Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 09, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | TEMPUR SEALY INTERNATIONAL, INC. | ||
Entity Central Index Key | 1,206,264 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,621,804,954 | ||
Entity Common Stock, Shares Outstanding | 62,424,870 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||||||||||
Net sales | $ 767.3 | $ 880 | $ 764.4 | $ 739.5 | $ 745.5 | $ 827.4 | $ 715 | $ 701.9 | $ 3,151.2 | $ 2,989.8 | $ 2,464.3 |
Cost of sales | 1,902.3 | 1,839.4 | 1,449.4 | ||||||||
Gross profit | 313.1 | 359.6 | 297.5 | 278.7 | 294.1 | 318.5 | 268.3 | 269.5 | 1,248.9 | 1,150.4 | 1,014.9 |
Selling and marketing expenses | 648 | 619.9 | 522.9 | ||||||||
General, administrative and other expenses | 322 | 280.6 | 266.3 | ||||||||
Equity income in earnings of unconsolidated affiliates | (11.9) | (8.3) | (4.4) | ||||||||
Royalty income, net of royalty expense | (18.3) | (18.1) | (13.7) | ||||||||
Operating (loss) income | 91.8 | 110.9 | 52 | 54.4 | 76.5 | 87.1 | 50.3 | 62.4 | 309.1 | 276.3 | 243.8 |
Other expense, net: | |||||||||||
Interest expense, net | 96.1 | 91.9 | 110.8 | ||||||||
Loss on disposal, net | 0 | 23.2 | 0 | ||||||||
Other expense (income), net | 12.9 | (13.7) | 5 | ||||||||
Total other expense | 109 | 101.4 | 115.8 | ||||||||
Income before income taxes | 200.1 | 174.9 | 128 | ||||||||
Income tax provision | (125.4) | (64.9) | (49.1) | ||||||||
Net income before non-controlling interest | 74.7 | 110 | 78.9 | ||||||||
Less: net income attributable to non-controlling interest | 1.2 | 1.1 | 0.3 | ||||||||
Net income attributable to Tempur Sealy International, Inc. | $ (11.3) | $ 40.2 | $ 21.2 | $ 23.4 | $ 46.6 | $ 37.1 | $ (2.2) | $ 27.4 | $ 73.5 | $ 108.9 | $ 78.6 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ (0.18) | $ 0.65 | $ 0.35 | $ 0.38 | $ 0.77 | $ 0.61 | $ (0.04) | $ 0.45 | $ 1.19 | $ 1.79 | $ 1.30 |
Diluted (in dollars per share) | $ (0.18) | $ 0.64 | $ 0.34 | $ 0.38 | $ 0.75 | $ 0.60 | $ (0.04) | $ 0.44 | $ 1.17 | $ 1.75 | $ 1.28 |
Weighted average common shares outstanding: | |||||||||||
Basic (in shares) | 61.7 | 60.8 | 60.3 | ||||||||
Diluted (in shares) | 62.6 | 62.1 | 61.6 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interest | $ 74.7 | $ 110 | $ 78.9 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments, net of tax | (61.4) | (38.4) | (10.6) |
Net change in unrecognized gain on interest rate swap, net of tax | 0.7 | 0.7 | 1.3 |
Net change in pension and other post retirement benefits, net of tax | 1 | (5.6) | 3.2 |
Unrealized loss on cash flow hedging derivatives, net of tax | 5.3 | 1.3 | 0 |
Other comprehensive (loss), net of tax | (54.4) | (42) | (6.1) |
Comprehensive income | 20.3 | 68 | 72.8 |
Less: Comprehensive income attributable to non-controlling interest | 1.2 | 1.1 | 0.3 |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ 19.1 | $ 66.9 | $ 72.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 153.9 | $ 62.5 |
Accounts receivable, net | 379.4 | 385.8 |
Inventories | 199.2 | 217.2 |
Prepaid expenses and other current assets | 76.6 | 56.5 |
Total Current Assets | 809.1 | 722 |
Property, plant and equipment, net | 361.7 | 355.6 |
Goodwill | 709.4 | 736.5 |
Other intangible assets, net | 695.4 | 727.1 |
Deferred income taxes | 12.2 | 10.7 |
Other non-current assets | 67.7 | 30.8 |
Total Assets | 2,655.5 | 2,582.7 |
Current Liabilities: | ||
Accounts payable | 266.3 | 226.4 |
Accrued expenses and other current liabilities | 254 | 233.3 |
Income taxes payable | 11.2 | 12 |
Current portion of long-term debt | 181.5 | 66.4 |
Total Current Liabilities | 713 | 538.1 |
Long-term debt, net | 1,273.3 | 1,498.3 |
Deferred income taxes | 195.4 | 216.7 |
Other non-current liabilities | 171.2 | 114.3 |
Total Liabilities | 2,352.9 | 2,367.4 |
Redeemable non-controlling interest | 12.4 | 12.6 |
Stockholders' Equity | ||
Common stock, $0.01 par value, 300.0 shares authorized; 99.2 million shares issued as of December 31, 2015 and 2014 | 1 | 1 |
Additional paid in capital | 463.4 | 411.9 |
Retained earnings | 1,110.3 | 1,036.8 |
Accumulated other comprehensive loss | (110.1) | (55.7) |
Treasury stock at cost; 36.8 and 38.3 shares as of December 31, 2015 and 2014, respectively | (1,174.4) | (1,191.3) |
Total Stockholders’ Equity | 290.2 | 202.7 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | $ 2,655.5 | $ 2,582.7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
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) | 36,800,000 | 38,300,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Redeemable non-controlling interest | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Balance at beginning of period at Dec. 31, 2012 | $ 0 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2012 | 99.2 | 39.5 | |||||
Balance at beginning of period at Dec. 31, 2012 | $ 22.3 | $ 1 | $ (1,199.4) | $ 379 | $ 849.3 | $ (7.6) | |
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 | 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 | 11.5 | ||||||
Balance at end of period (in shares) at Dec. 31, 2013 | 99.2 | 38.6 | |||||
Balance at end of period at Dec. 31, 2013 | 118.6 | $ 1 | $ (1,193.1) | 396.5 | 927.9 | (13.7) | |
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 | (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 | 12.6 | 12.6 | |||||
Balance at end of period (in shares) at Dec. 31, 2014 | 99.2 | 38.3 | |||||
Balance at end of period at Dec. 31, 2014 | 202.7 | $ 1 | $ (1,191.3) | 411.9 | 1,036.8 | (55.7) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 73.5 | 73.5 | |||||
Net income attributable to non-controlling interest | 1.2 | 1.2 | |||||
Distributions paid to non-controlling interest | (1.4) | ||||||
Adjustment to pension liability, net of tax | 1 | 1 | |||||
Derivative instruments accounted for as hedges, net of tax | 6 | 6 | |||||
Foreign currency adjustments | (61.4) | (61.4) | |||||
Exercise of stock options (in shares) | (1.3) | ||||||
Exercise of stock options | 20.4 | $ 16.5 | 3.9 | ||||
Treasury shares issed (in shares) | (0.1) | ||||||
Treasury stock issued to CEO | 5 | $ 0.9 | 4.1 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | (0.1) | ||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | $ 0.8 | (0.8) | ||||
Tax adjustments related to stock compensation | 21.8 | 21.8 | |||||
Treasury stock repurchased | (1.3) | $ (1.3) | |||||
Amortization of unearned stock-based compensation | 22.5 | 22.5 | |||||
Balance at end of period at Dec. 31, 2015 | 12.4 | $ 12.4 | |||||
Balance at end of period (in shares) at Dec. 31, 2015 | 99.2 | 36.8 | |||||
Balance at end of period at Dec. 31, 2015 | $ 290.2 | $ 1 | $ (1,174.4) | $ 463.4 | $ 1,110.3 | $ (110.1) |
CONSOLIDATED STATEMENTS OF STO7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | |||
Adjustment to pension liability, tax | $ 0.5 | $ (3.4) | $ (2) |
Derivative instruments accounted for as hedges, tax | $ (2.4) | $ (0.9) | $ (0.8) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income before non-controlling interest | $ 74.7 | $ 110 | $ 78.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 71.4 | 76.3 | 74.6 |
Amortization of stock-based compensation | 22.5 | 13.4 | 16.9 |
Amortization of deferred financing costs | 20.3 | 12.5 | 7.4 |
Write-off of deferred financing costs | 0 | 0 | 4.7 |
Bad debt expense | 6.9 | 4.9 | 1.3 |
Deferred income taxes | (21.3) | (27.2) | (49.1) |
Dividends received from unconsolidated affiliates | 9.1 | 2 | 2.5 |
Equity income in earnings of unconsolidated affiliates | (11.9) | (8.3) | (4.4) |
Non-cash interest expense on 8.0% Sealy Notes | 6.3 | 5.1 | 3.7 |
Loss on sale of assets | 1.5 | 3.9 | 0.8 |
Loss on disposal of business | 0 | 23.2 | 0 |
Foreign currency transaction adjustments and other | 5.5 | 1.8 | 0.1 |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | (35.3) | (58.8) | (30.1) |
Inventories | 10.7 | (34) | (34.5) |
Prepaid expenses and other current assets | (58.7) | (14.9) | 27.9 |
Accounts payable | 46.1 | 47.8 | 28.1 |
Accrued expenses and other | 90.3 | 56.7 | 4.4 |
Income taxes | (3.9) | 10.8 | (34.7) |
Net cash provided by operating activities | 234.2 | 225.2 | 98.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | (8.5) | (1,172.9) |
Proceeds from disposition of business | 7.2 | 43.5 | 0 |
Purchases of property, plant and equipment | (65.9) | (47.5) | (40) |
Other | (1) | 2.1 | (0.1) |
Net cash used in investing activities | (59.7) | (10.4) | (1,213) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from 2012 credit agreement | 413.5 | 271.5 | 2,992.6 |
Repayments of 2012 credit agreement | (988.3) | (510.9) | (1,658.3) |
Proceeds from issuance of Senior Notes | 450 | 0 | 375 |
Proceeds from 2011 credit facility | 0 | 0 | 46.5 |
Repayments of 2011 credit facility | 0 | 0 | (696.5) |
Proceeds from exercise of stock options | 20.4 | 4.3 | 8.7 |
Excess tax benefit from stock based compensation | 21.8 | 1.7 | 5.4 |
Proceeds from issuance of treasury stock by CEO | 5 | 0 | 0 |
Treasury stock repurchased | (1.3) | (2.2) | (7) |
Payments of deferred financing costs | (8) | (3.1) | (52) |
Other | (3.8) | 0.6 | (1) |
Net cash (used in) provided by financing activities | (90.7) | (238.1) | 1,013.4 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7.6 | 4.8 | 2.8 |
Increase (decrease) in cash and cash equivalents | 91.4 | (18.5) | (98.3) |
CASH AND CASH EQUIVALENTS, beginning of period | 62.5 | 81 | 179.3 |
CASH AND CASH EQUIVALENTS, end of period | 153.9 | 62.5 | 81 |
Cash paid during the period for: | |||
Interest | 59.9 | 73.5 | 92.1 |
Income taxes, net of refunds | $ 94.9 | $ 56.3 | $ 96.4 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 12, 2013 | Mar. 19, 2013 |
8.0% Sealy Notes | ||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. The Company sells its products through two sales channels: Retail 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® and Stearns & Foster® brands. The Company’s acquisition of Sealy (“Sealy Acquisition”) is more fully described in Note 3 , “ Acquisitions and Divestitures ”. The results of operations for Sealy are reported within the Company’s North America and International reportable segments and include results for the years ended December 31, 2015, 2014 and for the period of March 18, 2013 to December 31, 2013. The Company’s Consolidated Financial Statements include the results of Comfort Revolution, LLC ("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. The Company also has ownership interests in a group of Asia-Pacific joint ventures to develop markets for Sealy® branded products in those regions. The equity method of accounting is used for these joint ventures, over which the Company has significant influence but does not have effective control, and consolidation is not otherwise required. The Company’s Asia-Pacific joint ventures are more fully described in Note 5, "Unconsolidated Affiliate Companies". (b) Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International, 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 U.S. 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 (“AOCL”), 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 AOCL 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) 2015 2014 Finished goods $ 126.7 $ 134.0 Work-in-process 14.0 11.4 Raw materials and supplies 58.5 71.8 $ 199.2 $ 217.2 (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 3-5 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 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) 2015 2014 Machinery and equipment $ 257.0 $ 243.5 Land and buildings 243.7 247.1 Computer equipment and software 78.2 69.2 Furniture and fixtures 52.3 54.9 Construction in progress 57.4 39.4 Total property, plant, and equipment $ 688.6 $ 654.1 Accumulated depreciation (326.9 ) (298.5 ) Total property, plant, and equipment, net $ 361.7 $ 355.6 Depreciation expense, which includes depreciation expense for capital lease assets, for the Company was $53.5 million , $57.7 million and $59.4 million for the years ended December 31, 2015 , 2014 and 2013 , 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). The Company did not identify any indicators of impairment for the years ended December 31, 2015, 2014, and 2013. (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 impairment may have occurred. The Company performs an annual impairment test on goodwill and indefinite lived intangible 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. The Company identified three reporting units for purposes of evaluating goodwill impairment: Tempur Sealy U.S. and Tempur Sealy Canada reporting units within the North America segment and one reporting unit comprising the International segment. In conducting the impairment test for these reporting units 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. As allowed under U.S. GAAP, 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 2015 , 2014 and 2013 , 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. The Company considers the impact of recoverable salvage value on sales returns by segment in determining its estimate of future sales returns. 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, 2013 to December 31, 2015 : (in millions) 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 Amounts accrued 123.0 Returns charged to accrual (126.8 ) Balance as of December 31, 2015 $ 28.5 (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 Company provides warranties on mattresses with varying warranty terms. Tempur mattresses sold in the North America segment and all Sealy mattresses have warranty terms ranging from 10 to 25 years, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. Tempur mattresses sold in the International segment have warranty terms ranging from 5 to 15 years, non-prorated for the first 5 years and then prorated on a straight-line basis for the last 10 years of the warranty term. Tempur pillows have a warranty term of 3 years, non-prorated. The Company had the following activity for warranties from December 31, 2013 to December 31, 2015 : (in millions) 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 Amounts accrued 28.8 Warranties charged to accrual (30.5 ) Balance as of December 31, 2015 $ 29.6 As of December 31, 2015 and 2014 , $14.9 million and $16.1 million , of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $14.7 million and $15.2 million of accrued warranty expense is 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 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 $23.3 million and $19.5 million as of December 31, 2015 and 2014 , 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 $11.1 million , $14.7 million and $12.5 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Amounts included in cost of sales for shipping and handling were $161.6 million , $169.2 million and $142.5 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. During the periods ended December 31, 2015 and 2014, the Company recognized other income, net of expense, of $9.5 million and $15.6 million , respectively, from certain other non-recurring items, including the partial settlement of a legal dispute. No amounts were recognized in 2013. (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 includes 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. The Company records the liability associated with cooperative advertising, rebates and other promotion programs when sales are made to these customers. 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 years. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to the 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 $360.5 million , $326.7 million and $274.2 million for the years ended December 31, 2015 , 2014 and 2013 , 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 of the customer's underlying advertisement 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 $13.7 million and $9.7 million as of December 31, 2015 and 2014 , 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 $28.7 million , $21.6 million and $21.0 million for the years ended December 31, 2015 , 2014 and 2013 , 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 as a direct reduction from the carrying amount of the corresponding debt liability in the accompanying Consolidated Balance Sheets and the related amortization is included 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 $18.3 million , $18.1 million and $13.7 million for the years ended December 31, 2015 , 2014 and 2013, respectively. (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 pursuant to the Internal Revenue Code. 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 and the Company's other debt agreements, the Board of Directors may authorize share repurchases of the Company’s common stock (“Stock Repurchase Authorizations”). Stock 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. Stock repurchased under Stock Repurchase Authorizations are held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. Treasury stock is accounted for under the cost method and reported as a reduction of stockholders’ equity. Stock Repurchase Authorizations may be suspended, limited or terminated at any time without notice. During 2015, the Company sold 69,686 shares of Common Stock pursuant to a subscription agreement entered into with the Company's Chief Executive Officer ("CEO") in connection with his hiring by the Company. These shares were issued through treasury stock and the Company received $5.0 million from the CEO as proceeds from the issuance of the treasury shares. Please refer to "Recent Sales of Unregistered Securities" included in Part II, ITEM 5 for additional information. (x) Self-Insurance. The Company is self-insured up to $0.8 million per claim per year for certain losses related to medical claims with excess loss coverage. 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, 2015 and 2014 , $6.6 million and $4.8 million , respectively, of the recorded undiscounted liability is included in accrued expenses and other current liabilities and $11.5 million and $10.0 million , respectively, is 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 two of its active Sealy plants and nine 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. (bb) Restructuring Activities. For the year ended December 31, 2015, the Company initiated certain restructuring activities, which included headcount reductions and store closures. As a result, the Company recognized $13.5 million of restructuring expenses consisting primarily of severance benefits and costs associated with store closures, which are recorded in cost of sales; selling and marketing expenses; and general, administrative and other expenses. (cc) Subsequent events . On February 1, 2016, the Board of Directors authorized a new Stock Repurchase Authorization for up to $200.0 million of the Company's common stock. Stock repurchases under this program may be made through open market transactions, ne |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
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, 2017, 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 April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability. This ASU is effective for annual reporting periods beginning after December 15, 2015 and must be adopted retrospectively; however, early adoption is permitted. The Company has elected to early adopt this ASU as of December 31, 2015, and as a result debt issuance costs of $24.8 million are reducing the carrying amounts of the Company’s long-term debt. As required under the ASU, this adoption resulted in the reclassification of $37.6 million of debt issuance costs included in other non-current assets to long-term debt on the Consolidated Balance Sheet as of December 31, 2014. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet, rather than separating deferred taxes into current and noncurrent amounts. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and can be adopted prospectively or retrospectively; however, early adoption is permitted. The Company has elected to early adopt this ASU as of December 31, 2015 on a retrospective basis. As required under this ASU, this adoption resulted in the reclassification of $2.2 million current deferred income tax assets to noncurrent deferred income tax assets and $0.2 million current deferred income tax liabilities to noncurrent deferred income tax liabilities in the Consolidated Balance Sheet as of December 31, 2014. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Sealy Acquisition On March 18, 2013, the Company completed the Sealy Acquisition. The Company incurred $18.7 million of transaction costs for the year ended December 31, 2013. There were no transaction expenses incurred in 2014 or 2015. 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 with respect to the 2020 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 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 $ 2,757.2 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 Sale of Portland Manufacturing Facility Effective May 6, 2015, the Company sold its Sealy manufacturing facility in Portland, Oregon, which was previously held for sale and recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company received $7.2 million in proceeds on the sale and recorded a gain of $0.4 million , which is included in other expense (income), net in the Consolidated Statement of Income for the year ended December 31, 2015. Acquisition of Certain Assets and License Rights in Japan 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 . The Company accounted for this business combination using the acquisition method. The preliminary allocation of the purchase price was 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. The Company finalized the allocation of the purchase price during the year ended December 31, 2015, which did not result in any material measurement period adjustments. Disposal of Innerspring Component Production Facilities and Associated Equipment 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 Leggett & Platt (“L&P”) for total consideration of approximately $47.8 million , which included $1.5 million of other non-cash consideration. The working capital adjustment period ended during the quarter ended September 30, 2014 and resulted in a cash payment to L&P of $2.8 million , which reduced the total consideration received to $45.0 million . The carrying amount of the net assets sold in this transaction was approximately $66.8 million , including an allocation of goodwill within the historical Sealy segment which was determined using the relative fair value method. As a result, a loss on disposal of business was recorded of $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 discussed above. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Prior to January 1, 2015, the Company operated under three reportable segments: Tempur North America, Tempur International and Sealy. The following summarizes changes to the Company’s goodwill, by reportable segment for the period December 31, 2013 to December 31, 2014: (in millions) Tempur Tempur Sealy Total Balance as of December 31, 2013 $ 107.7 $ 107.3 $ 544.6 $ 759.6 Disposal of business — — (21.4 ) (21.4 ) Goodwill resulting from acquisitions — 2.3 — 2.3 Foreign currency translation adjustments (1.5 ) (1.2 ) (1.3 ) (4.0 ) Balance as of December 31, 2014 $ 106.2 $ 108.4 $ 521.9 $ 736.5 Effective January 1, 2015, the Company realigned its organizational structure and updated its segments in light of the progress made in 2013 and 2014 integrating Sealy into its historical business. The Company's updated reportable segments are North America and International. For additional information regarding the Company's realignment and reportable segment determination, see Note 16, "Segment Information". As a result of the Company's segment realignment, the composition of the Company's reporting units for the evaluation of goodwill impairment also changed. Historically, the Company's reporting units were the same as the reportable segments: Tempur North America, Tempur International, and Sealy. Effective January 1, 2015, the Company identified three reporting units for purposes of evaluating goodwill impairment: Tempur Sealy U.S. and Tempur Sealy Canada reporting units within the North America segment and one reporting unit comprising the International segment. As the composition of the reporting units changed, the Company reassigned historical goodwill to the new reporting units based on a relative fair value allocation approach. The relative fair value allocation approach yielded the reassignment of total Sealy goodwill as of December 31, 2014 of $521.9 million . The following summarizes the reassignment of goodwill from the historical segments to the new segments: (in millions) Reassigned Goodwill by Segment North America segment: Tempur North America segment goodwill as of January 1, 2015 $ 106.2 Sealy segment goodwill as of January 1, 2015 reassigned to the North America segment 468.3 Total North America segment goodwill as of January 1, 2015 $ 574.5 International segment: Tempur International segment goodwill as of January 1, 2015 $ 108.4 Sealy segment goodwill as of January 1, 2015 reassigned to the International segment 53.6 Total International segment goodwill as of January 1, 2015 $ 162.0 The following summarizes changes to the Company’s goodwill, by new reportable segment for the period January 1, 2015 to December 31, 2015: (in millions) North America International Consolidated Balance as of January 1, 2015 $ 574.5 $ 162.0 $ 736.5 Foreign currency translation adjustments and other (11.7 ) (15.4 ) (27.1 ) Balance as of December 31, 2015 $ 562.8 $ 146.6 $ 709.4 The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2015 December 31, 2014 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 558.1 $ — $ 558.1 $ 569.0 $ — $ 569.0 Amortized intangible assets: Contractual distributor relationships 15 $ 84.8 $ 15.8 $ 69.0 $ 88.2 $ 10.4 $ 77.8 Technology and other 4-10 90.8 39.2 51.6 92.6 32.6 60.0 Patents, other trademarks, and other trade names 5-20 27.2 16.9 10.3 27.3 14.6 12.7 Customer databases, relationships and reacquired rights 2-5 24.5 18.1 6.4 24.1 16.5 7.6 Total $ 785.4 $ 90.0 $ 695.4 $ 801.2 $ 74.1 $ 727.1 Amortization expense relating to intangible assets for the Company was $17.9 million , $18.5 million and $15.2 million for the years ended December 31, 2015 , 2014 and 2013 , 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 for the years ending December 31: (in millions) Amount 2016 $ 17.9 2017 17.2 2018 15.4 2019 14.8 2020 13.8 |
Unconsolidated Affiliate Compan
Unconsolidated Affiliate Companies | 12 Months Ended |
Dec. 31, 2015 | |
