Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 21, 2017 | Jun. 30, 2016 | |
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 | $ 2,845,571,126 | ||
Entity Common Stock, Shares Outstanding | 53,798,212 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net sales | $ 3,127.3 | $ 3,151.2 | $ 2,989.8 |
Cost of sales | 1,817.9 | 1,902.3 | 1,839.4 |
Gross profit | 1,309.4 | 1,248.9 | 1,150.4 |
Selling and marketing expenses | 648.5 | 648 | 619.9 |
General, administrative and other expenses | 278.2 | 322 | 280.6 |
Equity income in earnings of unconsolidated affiliates | (13.3) | (11.9) | (8.3) |
Royalty income, net of royalty expense | (19.5) | (18.3) | (18.1) |
Operating (loss) income | 415.5 | 309.1 | 276.3 |
Other expense, net: | |||
Interest expense, net | 85.2 | 96.1 | 91.9 |
Loss on extinguishment of debt | 47.2 | 0 | 0 |
Loss on disposal, net | 0 | 0 | (23.2) |
Other (income) expense, net | (0.2) | 12.9 | (13.7) |
Total other expense | 132.2 | 109 | 101.4 |
Income before income taxes | 283.3 | 200.1 | 174.9 |
Income tax provision | (86.8) | (125.4) | (64.9) |
Net income before non-controlling interests | 196.5 | 74.7 | 110 |
Less: net (loss) income attributable to non-controlling interests | (5.6) | 1.2 | 1.1 |
Net income attributable to Tempur Sealy International, Inc. | $ 202.1 | $ 73.5 | $ 108.9 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 3.43 | $ 1.19 | $ 1.79 |
Diluted (in dollars per share) | $ 3.38 | $ 1.17 | $ 1.75 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 59 | 61.7 | 60.8 |
Diluted (in shares) | 59.8 | 62.6 | 62.1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interests | $ 196.5 | $ 74.7 | $ 110 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments, net of tax | (4.5) | (61.4) | (38.4) |
Net change in unrecognized gain on interest rate swap, net of tax | 0 | 0.7 | 0.7 |
Net change in pension benefits, net of tax | (0.8) | 1 | (5.6) |
Unrealized (loss) income on cash flow hedging derivatives, net of tax | (6) | 5.3 | 1.3 |
Other comprehensive loss, net of tax | (11.3) | (54.4) | (42) |
Comprehensive income | 185.2 | 20.3 | 68 |
Less: Comprehensive (loss) income attributable to non-controlling interests | (5.6) | 1.2 | 1.1 |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ 190.8 | $ 19.1 | $ 66.9 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 65.7 | $ 153.9 |
Accounts receivable, net | 345.1 | 379.4 |
Inventories | 196.8 | 199.2 |
Prepaid expenses and other current assets | 63.9 | 76.6 |
Total Current Assets | 671.5 | 809.1 |
Property, plant and equipment, net | 422.2 | 361.7 |
Goodwill | 722.5 | 709.4 |
Other intangible assets, net | 678.7 | 695.4 |
Deferred income taxes | 22.5 | 12.2 |
Other non-current assets | 185.2 | 67.7 |
Total Assets | 2,702.6 | 2,655.5 |
Current Liabilities: | ||
Accounts payable | 219.3 | 266.3 |
Accrued expenses and other current liabilities | 250.1 | 254 |
Income taxes payable | 5.8 | 11.2 |
Current portion of long-term debt | 70.3 | 181.5 |
Total Current Liabilities | 545.5 | 713 |
Long-term debt, net | 1,817.8 | 1,273.3 |
Deferred income taxes | 174.6 | 195.4 |
Other non-current liabilities | 169.3 | 171.2 |
Total Liabilities | 2,707.2 | 2,352.9 |
Redeemable non-controlling interest | 7.6 | 12.4 |
Stockholders' (Deficit) Equity: | ||
Common stock, $0.01 par value, 300.0 million shares authorized; 99.2 million shares issued as of December 31, 2016 and 2015 | 1 | 1 |
Additional paid in capital | 492.8 | 463.4 |
Retained earnings | 1,312.4 | 1,110.3 |
Accumulated other comprehensive loss | (121.4) | (110.1) |
Treasury stock at cost; 44.8 million and 36.8 million shares as of December 31, 2016 and 2015, respectively | (1,700) | (1,174.4) |
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | (15.2) | 290.2 |
Non-controlling interest in subsidiaries | 3 | 0 |
Total Stockholders' (Deficit) Equity | (12.2) | 290.2 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | $ 2,702.6 | $ 2,655.5 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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) | 44,800,000 | 36,800,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) 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, 2013 | $ 11.5 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2013 | 99.2 | 38.6 | |||||
Balance at beginning of period at Dec. 31, 2013 | $ 118.6 | 0 | $ 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 (loss) attributable to noncontrolling interests | 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 | ||||||
Balance at end of period (in shares) at Dec. 31, 2014 | 99.2 | 38.3 | |||||
Balance at ending of period at Dec. 31, 2014 | 202.7 | 0 | $ 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 (loss) attributable to noncontrolling interests | 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 issued to CEO (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 | ||||||
Balance at end of period (in shares) at Dec. 31, 2015 | 99.2 | 36.8 | |||||
Balance at ending of period at Dec. 31, 2015 | 290.2 | 0 | $ 1 | $ (1,174.4) | 463.4 | 1,110.3 | (110.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 202.1 | 202.1 | |||||
