | ||
Total actual plan assets | 21.77% | ||
Other | |||
Target and actual asset allocations | |||
Total target plan assets | 0.00% | ||
Total actual plan assets | 1.37% | ||
U.S. equity | |||
Target and actual asset allocations | |||
Total assets | 19.6 | 13.1 | |
U.S. equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 13.1 | |
U.S. equity | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 19.6 | 0 | |
U.S. equity | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
International equity | |||
Target and actual asset allocations | |||
Total assets | 5.2 | 5.9 | |
International equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 5.9 | |
International equity | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 5.2 | 0 | |
International equity | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Total equity based funds | |||
Target and actual asset allocations | |||
Total assets | 24.8 | 19 | |
Total equity based funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 19 | |
Total equity based funds | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 24.8 | 0 | |
Total equity based funds | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Common/collective trust - fixed income | |||
Target and actual asset allocations | |||
Total assets | 7 | 10.5 | |
Common/collective trust - fixed income | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 10.5 | |
Common/collective trust - fixed income | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 7 | 0 | |
Common/collective trust - fixed income | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Money market funds | |||
Target and actual asset allocations | |||
Total assets | 0.7 | 1 | |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 1 | |
Money market funds | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 0.7 | 0 | |
Money market funds | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | $0 | $0 | |
United States Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 7.00% | ||
Canadian Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 6.00% |
Retirement_Plans_Multiemployer
Retirement Plans - Multi-employer Benefit Plans (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
facility | ||||
Multi-Employer Benefit Plans | ||||
Domestic employees represented by various labor unions with separate collective bargaining agreements (percentage) | 68.00% | |||
Maximum | ||||
Multi-Employer Benefit Plans | ||||
Total contributions for most recent plan year available (percentage) | 5.00% | |||
Red Zone | Maximum | ||||
Multi-Employer Benefit Plans | ||||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 65.00% | |||
Yellow Zone | ||||
Multi-Employer Benefit Plans | ||||
Number of years in which a multi-employer plan is projected to be a credit balance | 7 years | |||
Yellow Zone | Minimum | ||||
Multi-Employer Benefit Plans | ||||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 80.00% | |||
Green Zone | ||||
Multi-Employer Benefit Plans | ||||
Number of years in which a multi-employer plan is projected not to be a credit balance | 7 years | |||
Green Zone | Minimum | ||||
Multi-Employer Benefit Plans | ||||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 80.00% | |||
Multi-employer Retirement Plan | ||||
Multi-Employer Benefit Plans | ||||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | 8 | |||
Expenses recognized for contributions | $4.70 | $3.90 | ||
Multi-employer Health and Welfare Plan | Multi-employer Retirement Plan | ||||
Multi-Employer Benefit Plans | ||||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | 3 | |||
Expenses recognized for contributions | 2.2 | 2.2 | ||
United Furniture Workers Pension Fund A | ||||
Multi-Employer Benefit Plans | ||||
Surcharge (percentage) | 10.00% | [1],[2] | 10.00% | [1],[2] |
United Furniture Workers Pension Fund A | Multi-employer Retirement Plan | ||||
Multi-Employer Benefit Plans | ||||
Expenses recognized for contributions | 0.9 | [1] | 0.7 | [1] |
Pension Plan of the National Retirement Fund | ||||
Multi-Employer Benefit Plans | ||||
Surcharge (percentage) | 10.00% | [1],[2] | 10.00% | [2] |
Pension Plan of the National Retirement Fund | Multi-employer Retirement Plan | ||||
Multi-Employer Benefit Plans | ||||
Expenses recognized for contributions | 1.1 | [1] | 0.7 | |
Central States, Southeast & Southwest Areas Pension Plan | ||||
Multi-Employer Benefit Plans | ||||
Surcharge (percentage) | 10.00% | [2] | ||
Central States, Southeast & Southwest Areas Pension Plan | Multi-employer Retirement Plan | ||||
Multi-Employer Benefit Plans | ||||
Expenses recognized for contributions | $0.40 | |||
[1] | The Company represented more than 5.0% of the total contributions for the most recent plan year available. | |||
[2] | Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge. |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ||
Common stock shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock par or stated value (in dollars per share) | $0.01 | $0.01 |
Preferred stock authorized shares (in shares) | 10,000 | |
Preferred stock par or stated value (in dollars per share) | $0.01 | |
Common stock, voting rights per share held | 1 |
Other_Items_Accrued_Expenses_a
Other Items - Accrued Expenses and Other Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Other Items [Abstract] | |||
Wages and benefits | $60 | $59.30 | |
Advertising | 41.6 | 29.7 | |
Sales returns | 32.3 | 28.7 | 5.1 |
Rebates | 22.8 | 23 | |
Warranty | 16.1 | 14.9 | |
Other | 60.5 | 52.8 | |
Total accrued expenses and other current liabilities | $233.30 | $208.40 |
Other_Items_Accumulated_Other_
Other Items - Accumulated Other Comprehensive Loss (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | ($13.70) | |||||
Foreign currency translation adjustments | -38.4 | -10.6 | 8.2 | |||
Tax benefit (expense) | -64.9 | -49.1 | -122.4 | |||
Total other comprehensive income (loss) | -42 | -6.1 | 7.1 | |||
Balance at end of period | -55.7 | -13.7 | ||||
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | -15.6 | -5 | -13.2 | |||
Foreign currency translation adjustments | -38.4 | [1] | -13.3 | [1] | 10.9 | [1] |
Tax benefit (expense) | 0 | [1] | 2.7 | [1] | -2.7 | [1] |
Balance at end of period | -54 | -15.6 | -5 | |||
Interest Rate Swap Agreement | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | -1.4 | -2.7 | -1.6 | |||
Net change from period revaluations: | 3 | 5.2 | 2.7 | |||
Tax benefit (expense) | -1.2 | -1.5 | -0.5 | |||