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 $13.6 million and $12.9 million at December 31, 2015 and 2014 , 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, 2015 and 2014 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) 2015 2014 Current assets $ 50.0 $ 49.7 Non-current assets 15.7 5.1 Current liabilities 37.3 29.7 Equity 28.4 25.1 (in millions) 2015 2014 Revenue $ 131.6 $ 99.2 Gross profit 85.0 62.1 Income from operations 26.2 16.8 Net income 20.1 13.1 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt for the Company consists of the following: (in millions) December 31, 2015 December 31, 2014 Debt: Amount Rate Amount Rate Maturity Date Revolving credit facility $ — N/A $ 16.0 (1) March 18, 2018 Term A Facility 409.4 (2) 484.5 (2) March 18, 2018 Term B Facility 100.1 (3) 594.4 (3) March 18, 2020 2020 Senior Notes 375.0 6.875% 375.0 6.875% December 15, 2020 2023 Senior Notes 450.0 5.625% — —% October 15, 2023 8.0% Sealy Notes 111.1 8.0% 104.7 8.0% July 15, 2016 Capital lease obligations and other 34.0 27.7 Various Total debt 1,479.6 1,602.3 Less: deferred financing costs (24.8 ) (37.6 ) Total debt, net 1,454.8 1,564.7 Less: current portion (181.5 ) (66.4 ) Total long term debt, net 1,273.3 1,498.3 (1) Interest at Base Rate plus applicable margin of 2.00% or LIBOR plus applicable margin of 3.00% as of December 31, 2014. As of December 31, 2015, there were no borrowings under the Revolver. As of December 31, 2014, the Revolver LIBOR plus applicable margin interest rate was 3.16%. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2015 and 2.25% as of December 31, 2014. As of December 31, 2015 and 2014, the Term A Facility total LIBOR plus applicable margin interest rate was 2.42%. (3) Interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2015 and December 31, 2014. As of December 31, 2015 and 2014, the Term B Facility total LIBOR plus applicable margin was 3.50%. 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. 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 subtract from consolidated funded debt an amount equal to 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, 2015 , domestic qualified cash was $121.8 million and foreign qualified cash was $19.3 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. The Company used the proceeds from the issuance of its 5.625% senior notes due 2023 (the "2023 Senior Notes") and an additional $50.0 million of available cash to voluntarily prepay $479.9 on the Term B Facility and $13.9 million on the Term A Facility. In conjunction with the voluntary prepayment, the Company recognized accelerated amortization of $12.0 million of the associated deferred financing costs, which is included within interest expense, net in the accompanying Consolidated Statements of Income. The Company is in compliance with all applicable covenants at December 31, 2015 . Senior Notes 2023 Senior Notes On September 24, 2015, Tempur Sealy International issued $450.0 million aggregate principal amount of 5.625% senior notes due 2023 (the "2023 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 2023 Senior Notes were issued pursuant to an indenture, dated as of September 24, 2015 (the “2023 Indenture”), among Tempur Sealy International, certain subsidiaries of Tempur Sealy International as guarantors (the “Combined Guarantor Subsidiaries”), and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2023 Senior Notes are general unsecured senior obligations of Tempur Sealy International and are guaranteed on a senior unsecured basis by the Combined Guarantor Subsidiaries. The 2023 Senior Notes mature on October 15, 2023, and interest is payable semi-annually in arrears on each April 15 and October 15, beginning on April 15, 2016. The gross proceeds from the 2023 Senior Notes were used to refinance a portion of the term loan debt under the 2012 Credit Agreement and to pay related fees and expenses. Tempur Sealy International has the option to redeem all or a portion of the 2023 Senior Notes at any time on or after October 15, 2018. The initial redemption price is 104.219% of the principal amount, plus accrued and unpaid interest, if any. The redemption price will decline each year after 2018 until it becomes 100.0% of the principal amount beginning on October 15, 2021. In addition, Tempur Sealy International has the option at any time prior to October 15, 2018 to redeem some or all of the 2023 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 2023 Senior Notes prior to October 15, 2018, under certain circumstances with the net cash proceeds from certain equity offerings, at 105.625% of the principal amount plus accrued and unpaid interest, if any. Tempur Sealy International may make such redemptions as described in the preceding sentence only if, after any such redemption, at least 65.0% of the original aggregate principal amount of the 2023 Senior Notes issued remains outstanding. The 2023 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. In conjunction with the issuance and sale of the 2023 Senior Notes, Tempur Sealy International and the Combined Guarantor Subsidiaries have agreed through a Registration Rights Agreement to exchange the 2023 Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act. Tempur Sealy International and the Combined Guarantor Subsidiaries are required to pay additional interest if the 2023 Senior Notes are not registered within the time periods specified within the Registration Rights Agreement. 2020 Senior Notes On December 19, 2012, Tempur Sealy International issued $375.0 million aggregate principal amount of 6.875% senior notes due 2020 (the “2020 Senior Notes”) to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933 and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 2020 Senior Notes were issued pursuant to an indenture, dated as of December 19, 2012 (the “2020 Indenture” and together with the 2023 Indenture, the "Indentures"), among the Company, the Combined Guarantor Subsidiaries (the Combined Guarantor Subsidiaries are the same under both the 2023 Indenture and 2020 Indenture), and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2020 Senior Notes are general unsecured senior obligations of Tempur Sealy International and are guaranteed on a senior unsecured basis by the Combined Guarantor Subsidiaries. The 2020 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 2020 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 Combined Guarantor Subsidiaries of the 2020 Senior Notes. Tempur Sealy International has the option to redeem all or a portion of the 2020 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 2020 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 2020 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 2020 Senior Notes issued remains outstanding. The 2020 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 2020 Senior Notes, Tempur Sealy International and the Combined Guarantor Subsidiaries agreed through a Registration Rights Agreement to exchange the 2020 Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act. Tempur Sealy International and the Combined Guarantor Subsidiaries would have been required to pay additional interest if the 2020 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 2020 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, 2015 , the carrying value of the 8.0% Sealy Notes is $111.1 million , which includes $14.9 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, 2014 , the 8.0% Sealy Notes had a carrying value of $104.7 million , which includes $8.7 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, 2015 and 2014. The approximate remaining life of the leases ranges from 2 to 10 years as of December 31, 2015, with several including an option to extend the contract term. Deferred Financing Costs In conjunction with the voluntary prepayment on amounts outstanding under the 2012 Credit Facility using the proceeds from issuance of the 2023 Senior Notes and an additional $50.0 million of available cash, the Company recorded accelerated amortization of $12.0 million of the associated deferred financing costs which is included in interest expense, net in the Consolidated Statement of Income. Additionally, as a result of the issuance of the 2023 Senior Notes, $8.0 million of deferred financing costs were capitalized in 2015 and will be amortized as interest expense over the term of the 2023 Senior Notes, 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, which is included in interest expense, net in the Consolidated Statement of Income. 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 3 to 5 years of the debt instrument period, in conjunction with the initial deferred financing costs capitalized in 2013 and discussed above. As a result of the Company’s issuance of the 2020 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 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 which is included in interest expense, net in the Consolidated Statement of Income. Future Obligations As of December 31, 2015, 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 2016 $ 181.5 2017 58.0 2018 314.1 2019 7.3 2020 460.8 Thereafter 457.9 Total $ 1,479.6 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and 2014. At December 31, 2015 and 2014, the Company had foreign exchange forward contracts recorded at fair value. Additionally, as of December 31, 2014, the Company had an interest rate swap agreement 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 was not material for the years ended December 31, 2015 or 2014. The following table provides a summary by level of the fair value of foreign exchange forward contracts, which are measured on a recurring basis: Fair Value Measurements at December 31, 2015 Using: (in millions) December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 12.5 $ 12.5 — $ 12.5 $ — $ 12.5 $ — Liabilities: Foreign exchange forward contracts $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — Fair Value Measurements at December 31, 2014 Using: (in millions) December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — Liabilities: Foreign exchange forward contracts $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — 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 2023 Senior Notes was approximately $453.4 million at December 31, 2015 . The fair value of the 2020 Senior Notes was approximately $393.8 million and $398.4 million at December 31, 2015 and 2014 , respectively. The fair value of the 8.0% Sealy Notes was approximately $112.7 million and $110.7 million at December 31, 2015 and 2014 , respectively. The fair value of the 2023 Senior Notes, 2020 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 Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
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. Certain foreign exchange forward contracts relate 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 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 on its variable rate debt. 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 interest rate swap agreement expired on December 30, 2015. Foreign Exchange Forward Contracts As of December 31, 2015 and December 31, 2014 , the fair value of the Company's derivative financial instruments included in the accompanying Consolidated Balance Sheets was recorded as follows: Asset Derivatives Balance Sheet Location Fair Value (in millions) December 31, 2015 December 31, 2014 Derivatives designated as hedging instruments Foreign exchange forward contracts - current Prepaid expenses and other current assets $ 7.7 $ 1.8 Foreign exchange forward contracts - non-current Other non-current assets 1.3 — Derivatives not designated as hedging instruments Foreign exchange forward contracts - current Prepaid expenses and other current assets 3.5 — $ 12.5 $ 1.8 Liability Derivatives Balance Sheet Location Fair Value (in millions) December 31, 2015 December 31, 2014 Derivatives not designated as hedging instruments Foreign exchange forward contracts - current Accrued expenses and other current liabilities $ 1.2 $ 0.1 $ 1.2 $ 0.1 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, 2015 , 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 $87.0 million . These foreign exchange forward contracts have maturities ranging from January 2016 to September 2017. 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 AOCL until the underlying hedged item is reflected in the Company's accompanying Consolidated Statements of Income, at which time the effective amount in AOCL is reclassified to cost of sales in the accompanying Consolidated Statements of Income. The Company expects to reclassify a gain of approximately $5.7 million , net of tax, over the next 12 months based on December 31, 2015 exchange rates. In the event that the gains or losses in AOCL 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. 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, 2015 | |
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 $7.3 million , $5.0 million and $1.7 million of expenses associated with the 401(k) Plan for the years ended December 31, 2015 , 2014 and 2013 , respectively. Defined Contribution Plans Substantially all employees in the Company's North America segment 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 $2.8 million , $1.7 million and $4.0 million for the years ended December 31, 2015 , 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 two of its active Sealy plants and nine 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 (collectively, referred to as the "Plans"). The 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 Plans have 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 which is included in general, administrative and other expenses included in the accompanying Consolidated Statements of Income for the years ended December 31 were as follows: (in millions) 2015 2014 2013 Service cost $ 0.8 $ 0.9 $ 0.9 Interest cost 1.9 1.8 1.3 Expected return on assets (2.2 ) (2.1 ) (1.5 ) Curtailment loss — 0.1 — Amortization of net gain — (0.1 ) — Settlement loss 1.3 — — Net periodic pension cost $ 1.8 $ 0.6 $ 0.7 The other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss for the years ended December 31 were: (in millions) 2015 2014 2013 Net loss $ 0.2 $ 9.0 $ (6.2 ) Amortization of prior service cost — (0.2 ) 1.0 Amortization or settlement recognition of net gain (loss) (1.3 ) 0.1 — New prior service cost 0.1 0.1 — Total recognized in other comprehensive (income) loss $ (1.0 ) $ 9.0 $ (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: 2015 2014 2013 Discount rate (a) 4.12 % 4.01 % 4.23 % Expected long term return on plan assets 7.05 % 7.00 % 6.92 % (a) The discount rates used in 2015 to determine the expenses for the United States retirement plan and Canadian retirement plan were 3.94% and 4.20% , respectively. 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 the Company’s Plans is December 31. The funded status of the Plans as of December 31 were as follows: (in millions) 2015 2014 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 47.1 $ 36.4 Service cost 0.8 0.9 Interest cost 1.9 1.8 Plan amendments 0.1 0.2 Actuarial (gain) loss (3.3 ) 9.2 Curtailments — (0.1 ) Settlements (16.9 ) — Benefits paid (0.8 ) (0.7 ) Expenses paid (0.1 ) (0.2 ) Foreign currency exchange rate changes (0.6 ) (0.4 ) Projected benefit obligation at end of year $ 28.2 $ 47.1 Change in Plan Assets: Fair value of plan assets at beginning of year $ 32.5 $ 30.5 Actual (loss) return on assets (1.3 ) 2.2 Employer contribution 1.1 1.0 Settlements (16.9 ) — Benefits paid (0.8 ) (0.7 ) Expenses paid (0.1 ) (0.2 ) Foreign currency exchange rate changes (0.6 ) (0.3 ) Fair value of plan assets at end of year $ 13.9 $ 32.5 Funded status $ (14.3 ) $ (14.6 ) The Company’s defined benefit pension plan for U.S. Sealy employees is underfunded. As of December 31, 2015 , the projected benefit obligation and fair value of plan assets were $25.3 million and $10.8 million , respectively. As of December 31, 2014, the projected benefit obligation and fair value of plan assets were $43.7 million and $28.8 million , respectively. The Company’s defined benefit pension plan for employees of Sealy Canada, Ltd. is overfunded. As of December 31, 2015 , the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $2.9 million and $3.1 million , respectively. 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. During the fourth quarter of 2015, the Company offered a lump-sum settlement to terminated, vested participants in the defined benefit pension plan for U.S. Sealy employees, which resulted in the recognition of a settlement loss of approximately $1.3 million and reduction of the benefit obligation and plan assets of approximately $17.0 million . The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2015 2014 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 14.5 $ 14.9 Non-current benefit asset 0.2 0.3 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: 2015 2014 Discount rate (a) 4.44 % 5.00 % (a) The discount rates used in 2015 to determine the expenses for the United States retirement plan and Canadian retirement plan were 4.26% and 4.30% , respectively. The discount rates used in 2014 to determine the benefit obligations for the United States and Canadian defined benefit pension plans 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 2016 . Plan Contributions and Expected Benefit Payments During 2016 , the Company expects to contribute $3.2 million to the Company's Plans from available cash and cash equivalents. The following table presents estimated future benefit payments: (in millions) Fiscal 2016 $ 0.9 Fiscal 2017 0.9 Fiscal 2018 1.0 Fiscal 2019 1.0 Fiscal 2020 1.1 Fiscal 2021 ‑ Fiscal 2025 6.5 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: 2015 2015 Common/collective trust consisting primarily of: Equity securities 60.00 % 74.83 % Debt securities 40.00 % 21.03 % Other — % 4.14 % Total plan assets 100.00 % 100.00 % 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, 2015 was 7.00% for the defined benefit pension plan for U.S. Sealy Employees and 5.50% for the defined benefit pension plan for Sealy Canada Ltd. 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 common collective trusts 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 plan assets at December 31 by asset category was as follows: (in millions) 2015 Quoted Prices in Significant Other Significant Asset Category Common/collective trust U.S. equity $ 7.7 $ — $ 7.7 $ — International equity 2.7 — 2.7 — Total equity based funds 10.4 — 10.4 — Common/collective trust - fixed income 2.9 — 2.9 — Money market funds 0.6 — 0.6 — Total $ 13.9 $ — $ 13.9 $ — (in millions) 2014 Quoted Prices in Significant Other Significant 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 7.0 — 7.0 — Money market funds 0.7 — 0.7 — Total $ 32.5 $ — $ 32.5 $ — 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, 2015 and 2014, 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. Because 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) 2015 2014 Multi‑employer retirement plan expense $ 5.0 $ 4.7 Multi‑employer health and welfare plan expense 2.4 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) contributed to the multi‑employer plan by one employer may be used to provide benefits to employees of other participating employers; 2) 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) 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, 2015 and 2014, respectively: (in millions) Pension Fund EIN/Pension Plan Number Pension Protection Act (1) 2015 FIP/RP Status (2) Contributions of the Company 2015 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions United Furniture Workers Pension Fund A (4) 13-5511877-001 Red Implemented $ 1.1 Yes, 10% 2016 2013, 2014, 2015 Pension Plan of the National Retirement Fund 13-6130178-001 Red Implemented $ 1.2 Yes, 10% 2016 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 Red Implemented $ 0.5 Yes, 10% 2016 N/A (in millions) Pension Fund EIN/Pension Plan Number Pension Protection Act (1) 2014 FIP/RP Status (2) Contributions of the Company 2014 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions 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 (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 for each plan is based on information that the Company received from that plan and is certified by that 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, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity (a) Common Stock. 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. (b) Treasury Stock . Tempur Sealy International sold 69,686 shares of Common Stock pursuant to a subscription agreement entered into with the Company's CEO in connection with his hiring by the Company. These shares were issued through treasury stock and the Company received $5.0 million as proceeds from the issuance of the treasury shares from the CEO. Please refer to "Recent Sales of Unregistered Securities" included in Part II, ITEM 5 for additional information. (c) Accumulated Other Comprehensive Loss (“AOCL”). AOCL consisted of the following: Year Ended December 31, (in millions) 2015 2014 2013 Foreign Currency Translation Balance at beginning of period $ (54.0 ) $ (15.6 ) $ (5.0 ) Other comprehensive (loss) income: Foreign currency translation adjustments (1) (61.4 ) (38.4 ) (13.3 ) Tax benefit (1) — — 2.7 Balance at end of period $ (115.4 ) $ (54.0 ) $ (15.6 ) Interest Rate Swap Agreement Balance at beginning of period $ (0.7 ) $ (1.4 ) $ (2.7 ) Other comprehensive income: Net change from period revaluations: 3.1 3.0 5.2 Tax expense (2) (1.2 ) (1.2 ) (1.5 ) Total other comprehensive income before reclassifications, net of tax 1.9 1.8 3.7 Net amount reclassified to earnings (3) (1.9 ) (1.9 ) (3.2 ) Tax benefit (2) 0.7 0.8 0.8 Total amount reclassified from accumulated other comprehensive loss, net of tax (1.2 ) (1.1 ) (2.4 ) Total other comprehensive income 0.7 0.7 1.3 Balance at end of period $ — $ (0.7 ) $ (1.4 ) Pension Benefits Balance at beginning of period $ (2.4 ) $ 3.2 $ — Other comprehensive income: Net change from period revaluations: 0.2 (9.0 ) 5.2 Tax (expense) benefit (2) — 3.4 (2.0 ) Total other comprehensive income (loss) before reclassifications, net of tax 0.2 (5.6 ) 3.2 Net amount reclassified to earnings $ 1.3 $ — $ — Tax benefit (2) (0.5 ) — 0.0 Total amount reclassified from accumulated other comprehensive income, net of tax 0.8 — — Total other comprehensive income (loss) 1.0 (5.6 ) 3.2 Balance at end of period $ (1.4 ) $ (2.4 ) $ 3.2 Foreign Exchange Forward Contracts Balance at beginning of period $ 1.3 $ — $ — Other comprehensive income (loss): Net change from period revaluations: 14.6 3.4 — Tax expense (2) (3.8 ) (0.9 ) — Total other comprehensive income before reclassifications, net of tax 10.8 2.5 — Net amount reclassified to earnings (4) (7.4 ) (1.6 ) — Tax benefit (2) 1.9 0.4 — Total amount reclassified from accumulated other comprehensive income, net of tax (5.5 ) (1.2 ) — Total other comprehensive income 5.3 1.3 — Balance at end of period $ 6.6 $ 1.3 $ — (1) In 2015, 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. (4) This amount was included in cost of sales, net on the accompanying Consolidated Statements of Income . |
Other Items
Other Items | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 2014 Wages and benefits $ 72.4 $ 60.0 Advertising 48.4 41.6 Sales returns 28.5 32.3 Rebates 11.5 22.8 Warranty 14.9 16.1 Other 78.3 60.5 $ 254.0 $ 233.3 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