Net income (loss) attributable to noncontrolling interests | (4.8) | ||||||
Net loss attributable to non-controlling interests | (0.8) | (0.8) | |||||
Acquisition of non-controlling interest in subsidiary | 3.8 | 3.8 | |||||
Adjustment to pension liability, net of tax | (0.8) | (0.8) | |||||
Derivative instruments accounted for as hedges, net of tax | (6) | (6) | |||||
Foreign currency adjustments | (4.5) | (4.5) | |||||
Exercise of stock options (in shares) | (0.6) | ||||||
Exercise of stock options | 15.7 | $ 7.9 | 7.8 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | (0.1) | ||||||
Issuances of PRSUs, RSUs, and DSUs | (0.1) | $ 1.5 | (1.6) | ||||
Tax adjustments related to stock compensation | 7 | 7 | |||||
Treasury stock repurchased (in shares) | 8.7 | ||||||
Treasury stock repurchased | (533) | $ (533) | |||||
Treasury stock repurchased - PRSU/RSU/DSU releases | (2) | $ (2) | |||||
Amortization of unearned stock-based compensation | 16.2 | 16.2 | |||||
Balance at end of period at Dec. 31, 2016 | 7.6 | ||||||
Balance at end of period (in shares) at Dec. 31, 2016 | 99.2 | 44.8 | |||||
Balance at ending of period at Dec. 31, 2016 | $ (12.2) | $ 3 | $ 1 | $ (1,700) | $ 492.8 | $ 1,312.4 | $ (121.4) |
CONSOLIDATED STATEMENTS OF STO7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Adjustment to pension liability, tax | $ (0.5) | $ 0.5 | $ (3.4) |
Derivative instruments accounted for as hedges, tax | $ (2.2) | $ (2.4) | $ (0.9) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income before non-controlling interests | $ 196.5 | $ 74.7 | $ 110 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 73.3 | 71.4 | 76.3 |
Amortization of stock-based compensation | 16.2 | 22.5 | 13.4 |
Amortization of deferred financing costs | 3.5 | 20.3 | 12.5 |
Bad debt expense | 4.2 | 6.9 | 4.9 |
Deferred income taxes | (31.1) | (21.3) | (27.2) |
Dividends received from unconsolidated affiliates | 10.8 | 9.1 | 2 |
Equity income in earnings of unconsolidated affiliates | (13.3) | (11.9) | (8.3) |
Non-cash interest expense on 8.0% Sealy Notes | 4 | 6.3 | 5.1 |
Loss on extinguishment of debt | 47.2 | 0 | 0 |
Loss on sale of assets | 1.3 | 1.5 | 3.9 |
Loss on disposal of business | 0 | 0 | 23.2 |
Foreign currency adjustments and other | (0.5) | 5.5 | 1.8 |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | 17.3 | (35.3) | (58.8) |
Inventories | 1.5 | 10.7 | (34) |
Prepaid expenses and other assets | (124.4) | (58.7) | (14.9) |
Accounts payable | (47.8) | 46.1 | 47.8 |
Accrued expenses and other | 3.5 | 90.3 | 56.7 |
Income taxes | 3.3 | (3.9) | 10.8 |
Net cash provided by operating activities | 165.5 | 234.2 | 225.2 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | 0 | (8.5) |
Proceeds from disposition of business | 0 | 7.2 | 43.5 |
Purchases of property, plant and equipment | (62.4) | (65.9) | (47.5) |
Other | 0 | (1) | 2.1 |
Net cash used in investing activities | (62.4) | (59.7) | (10.4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 2,233.3 | 863.5 | 271.5 |
Repayments of borrowings under long-term debt obligations | (1,867.7) | (988.3) | (510.9) |
Proceeds from exercise of stock options | 15.7 | 20.4 | 4.3 |
Excess tax benefit from stock-based compensation | 7 | 21.8 | 1.7 |
Treasury stock repurchased | (535) | (1.3) | (2.2) |
Payment of deferred financing costs | (6.9) | (8) | (3.1) |
Fees paid to lenders | (7.8) | 0 | 0 |
Call premium on 2020 Senior Notes | (23.6) | 0 | 0 |
Proceeds from purchase of treasury shares by CEO | 0 | 5 | 0 |
Other | (0.1) | (3.8) | 0.6 |
Net cash used in financing activities | (185.1) | (90.7) | (238.1) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (6.2) | 7.6 | 4.8 |
(Decrease) increase in cash and cash equivalents | (88.2) | 91.4 | (18.5) |
CASH AND CASH EQUIVALENTS, beginning of period | 153.9 | 62.5 | 81 |
CASH AND CASH EQUIVALENTS, end of period | 65.7 | 153.9 | 62.5 |
Cash paid during the period for: | |||
Interest | 76.8 | 59.9 | 73.5 |
Income taxes, net of refunds | $ 81.3 | $ 94.9 | $ 56.3 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Dec. 31, 2016 |
8.0% Sealy Notes | |
Stated percentage | 8.00% |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
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. (b) Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International and its controlled subsidiaries and the results of Comfort Revolution, LLC ("Comfort Revolution"). Intercompany balances and transactions have been eliminated. Comfort Revolution is 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 Company is party to put and call arrangements with respect to the common securities that represent the 55.0% non-controlling interest in Comfort Revolution not owned by the Company. The operations of Comfort Revolution are not material to the Company’s Consolidated Financial Statements. 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 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. The Company’s Asia-Pacific joint ventures are more fully described in Note 5 , "Unconsolidated Affiliate Companies." (c) Use of Estimates. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“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 Consolidated 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 Consolidated 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. 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 measurements. There were no transfers between levels for the years ended December 31, 2016 or 2015. 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.The fair value of the Company's financial instruments that are recorded on a recurring basis at fair value are not material. (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’ (deficit) 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 exchange rates on the transaction date and on the settlement date. These amounts are not considered material to the Consolidated Financial Statements. (f) Derivative Financial Instruments. Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. 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. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. 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 income ("OCI"), 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' (deficit) 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. The Company manages a portion of 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. As of December 31, 2016, 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 $25.4 million . These foreign exchange forward contracts have maturities ranging from January 2017 to September 2017. The effectiveness of the cash flow hedge contracts, including time value, is assessed prospectively and retrospectively on a monthly basis using regression analysis, as well as other timing and probability criteria. 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 $0.6 million , net of tax, over the next 12 months based on December 31, 2016 exchange rates. The fair value of foreign exchange forward contract assets was $1.7 million and $12.5 million as of December 31, 2016 and 2015, respectively. There was no forward exchange liability as of December 31, 2016. The fair value of foreign exchange forward contract liabilities was $1.2 million as of December 31, 2015. The fair value of these financial instruments were based on Level 2 inputs. The Company is also exposed to foreign currency risk related to intercompany debt and associated interest payments and certain intercompany 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. (g) Cash and Cash Equivalents. Cash and cash equivalents consist of all highly liquid investments with initial maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of those instruments. (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) 2016 2015 Finished goods $ 130.1 $ 126.7 Work-in-process 10.7 14.0 Raw materials and supplies 56.0 58.5 $ 196.8 $ 199.2 (i) Property, Plant and Equipment. Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Estimated Useful Lives (in years) Buildings 25-30 Computer equipment and software 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. Assets under capital lease are included within property, plant and equipment and represent non-cash investing activities. Property, plant and equipment, net consisted of the following: December 31, (in millions) 2016 2015 Machinery and equipment $ 283.9 $ 257.0 Land and buildings 302.6 243.7 Computer equipment and software 97.2 78.2 Furniture and fixtures 50.4 52.3 Construction in progress 52.9 57.4 Total property, plant, and equipment 787.0 688.6 Accumulated depreciation (364.8 ) (326.9 ) Total property, plant and equipment, net $ 422.2 $ 361.7 Depreciation expense, which includes depreciation expense for capital lease assets, for the Company was $56.1 million , $53.5 million and $57.7 million for the years ended December 31, 2016 , 2015 and 2014 , 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, 2016, 2015, and 2014. (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. During 2016, the Company revised how its reporting units are managed and determined its reporting units to be the North America and International segments. The Company tested goodwill for impairment for both the historical reporting units, as well as the new reporting units, noting no impairment at October 1, 2016. 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 both trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2016 , 2015 and 2014 , none of which resulted in the recognition of impairment charges. The most recent annual impairment tests performed as of October 1, 2016, indicated that the fair values of each of the Company's reporting units and indefinite-lived intangible assets were substantially in excess of their carrying values. 