Total other comprehensive income before reclassifications, net of tax | 1.8 | 3.7 | 2.2 | |||
Total amount reclassified from accumulated other comprehensive loss, net of tax | -1.1 | -2.4 | -3.3 | |||
Total other comprehensive income (loss) | 0.7 | 1.3 | -1.1 | |||
Balance at end of period | -0.7 | -1.4 | -2.7 | |||
Pension Benefits | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | 3.2 | 0 | 0 | |||
Net change from period revaluations: | -9 | 5.2 | 0 | |||
Tax benefit (expense) | 3.4 | -2 | 0 | |||
Total other comprehensive income before reclassifications, net of tax | -5.6 | 3.2 | ||||
Total amount reclassified from accumulated other comprehensive loss, net of tax | 0 | |||||
Total other comprehensive income (loss) | -5.6 | -3.2 | ||||
Balance at end of period | -2.4 | 3.2 | 0 | |||
Foreign Exchange Forward Contracts | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Balance at beginning of period | 0 | 0 | 0 | |||
Net change from period revaluations: | 3.4 | 0 | 0 | |||
Tax benefit (expense) | -0.9 | 0 | 0 | |||
Total other comprehensive income before reclassifications, net of tax | 2.5 | 0 | 0 | |||
Total amount reclassified from accumulated other comprehensive loss, net of tax | -1.2 | 0 | 0 | |||
Total other comprehensive income (loss) | 1.3 | 0 | 0 | |||
Balance at end of period | 1.3 | 0 | 0 | |||
Reclassification out of Accumulated Other Comprehensive Income | Interest Rate Swap Agreement | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Tax benefit (expense) | 0.8 | [2] | 0.8 | [2] | 0.7 | [2] |
Net amount reclassified to earnings | -1.9 | [3] | -3.2 | [3] | -4 | [3] |
Reclassification out of Accumulated Other Comprehensive Income | Pension Benefits | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Tax benefit (expense) | 0 | [2] | ||||
Net amount reclassified to earnings | 0 | |||||
Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Forward Contracts | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||||
Tax benefit (expense) | 0.4 | [2] | 0 | [2] | 0 | [2] |
Net amount reclassified to earnings | ($1.60) | $0 | $0 | |||
[1] | In 2014 and 2013, there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. In 2012, a $2.7 million tax impact was recorded which reversed in 2013. | |||||
[2] | These amounts were included in the income tax provision on the accompanying Consolidated Statements of Income. | |||||
[3] | This amount was included in interest expense, net on the accompanying Consolidated Statements of Income. |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (USD $) | 12 Months Ended | |||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2003 | 22-May-13 | |
plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of compensation plans | 2 | |||||
Total stock-based compensation expense | $13.40 | $16.90 | $5.70 | |||
Weighted Average Grant Date Fair Value | ||||||
Fair value method used | Black-Scholes option pricing model | |||||
Fair value assumptions and methodology [Abstract] | ||||||
Expected volatility range of stock, minimum (in hundredths) | 56.70% | 63.00% | 49.00% | |||
Expected volatility range of stock, maximum (in hundredths) | 66.50% | 72.80% | 73.00% | |||
Expected life of option, range in years, minimum | 2 years | 2 years | 2 years | |||
Expected life of option, range in years, maximum | 4 years | 3 years | 4 years | |||
Risk-free interest rate range, minimum (in hundredths) | 0.40% | 0.30% | 0.30% | |||
Risk-free interest rate range, maximum (in hundredths) | 1.40% | 0.60% | 0.70% | |||
Expected dividend yield on stock, minimum (in hundredths) | 0.60% | 0.60% | 0.00% | |||
Expected dividend yield on stock, maximum (in hundredths) | 0.70% | 0.90% | 1.30% | |||
Weighted Average Exercise Price | ||||||
Total intrinsic value of options exercised | 6.7 | 17.1 | 29.8 | |||
Total unrecognized stock-based compensation expense | 13.5 | |||||
Weighted Average Remaining Vesting Period (in years) | 1 year 9 months 4 days | |||||
Cash received from exercise of stock options | 4.3 | 8.7 | 11.4 | |||
Performance-based Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 3.5 | 3 | -0.9 | |||
Revaluation benefit from PRSU Granted | 3 | 10.3 | ||||
Shares | ||||||
Beginning balance (in shares) | 0.3 | 0.3 | ||||
Granted (in shares) | 0.3 | 0.3 | ||||
Vested (in shares) | 0 | 0 | ||||
Forfeited (in shares) | -0.3 | -0.3 | ||||
Ending balance (in shares) | 0.3 | 0.3 | 0.3 | |||
Weighted Average Grant Date Fair Value | ||||||
Beginning balance (in dollars per share) | $39.04 | $58.52 | ||||
Granted (in dollars per share) | $51.87 | $39.34 | ||||
Vested (in dollars per share) | $37.05 | $0 | ||||
Forfeited (in dollars per share) | $39.38 | $56.92 | ||||
Ending balance (in dollars per share) | $53.45 | $39.04 | $58.52 | |||
Outstanding intrinsic value | 13.9 | |||||
Weighted Average Exercise Price | ||||||
Total unrecognized stock-based compensation expense | 9.2 | |||||
Weighted Average Remaining Vesting Period (in years) | 1 year 6 months 22 days | |||||
Performance-based Restricted Stock Units | 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target shares granted | 0.15 | [1] | ||||
Actual payout percentage, assumption and range | 100.00% | |||||
Weighted Average Grant Date Fair Value | ||||||
Granted (in dollars per share) | $51.87 | [1] | ||||
Performance-based Restricted Stock Units | 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target shares granted | 0.15 | [2] | ||||
Actual payout percentage, assumption and range | 100.00% | |||||
Weighted Average Grant Date Fair Value | ||||||
Granted (in dollars per share) | $51.87 | [2] | ||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 7 | 8.3 | 4.4 | |||
Weighted Average Exercise Price | ||||||
Total unrecognized stock-based compensation expense | 3.5 | |||||
Weighted Average Remaining Vesting Period (in years) | 2 years 2 months 1 day | |||||
Restricted Stock Units and Deferred Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 2.9 | 5.6 | 2.2 | |||
Shares | ||||||
Beginning balance (in shares) | 0.2 | 0.2 | ||||
Granted (in shares) | 0 | 0.2 | ||||
Vested (in shares) | -0.1 | -0.2 | ||||
Forfeited (in shares) | 0 | 0 | ||||
Ending balance (in shares) | 0.1 | 0.2 | 0.2 | |||
Weighted Average Grant Date Fair Value | ||||||
Beginning balance (in dollars per share) | $47 | $32.03 | ||||
Granted (in dollars per share) | $54.56 | $45.56 | ||||
Vested (in dollars per share) | $44.47 | $30.49 | ||||
Forfeited (in dollars per share) | $46.77 | $0 | ||||