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 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 primarily of a mix of stock options and performance restricted stock units ("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, 2015 included PRSUs, stock options, restricted stock units ("RSUs") and deferred stock units ("DSUs"). A summary of the Company’s stock-based compensation expense is presented below: December 31, (in millions) 2015 2014 2013 PRSU expense $ 13.7 $ 3.5 $ 3.0 Stock option expense 6.6 7.0 8.3 RSU/DSU expense 2.2 2.9 5.6 Total stock-based compensation expense $ 22.5 $ 13.4 $ 16.9 The Company granted PRSUs during the years ended December 31, 2015 , 2014 and 2013 . 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 for the year ended December 31, 2014 after re-evaluation of the probability of meeting certain required performance goals and determining that the performance goals would not be met. The Company did not record any similar benefits in 2015 or 2013. A summary of the Company’s PRSU activity and related information for the years ended December 31, 2015 and 2014 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2013 0.3 $ 39.04 Granted 0.3 51.87 Vested 0.0 37.05 Forfeited (0.3 ) 39.38 Awards unvested at December 31, 2014 0.3 $ 53.45 Granted 1.7 70.43 Vested — — Forfeited (0.1 ) 56.74 Awards unvested at December 31, 2015 1.9 $ 68.17 On September 4, 2015, in connection with the hiring of Scott L. Thompson as the new CEO, the Company and Mr. Thompson entered into an agreement by which the Company granted Mr. Thompson 620,000 PRSUs that vest if the Company achieves more than $650 million Adjusted EBITDA for 2017 (the "2017 Aspirational Plan PRSUs"). All of the 2017 Aspirational Plan PRSUs will vest in full if the Company achieves Adjusted EBITDA in 2017 greater than $650 million . In addition, if this target is not met in 2017 but the Company achieves more than $650 million in Adjusted EBITDA for 2018, then one-third of the total 2017 Aspirational Plan PRSUs will vest, and the remaining 2017 Aspirational Plan PRSUs will be forfeited. If the Company does not achieve more than $650 million of Adjusted EBITDA in either 2017 or 2018, then all of the 2017 Aspirational Plan PRSUs will be forfeited. Adjusted EBITDA is defined as the Company’s “Consolidated EBITDA” as such term is defined in the Company’s 2012 Credit Agreement. Based on the price of the Company’s common stock on the grant date, the total unrecognized compensation expense related to this award if the performance target is met for 2017 is $44.5 million , which would be expensed over the service period if it becomes probable of achieving the performance condition. Additionally, during the fourth quarter, the Company granted certain other senior executives and key employees a total of 770,000 2017 Aspirational Plan PRSUs with substantially the same terms as the 2017 Aspirational Plan PRSUs issued to the CEO as described above. Based on the price of the Company’s common stock on the respective grant dates, the total unrecognized compensation expense related to these awards if the performance target is met for 2017 is $56.6 million , which would be expensed over the service period if it becomes probable of achieving the performance condition. The Company did not record any stock-based compensation expense related to the 2017 Aspirational Plan PRSUs during the twelve months ended December 31, 2015, as it is not considered probable as of this date that the Company will achieve the specified performance target as of December 31, 2017 or December 31, 2018. The Company will continue to evaluate the probability of achieving the performance condition going forward and record the appropriate expense if necessary. The following table shows the PRSUs granted under the 2013 Plan and related Long-Term Incentive Plan, the maximum number of shares to be awarded under the PRSUs granted during the twelve months ended December 31, 2015 and the performance date and vesting schedule of the PRSUs granted. (shares in millions) Number of Shares Granted Maximum Number of Shares to be Awarded Performance Date Vesting Schedule 0.26 0.78 December 31, 2017 December 31, 2017 1.39 1.39 December 31, 2017 (1) December 31, 2017 (1) 0.07 0.07 December 31, 2016 Three annual installments beginning on September 4, 2016 (1) These shares will vest in full if the Company achieves the performance metric per the award agreement in 2017. In addition, if this target is not met in 2017 but the Company achieves the performance metric in 2018, then one-third, or 0.46 million, of the PRSUs will vest, and the remaining PRSUs shall be forfeited. During the year ended December 31, 2015 , no shares were issued from treasury stock to satisfy payouts under the PRSUs. During the year end December 31, 2014, shares of common stock with an aggregate intrinsic value of $1.4 million were issued from treasury stock to satisfy payouts under the PRSUs following the satisfaction of certain financial metrics over the one year performance period. The shares were issued from treasury stock to satisfy payouts under the PRSUs at 100.0% of the target award, the maximum payout. During the year ended December 31, 2013, shares granted in 2010 with an aggregate intrinsic value of $14.9 million were paid out from treasury stock following the satisfaction of certain financial metrics over the performance period. The PRSUs were paid out 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, 2015 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, 2015 , 2014 and 2013 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, 2015 2014 2013 Expected volatility range of stock 34.0% - 36.2% 56.7% - 66.5% 63.0% - 72.8% Expected life of option, range in years 3 - 5 2 - 4 2 - 3 Risk-free interest range rate 0.9% - 1.5% 0.4% - 1.4% 0.3% - 0.6% Expected dividend yield on stock 0.0% - 0.0% 0.6% - 0.7% 0.6% - 0.9% A summary of the Company’s unvested shares relating to stock options as of December 31, 2015 and 2014 , and changes during the years ended December 31, 2015 and 2014 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2013 0.6 $ 42.16 Granted 0.2 52.08 Vested (0.3 ) 42.46 Forfeited 0.0 50.53 Options unvested at December 31, 2014 0.5 $ 46.23 Granted 0.8 63.55 Vested (0.4 ) 44.25 Forfeited (0.1 ) 57.12 Options unvested at December 31, 2015 0.8 $ 62.34 A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2015 and 2014 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, 2013 2.8 $ 21.73 Granted 0.2 52.08 Released (0.2 ) 20.82 Forfeited 0.0 50.53 Options outstanding at December 31, 2014 2.8 $ 24.18 Granted 0.8 63.55 Released (1.4 ) 14.70 Forfeited (0.1 ) 57.12 Options outstanding at December 31, 2015 2.1 $ 42.75 6.47 $ 53.4 Options exercisable at December 31, 2015 1.3 $ 31.11 4.85 $ 52.0 The aggregate intrinsic value of options exercised during the years ended December 31, 2015 , 2014 and 2013 was $71.8 million , $6.7 million and $17.1 million , respectively. A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2015 and 2014 is presented below: (in millions, except release price and years) Shares Weighted Average Release Price Aggregate Intrinsic Value Awards outstanding at December 31, 2013 0.2 $ 47.00 Granted 0.0 54.56 Vested (0.1 ) 44.47 Terminated 0.0 46.77 Awards outstanding at December 31, 2014 0.1 $ 50.41 Granted 0.1 70.44 Vested (0.1 ) 58.73 Terminated 0.0 49.63 Awards outstanding at December 31, 2015 0.1 $ 66.41 $ 11.9 At December 31, 2015 , 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, 2015 was $4.0 million . Excluding the estimated compensation expense related to the 2017 Aspirational Plan PRSUs discussed above, 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, 2015 is presented below: (in millions, except years) December 31, 2015 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 9.2 2.49 Unrecognized DSU/RSU expense 7.9 2.59 Unrecognized PRSU expense 10.9 2.29 Total unrecognized stock-based compensation expense $ 28.0 2.44 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, 2015 , 2014 and 2013 was $20.4 million , $4.3 million , and $8.7 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 $41.4 million , $32.3 million , and $25.5 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Future minimum lease payments at December 31, 2015 under these non-cancelable leases are as follows: (in millions) Year Ended December 31, 2016 $ 27.3 2017 23.3 2018 20.8 2019 18.4 2020 16.5 Thereafter 40.3 $ 146.6 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, 2015 and December 31, 2014 . (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 asserted 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 sought 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 in the U.S. Court of Appeals for the Sixth Circuit ("Appeals Court"). Following oral argument, the Appeals Court issued an order on June 4, 2015, ruling in favor of the Company. The Plaintiff had until September 2, 2015 to file a petition seeking review by the United States Supreme Court. The Plaintiff did not file for review, therefore this matter has now been resolved in the Company's favor. (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. On June 27, 2013, an appraisal proceeding was commenced in the Delaware Court of Chancery (the “Appraisal Action”). This matter was settled on March 13, 2015. Sealy paid $2.20 per share for the Sealy common stock formerly held by the former Sealy stockholders seeking the appraisal, plus interest at the statutory rate, less $0.6 million already received in 2013 by one of the petitioners in connection with the closing of the Sealy Acquisition. The agreed upon per share value of $2.20 is equal to the amount paid to non-dissenting stockholders at the time of the closing of the Sealy Acquisition. (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. The Court was scheduled to consider class certification motions in the fourth quarter of 2015; however, the Plaintiff’s filed a Motion to Amend the Complaint, at which time the Company filed a Motion to Dismiss the Amended Complaint. A hearing on the Motion to Dismiss was held January 28, 2016 and the Court denied in part and granted in part the Company’s Motion to Dismiss allowing certain claims to proceed. The outcome of this case remains 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") 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 parties met during 2015 and negotiated a final settlement in October 2015. Under the terms of the settlement, in 2015 the Company paid approximately €15.5 million (approximately $17.4 million ) to fully resolve this matter. The Company recognized expense of $17.4 million ( €15.5 million ), which is presented within other expense (income), net in the accompanying Consolidated Statements of Income for the year ended December 31, 2015. (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 does not believe this matter is material to the Company's financial statements. 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 does not believe the contamination on this site is attributable to the Company’s operations, nor will have a material effect on the Company's financial statements. 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. The Company cannot predict the ultimate timing or costs of the South Brunswick, Oakville and Putnam 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. (h) Income Tax Assessments. The Company has received income tax assessments from SKAT. The Company believes the process to reach a final resolution of this matter could potentially extend over a number of years. If the Company is not successful in defending its position that its owes no additional taxes, the Company could be required to pay a significant amount to SKAT. In addition, the Company could choose to pursue a settlement with SKAT, which could also require the Company to pay significant amounts to SKAT in excess of any related reserve. Each of these outcomes could have a material adverse impact on the Company's results of operations and cash flows. In addition, prior to any ultimate resolution of this issue before the Tribunal or the Danish courts, or a settlement of the matter with SKAT, based on a change in facts and circumstances, the Company may be required to further increase its uncertain tax liability associated with this matter, which could have a material impact on the Company's reported earnings. 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 ”. (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, 2015 | |
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, 2015 2014 2013 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 70.0 35.0 % $ 61.2 35.0 % $ 44.8 35.0 % State income taxes, net of federal benefit 1.1 0.6 % 1.1 0.6 % 1.7 1.3 % Foreign repatriation, net of foreign tax credits 0.0 0.0 % 13.5 7.7 % (16.0 ) (12.6 )% Foreign tax differential (10.0 ) (5.0 )% (12.6 ) (7.2 )% (12.3 ) (9.6 )% Change in valuation allowances 2.5 1.2 % (17.7 ) (10.0 )% 20.4 15.9 % Uncertain tax positions 59.7 29.8 % 10.9 6.1 % 4.7 3.7 % Subpart F income 1.9 1.0 % 1.9 1.1 % 1.5 1.2 % Manufacturing deduction (1.6 ) (0.8 )% (3.7 ) (2.1 )% 0.1 — % Goodwill on disposal of business 0.0 0.0 % 7.5 4.2 % — — % Permanent and other 1.8 0.9 % 2.8 1.7 % 4.2 3.5 % Effective income tax provision $ 125.4 62.7 % $ 64.9 37.1 % $ 49.1 38.4 % 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, the Company has recognized cumulative tax on the repatriation transaction of approximately $63.9 million . At December 31, 2015, the Company’s book tax basis in its top tier foreign subsidiary exceeded the Company’s tax basis in such subsidiary in the hands of the top tier foreign subsidiary U.S. shareholder. It is the Company’s intent to permanently reinvest the earnings of this foreign subsidiary back into its operations. As such, no deferred tax liability has been recorded related to this basis difference. 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 cumulative total tax assessment at December 31, 2015 for all years for which an assessment has been received (2001 - 2008) is approximately Danish Krone ("DKK") 1,363.1 million , including interest and penalties ( $199.6 million , based on the DKK to USD exchange rate on December 31, 2015). The cumulative total tax assessment at December 31, 2014 for all years for which an assessment had been received up through that date (2001 - 2008) including interest and penalties was approximately DKK 1,317.2 million ( $215.1 million , based on the DKK to USD exchange rate on December 31, 2014). The increase of DKK 45.9 million is due to additional interest for the period between December 31, 2014 and December 31, 2015. As of December 31, 2015 and 2014, SKAT had 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. In addition, 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. From June 2012 through December 31, 2015 SKAT has withheld refunds of VAT otherwise owed to the Company, pending resolution of this matter. The total amount of withheld refunds at December 31, 2015 and 2014 is approximately $26 million and $15 million , respectively. This amount is included in other non-current assets on the Consolidated Balance Sheets. The Company filed timely protests with the Danish National Tax Tribunal (the "Tribunal") challenging the tax assessments. The Tribunal formally agreed to place the Tribunal process on hold pending the outcome of a Bilateral Advance Pricing Agreement ("Bilateral APA") between the United States and SKAT, which the Company filed in the third quarter of 2008. 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. In February 2013, as part of the Bilateral APA process, 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. The Company believes it has meritorious defenses to the proposed assessments and plans to oppose the assessments before the Tribunal and in the Danish courts in the event the Company does not resolve this matter outside of litigation. As part of the Tribunal process, the Tribunal assigned an individual to serve as a case manager on the matter. It is the responsibility of the case manager to gather data from both SKAT and the Company and independently evaluate such data. Beginning in April 2014, the Company provided information to the case manager. The output of the case manager’s evaluation is a non-binding recommendation made to the Tribunal on how the case manager believes the Tribunal should decide the issues. In the first half of 2015 the case manager issued a preliminary, non-binding recommendation in favor of each of SKAT’s annual assessments received by the Company. In June 2015, at the request of the case manager, the Company submitted additional information in response to the preliminary recommendation. In the submission, the Company reiterated its strong objection to SKAT’s position and SKAT’s assessments and reiterated the merits of the Company’s position. The Company had expected the case manager to issue the final non-binding recommendation to the Tribunal before the end of 2015; however, a final recommendation has not yet been received, and the issuance of such recommendation has been postponed as described below. During 2015, the Company engaged third-party advisors to assist the Company in further evaluating this matter to determine whether the Company should re-enter negotiations with SKAT. The additional analysis provided the Company with information to evaluate the options available to the Company to resolve this matter, through litigation or through a negotiated settlement, in light of the case manager’s preliminary, non-binding recommendation and the current tax litigation environment in Denmark. Upon evaluation of the advisor’s analysis, which was substantially completed in the fourth quarter of 2015, the Company concluded that it should discuss with SKAT the possibility of formally resuming negotiations on this matter. As a result, the Company met with SKAT in November 2015 to discuss the results of the third-party advisor's analysis and to outline a process to resume negotiations. In November 2015, the Company and its advisors met with SKAT to discuss various matters relating to the assessment. During this meeting, the Company provided general information regarding the output of the analysis of the Company's advisor as well as additional analyses prepared by the Company as a framework for further discussions with SKAT. SKAT and the Company agreed to continue the dialogue regarding a potential negotiated settlement into the future. In anticipation of continuing dialogue with SKAT on this matter, the Company continues to collect and analyze additional information with the assistance of the third-party advisors as well as discussing the tax litigation environment in Denmark with its Danish legal counsel. In December 2015, in response to a request by both the Company and SKAT the Tribunal agreed to delay the continuance of its process, including the issuance by the case manager of his final non-binding recommendation until the second quarter of 2016. The Company expects that it will continue its discussions with SKAT during this period. To date, the Company has received an assessment every year for the next year in the examination cycle. In this regard, the Company had expected to receive an assessment for the year 2009 in the second half of 2015. However, SKAT agreed to delay the issuance of the 2009 assessment until the second quarter of 2016 pending the progress of the discussions with the Company that had resumed in November 2015. If this matter is not resolved or if sufficient progress is not being made, the Company expects that SKAT will issue the 2009 assessment in the second quarter of 2016 as well as its assessment for 2010. Further, in this event the Company would expect to receive an assessment for 2011 in the second quarter of 2017, the 2012 assessment in the second quarter of 2018, and so forth. The Company expects the aggregate assessments for the years 2009 - 2015 to be in excess of the amounts described above as assessed for the years 2001 - 2008. As the result of the Tribunal case manager’s preliminary non-binding recommendation, the analyses prepared by the Company and its third-party advisors, and the evaluation of the increased risk of tax litigation in Denmark the Company has updated its analysis of this uncertain tax position in accordance with ASC 740 and has recorded a change in estimate to increase the uncertain tax liability for this item by approximately $60.7 million , from $18.9 million recorded at December 31, 2014 to $79.6 million recorded at December 31, 2015. The Company’s uncertain tax liability associated with this matter is derived using the cumulative probability analysis as required by ASC 740 with possible outcomes based on the Company's updated evaluation of the facts and circumstances regarding this matter and applying the technical requirements applicable to U.S., Danish, and international transfer pricing standards as required by GAAP, taking into account both the U.S. and Danish income tax implications of such outcomes. In conjunction with this tax examination discussed above, 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. The Company has responded to SKAT’s request for information. During 2013, the Company and SKAT agreed that the examination of this issue for the years 2009 - 2011 would be placed on hold pending the outcome of the Tribunal process above for the years 2001 - 2008, although SKAT would continue to issue assessments as described above. If the Company is not successful in defending its position before the Tribunal or in the Danish courts or in negotiating a mutually acceptable settlement, there is significant risk that the Company could be required to pay significant amounts to SKAT in excess of any related reserve. In addition, the Company could choose to pursue a settlement with SKAT, which could also require the Company to pay significant amounts to SKAT in excess of any related reserve in order to resolve this matter without litigation. Either of these outcomes could have a material adverse impact on the Company’s profitability and liquidity. In addition, prior to any ultimate resolution of this issue before the Tribunal or the Danish courts, based on a change in facts and circumstances, the Company may be required to further increase its uncertain tax liability associated with this matter, which could have a material impact on the Company's reported earnings. 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 and SKAT continue to discuss various matters. No assessment has been made by SKAT as of December 31, 2015. The Company believes it has meritorious defenses for all such items reported in the Danish income tax returns. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. 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 was finalized in the second quarter of 2015 with no material adjustments. In the quarter ended September 30, 2015, the Company was advised by the IRS that the federal income tax return for 2013 would be examined. In November 2015 the IRS began its examination, which is still 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. Other than the changes discussed in the preceding paragraphs, particularly as it relates to the Danish royalty matter, there were no significant changes to the liability for unrecognized tax benefits during the twelve months ended December 31, 2015. 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, 2015, 2014 and 2013: Year Ended December 31, (in millions) 2015 2014 2013 Income before income taxes: United States $ 120.2 $ 46.9 $ (4.5 ) Rest of the world 79.9 128.0 132.5 $ 200.1 $ 174.9 $ 128.0 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, 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 Additions based on tax positions related to 2015 0.9 Additions for tax positions of prior years 25.7 Expiration of statutes of limitations (2.1 ) Settlements of uncertain tax positions with tax authorities (2.3 ) Balance as of December 31, 2015 $ 69.8 The amount of unrecognized tax benefits that would impact the effective tax rate if recognized at December 31, 2015, 2014 and 2013 would be $67.7 , $44.6 million and $22.2 million , respectively. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. During the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $33.5 million , $1.9 million , and $1.8 million in interest and penalties, respectively, in income tax expense. The Company had approximately $43.8 million , $10.3 million , and $11.0 million of accrued interest and penalties at December 31, 2015, 2014, and 2013, respectively. The Company has the following gross income tax attributes available at December 31, 2015 and 2014 respectively (in millions): 2015 2014 State net operating losses (“SNOLs”) 128.8 145.3 U.S. federal foreign tax credits (“FTCs”) 7.8 7.8 U.S. state income tax credits ("SITCs") 5.5 1.6 Foreign net operating losses (“FNOLs”) 38.0 44.2 Charitable contribution carryover ("CCCs") 23.7 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. The Company has recorded valuation allowances against approximately $87.0 million of the SNOL, $7.8 million of the FTC, and $3.6 million of SITCs. With respect to all other tax attributes above, 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 underlying deferred tax assets. 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) 2015 2014 2013 Current provision Federal $ 107.1 $ 50.7 $ 48.6 State 7.2 4.5 7.3 Foreign 32.4 36.9 42.3 Total current $ 146.7 $ 92.1 $ 98.2 Deferred provision Federal $ (12.3 ) $ (25.2 ) $ (47.0 ) State (3.7 ) (1.2 ) 0.4 Foreign (5.3 ) (0.8 ) (2.5 ) Total deferred (21.3 ) (27.2 ) (49.1 ) Total income tax provision $ 125.4 $ 64.9 $ 49.1 The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets consisted of the following: December 31, (in millions) 2015 2014 Deferred tax assets: Stock-based compensation $ 16.0 $ 12.4 Accrued expenses and other 57.6 57.9 Net operating losses, foreign tax credits and charitable contribution carryforward 33.1 30.6 Inventories 5.1 4.5 Transaction costs 22.0 14.5 Property, plant and equipment 2.9 4.0 Total deferred tax assets 136.7 123.9 Valuation allowances (24.2 ) (21.7 ) Total net deferred tax assets $ 112.5 $ 102.2 Deferred tax liabilities: Intangible assets $ (247.8 ) $ (258.1 ) Property, plant and equipment (42.0 ) (45.7 ) Accrued expenses and other (5.9 ) (4.5 ) Total deferred tax liabilities (295.7 ) (308.3 ) Net deferred tax liabilities $ (183.2 ) $ (206.1 ) |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers The top five customers accounted for approximately 39.4% , 34.9% and 27.5% of the Company’s net sales for the years ended December 31, 2015 , 2014 and 2013 , respectively. Net sales from one customer (Mattress Firm Holding Corp.) represented more than 10.0% of net sales for the year ended December 31, 2015 , 2014 and 2013, which is included in the North America segment. The top five customers also accounted for approximately 34.5% and 32.0% of accounts receivable as of December 31, 2015 and 2014 , respectively. On February 5, 2016, Mattress Firm Holding Corp. acquired all of the outstanding equity interests in HMK Mattress Holdings, LLC (Sleepy’s). Sleepy’s was also one of the Company's top five customers in 2015 and as a result of this acquisition, based on 2015 net sales, the combined companies would have represented approximately 25% of the Company's overall net sales for 2015. |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interest | 12 Months Ended |
Dec. 31, 2015 | |