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, 2014 to December 31, 2016 : (in millions) 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 Amounts accrued 130.6 Returns charged to accrual (128.8 ) Balance as of December 31, 2016 $ 30.3 (m) Warranties. The Company provides warranties on certain products, which vary based by segment, product and brand. Estimates of warranty expenses are based primarily on historical claims experience and product testing. Estimated future obligations related to these products are charged to cost of sales in the period in which the related revenue is recognized. In estimating its warranty obligations, the Company considers the impact of recoverable salvage value on warranty costs by segment in determining its estimate of future warranty obligations. The 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, 2014 to December 31, 2016 : (in millions) 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 Amounts accrued 33.3 Warranties charged to accrual (33.0 ) Balance as of December 31, 2016 $ 29.9 As of December 31, 2016 and 2015 , $14.3 million and $14.9 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $15.6 million and $14.7 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 $22.1 million and $23.3 million as of December 31, 2016 and 2015 , 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 $11.7 million , $11.1 million and $14.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Amounts included in cost of sales for shipping and handling were $155.1 million , $161.6 million and $169.2 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. During the years 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. (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 programs with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these programs. 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 programs 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 in 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 $352.7 million , $360.5 million and $326.7 million for the years ended December 31, 2016 , 2015 and 2014 , 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 $7.4 million and $13.7 million as of December 31, 2016 and 2015 , 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 $26.7 million , $28.7 million and $21.6 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. (t) 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 $19.5 million , $18.3 million and $18.1 million for the years ended December 31, 2016 , 2015 and 2014, respectively. (u) 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 of 1986, as amended (the "Code"). Further information regarding stock-based compensation can be found in Note 10 , “ Stock-based Compensation .” (v) Treasury Stock. Subject to Delaware law, and the limitations in the Company's 2016 Credit Agreement (as defined in Note 6 , "Debt") and the Company's other debt agreements, the Board of Directors may authorize share repurchases of the Company’s common stock (“Stock Repurchase Authorizations”). Purchases made pursuant to Stock Repurchase Authorizations may be carried out through open market transactions, negotiated purchases or otherwise, at times and in such amounts as the Company deems appropriate. Stock repurchased under Stock Repurchase Authorizations is held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. On February 1, 2016 , the Board of Directors authorized a new share repurchase authorization of up to $200.0 million of Tempur Sealy International's common stock. On both June 7, 2016 and July 27, 2016 , the Board of Directors increased the authorization under the Company's share repurchase program by an additional $200.0 million . As of December 31, 2016 , the Company had repurchased 8.7 million shares for approximately $533.0 million under the share repurchase authorization. As of December 31, 2016 , the Company had approximately $67.0 million remaining under the existing share repurchase authorization. In addition, the Company acquired 0.0 million shares upon the vesting of certain PRSUs, which were withheld to satisfy tax withholding obligations during the year ended December 31, 2016 and 2015 , respectively. The shares withheld were valued at the closing price of the common stock on the New York Stock Exchange on the vesting date or last business day prior to, resulting in approximately $2.0 million and $1.3 million in treasury stock acquired during the year ended December 31, 2016 and 2015 , respectively. Treasury stock is accounted for under the cost method and reported as a reduction of stockholders’ (deficit) equity. Stock Repurchase Authorizations may be suspended, limited or terminated at any time without notice. (w) 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 Consolidated 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, 2016 and 2015 , $8.6 million and $6.6 million , respectively, of the recorded undiscounted liability is included in accrued expenses and other current liabilities and $12.3 million and $11.5 million , respectively, is included in other non-current liabilities within the accompanying Consolidated Balance Sheets. During 2016, the Company entered into a retroactive insurance policy to limit exposure on historical worker's compensation claims. As of December 31, 2016 , $ 14.2 million is included in other non-current assets within the accompanying Consolidated Balance Sheets, which represents the value of expected recoveries related to the underlying insured events. The related liabilities for the Company's worker's compensation exposure are included in other non-current liabilities within the accompanying Consolidated Balance Sheets. (x) 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 ten 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 a |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2016 | |