Ending balance (in dollars per share) | $50.41 | $47 | $32.03 | |||
Weighted Average Exercise Price | ||||||
Aggregate intrinsic value of units outstanding | 5.8 | |||||
Aggregate intrinsic value of RSUs and DSUs vested during the period | 5.5 | |||||
Total unrecognized stock-based compensation expense | 0.8 | |||||
Weighted Average Remaining Vesting Period (in years) | 2 years 1 month 10 days | |||||
Deferred Stock Units (DSU) | ||||||
Shares | ||||||
Granted (in shares) | 0.02 | |||||
Restricted Stock Units (RSUs) | ||||||
Shares | ||||||
Granted (in shares) | 0.01 | |||||
Unvested Stock Options | ||||||
Shares | ||||||
Beginning balance (in shares) | 0.6 | 0.9 | ||||
Granted (in shares) | 0.2 | 0.6 | ||||
Vested (in shares) | -0.3 | -0.8 | ||||
Forfeited/Terminated (in shares) | 0 | -0.1 | ||||
Ending balance (in shares) | 0.5 | 0.6 | ||||
Weighted Average Grant Date Fair Value | ||||||
Beginning of period weighted average grant date fair value (dollars per share) | $42.16 | $23.49 | ||||
Granted weighted average grant date fair value (dollars per share) | $52.08 | $39.77 | ||||
Vested weighted average grant date fair value (dollars per share) | $42.46 | $19.71 | ||||
Forfeited weighted average grant date fair value (dollars per share) | $50.53 | $39.62 | ||||
Ending of period weighted average grant date fair value (dollars per share) | $46.23 | $42.16 | ||||
Amended And Restated 2003 Equity Incentive Plan | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of common stock shares to be issued (in shares) | 11.5 | |||||
Long Term Incentive Plan 2013 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of common stock shares to be issued (in shares) | 5.1 | |||||
Stock Option Plans 2002, 2003 and 2013 | ||||||
Shares | ||||||
Beginning balance (in shares) | 2.8 | 2.9 | ||||
Granted (in shares) | 0.2 | 0.6 | ||||
Exercised (in shares) | -0.2 | -0.6 | ||||
Forfeited/Terminated (in shares) | 0 | -0.1 | ||||
Ending balance (in shares) | 2.8 | 2.8 | ||||
Options exercisable (in shares) | 2.3 | |||||
Weighted Average Exercise Price | ||||||
Beginning balance weighted average exercise price (dollars per share) | $21.73 | $17 | ||||
Granted weighted average exercise price (dollars per share) | $52.08 | $39.77 | ||||
Exercised weighted average exercise price (dollars per share) | $20.82 | $14.54 | ||||
Terminated weighted average exercise price (dollars per share) | $50.53 | $39.62 | ||||
Ending balance weighted average exercise price (dollars per share) | $24.18 | $21.73 | ||||
Options exercisable weighted average exercise price (dollars per share) | $19.20 | |||||
Ending balance weighted average remaining contractual term (in years) | 5 years 1 month 17 days | |||||
Options exercisable weighted average remaining contractual term (in years) | 4 years 4 months 6 days | |||||
Ending balance aggregate intrinsic value | 84.3 | |||||
Options exercisable aggregate intrinsic value | 82.9 | |||||
Treasury Shares | ||||||
Shares | ||||||
Exercised (in shares) | -0.2 | -0.6 | -0.9 | |||
Treasury Shares | Performance-based Restricted Stock Units | ||||||
Weighted Average Grant Date Fair Value | ||||||
Grant date intrinsic value | $1.40 | $14.90 | ||||
Performance period | 1 year | |||||
Percentage of stock units released | 100.00% | 282.00% | ||||
Maximum payout (percent) | 300.00% | |||||
Minimum | Performance-based Restricted Stock Units | 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Actual payout percentage, assumption and range | 0.00% | |||||
Minimum | Performance-based Restricted Stock Units | 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Actual payout percentage, assumption and range | 0.00% | |||||
Maximum | Performance-based Restricted Stock Units | 2015 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Actual payout percentage, assumption and range | 200.00% | |||||
Maximum | Performance-based Restricted Stock Units | 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Actual payout percentage, assumption and range | 300.00% | |||||
[1] | At the end of the performance period, the actual number of shares issuable can range from zero to 200.0% of the target shares granted, which is assumed to be 100.0%. | |||||
[2] | At the end of the performance period, the actual number of shares issuable can range from zero to 300.0% of the target shares granted, which is assumed to be 100.0%. |
Commitments_and_Contingencies_1
Commitments and Contingencies - Operating Leases (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expenses | $32.30 | $25.50 | $9.50 |
Operating leases future minimum lease payments [Abstract] | |||
2015 | 29.1 | ||
2016 | 27 | ||
2017 | 24.4 | ||
2018 | 21.3 | ||
2019 | 15 | ||
Thereafter | 44.4 | ||
Total | $161.20 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Litigation and Environmental Contingencies (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Jun. 25, 2012 | Jun. 20, 2012 | Dec. 31, 2014 | Jun. 27, 2013 | Dec. 31, 2012 |
officer | officer | ||||
Loss Contingencies [Line Items] | |||||
Loss contingency, number of defendants | 2 | 2 | |||
Loss contingency, estimated litigation period | 5 years | ||||
New Jersey | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | 2.5 | ||||
Connecticut | |||||
Loss Contingencies [Line Items] | |||||
Accrual for environmental loss contingencies | $0.10 | ||||
Class Action Lawsuits Relating To Merger | |||||
Loss Contingencies [Line Items] | |||||
Number of shares held by shareholders who sent notices to exercise rights as per merger agreement | 3.1 | ||||
Litigation required notice period | 120 days |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation in dollars [Abstract] | |||
Statutory U.S. federal income tax | $61.20 | $44.80 | $80.20 |
State income taxes, net of federal benefit | 1.1 | 1.7 | 4.5 |
Foreign repatriation, net of foreign tax credits | 13.5 | -16 | 48.1 |
Foreign tax differential | -12.6 | -12.3 | -9.7 |
Change in valuation allowances | -17.7 | 20.4 | -2.8 |
Uncertain tax positions | 10.9 | 4.7 | 2.6 |
Subpart F income | 1.9 | 1.5 | 4.1 |
Manufacturing deduction | -3.7 | 0.1 | -3.8 |
Goodwill on disposal of business | 7.5 | 0 | 0 |
Permanent and other | 2.8 | 4.2 | -0.8 |
Effective income tax provision | $64.90 | $49.10 | $122.40 |
Reconciliation in percentages [Abstract] | |||
Statutory U.S. federal income tax (percentage) | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit (percentage) | 0.60% | 1.30% | 2.00% |