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, 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 call arrangement may be exercised by the Company on June 12, 2017. 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 and is recorded on the Consolidated 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 contractually-defined redemption value as of the balance sheet date. As of December 31, 2015 and 2014, the accumulated earnings exceeded the redemption value and accordingly, a redemption value adjustment was not necessary. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share The following table sets forth the components of the numerator and denominator for the computation of basic and diluted earnings per share for net income attributable to Tempur Sealy International. Year Ended December 31, (in millions, except per common share amounts) 2015 2014 2013 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 73.5 $ 108.9 $ 78.6 Denominator: Denominator for basic earnings per common share—weighted average shares 61.7 60.8 60.3 Effect of dilutive securities: Employee stock based compensation 0.9 1.3 1.3 Denominator for diluted earnings per common share—adjusted weighted average shares 62.6 62.1 61.6 Basic earnings per common share $ 1.19 $ 1.79 $ 1.30 Diluted earnings per common share $ 1.17 $ 1.75 $ 1.28 The Company excluded 0.2 million , 0.3 million and 0.3 million shares issuable upon exercise of outstanding stock options for the years ended December 31, 2015 , 2014 , and 2013 , 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 thereon. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information Effective January 1, 2015, the Company realigned its organizational structure in light of the progress made in 2013 and 2014 integrating Sealy into its business. As a result of these changes, information that the Company's chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance changed such that it is based on geography. As a result of this realignment, the Company updated its segment reporting. Effective January 1, 2015, the Company operates in two segments: North America and International. Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results. These segments are strategic business units that are managed separately based on geography. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the U.S. and Canada. The International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. The Company evaluates segment performance based on net sales, gross profit and operating income. The Company’s North America and International segment assets include investments in subsidiaries that are appropriately eliminated in the Company’s accompanying Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable and payables. The historical information presented for 2014 in the following tables has been restated for the change in the composition of the segments. The following table summarizes total assets by segment: December 31, December 31, (in millions) 2015 2014 North America $ 2,533.1 $ 2,465.2 International 477.1 474.3 Corporate 775.0 820.9 Inter-segment eliminations (1,129.7 ) (1,177.7 ) Total assets $ 2,655.5 $ 2,582.7 The following table summarizes property, plant and equipment, net by segment: December 31, December 31, (in millions) 2015 2014 North America $ 239.2 $ 240.5 International 54.8 60.3 Corporate 67.7 54.8 Total property, plant and equipment, net $ 361.7 $ 355.6 The following table summarizes segment information for the twelve months ended December 31, 2015 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,428.9 $ 458.3 $ — $ — $ 2,887.2 Other sales 148.3 115.7 — — 264.0 Net sales 2,577.2 574.0 — — 3,151.2 Inter-segment sales $ 5.9 $ 0.7 $ — $ (6.6 ) $ — Gross profit 954.6 294.3 — — 1,248.9 Inter-segment royalty expense (income) 7.1 (7.1 ) — — — Operating income (loss) 335.6 98.9 (125.4 ) — 309.1 Income (loss) before income taxes 324.4 73.2 (197.5 ) — 200.1 Depreciation and amortization (1) $ 43.3 $ 16.0 $ 34.6 $ — $ 93.9 Capital expenditures 28.9 14.8 22.2 — 65.9 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the twelve months ended December 31, 2014 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,261.9 $ 464.6 $ — $ — $ 2,726.5 Other sales 143.0 120.3 — — 263.3 Net sales 2,404.9 584.9 — — 2,989.8 Inter-segment sales $ 5.1 $ 0.3 $ — $ (5.4 ) $ — Gross profit 834.8 315.6 — — 1,150.4 Inter-segment royalty expense (income) 6.1 (6.1 ) — — — Operating income (loss) 255.0 118.8 (97.5 ) — 276.3 Income (loss) before income taxes 228.0 112.2 (165.3 ) — 174.9 Depreciation and amortization (1) $ 47.9 $ 16.3 $ 25.5 $ — $ 89.7 Capital expenditures 17.8 15.6 14.1 — 47.5 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the twelve months ended December 31, 2013 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 1,779.3 $ 419.1 $ — $ — $ 2,198.4 Other sales 147.7 118.2 — — 265.9 Net sales 1,927.0 537.3 — — 2,464.3 Inter-segment sales $ 0.2 $ 0.6 $ — $ (0.8 ) $ — Gross profit 710.2 304.7 — — 1,014.9 Inter-segment royalty expense (income) 5.8 (5.8 ) — — — Operating income (loss) 229.0 124.7 (109.9 ) — 243.8 Income (loss) before income taxes 548.3 (204.5 ) (215.8 ) — 128.0 Depreciation and amortization (1) $ 49.9 $ 14.1 $ 27.5 $ — $ 91.5 Capital expenditures 19.5 11.2 9.3 — 40.0 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes property, plant and equipment, net by geographic region: December 31, December 31, (in millions) 2015 2014 United States $ 300.1 $ 287.3 Canada 6.8 8.0 Other International 54.8 60.3 Total property, plant and equipment, net $ 361.7 $ 355.6 Total International 61.6 68.3 The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2015 2014 2013 United States $ 2,374.7 $ 2,188.8 $ 1,736.8 Canada 202.5 216.1 190.2 Other International 574.0 584.9 537.3 Total net sales $ 3,151.2 $ 2,989.8 $ 2,464.3 Total International $ 776.5 $ 801.0 $ 727.5 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) Quarterly results of operations for the years ended December 31, 2015 and 2014 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2015 Net sales $ 739.5 $ 764.4 $ 880.0 $ 767.3 Gross profit 278.7 297.5 359.6 313.1 Operating income 54.4 52.0 110.9 91.8 Net income (loss) 23.4 21.2 40.2 (11.3 ) Basic earnings (loss) per common share $ 0.38 $ 0.35 $ 0.65 $ (0.18 ) Diluted earnings (loss) per common share $ 0.38 $ 0.34 $ 0.64 $ (0.18 ) 2014 Net sales $ 701.9 $ 715.0 $ 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 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 ) $ 0.60 $ 0.75 As described in Note 14, "Income Taxes", during the fourth quarter of 2015, the Company recorded a change in estimate of its uncertain tax positions related to the Danish tax matter of approximately $60.7 million . In addition, in the third quarter of 2015 and the fourth quarter of 2014, the Company recognized $9.5 million and $15.6 million , respectively, of other income from certain other non-recurring items, including the partial settlement of a legal dispute. 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. |
Guarantor_Non-Guarantor Financi
Guarantor/Non-Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2015 | |
Guarantor/Non-Guarantor Financial Information | |
Guarantor/Non-Guarantor Financial Information | Guarantor/Non-Guarantor Financial Information The $375.0 million and $450.0 million aggregate principal amount of 2020 Senior Notes and 2023 Senior Notes (collectively the "Senior Notes"), respectively, 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 applicable 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 applicable 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 applicable 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, 2015 and December 31, 2014 , and the related Consolidated Statements of Income and Comprehensive Income and Cash Flows for the years ended December 31, 2015 , 2014 and 2013 for Tempur Sealy International, Combined Guarantor Subsidiaries and Combined Non-Guarantor Subsidiaries. Sealy financial information is included from March 18, 2013 through December 31, 2015. TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2015 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 2,422.9 $ 778.9 $ (50.6 ) $ 3,151.2 Cost of sales — 1,532.6 420.3 (50.6 ) 1,902.3 Gross profit — 890.3 358.6 — 1,248.9 Selling and marketing expenses 4.1 460.1 183.8 — 648.0 General, administrative and other expenses 20.8 232.6 68.6 — 322.0 Equity income in earnings of unconsolidated affiliates — — (11.9 ) — (11.9 ) Royalty income, net of royalty expense — (18.3 ) — — (18.3 ) Operating (loss) income (24.9 ) 215.9 118.1 — 309.1 Other expense, net: Third party interest expense, net 27.2 66.2 2.7 — 96.1 Intercompany interest expense (income), net 32.9 (35.5 ) 2.6 — — Interest expense, net 60.1 30.7 5.3 — 96.1 Other (income) expense, net — (8.1 ) 21.0 — 12.9 Total other expense 60.1 22.6 26.3 — 109.0 Income from equity investees 132.9 64.7 — (197.6 ) — Income before income taxes 47.9 258.0 91.8 (197.6 ) 200.1 Income tax benefit (provision) 26.8 (125.1 ) (27.1 ) — (125.4 ) Net income 74.7 132.9 64.7 (197.6 ) 74.7 Less: net income attributable to non-controlling interest 1.2 1.2 — (1.2 ) 1.2 Net income attributable to Tempur Sealy International, Inc. $ 73.5 $ 131.7 $ 64.7 $ (196.4 ) $ 73.5 Comprehensive income $ 19.1 $ 130.9 $ (3.3 ) $ (127.6 ) $ 19.1 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 $ — $ 2,229.5 $ 802.9 $ (42.6 ) $ 2,989.8 Cost of sales — 1,465.3 416.7 (42.6 ) 1,839.4 Gross profit — 764.2 386.2 — 1,150.4 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 27.0 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 disposal, 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 110.0 159.2 98.7 (257.9 ) 110.0 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 $ — $ 1,758.2 $ 728.1 $ (22.0 ) $ 2,464.3 Cost of sales — 1,110.5 360.9 (22.0 ) 1,449.4 Gross profit — 647.7 367.2 — 1,014.9 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 expense, net — (0.9 ) 5.9 — 5.0 Total other expense (income) 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 ) 128.0 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 Balance Sheets December 31, 2015 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 121.8 $ 32.1 $ — $ 153.9 Accounts receivable, net — 231.9 147.5 — 379.4 Inventories — 145.3 53.9 — 199.2 Income tax receivable 193.1 — — (193.1 ) — Prepaid expenses and other current assets — 43.5 33.1 — 76.6 Total Current Assets 193.1 542.5 266.6 (193.1 ) 809.1 Property, plant and equipment, net — 300.1 61.6 — 361.7 Goodwill — 501.4 208.0 — 709.4 Other intangible assets, net — 612.9 82.5 — 695.4 Deferred tax asset 16.0 — 12.2 (16.0 ) 12.2 Other non-current assets — 23.3 44.4 — 67.7 Net investment in subsidiaries 1,960.5 — — (1,960.5 ) — Due from affiliates 548.1 1,655.3 4.8 (2,208.2 ) — Total Assets $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 212.2 $ 54.1 $ — $ 266.3 Accrued expenses and other current liabilities 1.4 183.8 68.8 — 254.0 Income taxes payable — 196.0 8.3 (193.1 ) 11.2 Current portion of long-term debt — 168.7 12.8 — 181.5 Total Current Liabilities 1.4 760.7 144.0 (193.1 ) 713.0 Long-term debt, net 811.9 461.4 — — 1,273.3 Deferred income taxes — 189.8 21.6 (16.0 ) 195.4 Other non-current liabilities — 166.6 4.6 — 171.2 Due to affiliates 1,601.8 96.5 604.9 (2,303.2 ) — Total Liabilities 2,415.1 1,675.0 775.1 (2,512.3 ) 2,352.9 Redeemable non-controlling interest 12.4 12.4 — (12.4 ) 12.4 Total Stockholders’ Equity 290.2 1,948.1 (95.0 ) (1,853.1 ) 290.2 Total Liabilities and Stockholders’ Equity $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 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 tax receivable 144.1 — — (144.1 ) — Prepaid expenses and other current assets — 28.2 28.3 — 56.5 Total Current Assets 144.5 453.2 268.4 (144.1 ) 722.0 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 12.4 — 10.7 (12.4 ) 10.7 Other non-current assets — 15.1 15.7 — 30.8 Net investment in subsidiaries 1,808.4 — — (1,808.4 ) — Due from affiliates 51.4 2,226.0 5.3 (2,282.7 ) — Total Assets $ 2,016.7 $ 4,150.7 $ 662.9 $ (4,247.6 ) $ 2,582.7 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 170.4 $ 56.0 $ — $ 226.4 Accrued expenses and other current liabilities 1.4 166.1 65.8 — 233.3 Income taxes payable — 163.0 (6.9 ) (144.1 ) 12.0 Current portion of long-term debt — 61.8 4.6 — 66.4 Total Current Liabilities 1.4 561.3 119.5 (144.1 ) 538.1 Long-term debt, net 368.7 1,129.6 — — 1,498.3 Deferred income taxes — 202.3 26.8 (12.4 ) 216.7 Other non-current liabilities — 109.3 5.0 — 114.3 Due to affiliates 1,431.3 340.2 849.4 (2,620.9 ) — Total Liabilities 1,801.4 2,342.7 1,000.7 (2,777.4 ) 2,367.4 Redeemable non-controlling interest 12.6 12.6 — (12.6 ) 12.6 Total Stockholders’ Equity 202.7 1,795.4 (337.8 ) (1,457.6 ) 202.7 Total Liabilities and Stockholders’ Equity $ 2,016.7 $ 4,150.7 $ 662.9 $ (4,247.6 ) $ 2,582.7 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2015 (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 $ (87.0 ) $ 274.7 $ 46.5 $ — $ 234.2 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposition of business — 7.2 — — 7.2 Purchases of property, plant and equipment — (49.9 ) (16.0 ) (65.9 ) Other — (0.7 ) (0.3 ) — (1.0 ) Net cash used in investing activities — (43.4 ) (16.3 ) — (59.7 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from 2012 Credit Agreement — 402.9 10.6 — 413.5 Repayments 2012 Credit Agreement — (988.3 ) — — (988.3 ) Proceeds from issuance of 2023 Senior Notes 450.0 — — — 450.0 Net activity in investment in and advances (to) from subsidiaries and affiliates (401.3 ) 453.4 (52.1 ) — — Proceeds from exercise of stock options 20.4 — — — 20.4 Excess tax benefit from stock based compensation 21.8 — — — 21.8 Proceeds from issuance of treasury stock by CEO 5.0 — — — 5.0 Treasury stock repurchased (1.3 ) — — — (1.3 ) Payment of deferred financing costs (8.0 ) — — — (8.0 ) Other — (3.0 ) (0.8 ) — (3.8 ) Net cash provided by (used in) financing activities 86.6 (135.0 ) (42.3 ) — (90.7 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 7.6 — 7.6 Increase (decrease) in cash and cash equivalents (0.4 ) 96.3 (4.5 ) — 91.4 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0.4 25.5 36.6 — 62.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 121.8 $ 32.1 $ — $ 153.9 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 Purchase of property, plant and equipment — (31.3 ) (16.2 ) — (47.5 ) Other — 3.0 (0.9 ) — 2.1 Net cash provided by (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 of the 2012 Credit Agreement — (510.9 ) — — (510.9 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 59.3 32.1 (91.4 ) — — 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 ) Payment of deferred financing costs — (3.1 ) — — (3.1 ) 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, BEGININNG OF PERIOD — 30.9 50.1 — 81.0 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 $ — $ 2,992.6 $ — $ — $ 2,992.6 Repayments of the 2012 Credit Agreement — (1,658.3 ) — — (1,658.3 ) Proceeds from issuance of 2020 Senior Notes 375.0 — — — 375.0 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 (to) from subsidiaries and affiliates (772.8 ) 874.9 (102.1 ) — — 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 ) Payment of deferred financing costs (8.4 ) (43.6 ) — — (52.0 ) Other — (1.3 ) 0.3 — (1.0 ) Net cash provided by (used in) financing activities 66.1 1,049.1 (101.8 ) — 1,013.4 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 $ — $ 81.0 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 2014 AND 2013 SCHEDULE II (in millions) Additions Description Balance at Beginning of Period Charges to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Allowance for doubtful accounts: 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 Year Ended December 31, 2015 $ 19.5 6.9 — (3.1 ) $ 23.3 Additions Description Balance at Beginning of Period Charges to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Valuation allowance for deferred tax assets: 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 Year Ended December 31, 2015 $ 21.7 4.6 — (2.1 ) $ 24.2 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. The Company sells its products through two sales channels: Retail and Other. |
Basis of Consolidation | Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International, 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 U.S. 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 (“AOCL”), 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 AOCL 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 3-5 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 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 impairment may have occurred. The Company performs an annual impairment test on goodwill and indefinite lived intangible 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. The Company identified three reporting units for purposes of evaluating goodwill impairment: Tempur Sealy U.S. and Tempur Sealy Canada reporting units within the North America segment and one reporting unit comprising the International segment. In conducting the impairment test for these reporting units 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. As allowed under U.S. GAAP, 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 2015 , 2014 and 2013 , 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. The Company considers the impact of recoverable salvage value on sales returns by segment in determining its estimate of future sales returns. 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 Company provides warranties on mattresses with varying warranty terms. Tempur mattresses sold in the North America segment and all Sealy mattresses have warranty terms ranging from 10 to 25 years, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. Tempur mattresses sold in the International segment have warranty terms ranging from 5 to 15 years, non-prorated for the first 5 years and then prorated on a straight-line basis for the last 10 years of the warranty term. Tempur pillows have a warranty term of 3 years, non-prorated. |
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 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 includes 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. The Company records the liability associated with cooperative advertising, rebates and other promotion programs when sales are made to these customers. 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 years. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to the 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. Advertising costs charged to expense were $360.5 million , $326.7 million and $274.2 million for the years ended December 31, 2015 , 2014 and 2013 , 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 of the customer's underlying advertisement 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. |
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 as a direct reduction from the carrying amount of the corresponding debt liability in the accompanying Consolidated Balance Sheets and the related amortization is included 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 pursuant to the Internal Revenue Code. |
Treasury Stock | Treasury Stock. Subject to Delaware law, and the limitations in the Company's 2012 Credit Agreement and the Company's other debt agreements, the Board of Directors may authorize share repurchases of the Company’s common stock (“Stock Repurchase Authorizations”). Stock 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. Stock repurchased under Stock Repurchase Authorizations are held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. Treasury stock is accounted for under the cost method and reported as a reduction of stockholders’ equity. Stock Repurchase Authorizations may be suspended, limited or terminated at any time without notice. |
Self-Insurance | Self-Insurance. The Company is self-insured up to $0.8 million per claim per year for certain losses related to medical claims with excess loss coverage. 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 two of its active Sealy plants and nine 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 | 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, 2017, 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 April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest- Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability. This ASU is effective for annual reporting periods beginning after December 15, 2015 and must be adopted retrospectively; however, early adoption is permitted. The Company has elected to early adopt this ASU as of December 31, 2015, and as a result debt issuance costs of $24.8 million are reducing the carrying amounts of the Company’s long-term debt. As required under the ASU, this adoption resulted in the reclassification of $37.6 million of debt issuance costs included in other non-current assets to long-term debt on the Consolidated Balance Sheet as of December 31, 2014. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet, rather than separating deferred taxes into current and noncurrent amounts. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and can be adopted prospectively or retrospectively; however, early adoption is permitted. The Company has elected to early adopt this ASU as of December 31, 2015 on a retrospective basis. As required under this ASU, this adoption resulted in the reclassification of $2.2 million current deferred income tax assets to noncurrent deferred income tax assets and $0.2 million current deferred income tax liabilities to noncurrent deferred income tax liabilities in the Consolidated Balance Sheet as of December 31, 2014. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 2014 Finished goods $ 126.7 $ 134.0 Work-in-process 14.0 11.4 Raw materials and supplies 58.5 71.8 $ 199.2 $ 217.2 |
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 3-5 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 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) 2015 2014 Machinery and equipment $ 257.0 $ 243.5 Land and buildings 243.7 247.1 Computer equipment and software 78.2 69.2 Furniture and fixtures 52.3 54.9 Construction in progress 57.4 39.4 Total property, plant, and equipment $ 688.6 $ 654.1 Accumulated depreciation (326.9 ) (298.5 ) Total property, plant, and equipment, net $ 361.7 $ 355.6 |
Changes in Accrued Sales Returns | The Company had the following activity for accrued sales returns from December 31, 2013 to December 31, 2015 : (in millions) 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 Amounts accrued 123.0 Returns charged to accrual (126.8 ) Balance as of December 31, 2015 $ 28.5 |
Warranty Activity | The Company had the following activity for warranties from December 31, 2013 to December 31, 2015 : (in millions) 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 Amounts accrued 28.8 Warranties charged to accrual (30.5 ) Balance as of December 31, 2015 $ 29.6 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
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 $ 2,757.2 Net income $ 90.9 Earnings per common share – Diluted $ 1.49 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Reportable Business Segment | The following summarizes the reassignment of goodwill from the historical segments to the new segments: (in millions) Reassigned Goodwill by Segment North America segment: Tempur North America segment goodwill as of January 1, 2015 $ 106.2 Sealy segment goodwill as of January 1, 2015 reassigned to the North America segment 468.3 Total North America segment goodwill as of January 1, 2015 $ 574.5 International segment: Tempur International segment goodwill as of January 1, 2015 $ 108.4 Sealy segment goodwill as of January 1, 2015 reassigned to the International segment 53.6 Total International segment goodwill as of January 1, 2015 $ 162.0 The following summarizes changes to the Company’s goodwill, by new reportable segment for the period January 1, 2015 to December 31, 2015: (in millions) North America International Consolidated Balance as of January 1, 2015 $ 574.5 $ 162.0 $ 736.5 Foreign currency translation adjustments and other (11.7 ) (15.4 ) (27.1 ) Balance as of December 31, 2015 $ 562.8 $ 146.6 $ 709.4 The following summarizes changes to the Company’s goodwill, by reportable segment for the period December 31, 2013 to December 31, 2014: (in millions) Tempur Tempur Sealy Total Balance as of December 31, 2013 $ 107.7 $ 107.3 $ 544.6 $ 759.6 Disposal of business — — (21.4 ) (21.4 ) Goodwill resulting from acquisitions — 2.3 — 2.3 Foreign currency translation adjustments (1.5 ) (1.2 ) (1.3 ) (4.0 ) Balance as of December 31, 2014 $ 106.2 $ 108.4 $ 521.9 $ 736.5 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2015 December 31, 2014 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 558.1 $ — $ 558.1 $ 569.0 $ — $ 569.0 Amortized intangible assets: Contractual distributor relationships 15 $ 84.8 $ 15.8 $ 69.0 $ 88.2 $ 10.4 $ 77.8 Technology and other 4-10 90.8 39.2 51.6 92.6 32.6 60.0 Patents, other trademarks, and other trade names 5-20 27.2 16.9 10.3 27.3 14.6 12.7 Customer databases, relationships and reacquired rights 2-5 24.5 18.1 6.4 24.1 16.5 7.6 Total $ 785.4 $ 90.0 $ 695.4 $ 801.2 $ 74.1 $ 727.1 |
Schedule of Indefinite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2015 December 31, 2014 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 558.1 $ — $ 558.1 $ 569.0 $ — $ 569.0 Amortized intangible assets: Contractual distributor relationships 15 $ 84.8 $ 15.8 $ 69.0 $ 88.2 $ 10.4 $ 77.8 Technology and other 4-10 90.8 39.2 51.6 92.6 32.6 60.0 Patents, other trademarks, and other trade names 5-20 27.2 16.9 10.3 27.3 14.6 12.7 Customer databases, relationships and reacquired rights 2-5 24.5 18.1 6.4 24.1 16.5 7.6 Total $ 785.4 $ 90.0 $ 695.4 $ 801.2 $ 74.1 $ 727.1 |
Expected Future Amortization Expense | Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31: (in millions) Amount 2016 $ 17.9 2017 17.2 2018 15.4 2019 14.8 2020 13.8 |
Unconsolidated Affiliate Comp35
Unconsolidated Affiliate Companies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 2014 Current assets $ 50.0 $ 49.7 Non-current assets 15.7 5.1 Current liabilities 37.3 29.7 Equity 28.4 25.1 (in millions) 2015 2014 Revenue $ 131.6 $ 99.2 Gross profit 85.0 62.1 Income from operations 26.2 16.8 Net income 20.1 13.1 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | Debt for the Company consists of the following: (in millions) December 31, 2015 December 31, 2014 Debt: Amount Rate Amount Rate Maturity Date Revolving credit facility $ — N/A $ 16.0 (1) March 18, 2018 Term A Facility 409.4 (2) 484.5 (2) March 18, 2018 Term B Facility 100.1 (3) 594.4 (3) March 18, 2020 2020 Senior Notes 375.0 6.875% 375.0 6.875% December 15, 2020 2023 Senior Notes 450.0 5.625% — —% October 15, 2023 8.0% Sealy Notes 111.1 8.0% 104.7 8.0% July 15, 2016 Capital lease obligations and other 34.0 27.7 Various Total debt 1,479.6 1,602.3 Less: deferred financing costs (24.8 ) (37.6 ) Total debt, net 1,454.8 1,564.7 Less: current portion (181.5 ) (66.4 ) Total long term debt, net 1,273.3 1,498.3 (1) Interest at Base Rate plus applicable margin of 2.00% or LIBOR plus applicable margin of 3.00% as of December 31, 2014. As of December 31, 2015, there were no borrowings under the Revolver. As of December 31, 2014, the Revolver LIBOR plus applicable margin interest rate was 3.16%. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2015 and 2.25% as of December 31, 2014. As of December 31, 2015 and 2014, the Term A Facility total LIBOR plus applicable margin interest rate was 2.42%. (3) Interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2015 and December 31, 2014. As of December 31, 2015 and 2014, the Term B Facility total LIBOR plus applicable margin was 3.50%. |
Schedule of Maturities of Long-term Debt | As of December 31, 2015, 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 2016 $ 181.5 2017 58.0 2018 314.1 2019 7.3 2020 460.8 Thereafter 457.9 Total $ 1,479.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets Measured on a Recurring Basis | The following table provides a summary by level of the fair value of foreign exchange forward contracts, which are measured on a recurring basis: Fair Value Measurements at December 31, 2015 Using: (in millions) December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 12.5 $ 12.5 — $ 12.5 $ — $ 12.5 $ — Liabilities: Foreign exchange forward contracts $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — Fair Value Measurements at December 31, 2014 Using: (in millions) December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — Liabilities: Foreign exchange forward contracts $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — |
Schedule of Fair Value Liabilities Measured on a Recurring Basis | The following table provides a summary by level of the fair value of foreign exchange forward contracts, which are measured on a recurring basis: Fair Value Measurements at December 31, 2015 Using: (in millions) December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 12.5 $ 12.5 — $ 12.5 $ — $ 12.5 $ — Liabilities: Foreign exchange forward contracts $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — $ 1.2 $ — Fair Value Measurements at December 31, 2014 Using: (in millions) December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange forward contracts $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — $ 1.8 $ — Liabilities: Foreign exchange forward contracts $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — $ 0.1 $ — |
Derivative Financial Instrume38
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative instruments | As of December 31, 2015 and December 31, 2014 , the fair value of the Company's derivative financial instruments included in the accompanying Consolidated Balance Sheets was recorded as follows: Asset Derivatives Balance Sheet Location Fair Value (in millions) December 31, 2015 December 31, 2014 Derivatives designated as hedging instruments Foreign exchange forward contracts - current Prepaid expenses and other current assets $ 7.7 $ 1.8 Foreign exchange forward contracts - non-current Other non-current assets 1.3 — Derivatives not designated as hedging instruments Foreign exchange forward contracts - current Prepaid expenses and other current assets 3.5 — $ 12.5 $ 1.8 Liability Derivatives Balance Sheet Location Fair Value (in millions) December 31, 2015 December 31, 2014 Derivatives not designated as hedging instruments Foreign exchange forward contracts - current Accrued expenses and other current liabilities $ 1.2 $ 0.1 $ 1.2 $ 0.1 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Components of Net Periodic Cost for Employees | Components of net periodic pension cost which is included in general, administrative and other expenses included in the accompanying Consolidated Statements of Income for the years ended December 31 were as follows: (in millions) 2015 2014 2013 Service cost $ 0.8 $ 0.9 $ 0.9 Interest cost 1.9 1.8 1.3 Expected return on assets (2.2 ) (2.1 ) (1.5 ) Curtailment loss — 0.1 — Amortization of net gain — (0.1 ) — Settlement loss 1.3 — — Net periodic pension cost $ 1.8 $ 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 other comprehensive (income) loss for the years ended December 31 were: (in millions) 2015 2014 2013 Net loss $ 0.2 $ 9.0 $ (6.2 ) Amortization of prior service cost — (0.2 ) 1.0 Amortization or settlement recognition of net gain (loss) (1.3 ) 0.1 — New prior service cost 0.1 0.1 — Total recognized in other comprehensive (income) loss $ (1.0 ) $ 9.0 $ (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: 2015 2014 2013 Discount rate (a) 4.12 % 4.01 % 4.23 % Expected long term return on plan assets 7.05 % 7.00 % 6.92 % (a) The discount rates used in 2015 to determine the expenses for the United States retirement plan and Canadian retirement plan were 3.94% and 4.20% , respectively. 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. |
Schedule of Funded Status of the Pension Plans | The measurement date for the Company’s Plans is December 31. The funded status of the Plans as of December 31 were as follows: (in millions) 2015 2014 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 47.1 $ 36.4 Service cost 0.8 0.9 Interest cost 1.9 1.8 Plan amendments 0.1 0.2 Actuarial (gain) loss (3.3 ) 9.2 Curtailments — (0.1 ) Settlements (16.9 ) — Benefits paid (0.8 ) (0.7 ) Expenses paid (0.1 ) (0.2 ) Foreign currency exchange rate changes (0.6 ) (0.4 ) Projected benefit obligation at end of year $ 28.2 $ 47.1 Change in Plan Assets: Fair value of plan assets at beginning of year $ 32.5 $ 30.5 Actual (loss) return on assets (1.3 ) 2.2 Employer contribution 1.1 1.0 Settlements (16.9 ) — Benefits paid (0.8 ) (0.7 ) Expenses paid (0.1 ) (0.2 ) Foreign currency exchange rate changes (0.6 ) (0.3 ) Fair value of plan assets at end of year $ 13.9 $ 32.5 Funded status $ (14.3 ) $ (14.6 ) |
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 Sheets: December 31, (in millions) 2015 2014 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 14.5 $ 14.9 Non-current benefit asset 0.2 0.3 |
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: 2015 2014 Discount rate (a) 4.44 % 5.00 % (a) The discount rates used in 2015 to determine the expenses for the United States retirement plan and Canadian retirement plan were 4.26% and 4.30% , respectively. The discount rates used in 2014 to determine the benefit obligations for the United States and Canadian defined benefit pension plans were both 5.00% |
Schedule of Estimated Future Benefit Payments | The following table presents estimated future benefit payments: (in millions) Fiscal 2016 $ 0.9 Fiscal 2017 0.9 Fiscal 2018 1.0 Fiscal 2019 1.0 Fiscal 2020 1.1 Fiscal 2021 ‑ Fiscal 2025 6.5 |
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations are as follows: 2015 2015 Common/collective trust consisting primarily of: Equity securities 60.00 % 74.83 % Debt securities 40.00 % 21.03 % Other — % 4.14 % Total plan assets 100.00 % 100.00 % |
Schedule of Fair Value of Pension Plan Assets by Asset Category | The fair value of the Company’s plan assets at December 31 by asset category was as follows: (in millions) 2015 Quoted Prices in Significant Other Significant Asset Category Common/collective trust U.S. equity $ 7.7 $ — $ 7.7 $ — International equity 2.7 — 2.7 — Total equity based funds 10.4 — 10.4 — Common/collective trust - fixed income 2.9 — 2.9 — Money market funds 0.6 — 0.6 — Total $ 13.9 $ — $ 13.9 $ — (in millions) 2014 Quoted Prices in Significant Other Significant 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 7.0 — 7.0 — Money market funds 0.7 — 0.7 — Total $ 32.5 $ — $ 32.5 $ — |
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) 2015 2014 Multi‑employer retirement plan expense $ 5.0 $ 4.7 Multi‑employer health and welfare plan expense 2.4 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, 2015 and 2014, respectively: (in millions) Pension Fund EIN/Pension Plan Number Pension Protection Act (1) 2015 FIP/RP Status (2) Contributions of the Company 2015 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions United Furniture Workers Pension Fund A (4) 13-5511877-001 Red Implemented $ 1.1 Yes, 10% 2016 2013, 2014, 2015 Pension Plan of the National Retirement Fund 13-6130178-001 Red Implemented $ 1.2 Yes, 10% 2016 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 Red Implemented $ 0.5 Yes, 10% 2016 N/A (in millions) Pension Fund EIN/Pension Plan Number Pension Protection Act (1) 2014 FIP/RP Status (2) Contributions of the Company 2014 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions 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 (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 for each plan is based on information that the Company received from that plan and is certified by that 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 (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Changes in accumulated other comprehensive income | Accumulated Other Comprehensive Loss (“AOCL”). AOCL consisted of the following: Year Ended December 31, (in millions) 2015 2014 2013 Foreign Currency Translation Balance at beginning of period $ (54.0 ) $ (15.6 ) $ (5.0 ) Other comprehensive (loss) income: Foreign currency translation adjustments (1) (61.4 ) (38.4 ) (13.3 ) Tax benefit (1) — — 2.7 Balance at end of period $ (115.4 ) $ (54.0 ) $ (15.6 ) Interest Rate Swap Agreement Balance at beginning of period $ (0.7 ) $ (1.4 ) $ (2.7 ) Other comprehensive income: Net change from period revaluations: 3.1 3.0 5.2 Tax expense (2) (1.2 ) (1.2 ) (1.5 ) Total other comprehensive income before reclassifications, net of tax 1.9 1.8 3.7 Net amount reclassified to earnings (3) (1.9 ) (1.9 ) (3.2 ) Tax benefit (2) 0.7 0.8 0.8 Total amount reclassified from accumulated other comprehensive loss, net of tax (1.2 ) (1.1 ) (2.4 ) Total other comprehensive income 0.7 0.7 1.3 Balance at end of period $ — $ (0.7 ) $ (1.4 ) Pension Benefits Balance at beginning of period $ (2.4 ) $ 3.2 $ — Other comprehensive income: Net change from period revaluations: 0.2 (9.0 ) 5.2 Tax (expense) benefit (2) — 3.4 (2.0 ) Total other comprehensive income (loss) before reclassifications, net of tax 0.2 (5.6 ) 3.2 Net amount reclassified to earnings $ 1.3 $ — $ — Tax benefit (2) (0.5 ) — 0.0 Total amount reclassified from accumulated other comprehensive income, net of tax 0.8 — — Total other comprehensive income (loss) 1.0 (5.6 ) 3.2 Balance at end of period $ (1.4 ) $ (2.4 ) $ 3.2 Foreign Exchange Forward Contracts Balance at beginning of period $ 1.3 $ — $ — Other comprehensive income (loss): Net change from period revaluations: 14.6 3.4 — Tax expense (2) (3.8 ) (0.9 ) — Total other comprehensive income before reclassifications, net of tax 10.8 2.5 — Net amount reclassified to earnings (4) (7.4 ) (1.6 ) — Tax benefit (2) 1.9 0.4 — Total amount reclassified from accumulated other comprehensive income, net of tax (5.5 ) (1.2 ) — Total other comprehensive income 5.3 1.3 — Balance at end of period $ 6.6 $ 1.3 $ — (1) In 2015, 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. (4) This amount was included in cost of sales, net on the accompanying Consolidated Statements of Income . |
Other Items (Tables)
Other Items (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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) 2015 2014 Wages and benefits $ 72.4 $ 60.0 Advertising 48.4 41.6 Sales returns 28.5 32.3 Rebates 11.5 22.8 Warranty 14.9 16.1 Other 78.3 60.5 $ 254.0 $ 233.3 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 included PRSUs, stock options, restricted stock units ("RSUs") and deferred stock units ("DSUs"). A summary of the Company’s stock-based compensation expense is presented below: December 31, (in millions) 2015 2014 2013 PRSU expense $ 13.7 $ 3.5 $ 3.0 Stock option expense 6.6 7.0 8.3 RSU/DSU expense 2.2 2.9 5.6 Total stock-based compensation expense $ 22.5 $ 13.4 $ 16.9 |
Summary of PRSU Activity and Related Information | A summary of the Company’s PRSU activity and related information for the years ended December 31, 2015 and 2014 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2013 0.3 $ 39.04 Granted 0.3 51.87 Vested 0.0 37.05 Forfeited (0.3 ) 39.38 Awards unvested at December 31, 2014 0.3 $ 53.45 Granted 1.7 70.43 Vested — — Forfeited (0.1 ) 56.74 Awards unvested at December 31, 2015 1.9 $ 68.17 The following table shows the PRSUs granted under the 2013 Plan and related Long-Term Incentive Plan, the maximum number of shares to be awarded under the PRSUs granted during the twelve months ended December 31, 2015 and the performance date and vesting schedule of the PRSUs granted. (shares in millions) Number of Shares Granted Maximum Number of Shares to be Awarded Performance Date Vesting Schedule 0.26 0.78 December 31, 2017 December 31, 2017 1.39 1.39 December 31, 2017 (1) December 31, 2017 (1) 0.07 0.07 December 31, 2016 Three annual installments beginning on September 4, 2016 (1) These shares will vest in full if the Company achieves the performance metric per the award agreement in 2017. In addition, if this target is not met in 2017 but the Company achieves the performance metric in 2018, then one-third, or 0.46 million, of the PRSUs will vest, and the remaining PRSUs shall be forfeited. |
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, 2015 , 2014 and 2013 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, 2015 2014 2013 Expected volatility range of stock 34.0% - 36.2% 56.7% - 66.5% 63.0% - 72.8% Expected life of option, range in years 3 - 5 2 - 4 2 - 3 Risk-free interest range rate 0.9% - 1.5% 0.4% - 1.4% 0.3% - 0.6% Expected dividend yield on stock 0.0% - 0.0% 0.6% - 0.7% 0.6% - 0.9% |
Schedule of Stock Option Activity | A summary of the Company’s unvested shares relating to stock options as of December 31, 2015 and 2014 , and changes during the years ended December 31, 2015 and 2014 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2013 0.6 $ 42.16 Granted 0.2 52.08 Vested (0.3 ) 42.46 Forfeited 0.0 50.53 Options unvested at December 31, 2014 0.5 $ 46.23 Granted 0.8 63.55 Vested (0.4 ) 44.25 Forfeited (0.1 ) 57.12 Options unvested at December 31, 2015 0.8 $ 62.34 A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2015 and 2014 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, 2013 2.8 $ 21.73 Granted 0.2 52.08 Released (0.2 ) 20.82 Forfeited 0.0 50.53 Options outstanding at December 31, 2014 2.8 $ 24.18 Granted 0.8 63.55 Released (1.4 ) 14.70 Forfeited (0.1 ) 57.12 Options outstanding at December 31, 2015 2.1 $ 42.75 6.47 $ 53.4 Options exercisable at December 31, 2015 1.3 $ 31.11 4.85 $ 52.0 |
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, 2015 and 2014 is presented below: (in millions, except release price and years) Shares Weighted Average Release Price Aggregate Intrinsic Value Awards outstanding at December 31, 2013 0.2 $ 47.00 Granted 0.0 54.56 Vested (0.1 ) 44.47 Terminated 0.0 46.77 Awards outstanding at December 31, 2014 0.1 $ 50.41 Granted 0.1 70.44 Vested (0.1 ) 58.73 Terminated 0.0 49.63 Awards outstanding at December 31, 2015 0.1 $ 66.41 $ 11.9 |
Schedule of Unrecognized Compensation Expense | 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, 2015 is presented below: (in millions, except years) December 31, 2015 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 9.2 2.49 Unrecognized DSU/RSU expense 7.9 2.59 Unrecognized PRSU expense 10.9 2.29 Total unrecognized stock-based compensation expense $ 28.0 2.44 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Rental Payments for Operating Leases | Future minimum lease payments at December 31, 2015 under these non-cancelable leases are as follows: (in millions) Year Ended December 31, 2016 $ 27.3 2017 23.3 2018 20.8 2019 18.4 2020 16.5 Thereafter 40.3 $ 146.6 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 2013 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 70.0 35.0 % $ 61.2 35.0 % $ 44.8 35.0 % State income taxes, net of federal benefit 1.1 0.6 % 1.1 0.6 % 1.7 1.3 % Foreign repatriation, net of foreign tax credits 0.0 0.0 % 13.5 7.7 % (16.0 ) (12.6 )% Foreign tax differential (10.0 ) (5.0 )% (12.6 ) (7.2 )% (12.3 ) (9.6 )% Change in valuation allowances 2.5 1.2 % (17.7 ) (10.0 )% 20.4 15.9 % Uncertain tax positions 59.7 29.8 % 10.9 6.1 % 4.7 3.7 % Subpart F income 1.9 1.0 % 1.9 1.1 % 1.5 1.2 % Manufacturing deduction (1.6 ) (0.8 )% (3.7 ) (2.1 )% 0.1 — % Goodwill on disposal of business 0.0 0.0 % 7.5 4.2 % — — % Permanent and other 1.8 0.9 % 2.8 1.7 % 4.2 3.5 % Effective income tax provision $ 125.4 62.7 % $ 64.9 37.1 % $ 49.1 38.4 % |
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, 2015, 2014 and 2013: Year Ended December 31, (in millions) 2015 2014 2013 Income before income taxes: United States $ 120.2 $ 46.9 $ (4.5 ) Rest of the world 79.9 128.0 132.5 $ 200.1 $ 174.9 $ 128.0 |
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, 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 Additions based on tax positions related to 2015 0.9 Additions for tax positions of prior years 25.7 Expiration of statutes of limitations (2.1 ) Settlements of uncertain tax positions with tax authorities (2.3 ) Balance as of December 31, 2015 $ 69.8 |
Operating Loss and Tax Credit Carryforwards | The Company has the following gross income tax attributes available at December 31, 2015 and 2014 respectively (in millions): 2015 2014 State net operating losses (“SNOLs”) 128.8 145.3 U.S. federal foreign tax credits (“FTCs”) 7.8 7.8 U.S. state income tax credits ("SITCs") 5.5 1.6 Foreign net operating losses (“FNOLs”) 38.0 44.2 Charitable contribution carryover ("CCCs") 23.7 8.4 |
Tax Provision Summary | The income tax provision consisted of the following: Year Ended December 31, (in millions) 2015 2014 2013 Current provision Federal $ 107.1 $ 50.7 $ 48.6 State 7.2 4.5 7.3 Foreign 32.4 36.9 42.3 Total current $ 146.7 $ 92.1 $ 98.2 Deferred provision Federal $ (12.3 ) $ (25.2 ) $ (47.0 ) State (3.7 ) (1.2 ) 0.4 Foreign (5.3 ) (0.8 ) (2.5 ) Total deferred (21.3 ) (27.2 ) (49.1 ) Total income tax provision $ 125.4 $ 64.9 $ 49.1 |
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) 2015 2014 Deferred tax assets: Stock-based compensation $ 16.0 $ 12.4 Accrued expenses and other 57.6 57.9 Net operating losses, foreign tax credits and charitable contribution carryforward 33.1 30.6 Inventories 5.1 4.5 Transaction costs 22.0 14.5 Property, plant and equipment 2.9 4.0 Total deferred tax assets 136.7 123.9 Valuation allowances (24.2 ) (21.7 ) Total net deferred tax assets $ 112.5 $ 102.2 Deferred tax liabilities: Intangible assets $ (247.8 ) $ (258.1 ) Property, plant and equipment (42.0 ) (45.7 ) Accrued expenses and other (5.9 ) (4.5 ) Total deferred tax liabilities (295.7 ) (308.3 ) Net deferred tax liabilities $ (183.2 ) $ (206.1 ) |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table sets forth the components of the numerator and denominator for the computation of basic and diluted earnings per share for net income attributable to Tempur Sealy International. Year Ended December 31, (in millions, except per common share amounts) 2015 2014 2013 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 73.5 $ 108.9 $ 78.6 Denominator: Denominator for basic earnings per common share—weighted average shares 61.7 60.8 60.3 Effect of dilutive securities: Employee stock based compensation 0.9 1.3 1.3 Denominator for diluted earnings per common share—adjusted weighted average shares 62.6 62.1 61.6 Basic earnings per common share $ 1.19 $ 1.79 $ 1.30 Diluted earnings per common share $ 1.17 $ 1.75 $ 1.28 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Total Assets and Long-lived Assets by Segment | The following table summarizes total assets by segment: December 31, December 31, (in millions) 2015 2014 North America $ 2,533.1 $ 2,465.2 International 477.1 474.3 Corporate 775.0 820.9 Inter-segment eliminations (1,129.7 ) (1,177.7 ) Total assets $ 2,655.5 $ 2,582.7 The following table summarizes property, plant and equipment, net by segment: December 31, December 31, (in millions) 2015 2014 North America $ 239.2 $ 240.5 International 54.8 60.3 Corporate 67.7 54.8 Total property, plant and equipment, net $ 361.7 $ 355.6 |
Segment Financial Information | The following table summarizes segment information for the twelve months ended December 31, 2015 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,428.9 $ 458.3 $ — $ — $ 2,887.2 Other sales 148.3 115.7 — — 264.0 Net sales 2,577.2 574.0 — — 3,151.2 Inter-segment sales $ 5.9 $ 0.7 $ — $ (6.6 ) $ — Gross profit 954.6 294.3 — — 1,248.9 Inter-segment royalty expense (income) 7.1 (7.1 ) — — — Operating income (loss) 335.6 98.9 (125.4 ) — 309.1 Income (loss) before income taxes 324.4 73.2 (197.5 ) — 200.1 Depreciation and amortization (1) $ 43.3 $ 16.0 $ 34.6 $ — $ 93.9 Capital expenditures 28.9 14.8 22.2 — 65.9 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the twelve months ended December 31, 2014 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,261.9 $ 464.6 $ — $ — $ 2,726.5 Other sales 143.0 120.3 — — 263.3 Net sales 2,404.9 584.9 — — 2,989.8 Inter-segment sales $ 5.1 $ 0.3 $ — $ (5.4 ) $ — Gross profit 834.8 315.6 — — 1,150.4 Inter-segment royalty expense (income) 6.1 (6.1 ) — — — Operating income (loss) 255.0 118.8 (97.5 ) — 276.3 Income (loss) before income taxes 228.0 112.2 (165.3 ) — 174.9 Depreciation and amortization (1) $ 47.9 $ 16.3 $ 25.5 $ — $ 89.7 Capital expenditures 17.8 15.6 14.1 — 47.5 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the twelve months ended December 31, 2013 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 1,779.3 $ 419.1 $ — $ — $ 2,198.4 Other sales 147.7 118.2 — — 265.9 Net sales 1,927.0 537.3 — — 2,464.3 Inter-segment sales $ 0.2 $ 0.6 $ — $ (0.8 ) $ — Gross profit 710.2 304.7 — — 1,014.9 Inter-segment royalty expense (income) 5.8 (5.8 ) — — — Operating income (loss) 229.0 124.7 (109.9 ) — 243.8 Income (loss) before income taxes 548.3 (204.5 ) (215.8 ) — 128.0 Depreciation and amortization (1) $ 49.9 $ 14.1 $ 27.5 $ — $ 91.5 Capital expenditures 19.5 11.2 9.3 — 40.0 (1) Depreciation and amortization includes stock-based compensation amortization expense. |
Long-lived assets by geographic region | The following table summarizes property, plant and equipment, net by geographic region: December 31, December 31, (in millions) 2015 2014 United States $ 300.1 $ 287.3 Canada 6.8 8.0 Other International 54.8 60.3 Total property, plant and equipment, net $ 361.7 $ 355.6 Total International 61.6 68.3 |
Net sales by geographic region | The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2015 2014 2013 United States $ 2,374.7 $ 2,188.8 $ 1,736.8 Canada 202.5 216.1 190.2 Other International 574.0 584.9 537.3 Total net sales $ 3,151.2 $ 2,989.8 $ 2,464.3 Total International $ 776.5 $ 801.0 $ 727.5 |
Quarterly Financial Data (una47
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly results of operations for the years ended December 31, 2015 and 2014 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2015 Net sales $ 739.5 $ 764.4 $ 880.0 $ 767.3 Gross profit 278.7 297.5 359.6 313.1 Operating income 54.4 52.0 110.9 91.8 Net income (loss) 23.4 21.2 40.2 (11.3 ) Basic earnings (loss) per common share $ 0.38 $ 0.35 $ 0.65 $ (0.18 ) Diluted earnings (loss) per common share $ 0.38 $ 0.34 $ 0.64 $ (0.18 ) 2014 Net sales $ 701.9 $ 715.0 $ 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 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 ) $ 0.60 $ 0.75 |
Guarantor_Non-Guarantor Finan48
Guarantor/Non-Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 2,422.9 $ 778.9 $ (50.6 ) $ 3,151.2 Cost of sales — 1,532.6 420.3 (50.6 ) 1,902.3 Gross profit — 890.3 358.6 — 1,248.9 Selling and marketing expenses 4.1 460.1 183.8 — 648.0 General, administrative and other expenses 20.8 232.6 68.6 — 322.0 Equity income in earnings of unconsolidated affiliates — — (11.9 ) — (11.9 ) Royalty income, net of royalty expense — (18.3 ) — — (18.3 ) Operating (loss) income (24.9 ) 215.9 118.1 — 309.1 Other expense, net: Third party interest expense, net 27.2 66.2 2.7 — 96.1 Intercompany interest expense (income), net 32.9 (35.5 ) 2.6 — — Interest expense, net 60.1 30.7 5.3 — 96.1 Other (income) expense, net — (8.1 ) 21.0 — 12.9 Total other expense 60.1 22.6 26.3 — 109.0 Income from equity investees 132.9 64.7 — (197.6 ) — Income before income taxes 47.9 258.0 91.8 (197.6 ) 200.1 Income tax benefit (provision) 26.8 (125.1 ) (27.1 ) — (125.4 ) Net income 74.7 132.9 64.7 (197.6 ) 74.7 Less: net income attributable to non-controlling interest 1.2 1.2 — (1.2 ) 1.2 Net income attributable to Tempur Sealy International, Inc. $ 73.5 $ 131.7 $ 64.7 $ (196.4 ) $ 73.5 Comprehensive income $ 19.1 $ 130.9 $ (3.3 ) $ (127.6 ) $ 19.1 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 $ — $ 2,229.5 $ 802.9 $ (42.6 ) $ 2,989.8 Cost of sales — 1,465.3 416.7 (42.6 ) 1,839.4 Gross profit — 764.2 386.2 — 1,150.4 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 27.0 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 disposal, 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 110.0 159.2 98.7 (257.9 ) 110.0 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 $ — $ 1,758.2 $ 728.1 $ (22.0 ) $ 2,464.3 Cost of sales — 1,110.5 360.9 (22.0 ) 1,449.4 Gross profit — 647.7 367.2 — 1,014.9 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 expense, net — (0.9 ) 5.9 — 5.0 Total other expense (income) 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 ) 128.0 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 |
Schedule of Supplemental Condensed Consolidating Balance Sheets | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2015 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 121.8 $ 32.1 $ — $ 153.9 Accounts receivable, net — 231.9 147.5 — 379.4 Inventories — 145.3 53.9 — 199.2 Income tax receivable 193.1 — — (193.1 ) — Prepaid expenses and other current assets — 43.5 33.1 — 76.6 Total Current Assets 193.1 542.5 266.6 (193.1 ) 809.1 Property, plant and equipment, net — 300.1 61.6 — 361.7 Goodwill — 501.4 208.0 — 709.4 Other intangible assets, net — 612.9 82.5 — 695.4 Deferred tax asset 16.0 — 12.2 (16.0 ) 12.2 Other non-current assets — 23.3 44.4 — 67.7 Net investment in subsidiaries 1,960.5 — — (1,960.5 ) — Due from affiliates 548.1 1,655.3 4.8 (2,208.2 ) — Total Assets $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 212.2 $ 54.1 $ — $ 266.3 Accrued expenses and other current liabilities 1.4 183.8 68.8 — 254.0 Income taxes payable — 196.0 8.3 (193.1 ) 11.2 Current portion of long-term debt — 168.7 12.8 — 181.5 Total Current Liabilities 1.4 760.7 144.0 (193.1 ) 713.0 Long-term debt, net 811.9 461.4 — — 1,273.3 Deferred income taxes — 189.8 21.6 (16.0 ) 195.4 Other non-current liabilities — 166.6 4.6 — 171.2 Due to affiliates 1,601.8 96.5 604.9 (2,303.2 ) — Total Liabilities 2,415.1 1,675.0 775.1 (2,512.3 ) 2,352.9 Redeemable non-controlling interest 12.4 12.4 — (12.4 ) 12.4 Total Stockholders’ Equity 290.2 1,948.1 (95.0 ) (1,853.1 ) 290.2 Total Liabilities and Stockholders’ Equity $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 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 tax receivable 144.1 — — (144.1 ) — Prepaid expenses and other current assets — 28.2 28.3 — 56.5 Total Current Assets 144.5 453.2 268.4 (144.1 ) 722.0 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 12.4 — 10.7 (12.4 ) 10.7 Other non-current assets — 15.1 15.7 — 30.8 Net investment in subsidiaries 1,808.4 — — (1,808.4 ) — Due from affiliates 51.4 2,226.0 5.3 (2,282.7 ) — Total Assets $ 2,016.7 $ 4,150.7 $ 662.9 $ (4,247.6 ) $ 2,582.7 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 170.4 $ 56.0 $ — $ 226.4 Accrued expenses and other current liabilities 1.4 166.1 65.8 — 233.3 Income taxes payable — 163.0 (6.9 ) (144.1 ) 12.0 Current portion of long-term debt — 61.8 4.6 — 66.4 Total Current Liabilities 1.4 561.3 119.5 (144.1 ) 538.1 Long-term debt, net 368.7 1,129.6 — — 1,498.3 Deferred income taxes — 202.3 26.8 (12.4 ) 216.7 Other non-current liabilities — 109.3 5.0 — 114.3 Due to affiliates 1,431.3 340.2 849.4 (2,620.9 ) — Total Liabilities 1,801.4 2,342.7 1,000.7 (2,777.4 ) 2,367.4 Redeemable non-controlling interest 12.6 12.6 — (12.6 ) 12.6 Total Stockholders’ Equity 202.7 1,795.4 (337.8 ) (1,457.6 ) 202.7 Total Liabilities and Stockholders’ Equity $ 2,016.7 $ 4,150.7 $ 662.9 $ (4,247.6 ) $ 2,582.7 |
Schedule of Supplemental Condensed Consolidating Statements of Cash Flows | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2015 (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 $ (87.0 ) $ 274.7 $ 46.5 $ — $ 234.2 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposition of business — 7.2 — — 7.2 Purchases of property, plant and equipment — (49.9 ) (16.0 ) (65.9 ) Other — (0.7 ) (0.3 ) — (1.0 ) Net cash used in investing activities — (43.4 ) (16.3 ) — (59.7 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from 2012 Credit Agreement — 402.9 10.6 — 413.5 Repayments 2012 Credit Agreement — (988.3 ) — — (988.3 ) Proceeds from issuance of 2023 Senior Notes 450.0 — — — 450.0 Net activity in investment in and advances (to) from subsidiaries and affiliates (401.3 ) 453.4 (52.1 ) — — Proceeds from exercise of stock options 20.4 — — — 20.4 Excess tax benefit from stock based compensation 21.8 — — — 21.8 Proceeds from issuance of treasury stock by CEO 5.0 — — — 5.0 Treasury stock repurchased (1.3 ) — — — (1.3 ) Payment of deferred financing costs (8.0 ) — — — (8.0 ) Other — (3.0 ) (0.8 ) — (3.8 ) Net cash provided by (used in) financing activities 86.6 (135.0 ) (42.3 ) — (90.7 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — 7.6 — 7.6 Increase (decrease) in cash and cash equivalents (0.4 ) 96.3 (4.5 ) — 91.4 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0.4 25.5 36.6 — 62.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 121.8 $ 32.1 $ — $ 153.9 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 Purchase of property, plant and equipment — (31.3 ) (16.2 ) — (47.5 ) Other — 3.0 (0.9 ) — 2.1 Net cash provided by (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 of the 2012 Credit Agreement — (510.9 ) — — (510.9 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 59.3 32.1 (91.4 ) — — 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 ) Payment of deferred financing costs — (3.1 ) — — (3.1 ) 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, BEGININNG OF PERIOD — 30.9 50.1 — 81.0 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 $ — $ 2,992.6 $ — $ — $ 2,992.6 Repayments of the 2012 Credit Agreement — (1,658.3 ) — — (1,658.3 ) Proceeds from issuance of 2020 Senior Notes 375.0 — — — 375.0 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 (to) from subsidiaries and affiliates (772.8 ) 874.9 (102.1 ) — — 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 ) Payment of deferred financing costs (8.4 ) (43.6 ) — — (52.0 ) Other — (1.3 ) 0.3 — (1.0 ) Net cash provided by (used in) financing activities 66.1 1,049.1 (101.8 ) — 1,013.4 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 $ — $ 81.0 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2015USD ($)channelfacilityshares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Feb. 01, 2016USD ($) | |