Foreign repatriation, net of foreign tax credits (percentage) | 7.70% | -12.60% | 21.00% |
Foreign tax differential (percentage) | -7.20% | -9.60% | -4.20% |
Change in valuation allowance (percentage) | -10.00% | 15.90% | -1.20% |
Uncertain tax positions (percentage) | 6.10% | 3.70% | 1.10% |
Subpart F income (percentage) | 1.10% | 1.20% | 1.80% |
Manufacturing deduction (percentage) | -2.10% | 0.00% | -1.70% |
Goodwill on disposal of business (percentage) | 4.20% | 0.00% | 0.00% |
Permanent and other (percentage) | 1.70% | 3.50% | -0.40% |
Effective income tax provision (percentage) | 37.10% | 38.40% | 53.40% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | |||
Tax recognized on repatriation of earnings in connection with Sealy Acquisition | $48.10 | ||
Tax benefit recorded on repatriation of earnings | 63.9 | ||
Royalty rate assessed on Danish earnings (percentage) | 20.00% | ||
Income tax assessment from Danish tax authority | 215.1 | ||
Unrecognized tax benefits | 47.6 | 12.9 | 26.1 |
Unrecognized tax benefits that would impact effective tax rate | 44.6 | 22.2 | |
Accrued interest and penalties | $10.30 | $5.80 | $11 |
Income_Taxes_Pretax_Income_Att
Income Taxes - Pre-tax Income Attributable to Operating Segments (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income before income taxes: | |||
United States | $46.90 | ($4.50) | $126.20 |
Rest of the world | 128 | 132.5 | 103 |
Income before income taxes | $174.90 | $128 | $229.20 |
Income_Taxes_Unrecognized_Tax_
Income Taxes - Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrecognized tax benefits [Roll Forward] | |||
Balance as of beginning of period | $26.10 | $12.90 | |
Additions attributable to Sealy on date of acquisition | 9.2 | ||
Additions based on tax positions related to current period | 24.3 | 2.3 | |
Additions for tax positions of prior years | 0.5 | 7.2 | |
Expiration of statutes of limitations | -3.2 | ||
Settlements of uncertain tax positions with tax authorities | -0.1 | -5.5 | |
Balance as of end of period | 47.6 | 26.1 | 12.9 |
Unrecognized tax benefits that would impact effective tax rate | 44.6 | 22.2 | |
Interest and penalties related to unrecognized tax benefits recorded in income tax expense | 1.9 | 1.8 | 3 |
Accrued interest and penalties | $10.30 | $11 | $5.80 |
Income_Taxes_Operating_Loss_an
Income Taxes - Operating Loss and Tax Credit Carryforwards (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Operating Loss Carryforwards [Line Items] | ||
Charitable contribution carryover (CCCs) | $8.40 | $0 |
US Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 0 | 19.6 |
Tax credit carryforwards | 7.8 | 20.4 |
US State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 145.3 | 135.6 |
Tax credit carryforwards | 1.6 | 0.7 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $44.20 | $67.10 |
Income_Taxes_Tax_Provision_Sum
Income Taxes - Tax Provision Summary (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current provision | |||
Federal | $50.70 | $48.60 | $49.90 |
State | 4.5 | 7.3 | 7.8 |
Foreign | 36.9 | 42.3 | 26.3 |
Total current | 92.1 | 98.2 | 84 |
Deferred provision | |||
Federal | -25.2 | -47 | 37.1 |
State | -1.2 | 0.4 | 4.2 |
Foreign | -0.8 | -2.5 | -2.9 |
Total deferred | -27.2 | -49.1 | 38.4 |
Effective income tax provision | $64.90 | $49.10 | $122.40 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ||
Stock-based compensation | $12.40 | $10 |
Accrued expenses and other | 57.9 | 53.7 |
Net operating losses, foreign tax credits and charitable contribution carryforward | 30.6 | 55.3 |
Inventories | 4.5 | 4.6 |
Intangible assets | 14.5 | 9 |
Property, plant and equipment | 4 | 3.9 |
Total deferred tax assets | 123.9 | 136.5 |
Valuation allowances | -21.7 | -39.4 |
Total net deferred tax assets | 102.2 | 97.1 |
Deferred tax liabilities: | ||
Transaction costs | -258.1 | -261.9 |
Property, plant and equipment | -45.7 | -62.5 |
Accrued expenses and other | -4.5 | -4.3 |
Total deferred tax liabilities | -308.3 | -328.7 |
Net deferred tax liabilities | ($206.10) | ($231.60) |
Major_Customers_Details
Major Customers (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
customer | customer | customer | |
Concentration Risk [Line Items] | |||
Number of customers being disclosed | 5 | 5 | 5 |
Mattress Firm Holding Corp. [Member] | |||
Concentration Risk [Line Items] | |||
Number of customers being disclosed | 1 | ||
Customer Concentration Risk | Sales Revenue, Goods, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than for 10.0%) | 34.90% | 27.50% | 24.00% |
Customer Concentration Risk | Sales Revenue, Goods, Net | Mattress Firm Holding Corp. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than for 10.0%) | 10.00% | ||
Credit Concentration Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage (more than for 10.0%) | 32.00% | 26.40% |
Redeemable_Noncontrolling_Inte1
Redeemable Non-controlling Interest (Details) (Comfort Revolution) | 12 Months Ended |
Dec. 31, 2014 | |
Comfort Revolution | |
Redeemable Noncontrolling Interest | |
Percentage of noncontrolling interest from the acquisition | 55.00% |
Redemption value of put and call arrangement as a percentage of EBITDA | 7.5 |
Period of EBITDA considered for redemption value | 12 months |
Earnings_Per_Common_Share_Deta
Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | $46.60 | $37.10 | ($2.20) | $27.40 | $27.50 | $40.20 | ($1.60) | $12.50 | $108.90 | $78.60 | $106.80 |
Denominator: | |||||||||||
Denominator for basic earnings per common share—weighted average shares | 60.8 | 60.3 | 61.5 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock based compensation (in shares) | 1.3 | 1.3 | 1.4 | ||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares | 62.1 | 61.6 | 62.9 | ||||||||
Basic earnings per common share (in dollars per share) | $0.77 | $0.61 | ($0.04) | $0.45 | $0.45 | $0.66 | ($0.03) | $0.21 | $1.79 | $1.30 | $1.74 |
Diluted earnings per common share (in dollars per share) | $0.75 | $0.60 | ($0.04) | $0.44 | $0.45 | $0.65 | ($0.03) | $0.20 | $1.75 | $1.28 | $1.70 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 0.3 | 0.3 | 0.2 |
Business_Segment_Information_D
Business Segment Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of business segments | 3 | ||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $2,662.60 | $2,729.90 | $2,662.60 | $2,729.90 | |||||||
Long-lived assets | 355.6 | 411.6 | 355.6 | 411.6 | |||||||
Net sales | 2,989.80 | 2,464.30 | 1,402.90 | ||||||||