Business Acquisition [Line Items] | ||||
Number of products sales channels | channel | 2 | |||
Noncontrolling interest, ownership percentage by parent | 100.00% | |||
Depreciation expense | $ 53,500,000 | $ 57,700,000 | $ 59,400,000 | |
Product warranty accrual, current | 14,900,000 | 16,100,000 | ||
Product warranty accrual, noncurrent | 14,700,000 | 15,200,000 | ||
Allowance for doubtful accounts included in accounts receivable, net | 23,300,000 | 19,500,000 | ||
Shipping and handling included in net sales | 11,100,000 | 14,700,000 | 12,500,000 | |
Shipping and handling included in cost of sales | 161,600,000 | 169,200,000 | 142,500,000 | |
Other income, net of expense | 9,500,000 | 15,600,000 | 0 | |
Advertising costs charged to expense | 360,500,000 | 326,700,000 | 274,200,000 | |
Advertising costs deferred and included in Prepaid expenses and other current assets | 13,700,000 | 9,700,000 | ||
Research and development costs charged to expense | 28,700,000 | 21,600,000 | 21,000,000 | |
Royalty revenue, net of royalty expense | $ 18,300,000 | 18,100,000 | $ 13,700,000 | |
Treasury stock sold (in shares) | shares | 69,686 | |||
Proceeds from issuance of treasury shares | $ 5,000,000 | |||
Self insurance reserve, excess loss coverage per claim per year | 800,000 | |||
Self insurance reserve, current | 6,600,000 | 4,800,000 | ||
Self insurance reserve, noncurrent | $ 11,500,000 | $ 10,000,000 | ||
Number of active plants | facility | 2 | |||
Number of previously closed US facilities | facility | 9 | |||
Term of supply agreements, minimum | 2 years | |||
Term of supply agreements, maximum | 5 years | |||
Restructuring expenses | $ 13,500,000 | |||
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% | |||
Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Amount of shares authorized to be repurchased | $ 200,000,000 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Finished goods | $ 126.7 | $ 134 |
Work-in-process | 14 | 11.4 |
Raw materials and supplies | 58.5 | 71.8 |
Total | $ 199.2 | $ 217.2 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 30 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 5 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 4 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Office furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 5 years |
Office furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Property, Plant and Equipment Summary (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 688.6 | $ 654.1 |
Accumulated depreciation | (326.9) | (298.5) |
Total property, plant, and equipment, net | 361.7 | 355.6 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 257 | 243.5 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 243.7 | 247.1 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 78.2 | 69.2 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 52.3 | 54.9 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 57.4 | $ 39.4 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Changes in Accrued Sales Returns (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in Accrued Sales Returns [Roll Forward] | ||
Beginning balance | $ 32.3 | $ 28.7 |
Amounts accrued | 123 | 127.4 |
Returns charged to accrual | (126.8) | (123.8) |
Ending balance | $ 28.5 | $ 32.3 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies - Warranty Terms (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Pillows | Non-prorated | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 3 years |
Tempur North America | Mattresses | Minimum | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 10 years |
Tempur North America | Mattresses | Minimum | Non-prorated | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 10 years |
Tempur North America | Mattresses | Maximum | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 25 years |
Tempur North America | Mattresses | Maximum | Non-prorated | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 15 years |
Tempur International | Mattresses | Non-prorated | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 5 years |
Tempur International | Mattresses | Prorated | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 10 years |
Tempur International | Mattresses | Minimum | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 5 years |
Tempur International | Mattresses | Maximum | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Warranty term (in years) | 15 years |
Summary of Significant Accoun55
Summary of Significant Accounting Policies - Warranty Activity (Details) - Warranty Reserves - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Extended Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 31.3 | $ 26.1 |
Amounts accrued | 28.8 | 34.2 |
Warranties charged to accrual | (30.5) | (29) |
Balance at end of period | $ 29.6 | $ 31.3 |
Recently Issued Accounting Pr56
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Long-term debt, net | $ 1,273.3 | $ 1,498.3 |
Deferred income taxes | 195.4 | 216.7 |
Adjustments for New Accounting Principle, Early Adoption | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Long-term debt, net | 24.8 | 37.6 |
Deferred income taxes | $ 2.2 | $ 0.2 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) | May. 06, 2015USD ($) | Jul. 01, 2014USD ($) | Jun. 30, 2014USD ($)facility | Sep. 30, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2011 |
Business Acquisition [Line Items] | ||||||||
Proceeds from disposition of business | $ 7,200,000 | $ 43,500,000 | $ 0 | |||||
Portland Manufacturing Facility | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from disposition of business | $ 7,200,000 | |||||||
Gain (loss) on disposal | 400,000 | |||||||
U.S. Innerspring | ||||||||
Business Acquisition [Line Items] | ||||||||
Gain (loss) on disposal | (23,200,000) | |||||||
Number of divestitures | facility | 3 | |||||||
Total consideration | $ 47,800,000 | $ 45,000,000 | ||||||
Other non-cash consideration | 1,500,000 | |||||||
Working capital adjustment | $ 2,800,000 | |||||||
Assets of disposal group | $ 66,800,000 | |||||||
Transaction costs | 1,400,000 | |||||||
Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Fiscal period duration | 364 days | |||||||
Maximum | ||||||||
Business Acquisition [Line Items] | ||||||||
Fiscal period duration | 371 days | |||||||
Sealy | ||||||||
Business Acquisition [Line Items] | ||||||||
Direct transaction costs | $ 0 | $ 0 | 18,700,000 | |||||
Incremental interest expense | $ 19,900,000 | |||||||
Japanese Third Party Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Net consideration transferred | $ 8,500,000 |
Acquisitions and Divestitures58
Acquisitions and Divestitures - Pro Forma Information (Details) - Sealy $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2013USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Net sales | $ 2,757.2 |
Net income | $ 90.9 |
Earnings per common share – Diluted (in dollars per share) | $ / shares | $ 1.49 |
Goodwill and Other Intangible59
Goodwill and Other Intangible Assets - Goodwill by Reportable Business Segment (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)reporting_unit | Dec. 31, 2014USD ($)segment | Dec. 31, 2013USD ($) | |
Goodwill [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | $ 736.5 | $ 759.6 | |
Disposal of business | $ (21.4) | ||
Goodwill resulting from acquisitions | 2.3 | ||
Foreign currency translation adjustments | (4) | ||
Foreign currency translation adjustments | (27.1) | ||
Goodwill, Ending balance | $ 709.4 | 736.5 | 759.6 |
Tempur North America | |||
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 3 | ||
Tempur International | |||
Goodwill [Line Items] | |||
Number of reporting units | reporting_unit | 1 | ||
Sealy | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | $ 521.9 | ||
Goodwill, Ending balance | 521.9 | ||
Operating Segments | Tempur North America | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 106.2 | 107.7 | |
Disposal of business | 0 | ||
Goodwill resulting from acquisitions | 0 | ||
Foreign currency translation adjustments | (1.5) | ||
Goodwill, Ending balance | 106.2 | 107.7 | |
Operating Segments | Tempur North America | Tempur Sealy U.S. [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 574.5 | ||
Foreign currency translation adjustments | (11.7) | ||
Goodwill, Ending balance | 562.8 | 574.5 | |
Operating Segments | Tempur International | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 108.4 | 107.3 | |
Disposal of business | 0 | ||
Goodwill resulting from acquisitions | 2.3 | ||
Foreign currency translation adjustments | (1.2) | ||
Goodwill, Ending balance | 108.4 | 107.3 | |
Operating Segments | Tempur International | Sealy Canada | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 162 | ||
Foreign currency translation adjustments | (15.4) | ||
Goodwill, Ending balance | 146.6 | 162 | |
Operating Segments | Sealy | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 521.9 | 544.6 | |
Disposal of business | (21.4) | ||
Goodwill resulting from acquisitions | 0 | ||
Foreign currency translation adjustments | (1.3) | ||
Goodwill, Ending balance | 521.9 | $ 544.6 | |
Scenario, Previously Reported | Operating Segments | Tempur North America | Tempur Sealy U.S. [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 106.2 | ||
Goodwill, Ending balance | 106.2 | ||
Scenario, Previously Reported | Operating Segments | Tempur International | Sealy Canada | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 108.4 | ||
Goodwill, Ending balance | 108.4 | ||
Restatement Adjustment | Operating Segments | Tempur North America | Tempur Sealy U.S. [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | 468.3 | ||
Goodwill, Ending balance | 468.3 | ||
Restatement Adjustment | Operating Segments | Tempur International | Sealy Canada | |||
Goodwill [Roll Forward] | |||
Goodwill, Beginning balance | $ 53.6 | ||
Goodwill, Ending balance | $ 53.6 |
Goodwill and Other Intangible60
Goodwill and Other Intangible Assets - Other Intangible Assets and Expected Future Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount, total | $ 785.4 | $ 801.2 | |
Accumulated Amortization | 90 | 74.1 | |
Net Carrying Amount | 695.4 | 727.1 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense relating to intangible assets | 17.9 | 18.5 | $ 15.2 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2,016 | 17.9 | ||
2,017 | 17.2 | ||
2,018 | 15.4 | ||
2,019 | 14.8 | ||
2,020 | 13.8 | ||
Trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - indefinite life intangible assets | 558.1 | 569 | |
Net Carrying Amount | $ 558.1 | 569 | |
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 | $ 84.8 | 88.2 | |
Accumulated Amortization | 15.8 | 10.4 | |
Net Carrying Amount | 69 | 77.8 | |
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 | 90.8 | 92.6 | |
Accumulated Amortization | 39.2 | 32.6 | |
Net Carrying Amount | $ 51.6 | 60 | |
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 | $ 27.2 | 27.3 | |
Accumulated Amortization | 16.9 | 14.6 | |
Net Carrying Amount | $ 10.3 | 12.7 | |
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 | $ 24.5 | 24.1 | |
Accumulated Amortization | 18.1 | 16.5 | |
Net Carrying Amount | $ 6.4 | $ 7.6 | |
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 Comp61
Unconsolidated Affiliate Companies (Details) - Joint Ventures - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Unconsolidated Affiliate Companies | ||
Ownership percentage | 50.00% | |
Net investment | $ 13.6 | $ 12.9 |
Current assets | 50 | 49.7 |
Non-current assets | 15.7 | 5.1 |
Current liabilities | 37.3 | 29.7 |
Equity | 28.4 | 25.1 |
Revenue | 131.6 | 99.2 |
Gross profit | 85 | 62.1 |
Income from operations | 26.2 | 16.8 |
Net income | $ 20.1 | $ 13.1 |
Debt - Schedule of Borrowings O
Debt - Schedule of Borrowings Outstanding (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Sep. 24, 2015 | Apr. 12, 2013 | Mar. 19, 2013 | Dec. 19, 2012 | |
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Total debt | $ 1,479,600,000 | $ 1,602,300,000 | ||||
Less: deferred financing costs | (24,800,000) | (37,600,000) | ||||
Total debt, net | 1,454,800,000 | 1,564,700,000 | ||||
Less: current portion | (181,500,000) | (66,400,000) | ||||
Total long term debt, net | 1,273,300,000 | 1,498,300,000 | ||||
2020 Senior Notes | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | $ 375,000,000 | |||
Line of Credit Facility [Abstract] | ||||||
Stated percentage | 6.875% | 6.875% | 6.875% | |||
2023 Senior Notes | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Senior notes, noncurrent | $ 450,000,000 | $ 0 | $ 450,000,000 | |||
Line of Credit Facility [Abstract] | ||||||
Stated percentage | 5.625% | 0.00% | 5.625% | |||
8.0% Sealy Notes | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Notes, carrying value | $ 111,100,000 | $ 104,700,000 | ||||
Line of Credit Facility [Abstract] | ||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||
Capital lease obligations and other | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Capital lease obligations and other | $ 34,000,000 | $ 27,700,000 | ||||
2012 Credit Agreement | Base | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Line of credit | $ 409,400,000 | $ 484,500,000 | ||||
2012 Credit Agreement | Base | LIBOR | ||||||
Line of Credit Facility [Abstract] | ||||||
Index rate or LIBOR plus (percentage) | 2.00% | 2.25% | ||||
Effective percentage | 2.42% | |||||
2012 Credit Agreement | Term B Facility | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Line of credit | $ 100,100,000 | $ 594,400,000 | ||||
2012 Credit Agreement | Term B Facility | LIBOR | ||||||
Line of Credit Facility [Abstract] | ||||||
Index rate or LIBOR plus (percentage) | 2.75% | 2.75% | ||||
Interest rate floor (as a percent) | 0.75% | 0.75% | ||||
Effective percentage | 3.50% | |||||
LIBOR | ||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||
Line of credit | $ 0 | $ 16,000,000 | ||||
LIBOR | LIBOR | ||||||
Line of Credit Facility [Abstract] | ||||||
Index rate or LIBOR plus (percentage) | 3.00% | |||||
Effective percentage | 3.16% | |||||
LIBOR | Base Rate | ||||||
Line of Credit Facility [Abstract] | ||||||
Index rate or LIBOR plus (percentage) | 2.00% |
Debt - Credit Facilities and Ot
Debt - Credit Facilities and Other Additional Information (Details) - USD ($) | Oct. 17, 2014 | Sep. 30, 2014 | Dec. 12, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 24, 2015 | Jul. 11, 2013 | May. 16, 2013 | Dec. 31, 2012 | Dec. 19, 2012 |
Line of Credit Facility [Line Items] | |||||||||||
Debt basket | $ 50,000,000 | ||||||||||
Cash Used for Repayments of Line of Credit | $ 50,000,000 | ||||||||||
Deferred financing costs | $ 54,300,000 | $ 54,300,000 | |||||||||
Write-off of deferred financing costs | $ 0 | $ 0 | $ 4,700,000 | ||||||||
Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Remaining lease term (in years) | 2 years | ||||||||||
Debt instrument amortization period deferred financing costs (in years | 3 years | 5 years | |||||||||
Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Remaining lease term (in years) | 10 years | ||||||||||
Debt instrument amortization period deferred financing costs (in years | 5 years | 8 years | |||||||||
2023 Notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Stated percentage | 5.625% | 0.00% | 5.625% | ||||||||
Debt issuance cost | $ 12,000,000 | ||||||||||
Deferred financing costs | $ 8,000,000 | ||||||||||
Senior Notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Stated percentage | 6.875% | 6.875% | 6.875% | ||||||||
Debt issuance cost | $ 3,100,000 | ||||||||||
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 | 121,800,000 | ||||||||||
Foreign qualified cash, maximum | 19,300,000 | ||||||||||
2012 Credit Agreement | Senior Notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt issuance cost | $ 3,300,000 | ||||||||||
2012 Credit Agreement | Base | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Principal borrowing capacity, maximum | $ 550,000,000 | ||||||||||
Debt instrument, reduction in applicable margin (percentage) | 0.75% | ||||||||||
Voluntary prepayments | 13,900,000 | ||||||||||
2012 Credit Agreement | Base | Adjusted LIBOR | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Index rate or LIBOR plus (percentage) | 3.00% | ||||||||||
2012 Credit Agreement | Base | 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 | ||||||||||
Voluntary prepayments | $ 479,900,000 | ||||||||||
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% | ||||||||||
LIBOR | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Initial unused commitment fee (percentage) | 0.50% | ||||||||||
Unused commitment fee (percentage) | 0.375% | ||||||||||
Total net leverage ratio | 3.50 | ||||||||||
Credit Facility 2011 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Write-off of deferred financing costs | $ 4,700,000 |
Debt - Notes Payable (Details)
Debt - Notes Payable (Details) - USD ($) | Mar. 19, 2013 | Dec. 31, 2015 | Sep. 24, 2015 | Dec. 31, 2014 | Apr. 12, 2013 | Mar. 18, 2013 | Dec. 19, 2012 |
2023 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes, noncurrent | $ 450,000,000 | $ 450,000,000 | $ 0 | ||||
Stated percentage | 5.625% | 5.625% | 0.00% | ||||
Percentage of principal amount that may be redeemed | 105.625% | ||||||
Minimum percentage of notes not eligible for early redemption | 65.00% | ||||||
2023 Notes | Any time on or after October 15, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 104.219% | ||||||
2023 Notes | Beginning on October 15, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 100.00% | ||||||
2023 Notes | Any time prior to October 15, 2018 with a 'make-whole' premium and accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of redemption on notes | 100.00% | ||||||
2023 Notes | Any time prior to October 15, 2018 with the net cash proceeds from certain equity offerings plus accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 35.00% | ||||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | $ 375,000,000 | ||||
Stated percentage | 6.875% | 6.875% | 6.875% | ||||
Percentage of principal amount that may be redeemed | 106.875% | ||||||
Minimum percentage of notes not eligible for early redemption | 65.00% | ||||||
Senior Notes | Any time on or after December 15, 2016 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 103.438% | ||||||
Senior Notes | Any time on or after December 15, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 101.719% | ||||||
Senior Notes | Any time on or after December 15, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 100.00% | ||||||
Senior Notes | Any time prior to December 15, 2016 with 'make-whole' premium and accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of redemption on notes | 100.00% | ||||||
Senior Notes | Any time prior to December 15, 2016 with the net cash proceeds from certain equity offerings plus accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of redemption on notes | 35.00% | ||||||
8.0% 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 | $ 96,200,000 | ||||||
Notes, carrying value | $ 111,100,000 | $ 104,700,000 | |||||
Debt instrument, accreted discount | $ 14,900,000 | 8,700,000 | |||||
8.0% Sealy Notes, due July 15, 2016 | $ 104,700,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 181.5 |
2,017 | 58 |
2,018 | 314.1 |
2,019 | 7.3 |
2,020 | 460.8 |
Thereafter | 457.9 |
Total | $ 1,479.6 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Sep. 24, 2015 | Dec. 31, 2014 | Apr. 12, 2013 | Mar. 19, 2013 | Mar. 18, 2013 | Dec. 19, 2012 |
2023 Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Stated percentage | 5.625% | 5.625% | 0.00% | ||||
Senior Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Stated percentage | 6.875% | 6.875% | 6.875% | ||||
8.0% Sealy Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Notes, fair value | $ 96.2 | ||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | |||
Significant Other Observable Inputs (Level 2) | 2023 Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Notes, fair value | $ 453.4 | ||||||
Significant Other Observable Inputs (Level 2) | Senior Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Notes, fair value | 393.8 | $ 398.4 | |||||
Significant Other Observable Inputs (Level 2) | 8.0% Sealy Notes | |||||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Notes, fair value | 112.7 | 110.7 | |||||
Fair Value, Measurements, Recurring | |||||||
Assets, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 12.5 | 1.8 | |||||
Assets, Fair Value | 12.5 | 1.8 | |||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 1.2 | 0.1 | |||||
Notes, fair value | 1.2 | 0.1 | |||||
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
Assets, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 0 | ||||||
Assets, Fair Value | 0 | 0 | |||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 0 | 0 | |||||
Notes, fair value | 0 | 0 | |||||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | |||||||
Assets, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 12.5 | 1.8 | |||||
Assets, Fair Value | 12.5 | 1.8 | |||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 1.2 | 0.1 | |||||
Notes, fair value | 1.2 | 0.1 | |||||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||||||
Assets, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 0 | 0 | |||||
Assets, Fair Value | 0 | 0 | |||||
Liabilities, Fair Value Disclosure [Abstract] | |||||||
Foreign exchange forward contracts | 0 | 0 | |||||
Notes, fair value | $ 0 | $ 0 |
Derivative Financial Instrume67
Derivative Financial Instruments (Details) - USD ($) $ in Millions | Aug. 08, 2011 | Dec. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | |||
Term of interest rate swap (in years) | 4 years | ||
Derivative Asset [Abstract] | |||
Fair Value | $ 12.5 | $ 1.8 | |
Derivative Liability [Abstract] | |||
Fair Value | 1.2 | 0.1 | |
Foreign Exchange Forward | |||
Derivative Liability [Abstract] | |||
Notional amount | 87 | ||
Gain on derivative | 5.7 | ||
Accrued expenses and other current liabilities | Foreign Exchange Forward | |||
Derivative Liability [Abstract] | |||
Fair Value | 1.2 | 0.1 | |
Derivatives designated as hedging instruments | Prepaid expenses and other current assets | Foreign Exchange Forward | |||
Derivative Asset [Abstract] | |||
Fair Value | 7.7 | 1.8 | |
Derivatives designated as hedging instruments | Other non-current assets | Foreign Exchange Forward | |||
Derivative Asset [Abstract] | |||
Fair Value | 1.3 | 0 | |
Derivatives not designated as hedging instruments | Prepaid expenses and other current assets | Foreign Exchange Forward | |||
Derivative Asset [Abstract] | |||
Fair Value | $ 3.5 | $ 0 |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Profit Sharing | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, cost recognized | $ 2.8 | $ 1.7 | $ 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 | $ 7.3 | $ 5 | $ 1.7 |
Retirement Plans - Defined Bene
Retirement Plans - Defined Benefit Plans (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($)facility | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Retirement plans | ||||
Number of active plants at which a defined benefit pension plan for current and former hourly employees is provided | facility | 2 | |||
Number of previously closed U.S. facilities at which a defined benefit pension plan for current and former hourly employees was provided | facility | 9 | |||
Components of net periodic pension cost for employees | ||||
Service cost | $ 0.8 | $ 0.9 | $ 0.9 | |
Interest cost | 1.9 | 1.8 | 1.3 | |
Expected return on assets | (2.2) | (2.1) | (1.5) | |
Curtailment loss | 0 | 0.1 | 0 | |
Amortization of net gain | 0 | (0.1) | 0 | |
Settlement loss | $ 1.3 | 1.3 | 0 | 0 |
Net periodic pension cost | 1.8 | 0.6 | 0.7 | |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income | ||||
Net loss | 0.2 | 9 | (6.2) | |
Amortization of prior service cost | 0 | (0.2) | 1 | |
Amortization or settlement recognition of net gain (loss) | (1.3) | 0.1 | 0 | |
New prior service cost | 0.1 | 0.1 | 0 | |
Total recognized in other comprehensive loss | $ (1) | $ 9 | $ (5.2) | |
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 4.12% | 4.01% | 4.23% | |
Expected long term return on plan assets (as a percent) | 7.05% | 7.00% | 6.92% | |
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | $ 47.1 | $ 36.4 | ||
Service cost | 0.8 | 0.9 | $ 0.9 | |
Interest cost | 1.9 | 1.8 | 1.3 | |
Plan amendments | 0.1 | 0.2 | ||
Actuarial (gain) loss | (3.3) | 9.2 | ||
Curtailments | 0 | (0.1) | ||
Settlements | (16.9) | 0 | ||
Benefits paid | (0.8) | (0.7) | ||
Expenses paid | (0.1) | (0.2) | ||
Foreign currency exchange rate changes | (0.6) | (0.4) | ||
Projected benefit obligation at end of year | 28.2 | 28.2 | 47.1 | 36.4 |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 32.5 | 30.5 | ||
Actual (loss) return on assets | (1.3) | 2.2 | ||
Employer contribution | 1.1 | 1 | ||
Benefits paid | (0.8) | (0.7) | ||
Settlements | (16.9) | 0 | ||
Expenses paid | (0.1) | (0.2) | ||
Foreign currency exchange rate changes | (0.6) | (0.3) | ||
Fair value of plan assets at end of year | 13.9 | 13.9 | 32.5 | $ 30.5 |
Funded status | (14.3) | (14.3) | (14.6) | |
Decrease in benefit obligation | 17 | |||
Decrease in plan assets | 17 | |||
Amounts recognized in the Consolidated Balance Sheets: | ||||
Non-current portion of benefit liability | 14.5 | 14.5 | 14.9 | |
Non-current benefit asset | $ 0.2 | $ 0.2 | $ 0.3 | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.44% | 4.44% | 5.00% | |
United States Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 3.94% | 3.94% | 4.25% | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.26% | 4.26% | 5.00% | |
Canadian Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 4.20% | 5.00% | 4.00% | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.30% | 4.30% | ||
Sealy | ||||
Retirement plans | ||||
Ownership interest (percentage) | 100.00% | |||
Number of facilities where employees are covered by defined benefit pension plan | facility | 1 | |||