Net sales | 745.5 | 827.4 | 715 | 701.9 | 678.1 | 735.5 | 660.6 | 390.1 | 2,989.80 | 2,464.30 | 1,402.90 |
Gross profit | 294.1 | 318.5 | 268.3 | 269.5 | 272.9 | 298.7 | 254.9 | 188.4 | 1,150.40 | 1,014.90 | 714.6 |
Operating income | 76.5 | 87.1 | 50.3 | 62.4 | 74.1 | 81.2 | 44 | 44.5 | 276.3 | 243.8 | 248.3 |
Income before income taxes | 174.9 | 128 | 229.2 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 89.7 | 91.5 | 42 | ||||||||
Intercompany royalties | 0 | 0 | 0 | ||||||||
Capital expenditures | 47.5 | 40 | 50.5 | ||||||||
United States | |||||||||||
Segment information [Abstract] | |||||||||||
Long-lived assets | 287.3 | 335.9 | 287.3 | 335.9 | |||||||
Net sales | 2,188.70 | 1,736.80 | 923.4 | ||||||||
Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Long-lived assets | 8 | 9.3 | 8 | 9.3 | |||||||
Net sales | 216.4 | 190.2 | 40.8 | ||||||||
Other International | |||||||||||
Segment information [Abstract] | |||||||||||
Long-lived assets | 60.3 | 66.4 | 60.3 | 66.4 | |||||||
Net sales | 584.7 | 537.3 | 438.7 | ||||||||
Total International | |||||||||||
Segment information [Abstract] | |||||||||||
Long-lived assets | 68.3 | 75.7 | 68.3 | 75.7 | |||||||
Net sales | 801.1 | 727.5 | 479.5 | ||||||||
Tempur North America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of domestic manufacturing facilities | 2 | ||||||||||
Operating expenses | 75.5 | 83 | 58 | ||||||||
Segment information [Abstract] | |||||||||||
Net sales | 993.2 | 910 | 964.3 | ||||||||
Operating income | 84.9 | 67.6 | 144.4 | ||||||||
Income before income taxes | 19.8 | -33.8 | 126.2 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 31.7 | 42 | 30.6 | ||||||||
Intercompany royalties | 6.1 | 5.8 | 12.7 | ||||||||
Capital expenditures | 20.2 | 20.7 | 36.8 | ||||||||
Tempur North America | Bedding | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 930.5 | 830.4 | 882.3 | ||||||||
Tempur North America | Other products | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 62.7 | 79.6 | 82 | ||||||||
Tempur International | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 472 | 439.6 | 438.6 | ||||||||
Operating income | 91.6 | 107.5 | 103.9 | ||||||||
Income before income taxes | 88.5 | 102.6 | 103 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 13.7 | 12.8 | 11.4 | ||||||||
Intercompany royalties | -6.1 | -5.8 | -12.7 | ||||||||
Capital expenditures | 14.4 | 10.1 | 13.7 | ||||||||
Tempur International | Bedding | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 354.7 | 327.7 | 332.4 | ||||||||
Tempur International | Other products | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 117.3 | 111.9 | 106.2 | ||||||||
Sealy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating expenses | 22 | 26.9 | |||||||||
Segment information [Abstract] | |||||||||||
Net sales | 1,524.60 | 1,114.70 | 0 | ||||||||
Operating income | 99.8 | 68.7 | 0 | ||||||||
Income before income taxes | 66.6 | 59.2 | 0 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 44.3 | 36.7 | 0 | ||||||||
Intercompany royalties | 0 | 0 | 0 | ||||||||
Capital expenditures | 12.9 | 9.2 | 0 | ||||||||
Sealy | Bedding | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 1,441.30 | 1,040.30 | 0 | ||||||||
Sealy | Other products | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 83.3 | 74.4 | 0 | ||||||||
Operating Segments | |||||||||||
Segment information [Abstract] | |||||||||||
Long-lived assets | 355.6 | 411.6 | 355.6 | 411.6 | |||||||
Gross profit | 1,150.40 | 1,014.90 | 714.6 | ||||||||
Operating Segments | Tempur North America | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 2,431.40 | 2,110.70 | 2,431.40 | 2,110.70 | |||||||
Long-lived assets | 137.1 | 132.8 | 137.1 | 132.8 | |||||||
Gross profit | 413.9 | 392.7 | 449.3 | ||||||||
Operating Segments | Tempur International | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 463.1 | 477.7 | 463.1 | 477.7 | |||||||
Long-lived assets | 49.2 | 53.2 | 49.2 | 53.2 | |||||||
Gross profit | 274.9 | 269.8 | 265.3 | ||||||||
Operating Segments | Sealy | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 2,000.60 | 1,956.60 | 2,000.60 | 1,956.60 | |||||||
Long-lived assets | 169.3 | 225.6 | 169.3 | 225.6 | |||||||
Gross profit | 461.6 | 352.4 | 0 | ||||||||
Inter-segment eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment eliminations | Tempur North America | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 3.8 | 0.2 | 0.9 | ||||||||
Inter-segment eliminations | Tempur International | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0.6 | 0.6 | 1.5 | ||||||||
Inter-segment eliminations | Sealy | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 22.8 | 5.9 | 0 | ||||||||
Inter-segment eliminations | Intercompany eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | -27.2 | -6.7 | -2.4 | ||||||||
Inter-segment eliminations | Inter-segment eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | ($2,232.50) | ($1,815.10) | ($2,232.50) | ($1,815.10) |
Quarterly_Financial_Data_unaud2
Quarterly Financial Data (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $745.50 | $827.40 | $715 | $701.90 | $678.10 | $735.50 | $660.60 | $390.10 | $2,989.80 | $2,464.30 | $1,402.90 |
Gross profit | 294.1 | 318.5 | 268.3 | 269.5 | 272.9 | 298.7 | 254.9 | 188.4 | 1,150.40 | 1,014.90 | 714.6 |
Operating income | 76.5 | 87.1 | 50.3 | 62.4 | 74.1 | 81.2 | 44 | 44.5 | 276.3 | 243.8 | 248.3 |
Net income | $46.60 | $37.10 | ($2.20) | $27.40 | $27.50 | $40.20 | ($1.60) | $12.50 | $108.90 | $78.60 | $106.80 |
Basic earnings (loss) per common share (in dollars per share) | $0.77 | $0.61 | ($0.04) | $0.45 | $0.45 | $0.66 | ($0.03) | $0.21 | $1.79 | $1.30 | $1.74 |
Diluted earnings (loss) per common share (in dollars per share) | $0.75 | $0.60 | ($0.04) | $0.44 | $0.45 | $0.65 | ($0.03) | $0.20 | $1.75 | $1.28 | $1.70 |
GuarantorNonGuarantor_Financia2
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Operations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental condensed consolidating statements of operations | |||||||||||
Net sales | $2,989.80 | $2,464.30 | $1,402.90 | ||||||||
Cost of sales | 1,839.40 | 1,449.40 | 688.3 | ||||||||
Gross profit | 294.1 | 318.5 | 268.3 | 269.5 | 272.9 | 298.7 | 254.9 | 188.4 | 1,150.40 | 1,014.90 | 714.6 |
Selling and marketing expenses | 619.9 | 522.9 | 319.1 | ||||||||
General, administrative and other expenses | 280.6 | 266.3 | 147.2 | ||||||||
Equity income in earnings of unconsolidated affiliates | -8.3 | -4.4 | 0 | ||||||||
Royalty income, net of royalty expense | -18.1 | -13.7 | 0 | ||||||||
Operating income | 76.5 | 87.1 | 50.3 | 62.4 | 74.1 | 81.2 | 44 | 44.5 | 276.3 | 243.8 | 248.3 |
Other expense, net: | |||||||||||
Third party interest expense, net | 91.9 | 110.8 | 18.8 | ||||||||
Intercompany interest expense (income), net | 0 | 0 | 0 | ||||||||
Interest expense, net | 91.9 | 110.8 | 18.8 | ||||||||
Loss on disposal, net | 23.2 | 0 | 0 | ||||||||
Other (income) expense, net | -13.7 | 5 | 0.3 | ||||||||
Total other expense | 101.4 | 115.8 | 19.1 | ||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||
Income before income taxes | 174.9 | 128 | 229.2 | ||||||||
Income tax provision | -64.9 | -49.1 | -122.4 | ||||||||
Net income before non-controlling interest | 110 | 78.9 | 106.8 | ||||||||
Less: net income attributable to non-controlling interest | 1.1 | 0.3 | 0 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | 46.6 | 37.1 | -2.2 | 27.4 | 27.5 | 40.2 | -1.6 | 12.5 | 108.9 | 78.6 | 106.8 |
Comprehensive income | 66.9 | 72.5 | 113.9 | ||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | |||||||||||
Guarantor/non-guarantor financial information | |||||||||||
Percentage of interest held by parent | 100.00% | ||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Selling and marketing expenses | 2.4 | 2.4 | 2.5 | ||||||||
General, administrative and other expenses | 13.4 | 17.1 | 4.9 | ||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | ||||||||
Operating income | -15.8 | -19.5 | -7.4 | ||||||||
Other expense, net: | |||||||||||
Third party interest expense, net | 27 | 27.5 | 0 | ||||||||
Intercompany interest expense (income), net | 32.7 | 32.7 | 31.5 | ||||||||
Interest expense, net | 59.7 | 60.2 | 31.5 | ||||||||
Loss on disposal, net | 0 | ||||||||||
Other (income) expense, net | 0 | 0 | 0 | ||||||||
Total other expense | 59.7 | 60.2 | 31.5 | ||||||||
Income from equity investees | 159.2 | 133.4 | 134.8 | ||||||||
Income before income taxes | 83.7 | 53.7 | 95.9 | ||||||||
Income tax provision | 26.3 | 25.2 | 10.9 | ||||||||
Net income before non-controlling interest | 110 | 78.9 | 106.8 | ||||||||
Less: net income attributable to non-controlling interest | 1.1 | 0.3 | 0 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | 108.9 | 78.6 | 106.8 | ||||||||
Comprehensive income | 66.9 | 72.5 | 113.9 | ||||||||
Combined Guarantor Subsidiaries | |||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||
Net sales | 2,229.50 | 1,758.20 | 947.8 | ||||||||
Cost of sales | 1,465.30 | 1,110.50 | 509 | ||||||||
Gross profit | 764.2 | 647.7 | 438.8 | ||||||||
Selling and marketing expenses | 431.2 | 358.1 | 191.9 | ||||||||
General, administrative and other expenses | 200.5 | 181.6 | 96.4 | ||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||
Royalty income, net of royalty expense | -18.1 | -13.7 | 0 | ||||||||
Operating income | 150.6 | 121.7 | 150.5 | ||||||||
Other expense, net: | |||||||||||
Third party interest expense, net | 62.4 | 81.5 | 18.3 | ||||||||
Intercompany interest expense (income), net | -34.6 | -34.1 | -31.5 | ||||||||
Interest expense, net | 27.8 | 47.4 | -13.2 | ||||||||
Loss on disposal, net | 23.2 | ||||||||||
Other (income) expense, net | -17.2 | -0.9 | 0 | ||||||||
Total other expense | 33.8 | 46.5 | -13.2 | ||||||||
Income from equity investees | 98.7 | 93.6 | 81 | ||||||||
Income before income taxes | 215.5 | 168.8 | 244.7 | ||||||||
Income tax provision | -56.3 | -35.4 | -109.9 | ||||||||
Net income before non-controlling interest | 159.2 | 133.4 | 134.8 | ||||||||
Less: net income attributable to non-controlling interest | 1.1 | 0.3 | 0 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | 158.1 | 133.1 | 134.8 | ||||||||
Comprehensive income | 163.3 | 133.8 | 136.9 | ||||||||
Combined Non-Guarantor Subsidiaries | |||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||
Net sales | 802.9 | 728.1 | 481 | ||||||||
Cost of sales | 416.7 | 360.9 | 205.2 | ||||||||
Gross profit | 386.2 | 367.2 | 275.8 | ||||||||
Selling and marketing expenses | 186.3 | 162.4 | 124.7 | ||||||||
General, administrative and other expenses | 66.7 | 67.6 | 45.9 | ||||||||
Equity income in earnings of unconsolidated affiliates | -8.3 | -4.4 | 0 | ||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | ||||||||
Operating income | 141.5 | 141.6 | 105.2 | ||||||||
Other expense, net: | |||||||||||
Third party interest expense, net | 2.5 | 1.8 | 0.5 | ||||||||
Intercompany interest expense (income), net | 1.9 | 1.4 | 0 | ||||||||
Interest expense, net | 4.4 | 3.2 | 0.5 | ||||||||
Loss on disposal, net | 0 | ||||||||||
Other (income) expense, net | 3.5 | 5.9 | 0.3 | ||||||||
Total other expense | 7.9 | 9.1 | 0.8 | ||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||
Income before income taxes | 133.6 | 132.5 | 104.4 | ||||||||
Income tax provision | -34.9 | -38.9 | -23.4 | ||||||||
Net income before non-controlling interest | 98.7 | 93.6 | 81 | ||||||||
Less: net income attributable to non-controlling interest | 0 | 0 | 0 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | 98.7 | 93.6 | 81 | ||||||||
Comprehensive income | 60.3 | 86.2 | 86 | ||||||||
Eliminations | |||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||
Net sales | -42.6 | -22 | -25.9 | ||||||||
Cost of sales | -42.6 | -22 | -25.9 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Selling and marketing expenses | 0 | 0 | 0 | ||||||||
General, administrative and other expenses | 0 | 0 | 0 | ||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Other expense, net: | |||||||||||
Third party interest expense, net | 0 | 0 | 0 | ||||||||
Intercompany interest expense (income), net | 0 | 0 | 0 | ||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Loss on disposal, net | 0 | ||||||||||
Other (income) expense, net | 0 | 0 | 0 | ||||||||
Total other expense | 0 | 0 | 0 | ||||||||
Income from equity investees | -257.9 | -227 | -215.8 | ||||||||
Income before income taxes | -257.9 | -227 | -215.8 | ||||||||
Income tax provision | 0 | 0 | 0 | ||||||||
Net income before non-controlling interest | -257.9 | -227 | -215.8 | ||||||||
Less: net income attributable to non-controlling interest | -1.1 | -0.3 | 0 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | -256.8 | -226.7 | -215.8 | ||||||||
Comprehensive income | ($223.60) | ($220) | ($222.90) |
GuarantorNonGuarantor_Financia3