Sealy | United States Retirement Plan | ||||
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | $ 43.7 | |||
Projected benefit obligation at end of year | $ 25.3 | 25.3 | $ 43.7 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 28.8 | |||
Fair value of plan assets at end of year | 10.8 | 10.8 | 28.8 | |
Sealy | Canadian Retirement Plan | ||||
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | 3.4 | |||
Projected benefit obligation at end of year | 2.9 | 2.9 | 3.4 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 3.7 | |||
Fair value of plan assets at end of year | $ 3.1 | $ 3.1 | $ 3.7 |
Retirement Plans - Plan Assets
Retirement Plans - Plan Assets and Estimated Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Retirement plans | |||
Expected contribution in next fiscal year | $ 3.2 | ||
Estimated future benefit payments | |||
Fiscal 2,016 | 0.9 | ||
Fiscal 2,017 | 0.9 | ||
Fiscal 2,018 | 1 | ||
Fiscal 2,019 | 1 | ||
Fiscal 2,020 | 1.1 | ||
Fiscal 2021 ‑ Fiscal 2024 | $ 6.5 | ||
Target and actual asset allocations | |||
Total target plan assets | 100.00% | ||
Total actual plan assets | 100.00% | ||
Total assets | $ 13.9 | $ 32.5 | $ 30.5 |
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) | 5.50% | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | $ 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 13.9 | 32.5 | |
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 | 74.83% | ||
Debt securities | |||
Target and actual asset allocations | |||
Total target plan assets | 40.00% | ||
Total actual plan assets | 21.03% | ||
Other | |||
Target and actual asset allocations | |||
Total target plan assets | 0.00% | ||
Total actual plan assets | 4.14% | ||
U.S. equity | |||
Target and actual asset allocations | |||
Total assets | $ 7.7 | 19.6 | |
U.S. equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
U.S. equity | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 7.7 | 19.6 | |
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 | 2.7 | 5.2 | |
International equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
International equity | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 2.7 | 5.2 | |
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 | 10.4 | 24.8 | |
Total equity based funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Total equity based funds | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 10.4 | 24.8 | |
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 | 2.9 | 7 | |
Common/collective trust - fixed income | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Common/collective trust - fixed income | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 2.9 | 7 | |
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 | 0.6 | 0.7 | |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Target and actual asset allocations | |||
Total assets | 0 | 0 | |
Money market funds | Significant Other Observable Inputs (Level 2) | |||
Target and actual asset allocations | |||
Total assets | 0.6 | 0.7 | |
Money market funds | Significant Unobservable Inputs (Level 3) | |||
Target and actual asset allocations | |||
Total assets | $ 0 | $ 0 |
Retirement Plans - Multi-employ
Retirement Plans - Multi-employer Benefit Plans (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)facility | Dec. 31, 2014USD ($) | |
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% | 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% | 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% | 80.00% |
Multi-employer Retirement Plan | ||
Multi-Employer Benefit Plans | ||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | facility | 8 | |
Expenses recognized for contributions | $ 5 | $ 4.7 |
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 | facility | 3 | |
Expenses recognized for contributions | $ 2.4 | $ 2.2 |
United Furniture Workers Pension Fund A | ||
Multi-Employer Benefit Plans | ||
Surcharge (percentage) | 10.00% | 10.00% |
United Furniture Workers Pension Fund A | Multi-employer Retirement Plan | ||
Multi-Employer Benefit Plans | ||
Expenses recognized for contributions | $ 1.1 | $ 0.9 |
Pension Plan of the National Retirement Fund | ||
Multi-Employer Benefit Plans | ||
Surcharge (percentage) | 10.00% | 10.00% |
Pension Plan of the National Retirement Fund | Multi-employer Retirement Plan | ||
Multi-Employer Benefit Plans | ||
Expenses recognized for contributions | $ 1.2 | $ 1.1 |
Central States, Southeast & Southwest Areas Pension Plan | ||
Multi-Employer Benefit Plans | ||
Surcharge (percentage) | 10.00% | 10.00% |
Central States, Southeast & Southwest Areas Pension Plan | Multi-employer Retirement Plan | ||
Multi-Employer Benefit Plans | ||
Expenses recognized for contributions | $ 0.5 | $ 0.4 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
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 | |||
Treasury stock sold (in shares) | 69,686 | |||
Proceeds from issuance of treasury shares | $ 5,000,000 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (55,700,000) | |||
Other comprehensive income: | ||||
Foreign currency translation adjustments | (61,400,000) | $ (38,400,000) | $ (10,600,000) | |
Tax benefit (expense) | (125,400,000) | (64,900,000) | (49,100,000) | |
Total other comprehensive income (loss) | (54,400,000) | (42,000,000) | (6,100,000) | |
Balance at end of period | (110,100,000) | (55,700,000) | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (54,000,000) | (15,600,000) | (5,000,000) | |
Other comprehensive income: | ||||
Foreign currency translation adjustments | (61,400,000) | (38,400,000) | (13,300,000) | |
Tax benefit (expense) | 0 | 0 | 2,700,000 | $ (2,700,000) |
Balance at end of period | (115,400,000) | (54,000,000) | (15,600,000) | (5,000,000) |
Interest Rate Swap Agreement | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (700,000) | (1,400,000) | (2,700,000) | |
Other comprehensive income: | ||||
Net change from period revaluations: | 3,100,000 | 3,000,000 | 5,200,000 | |
Tax benefit (expense) | (1,200,000) | (1,200,000) | (1,500,000) | |
Total other comprehensive income (loss) before reclassifications, net of tax | 1,900,000 | 1,800,000 | 3,700,000 | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | (1,200,000) | (1,100,000) | (2,400,000) | |
Total other comprehensive income (loss) | 700,000 | 700,000 | 1,300,000 | |
Balance at end of period | 0 | (700,000) | (1,400,000) | (2,700,000) |
Interest Rate Swap Agreement | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive income: | ||||
Tax benefit (expense) | 700,000 | 800,000 | 800,000 | |
Net amount reclassified to earnings | (1,900,000) | (1,900,000) | (3,200,000) | |
Pension Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (2,400,000) | 3,200,000 | 0 | |
Other comprehensive income: | ||||
Net change from period revaluations: | 200,000 | (9,000,000) | 5,200,000 | |
Tax benefit (expense) | 0 | 3,400,000 | (2,000,000) | |
Total other comprehensive income (loss) before reclassifications, net of tax | 200,000 | (5,600,000) | 3,200,000 | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | 800,000 | 0 | 0 | |
Total other comprehensive income (loss) | 1,000,000 | (5,600,000) | 3,200,000 | |
Balance at end of period | (1,400,000) | (2,400,000) | 3,200,000 | 0 |
Pension Benefits | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive income: | ||||
Tax benefit (expense) | (500,000) | 0 | 0 | |
Net amount reclassified to earnings | 1,300,000 | 0 | 0 | |
Foreign Exchange Forward Contracts | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 1,300,000 | 0 | 0 | |
Other comprehensive income: | ||||
Net change from period revaluations: | 14,600,000 | 3,400,000 | 0 | |
Tax benefit (expense) | (3,800,000) | (900,000) | 0 | |
Total other comprehensive income (loss) before reclassifications, net of tax | 10,800,000 | 2,500,000 | 0 | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | (5,500,000) | (1,200,000) | 0 | |
Total other comprehensive income (loss) | 5,300,000 | 1,300,000 | 0 | |
Balance at end of period | 6,600,000 | 1,300,000 | 0 | $ 0 |
Foreign Exchange Forward Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive income: | ||||
Tax benefit (expense) | 1,900,000 | 400,000 | 0 | |
Net amount reclassified to earnings | $ (7,400,000) | $ (1,600,000) | $ 0 |
Other Items - Accrued Expenses
Other Items - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Other Items [Abstract] | |||
Wages and benefits | $ 72.4 | $ 60 | |
Advertising | 48.4 | 41.6 | |
Sales returns | 28.5 | 32.3 | $ 28.7 |
Rebates | 11.5 | 22.8 | |
Warranty | 14.9 | 16.1 | |
Other | 78.3 | 60.5 | |
Total accrued expenses and other current liabilities | $ 254 | $ 233.3 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) | Sep. 04, 2015USD ($)shares | Dec. 31, 2015USD ($)$ / sharesshares | Sep. 30, 2015$ / sharesshares | Dec. 31, 2015USD ($)plan$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | May. 22, 2013shares | Dec. 31, 2003shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of compensation plans | plan | 2 | |||||||
Total stock-based compensation expense | $ | $ 22,500,000 | $ 13,400,000 | $ 16,900,000 | |||||
Fair value assumptions and methodology [Abstract] | ||||||||
Expected volatility range of stock, minimum (in hundredths) | 34.00% | 56.70% | 63.00% | |||||
Expected volatility range of stock, maximum (in hundredths) | 36.20% | 66.50% | 72.80% | |||||
Expected life of option, range in years, minimum | 3 years | 2 years | 2 years | |||||
Expected life of option, range in years, maximum | 5 years | 4 years | 3 years | |||||
Risk-free interest rate range, minimum (in hundredths) | 0.90% | 0.40% | 0.30% | |||||
Risk-free interest rate range, maximum (in hundredths) | 1.50% | 1.40% | 0.60% | |||||
Expected dividend yield on stock, minimum (in hundredths) | 0.00% | 0.60% | 0.60% | |||||
Expected dividend yield on stock, maximum (in hundredths) | 0.00% | 0.70% | 0.90% | |||||
Weighted Average Exercise Price | ||||||||
Total intrinsic value of options exercised | $ | $ 71,800,000 | $ 6,700,000 | $ 17,100,000 | |||||
Total unrecognized stock-based compensation expense | $ | $ 28,000,000 | $ 28,000,000 | ||||||
Weighted Average Remaining Vesting Period (in years) | 2 years 5 months 9 days | |||||||
Cash received from exercise of stock options | $ | $ 20,400,000 | $ 4,300,000 | $ 8,700,000 | |||||
Treasury Stock | ||||||||
Shares | ||||||||
Released (in shares) | (1,300,000) | (200,000) | (600,000) | |||||
Performance-based Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation expense | $ | $ 13,700,000 | $ 3,500,000 | $ 3,000,000 | |||||
Revaluation benefit from PRSU Granted | $ | $ 0 | $ 3,000,000 | $ 0 | |||||
Shares | ||||||||
Beginning balance (in shares) | 300,000 | 300,000 | 300,000 | |||||
Granted (in shares) | 1,700,000 | 300,000 | ||||||
Vested (in shares) | 0 | 0 | ||||||
Forfeited/Terminated (in shares) | (100,000) | (300,000) | ||||||
Ending balance (in shares) | 1,900,000 | 1,900,000 | 300,000 | 300,000 | ||||
Weighted Average Grant Date Fair Value | ||||||||
Beginning balance (in dollars per share) | $ / shares | $ 53.45 | $ 53.45 | $ 39.04 | |||||
Granted (in dollars per share) | $ / shares | 70.43 | 51.87 | ||||||
Vested (in dollars per share) | $ / shares | 0 | 37.05 | ||||||
Forfeited/Terminated (in dollars per share) | $ / shares | 56.74 | 39.38 | ||||||
Ending balance (in dollars per share) | $ / shares | $ 68.17 | $ 68.17 | $ 53.45 | $ 39.04 | ||||
Outstanding intrinsic value | $ | $ 13,900,000 | $ 13,900,000 | ||||||
Weighted Average Exercise Price | ||||||||
Total unrecognized stock-based compensation expense | $ | 10,900,000 | $ 10,900,000 | ||||||
Weighted Average Remaining Vesting Period (in years) | 2 years 3 months 15 days | |||||||
Performance-based Restricted Stock Units | 2018 if target is not met | ||||||||
Weighted Average Grant Date Fair Value | ||||||||
Percentage of target shares to vest | 33.33% | |||||||
Number of target shares to vest | 460,000 | |||||||
Performance-based Restricted Stock Units | Treasury Stock | ||||||||
Weighted Average Grant Date Fair Value | ||||||||
Grant date intrinsic value | $ | $ 0 | $ 1,400,000 | $ 14,900,000 | |||||
Performance period (in years) | 1 year | |||||||
Percentage of stock units released | 100.00% | 282.00% | ||||||
Maximum payout (percent) | 300.00% | |||||||
Performance-based Restricted Stock Units | Chief Executive Officer | 2018 if target is not met | ||||||||
Weighted Average Grant Date Fair Value | ||||||||
Percentage of target shares to vest | 33.33% | |||||||
Performance-based Restricted Stock Units | December 31, 2017 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target shares granted | 260,000 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Maximum Number of Shares to be Awarded | 780,000 | |||||||
Performance-based Restricted Stock Units | December 31, 2017 if target is met | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target shares granted | 1,390,000 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Maximum Number of Shares to be Awarded | 1,390,000 | |||||||
Performance-based Restricted Stock Units | Three annual installments beginning on September 4, 2016 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target shares granted | 70,000 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Maximum Number of Shares to be Awarded | 70,000 | |||||||
Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation expense | $ | $ 6,600,000 | 7,000,000 | $ 8,300,000 | |||||
Weighted Average Exercise Price | ||||||||
Total unrecognized stock-based compensation expense | $ | $ 9,200,000 | $ 9,200,000 | ||||||
Weighted Average Remaining Vesting Period (in years) | 2 years 5 months 27 days | |||||||
Restricted Stock Units and Deferred Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total stock-based compensation expense | $ | $ 2,200,000 | $ 2,900,000 | $ 5,600,000 | |||||
Shares | ||||||||
Beginning balance (in shares) | 100,000 | 100,000 | 200,000 | |||||
Granted (in shares) | 100,000 | 0 | ||||||
Vested (in shares) | (100,000) | (100,000) | ||||||
Forfeited/Terminated (in shares) | 0 | 0 | ||||||
Ending balance (in shares) | 100,000 | 100,000 | 100,000 | 200,000 | ||||
Weighted Average Grant Date Fair Value | ||||||||
Beginning balance (in dollars per share) | $ / shares | $ 50.41 | $ 50.41 | $ 47 | |||||
Granted (in dollars per share) | $ / shares | 70.44 | 54.56 | ||||||
Vested (in dollars per share) | $ / shares | 58.73 | 44.47 | ||||||
Forfeited/Terminated (in dollars per share) | $ / shares | 49.63 | 46.77 | ||||||
Ending balance (in dollars per share) | $ / shares | $ 66.41 | $ 66.41 | $ 50.41 | $ 47 | ||||
Weighted Average Exercise Price | ||||||||
Aggregate intrinsic value of units outstanding | $ | $ 11,900,000 | $ 11,900,000 | ||||||
Aggregate intrinsic value of RSUs and DSUs vested during the period | $ | 4,000,000 | |||||||
Total unrecognized stock-based compensation expense | $ | $ 7,900,000 | $ 7,900,000 | ||||||
Weighted Average Remaining Vesting Period (in years) | 2 years 7 months 2 days | |||||||
Unvested Stock Options | ||||||||
Shares | ||||||||
Beginning balance (in shares) | 500,000 | 500,000 | 600,000 | |||||
Granted (in shares) | 800,000 | 200,000 | ||||||
Vested (in shares) | (400,000) | (300,000) | ||||||
Forfeited (in shares) | (100,000) | 0 | ||||||
Ending balance (in shares) | 800,000 | 800,000 | 500,000 | 600,000 | ||||
Weighted Average Grant Date Fair Value | ||||||||
Beginning of period weighted average grant date fair value (dollars per share) | $ / shares | $ 46.23 | $ 46.23 | $ 42.16 | |||||
Granted weighted average grant date fair value (dollars per share) | $ / shares | 63.55 | 52.08 | ||||||
Vested weighted average grant date fair value (dollars per share) | $ / shares | 44.25 | 42.46 | ||||||
Forfeited weighted average grant date fair value (dollars per share) | $ / shares | 57.12 | 50.53 | ||||||
Ending of period weighted average grant date fair value (dollars per share) | $ / shares | $ 62.34 | $ 62.34 | $ 46.23 | $ 42.16 | ||||
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) | 5,100,000 | |||||||
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) | 11,500,000 | |||||||
Aspirational Plan | Performance-based Restricted Stock Units | Chief Executive Officer | ||||||||
Shares | ||||||||
Granted (in shares) | 620,000 | |||||||
Weighted Average Grant Date Fair Value | ||||||||
Minimum Adjusted EBITDA (more than) | $ | $ 650,000,000 | |||||||
Unrecognized compensation expense | $ | $ 44,500,000 | $ 56,600,000 | $ 56,600,000 | |||||
Aspirational Plan | Performance-based Restricted Stock Units | Executive Officer | ||||||||
Shares | ||||||||
Granted (in shares) | 770,000 | |||||||
Stock Option Plans 2002, 2003 and 2013 | ||||||||
Shares | ||||||||
Beginning balance (in shares) | 2,800,000 | 2,800,000 | 2,800,000 | |||||
Granted (in shares) | 800,000 | 200,000 | ||||||
Released (in shares) | (1,400,000) | (200,000) | ||||||
Forfeited (in shares) | (100,000) | 0 | ||||||
Ending balance (in shares) | 2,100,000 | 2,100,000 | 2,800,000 | 2,800,000 | ||||
Options exercisable (in shares) | 1,300,000 | 1,300,000 | ||||||
Weighted Average Exercise Price | ||||||||
Beginning balance weighted average exercise price (dollars per share) | $ / shares | $ 24.18 | $ 24.18 | $ 21.73 | |||||
Granted weighted average exercise price (dollars per share) | $ / shares | 63.55 | 52.08 | ||||||
Released weighted average exercise price (in dollars per share) | $ / shares | 14.70 | 20.82 | ||||||
Forfeited weighted average exercise price (dollars per share) | $ / shares | 57.12 | 50.53 | ||||||
Ending balance weighted average exercise price (dollars per share) | $ / shares | $ 42.75 | 42.75 | $ 24.18 | $ 21.73 | ||||
Options exercisable weighted average exercise price (dollars per share) | $ / shares | $ 31.11 | $ 31.11 | ||||||
Ending balance weighted average remaining contractual term (in years) | 6 years 5 months 19 days | |||||||
Options exercisable weighted average remaining contractual term (in years) | 4 years 10 months 6 days | |||||||
Ending balance aggregate intrinsic value | $ | $ 53,400,000 | $ 53,400,000 | ||||||
Options exercisable aggregate intrinsic value | $ | $ 52,000,000 | $ 52,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expenses | $ 41.4 | $ 32.3 | $ 25.5 |
Operating leases future minimum lease payments [Abstract] | |||
2,016 | 27.3 | ||
2,017 | 23.3 | ||
2,018 | 20.8 | ||
2,019 | 18.4 | ||
2,020 | 16.5 | ||
Thereafter | 40.3 | ||
Total | $ 146.6 |
Commitments and Contingencies76
Commitments and Contingencies - Litigation and Environmental Contingencies (Details) $ / shares in Units, shares in Millions, $ in Millions | Jun. 27, 2013shares | Mar. 13, 2013USD ($) | Jun. 25, 2012officer | Jun. 20, 2012officer | Mar. 13, 2015$ / shares |
Loss Contingencies [Line Items] | |||||
Loss contingency, number of defendants | officer | 2 | 2 | |||
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 | shares | 3.1 | ||||
Sealy | Class Action Lawsuits Relating To Merger | |||||
Loss Contingencies [Line Items] | |||||
Cash price per share (in dollars per share) | $ / shares | $ 2.20 | ||||
Net consideration transferred | $ | $ 0.6 |
Commitments and Contingencies77
Commitments and Contingencies - German Regulatory Investigation (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2015USD ($) | Oct. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | |
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Amount | $ 17.4 | € 15.5 | ||
Other Expense | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Expense | $ 17.4 | € 15.5 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation in dollars [Abstract] | |||
Statutory U.S. federal income tax | $ 70 | $ 61.2 | $ 44.8 |
State income taxes, net of federal benefit | 1.1 | 1.1 | 1.7 |
Foreign repatriation, net of foreign tax credits | 0 | 13.5 | (16) |
Foreign tax differential | (10) | (12.6) | (12.3) |
Change in valuation allowances | 2.5 | (17.7) | 20.4 |
Uncertain tax positions | 59.7 | 10.9 | 4.7 |
Subpart F income | 1.9 | 1.9 | 1.5 |
Manufacturing deduction | (1.6) | (3.7) | 0.1 |
Goodwill on disposal of business | 0 | 7.5 | 0 |
Permanent and other | 1.8 | 2.8 | 4.2 |
Effective income tax provision | $ 125.4 | $ 64.9 | $ 49.1 |
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% | 0.60% | 1.30% |
Foreign repatriation, net of foreign tax credits (percentage) | 0.00% | 7.70% | (12.60%) |
Foreign tax differential (percentage) | (5.00%) | (7.20%) | (9.60%) |
Change in valuation allowance (percentage) | 1.20% | (10.00%) | 15.90% |
Uncertain tax positions (percentage) | 29.80% | 6.10% | 3.70% |
Subpart F income (percentage) | 1.00% | 1.10% | 1.20% |
Manufacturing deduction (percentage) | (0.80%) | (2.10%) | (0.00%) |
Goodwill on disposal of business (percentage) | 0.00% | 4.20% | 0.00% |
Permanent and other (percentage) | 0.90% | 1.70% | 3.50% |
Effective income tax provision (percentage) | 62.70% | 37.10% | 38.40% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) DKK in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2015DKK | Dec. 31, 2014DKK | Dec. 31, 2013USD ($) | |
Income Tax Examination [Line Items] | ||||||
Tax recognized on repatriation of earnings in connection with Sealy Acquisition | $ 48.1 | |||||
Tax benefit recorded on repatriation of earnings | $ 63.9 | |||||
Uncertain tax liability | $ 69.8 | 47.6 | $ 26.1 | |||
Valuation allowance | $ 24.2 | 21.7 | ||||
Danish Tax Authority | ||||||
Income Tax Examination [Line Items] | ||||||
Royalty rate assessed on Danish earnings (percentage) | 20.00% | |||||
Cumulative Assessment Amount Including Interest And Penalties | $ 199.6 | 215.1 | DKK 1,363.1 | DKK 1,317.2 | ||
Increase in tax liability due to the accrual of additional interest | DKK | DKK 45.9 | |||||
VAT Taxes Withheld by Tax Authority | 26 | 15 | ||||
Increase in uncertain tax liability | 60.7 | |||||
Uncertain tax liability | 79.6 | $ 18.9 | ||||
Valuation Allowance, Operating Loss Carryforwards | US State | ||||||
Income Tax Examination [Line Items] | ||||||
Valuation allowance | 87 | |||||
Valuation Allowance, Tax Credit Carryforward | US State | ||||||
Income Tax Examination [Line Items] | ||||||
Valuation allowance | 3.6 | |||||
Valuation Allowance, Tax Credit Carryforward | US Federal | ||||||
Income Tax Examination [Line Items] | ||||||
Valuation allowance | $ 7.8 |
Income Taxes - Pre-tax Income A
Income Taxes - Pre-tax Income Attributable to Operating Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income before income taxes: | |||
United States | $ 120.2 | $ 46.9 | $ (4.5) |
Rest of the world | 79.9 | 128 | 132.5 |
Income before income taxes | $ 200.1 | $ 174.9 | $ 128 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits [Roll Forward] | |||
Balance as of beginning of period | $ 47.6 | $ 26.1 | |
Additions based on tax positions related to current period | 0.9 | 24.3 | |
Additions for tax positions of prior years | 25.7 | 0.5 | |
Expiration of statutes of limitations | (2.1) | (3.2) | |
Settlements of uncertain tax positions with tax authorities | (2.3) | (0.1) | |
Balance as of end of period | 69.8 | 47.6 | $ 26.1 |
Unrecognized tax benefits that would impact effective tax rate | 67.7 | 44.6 | 22.2 |
Interest and penalties related to unrecognized tax benefits recorded in income tax expense | 33.5 | 1.9 | 1.8 |
Accrued interest and penalties | $ 43.8 | $ 10.3 | $ 11 |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Tax Credit Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss Carryforwards [Line Items] | ||
Charitable contribution carryover (CCCs) | $ 23.7 | $ 8.4 |
US State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 128.8 | 145.3 |
Tax credit carryforwards | 5.5 | 1.6 |
US Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforwards | 7.8 | 7.8 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 38 | $ 44.2 |
Income Taxes - Tax Provision Su
Income Taxes - Tax Provision Summary (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current provision | |||
Federal | $ 107.1 | $ 50.7 | $ 48.6 |
State | 7.2 | 4.5 | 7.3 |
Foreign | 32.4 | 36.9 | 42.3 |
Total current | 146.7 | 92.1 | 98.2 |
Deferred provision | |||
Federal | (12.3) | (25.2) | (47) |
State | (3.7) | (1.2) | 0.4 |
Foreign | (5.3) | (0.8) | (2.5) |
Total deferred | (21.3) | (27.2) | (49.1) |
Effective income tax provision | $ 125.4 | $ 64.9 | $ 49.1 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Stock-based compensation | $ 16 | $ 12.4 |
Accrued expenses and other | 57.6 | 57.9 |
Net operating losses, foreign tax credits and charitable contribution carryforward | 33.1 | 30.6 |
Inventories | 5.1 | 4.5 |
Transaction costs | 22 | 14.5 |
Property, plant and equipment | 2.9 | 4 |
Total deferred tax assets | 136.7 | 123.9 |
Valuation allowances | (24.2) | (21.7) |
Total net deferred tax assets | 112.5 | 102.2 |
Deferred tax liabilities: | ||
Intangible assets | (247.8) | (258.1) |
Property, plant and equipment | (42) | (45.7) |
Accrued expenses and other | (5.9) | (4.5) |
Total deferred tax liabilities | (295.7) | (308.3) |
Net deferred tax liabilities | $ (183.2) | $ (206.1) |
Major Customers (Details)
Major Customers (Details) - customer | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
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 | 1 | 1 |
Customer Concentration Risk | Sales Revenue, Goods, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage\ | 39.40% | 34.90% | 27.50% |
Customer Concentration Risk | Sales Revenue, Goods, Net | Mattress Firm Holding Corp. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage\ | 10.00% | 10.00% | 10.00% |
Credit Concentration Risk | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage\ | 34.50% | 32.00% | |
Pro Forma | Customer Concentration Risk | Sales Revenue, Goods, Net | Mattress Firm Holding Corp. [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage\ | 25.00% |
Redeemable Non-controlling In86
Redeemable Non-controlling Interest (Details) | 12 Months Ended |
Dec. 31, 2015 | |
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 |
Comfort Revolution | Variable Interest Entity, Primary Beneficiary | |
Redeemable Noncontrolling Interest | |
Equity method investment, ownership percentage | 45.00% |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ (11.3) | $ 40.2 | $ 21.2 | $ 23.4 | $ 46.6 | $ 37.1 | $ (2.2) | $ 27.4 | $ 73.5 | $ 108.9 | $ 78.6 |
Denominator: | |||||||||||
Denominator for basic earnings per common share—weighted average shares | 61.7 | 60.8 | 60.3 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock based compensation (in shares) | 0.9 | 1.3 | 1.3 | ||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares | 62.6 | 62.1 | 61.6 | ||||||||
Basic earnings per common share (in dollars per share) | $ (0.18) | $ 0.65 | $ 0.35 | $ 0.38 | $ 0.77 | $ 0.61 | $ (0.04) | $ 0.45 | $ 1.19 | $ 1.79 | $ 1.30 |
Diluted earnings per common share (in dollars per share) | $ (0.18) | $ 0.64 | $ 0.34 | $ 0.38 | $ 0.75 | $ 0.60 | $ (0.04) | $ 0.44 | $ 1.17 | $ 1.75 | $ 1.28 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 0.2 | 0.3 | 0.3 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of business segments | segment | 2 | ||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $ 2,655.5 | $ 2,582.7 | $ 2,655.5 | $ 2,582.7 | |||||||