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Balance Sheets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||||
Current Assets: | ||||
Cash and cash equivalents | $62.50 | $81 | $179.30 | $111.40 |
Accounts receivable, net | 385.8 | 349.2 | ||
Inventories | 217.2 | 199.2 | ||
Income taxes payable | 0 | 0 | ||
Prepaid expenses and other current assets | 56.5 | 53.7 | ||
Deferred income taxes | 44.4 | 44.4 | ||
Total Current Assets | 766.4 | 727.5 | ||
Property, plant and equipment, net | 355.6 | 411.6 | ||
Goodwill | 736.5 | 759.6 | 216.1 | |
Other intangible assets, net | 727.1 | 750.1 | ||
Deferred tax asset | 8.6 | 10.9 | ||
Other non-current assets | 68.4 | 70.2 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Total Assets | 2,662.60 | 2,729.90 | ||
Current Liabilities: | ||||
Accounts payable | 226.4 | 191.2 | ||
Accrued expenses and other current liabilities | 233.3 | 208.4 | ||
Deferred income taxes | 0.2 | 0.8 | ||
Income taxes payable | 12 | 1.5 | ||
Current portion of long-term debt | 66.4 | 39.6 | ||
Total Current Liabilities | 538.3 | 441.5 | ||
Long-term debt | 1,535.90 | 1,796.90 | ||
Deferred income taxes | 258.8 | 286.1 | ||
Other non-current liabilities | 114.3 | 75.3 | ||
Due to affiliates | 0 | 0 | ||
Total Liabilities | 2,447.30 | 2,599.80 | ||
Redeemable non-controlling interest | 12.6 | 11.5 | ||
Total Stockholders’ Equity | 202.7 | 118.6 | 22.3 | 30.8 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 2,662.60 | 2,729.90 | ||
Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Current Assets: | ||||
Cash and cash equivalents | 0.4 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income taxes payable | 144.1 | 118.4 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Deferred income taxes | 12.4 | 10 | ||
Total Current Assets | 156.9 | 128.4 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred tax asset | 0 | 0 | ||
Other non-current assets | 6.3 | 7.6 | ||
Net investment in subsidiaries | 1,808.40 | 756 | ||
Due from affiliates | 51.4 | 1,299.90 | ||
Total Assets | 2,023 | 2,191.90 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 1.4 | 1.4 | ||
Deferred income taxes | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | 1.4 | 1.4 | ||
Long-term debt | 375 | 375 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | 1,431.30 | 1,685.40 | ||
Total Liabilities | 1,807.70 | 2,061.80 | ||
Redeemable non-controlling interest | 12.6 | 11.5 | ||
Total Stockholders’ Equity | 202.7 | 118.6 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 2,023 | 2,191.90 | ||
Combined Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 25.5 | 30.9 | 19.2 | 10.8 |
Accounts receivable, net | 241.2 | 192.6 | ||
Inventories | 158.3 | 147.5 | ||
Income taxes payable | 0 | 0 | ||
Prepaid expenses and other current assets | 28.2 | 26.3 | ||
Deferred income taxes | 26.8 | 29.3 | ||
Total Current Assets | 480 | 426.6 | ||
Property, plant and equipment, net | 287.3 | 335.9 | ||
Goodwill | 557.2 | 577.2 | ||
Other intangible assets, net | 611.9 | 624.6 | ||
Deferred tax asset | 0 | 0 | ||
Other non-current assets | 46.4 | 47 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 2,226 | 2,306.50 | ||
Total Assets | 4,208.80 | 4,317.80 | ||
Current Liabilities: | ||||
Accounts payable | 170.4 | 140.5 | ||
Accrued expenses and other current liabilities | 166.1 | 144.2 | ||
Deferred income taxes | 0 | 0 | ||
Income taxes payable | 163 | 115.2 | ||
Current portion of long-term debt | 61.8 | 36.6 | ||
Total Current Liabilities | 561.3 | 436.5 | ||
Long-term debt | 1,160.90 | 1,421.90 | ||
Deferred income taxes | 229.1 | 252.8 | ||
Other non-current liabilities | 109.3 | 69.1 | ||
Due to affiliates | 340.2 | 1,381.50 | ||
Total Liabilities | 2,400.80 | 3,561.80 | ||
Redeemable non-controlling interest | 12.6 | 11.5 | ||
Total Stockholders’ Equity | 1,795.40 | 744.5 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 4,208.80 | 4,317.80 | ||
Combined Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 36.6 | 50.1 | 160.1 | 100.6 |
Accounts receivable, net | 144.6 | 156.6 | ||
Inventories | 58.9 | 51.7 | ||
Income taxes payable | 0 | 0 | ||
Prepaid expenses and other current assets | 28.3 | 27.4 | ||
Deferred income taxes | 5.2 | 5.1 | ||
Total Current Assets | 273.6 | 290.9 | ||
Property, plant and equipment, net | 68.3 | 75.7 | ||
Goodwill | 179.3 | 182.4 | ||
Other intangible assets, net | 115.2 | 125.5 | ||
Deferred tax asset | 8.6 | 10.9 | ||
Other non-current assets | 15.7 | 15.6 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 5.3 | 0.9 | ||
Total Assets | 666 | 701.9 | ||
Current Liabilities: | ||||
Accounts payable | 56 | 50.7 | ||
Accrued expenses and other current liabilities | 65.8 | 62.8 | ||
Deferred income taxes | 0.2 | 0.8 | ||
Income taxes payable | -6.9 | 4.7 | ||
Current portion of long-term debt | 4.6 | 3 | ||
Total Current Liabilities | 119.7 | 122 | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | 29.7 | 33.3 | ||
Other non-current liabilities | 5 | 6.2 | ||
Due to affiliates | 849.4 | 940.5 | ||
Total Liabilities | 1,003.80 | 1,102 | ||
Redeemable non-controlling interest | 0 | 0 | ||
Total Stockholders’ Equity | -337.8 | -400.1 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 666 | 701.9 | ||
Eliminations | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income taxes payable | -144.1 | -118.4 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total Current Assets | -144.1 | -118.4 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred tax asset | 0 | 0 | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | -1,808.40 | -756 | ||
Due from affiliates | -2,282.70 | -3,607.30 | ||
Total Assets | -4,235.20 | -4,481.70 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Income taxes payable | -144.1 | -118.4 | ||
Current portion of long-term debt | 0 | |||
Total Current Liabilities | -144.1 | -118.4 | ||
Long-term debt | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | -2,620.90 | -4,007.40 | ||
Total Liabilities | -2,765 | -4,125.80 | ||
Redeemable non-controlling interest | -12.6 | -11.5 | ||
Total Stockholders’ Equity | -1,457.60 | -344.4 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | ($4,235.20) | ($4,481.70) |
GuarantorNonGuarantor_Financia4
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Cash Flows (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | $225.20 | $98.50 | $189.90 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | -8.5 | -1,172.90 | -4.5 |
Proceeds from disposition of business | 43.5 | 0 | 0 |
Purchases of property, plant and equipment | -47.5 | -40 | -50.5 |
Other | 2.1 | -0.1 | 0 |
Net cash used in investing activities | -10.4 | -1,213 | -55 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 271.5 | 2,992.60 | 0 |
Repayments of 2012 credit agreement | -510.9 | -1,658.30 | 0 |
Proceeds from issuance of senior notes | 0 | 375 | 0 |
Proceeds from 2011 credit facility | 0 | 46.5 | 352 |
Repayments of 2011 credit facility | 0 | -696.5 | -287 |
Net activity in investment in and advances (to) from subsidiaries and affiliates | 0 | 0 | 0 |
Payments of deferred financing costs | -3.1 | -52 | -2.3 |
Proceeds from exercise of stock options | 4.3 | 8.7 | 11.4 |
Excess tax benefit from stock based compensation | 1.7 | 5.4 | 10.5 |
Treasury shares repurchased | -2.2 | -7 | -152.6 |
Other | 0.6 | -1 | -2.8 |
Net cash (used in) provided by financing activities | -238.1 | 1,013.40 | -70.8 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 4.8 | 2.8 | 3.8 |
Increase (decrease) in cash and cash equivalents | -18.5 | -98.3 | 67.9 |
CASH AND CASH EQUIVALENTS, beginning of period | 81 | 179.3 | 111.4 |
CASH AND CASH EQUIVALENTS, end of period | 62.5 | 81 | 179.3 |
Tempur Sealy International, Inc. (Ultimate Parent) | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | -62.7 | -66.1 | -43.6 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | 0 | 0 |
Proceeds from disposition of business | 0 | ||
Purchases of property, plant and equipment | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Net cash used in investing activities | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 0 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from issuance of senior notes | 375 | ||
Proceeds from 2011 credit facility | 0 | 0 | |
Repayments of 2011 credit facility | 0 | 0 | |
Net activity in investment in and advances (to) from subsidiaries and affiliates | 59.3 | -772.8 | 187 |
Payments of deferred financing costs | 0 | -8.4 | -2.2 |
Proceeds from exercise of stock options | 4.3 | 8.7 | 11.4 |
Excess tax benefit from stock based compensation | 1.7 | 5.4 | 0 |
Treasury shares repurchased | -2.2 | 458.2 | -152.6 |
Other | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 63.1 | 66.1 | 43.6 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0.4 | 0 | 0 |
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, end of period | 0.4 | 0 | 0 |
Combined Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 191.5 | 80.9 | 140.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | -1,035.30 | 0 |
Proceeds from disposition of business | 43.5 | ||
Purchases of property, plant and equipment | -31.3 | -28.3 | -36.7 |
Other | 3 | -54.7 | -0.1 |
Net cash used in investing activities | 15.2 | -1,118.30 | -36.8 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 271.5 | 2,992.60 | 0 |
Repayments of 2012 credit agreement | -510.9 | -1,658.30 | 0 |
Proceeds from issuance of senior notes | 0 | ||
Proceeds from 2011 credit facility | 46.5 | 352 | |
Repayments of 2011 credit facility | -696.5 | -287 | |
Net activity in investment in and advances (to) from subsidiaries and affiliates | 32.1 | 874.9 | -170.8 |
Payments of deferred financing costs | -3.1 | -43.6 | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 10.5 |
Treasury shares repurchased | 0 | -465.2 | 0 |
Other | -1.7 | -1.3 | 0 |
Net cash (used in) provided by financing activities | -212.1 | 1,049.10 | -95.3 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | -5.4 | 11.7 | 8.4 |
CASH AND CASH EQUIVALENTS, beginning of period | 30.9 | 19.2 | 10.8 |
CASH AND CASH EQUIVALENTS, end of period | 25.5 | 30.9 | 19.2 |
Combined Non-Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 96.4 | 83.7 | 93 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | -8.5 | -137.6 | -4.5 |
Proceeds from disposition of business | 0 | ||
Purchases of property, plant and equipment | -16.2 | -11.7 | -13.8 |
Other | -0.9 | 54.6 | 0.1 |
Net cash used in investing activities | -25.6 | -94.7 | -18.2 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 0 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from issuance of senior notes | 0 | ||
Proceeds from 2011 credit facility | 0 | 0 | |
Repayments of 2011 credit facility | 0 | 0 | |
Net activity in investment in and advances (to) from subsidiaries and affiliates | -91.4 | -102.1 | -16.2 |
Payments of deferred financing costs | 0 | 0 | -0.1 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 0 |
Treasury shares repurchased | 0 | 0 | 0 |
Other | 2.3 | 0.3 | -2.8 |
Net cash (used in) provided by financing activities | -89.1 | -101.8 | -19.1 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 4.8 | 2.8 | 3.8 |
Increase (decrease) in cash and cash equivalents | -13.5 | -110 | 59.5 |
CASH AND CASH EQUIVALENTS, beginning of period | 50.1 | 160.1 | 100.6 |
CASH AND CASH EQUIVALENTS, end of period | 36.6 | 50.1 | 160.1 |
Eliminations | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 0 | 0 | 0 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | 0 | 0 |
Proceeds from disposition of business | 0 | ||
Purchases of property, plant and equipment | 0 | 0 | |
Other | 0 | 0 | 0 |
Net cash used in investing activities | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 0 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from issuance of senior notes | 0 | ||
Proceeds from 2011 credit facility | 0 | 0 | |
Repayments of 2011 credit facility | 0 | 0 | |
Net activity in investment in and advances (to) from subsidiaries and affiliates | 0 | 0 | 0 |
Payments of deferred financing costs | 0 | 0 | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 0 |
Treasury shares repurchased | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 0 | 0 | 0 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, end of period | $0 | $0 | $0 |
VALUATION_AND_QUALIFYING_ACCOU1
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Bad debt expense | $4.90 | $1.30 | $2.50 |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 19.3 | 8.2 | 6.8 |
Additions - Charges to Costs and Expenses | 4.9 | 1.3 | 2.5 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | -4.7 | 9.8 | -1.1 |
Balance at End of Period | 19.5 | 19.3 | 8.2 |
Valuation Allowance of Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 39.4 | 0.1 | 2.9 |
Additions - Charges to Costs and Expenses | 2.2 | 20.4 | 0 |
Additions - Charged to Other Accounts | 0 | 18.9 | 0 |
Deductions | -19.9 | 0 | -2.8 |
Balance at End of Period | $21.70 | $39.40 | $0.10 |