Total property, plant and equipment, net | 361.7 | 355.6 | 361.7 | 355.6 | |||||||
Net sales | 767.3 | $ 880 | $ 764.4 | $ 739.5 | 745.5 | $ 827.4 | $ 715 | $ 701.9 | 3,151.2 | 2,989.8 | $ 2,464.3 |
Inter-segment sales | 0 | 0 | 0 | ||||||||
Gross profit | 313.1 | 359.6 | 297.5 | 278.7 | 294.1 | 318.5 | 268.3 | 269.5 | 1,248.9 | 1,150.4 | 1,014.9 |
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Operating income (loss) | 91.8 | $ 110.9 | $ 52 | $ 54.4 | 76.5 | $ 87.1 | $ 50.3 | $ 62.4 | 309.1 | 276.3 | 243.8 |
Income (loss) before income taxes | 200.1 | 174.9 | 128 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 93.9 | 89.7 | 91.5 | ||||||||
Capital expenditures | 65.9 | 47.5 | 40 | ||||||||
Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,887.2 | 2,726.5 | 2,198.4 | ||||||||
Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 264 | 263.3 | 265.9 | ||||||||
United States | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 300.1 | 287.3 | 300.1 | 287.3 | |||||||
Net sales | 2,374.7 | 2,188.8 | 1,736.8 | ||||||||
Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 6.8 | 8 | 6.8 | 8 | |||||||
Net sales | 202.5 | 216.1 | 190.2 | ||||||||
Other International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 54.8 | 60.3 | 54.8 | 60.3 | |||||||
Net sales | 574 | 584.9 | 537.3 | ||||||||
Total International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 61.6 | 68.3 | 61.6 | 68.3 | |||||||
Net sales | 776.5 | 801 | 727.5 | ||||||||
Operating Segments | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 361.7 | 355.6 | 361.7 | 355.6 | |||||||
Operating Segments | Tempur North America | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 2,533.1 | 2,465.2 | 2,533.1 | 2,465.2 | |||||||
Total property, plant and equipment, net | 239.2 | 240.5 | 239.2 | 240.5 | |||||||
Net sales | 2,577.2 | 2,404.9 | 1,927 | ||||||||
Inter-segment sales | 5.9 | 5.1 | 0.2 | ||||||||
Gross profit | 954.6 | 834.8 | 710.2 | ||||||||
Inter-segment royalty expense (income) | 7.1 | 6.1 | 5.8 | ||||||||
Operating income (loss) | 335.6 | 255 | 229 | ||||||||
Income (loss) before income taxes | 324.4 | 228 | 548.3 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 43.3 | 47.9 | 49.9 | ||||||||
Capital expenditures | 28.9 | 17.8 | 19.5 | ||||||||
Operating Segments | Tempur North America | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,428.9 | 2,261.9 | 1,779.3 | ||||||||
Operating Segments | Tempur North America | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 148.3 | 143 | 147.7 | ||||||||
Operating Segments | Tempur International | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 477.1 | 474.3 | 477.1 | 474.3 | |||||||
Total property, plant and equipment, net | 54.8 | 60.3 | 54.8 | 60.3 | |||||||
Net sales | 574 | 584.9 | 537.3 | ||||||||
Inter-segment sales | 0.7 | 0.3 | 0.6 | ||||||||
Gross profit | 294.3 | 315.6 | 304.7 | ||||||||
Inter-segment royalty expense (income) | (7.1) | (6.1) | (5.8) | ||||||||
Operating income (loss) | 98.9 | 118.8 | 124.7 | ||||||||
Income (loss) before income taxes | 73.2 | 112.2 | (204.5) | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 16 | 16.3 | 14.1 | ||||||||
Capital expenditures | 14.8 | 15.6 | 11.2 | ||||||||
Operating Segments | Tempur International | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 458.3 | 464.6 | 419.1 | ||||||||
Operating Segments | Tempur International | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 115.7 | 120.3 | 118.2 | ||||||||
Corporate | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 775 | 820.9 | 775 | 820.9 | |||||||
Total property, plant and equipment, net | 67.7 | 54.8 | 67.7 | 54.8 | |||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment sales | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Operating income (loss) | (125.4) | (97.5) | (109.9) | ||||||||
Income (loss) before income taxes | (197.5) | (165.3) | (215.8) | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 34.6 | 25.5 | 27.5 | ||||||||
Capital expenditures | 22.2 | 14.1 | 9.3 | ||||||||
Corporate | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Corporate | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $ (1,129.7) | $ (1,177.7) | (1,129.7) | (1,177.7) | |||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment sales | (6.6) | (5.4) | (0.8) | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Operating income (loss) | 0 | 0 | 0 | ||||||||
Income (loss) before income taxes | 0 | 0 | 0 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 0 | 0 | 0 | ||||||||
Capital expenditures | 0 | 0 | 0 | ||||||||
Inter-segment eliminations | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment eliminations | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | $ 0 | $ 0 | $ 0 |
Quarterly Financial Data (una89
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Examination [Line Items] | |||||||||||
Net sales | $ 767.3 | $ 880 | $ 764.4 | $ 739.5 | $ 745.5 | $ 827.4 | $ 715 | $ 701.9 | $ 3,151.2 | $ 2,989.8 | $ 2,464.3 |
Gross profit | 313.1 | 359.6 | 297.5 | 278.7 | 294.1 | 318.5 | 268.3 | 269.5 | 1,248.9 | 1,150.4 | 1,014.9 |
Operating income | 91.8 | 110.9 | 52 | 54.4 | 76.5 | 87.1 | 50.3 | 62.4 | 309.1 | 276.3 | 243.8 |
Net income (loss) | $ (11.3) | $ 40.2 | $ 21.2 | $ 23.4 | $ 46.6 | $ 37.1 | $ (2.2) | $ 27.4 | $ 73.5 | $ 108.9 | $ 78.6 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.18) | $ 0.65 | $ 0.35 | $ 0.38 | $ 0.77 | $ 0.61 | $ (0.04) | $ 0.45 | $ 1.19 | $ 1.79 | $ 1.30 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.18) | $ 0.64 | $ 0.34 | $ 0.38 | $ 0.75 | $ 0.60 | $ (0.04) | $ 0.44 | $ 1.17 | $ 1.75 | $ 1.28 |
Other nonrecurring income | $ 9.5 | $ 15.6 | |||||||||
Danish Tax Authority | |||||||||||
Income Tax Examination [Line Items] | |||||||||||
Increase in uncertain tax liability | $ 60.7 |
Guarantor_Non-Guarantor Finan90
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 24, 2015 | Dec. 19, 2012 | |
Supplemental condensed consolidating statements of operations | |||||||||||||
Net sales | $ 767,300,000 | $ 880,000,000 | $ 764,400,000 | $ 739,500,000 | $ 745,500,000 | $ 827,400,000 | $ 715,000,000 | $ 701,900,000 | $ 3,151,200,000 | $ 2,989,800,000 | $ 2,464,300,000 | ||
Cost of sales | 1,902,300,000 | 1,839,400,000 | 1,449,400,000 | ||||||||||
Gross profit | 313,100,000 | 359,600,000 | 297,500,000 | 278,700,000 | 294,100,000 | 318,500,000 | 268,300,000 | 269,500,000 | 1,248,900,000 | 1,150,400,000 | 1,014,900,000 | ||
Selling and marketing expenses | 648,000,000 | 619,900,000 | 522,900,000 | ||||||||||
General, administrative and other expenses | 322,000,000 | 280,600,000 | 266,300,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | (11,900,000) | (8,300,000) | (4,400,000) | ||||||||||
Royalty income, net of royalty expense | (18,300,000) | (18,100,000) | (13,700,000) | ||||||||||
Operating (loss) income | 91,800,000 | 110,900,000 | 52,000,000 | 54,400,000 | 76,500,000 | 87,100,000 | 50,300,000 | 62,400,000 | 309,100,000 | 276,300,000 | 243,800,000 | ||
Other expense, net: | |||||||||||||
Third party interest expense, net | 96,100,000 | 91,900,000 | 110,800,000 | ||||||||||
Intercompany interest expense (income), net | 0 | 0 | 0 | ||||||||||
Interest expense, net | 96,100,000 | 91,900,000 | 110,800,000 | ||||||||||
Loss on disposal, net | 0 | 23,200,000 | 0 | ||||||||||
Other (income) expense, net | 12,900,000 | (13,700,000) | 5,000,000 | ||||||||||
Total other expense | 109,000,000 | 101,400,000 | 115,800,000 | ||||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||||
Income before income taxes | 200,100,000 | 174,900,000 | 128,000,000 | ||||||||||
Income tax benefit (provision) | (125,400,000) | (64,900,000) | (49,100,000) | ||||||||||
Net income before non-controlling interest | 74,700,000 | 110,000,000 | 78,900,000 | ||||||||||
Less: net income attributable to non-controlling interest | 1,200,000 | 1,100,000 | 300,000 | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | (11,300,000) | $ 40,200,000 | $ 21,200,000 | $ 23,400,000 | 46,600,000 | $ 37,100,000 | $ (2,200,000) | $ 27,400,000 | 73,500,000 | 108,900,000 | 78,600,000 | ||
Comprehensive income | 19,100,000 | 66,900,000 | 72,500,000 | ||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | |||||||||||||
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 | 4,100,000 | 2,400,000 | 2,400,000 | ||||||||||
General, administrative and other expenses | 20,800,000 | 13,400,000 | 17,100,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | ||||||||||
Operating (loss) income | (24,900,000) | (15,800,000) | (19,500,000) | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 27,200,000 | 27,000,000 | 27,500,000 | ||||||||||
Intercompany interest expense (income), net | 32,900,000 | 32,700,000 | 32,700,000 | ||||||||||
Interest expense, net | 60,100,000 | 59,700,000 | 60,200,000 | ||||||||||
Loss on disposal, net | 0 | ||||||||||||
Other (income) expense, net | 0 | 0 | 0 | ||||||||||
Total other expense | 60,100,000 | 59,700,000 | 60,200,000 | ||||||||||
Income from equity investees | 132,900,000 | 159,200,000 | 133,400,000 | ||||||||||
Income before income taxes | 47,900,000 | 83,700,000 | 53,700,000 | ||||||||||
Income tax benefit (provision) | 26,800,000 | 26,300,000 | 25,200,000 | ||||||||||
Net income before non-controlling interest | 74,700,000 | 110,000,000 | 78,900,000 | ||||||||||
Less: net income attributable to non-controlling interest | 1,200,000 | 1,100,000 | 300,000 | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 73,500,000 | 108,900,000 | 78,600,000 | ||||||||||
Comprehensive income | 19,100,000 | 66,900,000 | 72,500,000 | ||||||||||
Combined Guarantor Subsidiaries | |||||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||||
Net sales | 2,422,900,000 | 2,229,500,000 | 1,758,200,000 | ||||||||||
Cost of sales | 1,532,600,000 | 1,465,300,000 | 1,110,500,000 | ||||||||||
Gross profit | 890,300,000 | 764,200,000 | 647,700,000 | ||||||||||
Selling and marketing expenses | 460,100,000 | 431,200,000 | 358,100,000 | ||||||||||
General, administrative and other expenses | 232,600,000 | 200,500,000 | 181,600,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||||
Royalty income, net of royalty expense | (18,300,000) | (18,100,000) | (13,700,000) | ||||||||||
Operating (loss) income | 215,900,000 | 150,600,000 | 121,700,000 | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 66,200,000 | 62,400,000 | 81,500,000 | ||||||||||
Intercompany interest expense (income), net | (35,500,000) | (34,600,000) | (34,100,000) | ||||||||||
Interest expense, net | 30,700,000 | 27,800,000 | 47,400,000 | ||||||||||
Loss on disposal, net | 23,200,000 | ||||||||||||
Other (income) expense, net | (8,100,000) | (17,200,000) | (900,000) | ||||||||||
Total other expense | 22,600,000 | 33,800,000 | 46,500,000 | ||||||||||
Income from equity investees | 64,700,000 | 98,700,000 | 93,600,000 | ||||||||||
Income before income taxes | 258,000,000 | 215,500,000 | 168,800,000 | ||||||||||
Income tax benefit (provision) | (125,100,000) | (56,300,000) | (35,400,000) | ||||||||||
Net income before non-controlling interest | 132,900,000 | 159,200,000 | 133,400,000 | ||||||||||
Less: net income attributable to non-controlling interest | 1,200,000 | 1,100,000 | 300,000 | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 131,700,000 | 158,100,000 | 133,100,000 | ||||||||||
Comprehensive income | 130,900,000 | 163,300,000 | 133,800,000 | ||||||||||
Combined Non-Guarantor Subsidiaries | |||||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||||
Net sales | 778,900,000 | 802,900,000 | 728,100,000 | ||||||||||
Cost of sales | 420,300,000 | 416,700,000 | 360,900,000 | ||||||||||
Gross profit | 358,600,000 | 386,200,000 | 367,200,000 | ||||||||||
Selling and marketing expenses | 183,800,000 | 186,300,000 | 162,400,000 | ||||||||||
General, administrative and other expenses | 68,600,000 | 66,700,000 | 67,600,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | (11,900,000) | (8,300,000) | (4,400,000) | ||||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | ||||||||||
Operating (loss) income | 118,100,000 | 141,500,000 | 141,600,000 | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 2,700,000 | 2,500,000 | 1,800,000 | ||||||||||
Intercompany interest expense (income), net | 2,600,000 | 1,900,000 | 1,400,000 | ||||||||||
Interest expense, net | 5,300,000 | 4,400,000 | 3,200,000 | ||||||||||
Loss on disposal, net | 0 | ||||||||||||
Other (income) expense, net | 21,000,000 | 3,500,000 | 5,900,000 | ||||||||||
Total other expense | 26,300,000 | 7,900,000 | 9,100,000 | ||||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||||
Income before income taxes | 91,800,000 | 133,600,000 | 132,500,000 | ||||||||||
Income tax benefit (provision) | (27,100,000) | (34,900,000) | (38,900,000) | ||||||||||
Net income before non-controlling interest | 64,700,000 | 98,700,000 | 93,600,000 | ||||||||||
Less: net income attributable to non-controlling interest | 0 | 0 | 0 | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 64,700,000 | 98,700,000 | 93,600,000 | ||||||||||
Comprehensive income | (3,300,000) | 60,300,000 | 86,200,000 | ||||||||||
Eliminations | |||||||||||||
Supplemental condensed consolidating statements of operations | |||||||||||||
Net sales | (50,600,000) | (42,600,000) | (22,000,000) | ||||||||||
Cost of sales | (50,600,000) | (42,600,000) | (22,000,000) | ||||||||||
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 (loss) 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 | (197,600,000) | (257,900,000) | (227,000,000) | ||||||||||
Income before income taxes | (197,600,000) | (257,900,000) | (227,000,000) | ||||||||||
Income tax benefit (provision) | 0 | 0 | 0 | ||||||||||
Net income before non-controlling interest | (197,600,000) | (257,900,000) | (227,000,000) | ||||||||||
Less: net income attributable to non-controlling interest | (1,200,000) | (1,100,000) | (300,000) | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | (196,400,000) | (256,800,000) | (226,700,000) | ||||||||||
Comprehensive income | (127,600,000) | (223,600,000) | $ (220,000,000) | ||||||||||
2020 Senior Notes | |||||||||||||
Guarantor/non-guarantor financial information | |||||||||||||
Senior notes, noncurrent | 375,000,000 | 375,000,000 | 375,000,000 | 375,000,000 | $ 375,000,000 | ||||||||
2023 Notes | |||||||||||||
Guarantor/non-guarantor financial information | |||||||||||||
Senior notes, noncurrent | $ 450,000,000 | $ 0 | $ 450,000,000 | $ 0 | $ 450,000,000 |
Guarantor_Non-Guarantor Finan91
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Assets: | ||||
Cash and cash equivalents | $ 153.9 | $ 62.5 | $ 81 | $ 179.3 |
Accounts receivable, net | 379.4 | 385.8 | ||
Inventories | 199.2 | 217.2 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 76.6 | 56.5 | ||
Total Current Assets | 809.1 | 722 | ||
Property, plant and equipment, net | 361.7 | 355.6 | ||
Goodwill | 709.4 | 736.5 | 759.6 | |
Other intangible assets, net | 695.4 | 727.1 | ||
Deferred tax asset | 12.2 | 10.7 | ||
Other non-current assets | 67.7 | 30.8 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Total Assets | 2,655.5 | 2,582.7 | ||
Current Liabilities: | ||||
Accounts payable | 266.3 | 226.4 | ||
Accrued expenses and other current liabilities | 254 | 233.3 | ||
Income taxes payable | 11.2 | 12 | ||
Current portion of long-term debt | 181.5 | 66.4 | ||
Total Current Liabilities | 713 | 538.1 | ||
Long-term debt, net | 1,273.3 | 1,498.3 | ||
Deferred income taxes | 195.4 | 216.7 | ||
Other non-current liabilities | 171.2 | 114.3 | ||
Due to affiliates | 0 | 0 | ||
Total Liabilities | 2,352.9 | 2,367.4 | ||
Redeemable non-controlling interest | 12.4 | 12.6 | ||
Total Stockholders’ Equity | 290.2 | 202.7 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 2,655.5 | 2,582.7 | ||
Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0.4 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income tax receivable | 193.1 | 144.1 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total Current Assets | 193.1 | 144.5 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred tax asset | 16 | 12.4 | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | 1,960.5 | 1,808.4 | ||
Due from affiliates | 548.1 | 51.4 | ||
Total Assets | 2,717.7 | 2,016.7 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 1.4 | 1.4 | ||
Income taxes payable | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | 1.4 | 1.4 | ||
Long-term debt, net | 811.9 | 368.7 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | 1,601.8 | 1,431.3 | ||
Total Liabilities | 2,415.1 | 1,801.4 | ||
Redeemable non-controlling interest | 12.4 | 12.6 | ||
Total Stockholders’ Equity | 290.2 | 202.7 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 2,717.7 | 2,016.7 | ||
Combined Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 121.8 | 25.5 | 30.9 | 19.2 |
Accounts receivable, net | 231.9 | 241.2 | ||
Inventories | 145.3 | 158.3 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 43.5 | 28.2 | ||
Total Current Assets | 542.5 | 453.2 | ||
Property, plant and equipment, net | 300.1 | 287.3 | ||
Goodwill | 501.4 | 557.2 | ||
Other intangible assets, net | 612.9 | 611.9 | ||
Deferred tax asset | 0 | 0 | ||
Other non-current assets | 23.3 | 15.1 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 1,655.3 | 2,226 | ||
Total Assets | 3,635.5 | 4,150.7 | ||
Current Liabilities: | ||||
Accounts payable | 212.2 | 170.4 | ||
Accrued expenses and other current liabilities | 183.8 | 166.1 | ||
Income taxes payable | 196 | 163 | ||
Current portion of long-term debt | 168.7 | 61.8 | ||
Total Current Liabilities | 760.7 | 561.3 | ||
Long-term debt, net | 461.4 | 1,129.6 | ||
Deferred income taxes | 189.8 | 202.3 | ||
Other non-current liabilities | 166.6 | 109.3 | ||
Due to affiliates | 96.5 | 340.2 | ||
Total Liabilities | 1,675 | 2,342.7 | ||
Redeemable non-controlling interest | 12.4 | 12.6 | ||
Total Stockholders’ Equity | 1,948.1 | 1,795.4 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 3,635.5 | 4,150.7 | ||
Combined Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 32.1 | 36.6 | 50.1 | 160.1 |
Accounts receivable, net | 147.5 | 144.6 | ||
Inventories | 53.9 | 58.9 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 33.1 | 28.3 | ||
Total Current Assets | 266.6 | 268.4 | ||
Property, plant and equipment, net | 61.6 | 68.3 | ||
Goodwill | 208 | 179.3 | ||
Other intangible assets, net | 82.5 | 115.2 | ||
Deferred tax asset | 12.2 | 10.7 | ||
Other non-current assets | 44.4 | 15.7 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 4.8 | 5.3 | ||
Total Assets | 680.1 | 662.9 | ||
Current Liabilities: | ||||
Accounts payable | 54.1 | 56 | ||
Accrued expenses and other current liabilities | 68.8 | 65.8 | ||
Income taxes payable | 8.3 | (6.9) | ||
Current portion of long-term debt | 12.8 | 4.6 | ||
Total Current Liabilities | 144 | 119.5 | ||
Long-term debt, net | 0 | 0 | ||
Deferred income taxes | 21.6 | 26.8 | ||
Other non-current liabilities | 4.6 | 5 | ||
Due to affiliates | 604.9 | 849.4 | ||
Total Liabilities | 775.1 | 1,000.7 | ||
Redeemable non-controlling interest | 0 | 0 | ||
Total Stockholders’ Equity | (95) | (337.8) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | 680.1 | 662.9 | ||
Eliminations | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income tax receivable | (193.1) | (144.1) | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total Current Assets | (193.1) | (144.1) | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred tax asset | (16) | (12.4) | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | (1,960.5) | (1,808.4) | ||
Due from affiliates | (2,208.2) | (2,282.7) | ||
Total Assets | (4,377.8) | (4,247.6) | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 0 | 0 | ||
Income taxes payable | (193.1) | (144.1) | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | (193.1) | (144.1) | ||
Long-term debt, net | 0 | 0 | ||
Deferred income taxes | (16) | (12.4) | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | (2,303.2) | (2,620.9) | ||
Total Liabilities | (2,512.3) | (2,777.4) | ||
Redeemable non-controlling interest | (12.4) | (12.6) | ||
Total Stockholders’ Equity | (1,853.1) | (1,457.6) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | $ (4,377.8) | $ (4,247.6) |
Guarantor_Non-Guarantor Finan92
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | $ 234.2 | $ 225.2 | $ 98.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | (8.5) | (1,172.9) |
Proceeds from disposition of business | 7.2 | 43.5 | 0 |
Purchases of property, plant and equipment | (65.9) | (47.5) | (40) |
Other | (1) | 2.1 | (0.1) |
Net cash used in investing activities | (59.7) | (10.4) | (1,213) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of Senior Notes | 450 | 0 | 375 |
Proceeds from 2012 credit agreement | 413.5 | 271.5 | 2,992.6 |
Repayments of 2012 credit agreement | (988.3) | (510.9) | (1,658.3) |
Proceeds from 2011 credit facility | 0 | 0 | 46.5 |
Repayments of 2011 credit facility | 0 | 0 | (696.5) |
Net activity in investment in and advances (to) from subsidiaries and affiliates | 0 | 0 | 0 |
Proceeds from exercise of stock options | 20.4 | 4.3 | 8.7 |
Excess tax benefit from stock based compensation | 21.8 | 1.7 | 5.4 |
Treasury stock repurchased | (1.3) | (2.2) | (7) |
Payments of deferred financing costs | (8) | (3.1) | (52) |
Proceeds from issuance of treasury stock by CEO | 5 | 0 | 0 |
Other | (3.8) | 0.6 | (1) |
Net cash (used in) provided by financing activities | (90.7) | (238.1) | 1,013.4 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7.6 | 4.8 | 2.8 |
Increase (decrease) in cash and cash equivalents | 91.4 | (18.5) | (98.3) |
CASH AND CASH EQUIVALENTS, beginning of period | 62.5 | 81 | 179.3 |
CASH AND CASH EQUIVALENTS, end of period | 153.9 | 62.5 | 81 |
Tempur Sealy International, Inc. (Ultimate Parent) | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | (87) | (62.7) | (66.1) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | 0 | |
Proceeds from disposition of business | 0 | 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 issuance of Senior Notes | 450 | 375 | |
Proceeds from 2012 credit agreement | 0 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from 2011 credit facility | 0 | ||
Repayments of 2011 credit facility | 0 | ||
Net activity in investment in and advances (to) from subsidiaries and affiliates | (401.3) | 59.3 | (772.8) |
Proceeds from exercise of stock options | 20.4 | 4.3 | 8.7 |
Excess tax benefit from stock based compensation | 21.8 | 1.7 | 5.4 |
Treasury stock repurchased | (1.3) | (2.2) | 458.2 |
Payments of deferred financing costs | (8) | 0 | (8.4) |
Proceeds from issuance of treasury stock by CEO | 5 | ||
Other | 0 | 0 | 0 |
Net cash (used in) provided by financing activities | 86.6 | 63.1 | 66.1 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | (0.4) | 0.4 | 0 |
CASH AND CASH EQUIVALENTS, beginning of period | 0.4 | 0 | 0 |
CASH AND CASH EQUIVALENTS, end of period | 0 | 0.4 | 0 |
Combined Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 274.7 | 191.5 | 80.9 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | (1,035.3) | |
Proceeds from disposition of business | 7.2 | 43.5 | |
Purchases of property, plant and equipment | (49.9) | (31.3) | (28.3) |
Other | (0.7) | 3 | (54.7) |
Net cash used in investing activities | (43.4) | 15.2 | (1,118.3) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of Senior Notes | 0 | 0 | |
Proceeds from 2012 credit agreement | 402.9 | 271.5 | 2,992.6 |
Repayments of 2012 credit agreement | (988.3) | (510.9) | (1,658.3) |
Proceeds from 2011 credit facility | 46.5 | ||
Repayments of 2011 credit facility | (696.5) | ||
Net activity in investment in and advances (to) from subsidiaries and affiliates | 453.4 | 32.1 | 874.9 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | (465.2) |
Payments of deferred financing costs | 0 | (3.1) | (43.6) |
Proceeds from issuance of treasury stock by CEO | 0 | ||
Other | (3) | (1.7) | (1.3) |
Net cash (used in) provided by financing activities | (135) | (212.1) | 1,049.1 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 96.3 | (5.4) | 11.7 |
CASH AND CASH EQUIVALENTS, beginning of period | 25.5 | 30.9 | 19.2 |
CASH AND CASH EQUIVALENTS, end of period | 121.8 | 25.5 | 30.9 |
Combined Non-Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 46.5 | 96.4 | 83.7 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | (8.5) | (137.6) | |
Proceeds from disposition of business | 0 | 0 | |
Purchases of property, plant and equipment | (16) | (16.2) | (11.7) |
Other | (0.3) | (0.9) | 54.6 |
Net cash used in investing activities | (16.3) | (25.6) | (94.7) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of Senior Notes | 0 | 0 | |
Proceeds from 2012 credit agreement | 10.6 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from 2011 credit facility | 0 | ||
Repayments of 2011 credit facility | 0 | ||
Net activity in investment in and advances (to) from subsidiaries and affiliates | (52.1) | (91.4) | (102.1) |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | 0 |
Payments of deferred financing costs | 0 | 0 | 0 |
Proceeds from issuance of treasury stock by CEO | 0 | ||
Other | (0.8) | 2.3 | 0.3 |
Net cash (used in) provided by financing activities | (42.3) | (89.1) | (101.8) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7.6 | 4.8 | 2.8 |
Increase (decrease) in cash and cash equivalents | (4.5) | (13.5) | (110) |
CASH AND CASH EQUIVALENTS, beginning of period | 36.6 | 50.1 | 160.1 |
CASH AND CASH EQUIVALENTS, end of period | 32.1 | 36.6 | 50.1 |
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 | |
Proceeds from disposition of business | 0 | 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 issuance of Senior Notes | 0 | 0 | |
Proceeds from 2012 credit agreement | 0 | 0 | 0 |
Repayments of 2012 credit agreement | 0 | 0 | 0 |
Proceeds from 2011 credit facility | 0 | ||
Repayments of 2011 credit facility | 0 | ||
Net activity in investment in and advances (to) from subsidiaries and affiliates | 0 | 0 | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock based compensation | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | 0 |
Payments of deferred financing costs | 0 | 0 | 0 |
Proceeds from issuance of treasury stock by CEO | 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 ACCO93
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 19.5 | $ 19.3 | $ 8.2 |
Additions - Charges to Costs and Expenses | 6.9 | 4.9 | 1.3 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (3.1) | (4.7) | 9.8 |
Balance at End of Period | 23.3 | 19.5 | 19.3 |
Valuation Allowance of Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 21.7 | 39.4 | 0.1 |
Additions - Charges to Costs and Expenses | 4.6 | 2.2 | 20.4 |
Additions - Charged to Other Accounts | 0 | 0 | 18.9 |
Deductions | (2.1) | (19.9) | 0 |
Balance at End of Period | $ 24.2 | $ 21.7 | $ 39.4 |