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. The new standard is effective for the Company beginning January 1, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently anticipates adopting the standard using the modified retrospective method as of January 1, 2018. The Company is evaluating the effect of the adoption of this standard on our financial position and results of operations. In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) , which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The Company adopted this ASU as of December 31, 2016. Accordingly, the fair value hierarchy of pension plan assets, which are measured using the net asset value per share practical expedient, is removed from Note 7 , " Retirement Plans ." In February 2016, the FASB issued ASU No. 2016-02, Leases , that requires lessees to recognize most leases on the balance sheet and provides for expanded disclosures on key information about leasing arrangements. This ASU is effective for interim and the Company on January 1, 2019, however early adoption is permitted. In transition, entities are required to use a modified retrospective approach for the adoption of this ASU. The Company is currently evaluating this ASU to determine the impact it will have on the Company's Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Entities should use a modified retrospective approach when adopting amendments related to the timing of excess tax benefit recognition, minimum statutory withholding requirements and forfeitures, and a retrospective approach when adopting amendments related to recognition of excess tax benefits and tax deficiencies in the income statement. In addition, entities have the option of using a prospective or a retrospective transition approach when adopting amendments related to the presentation of excess tax benefits on the statement of cash flows. This ASU is effective for the Company on January 1, 2017. The Company currently anticipates adopting the provisions of the presentation of excess tax benefits on the statement of cash flows using the retrospective transition approach. Further, the Company anticipates most of the simplification initiatives will not have a material impact on the Company’s Consolidated Financial Statements; however, upon adoption, the Company expects increased volatility in income tax expense. If adopted in the current period, the income tax benefit associated with excess tax benefits would have been $7.0 million for the year ended December 31, 2016. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures On October 3, 2016, the Company acquired 51% of the outstanding equity of an entity included in the North American segment. The remaining 49% of the outstanding equity represents a non-controlling interest, which is presented as a separate component of total equity. The acquisition was valued at $7.7 million , and the purchase price allocation primarily included inventory, goodwill and non-controlling interest. The results of operations were not material to the Company’s Consolidated Financial Statements. 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, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following summarizes the Company's goodwill by reportable segment: (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 Goodwill resulting from acquisition 7.4 — 7.4 Foreign currency translation adjustments and other 1.8 3.9 5.7 Balance as of December 31, 2016 $ 572.0 $ 150.5 $ 722.5 The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2016 December 31, 2015 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 $ 559.8 $ — $ 559.8 $ 558.1 $ — $ 558.1 Amortized intangible assets: Contractual distributor relationships 15 $ 85.0 $ 21.5 $ 63.5 $ 84.8 $ 15.8 $ 69.0 Technology and other 4-10 90.4 46.5 43.9 90.8 39.2 51.6 Patents, other trademarks and other trade names 5-20 27.1 19.2 7.9 27.2 16.9 10.3 Customer databases, relationships and reacquired rights 2-5 24.2 20.6 3.6 24.5 18.1 6.4 Total $ 786.5 $ 107.8 $ 678.7 $ 785.4 $ 90.0 $ 695.4 Amortization expense relating to intangible assets for the Company was $17.2 million , $17.9 million and $18.5 million for the years ended December 31, 2016 , 2015 and 2014 , 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) 2017 $ 18.7 2018 16.1 2019 14.3 2020 14.6 2021 11.9 |
Unconsolidated Affiliate Compan
Unconsolidated Affiliate Companies | 12 Months Ended |
Dec. 31, 2016 | |
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 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 investment of $15.5 million and $13.6 million at December 31, 2016 and 2015 , respectively, is recorded in other non-current assets in the accompanying Consolidated Balance Sheets. The Company’s share of earnings for the year ended December 31, 2016 and 2015 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) 2016 2015 Current assets $ 58.6 $ 50.0 Non-current assets 14.2 15.7 Current liabilities 41.8 37.3 Equity 31.0 28.4 (in millions) 2016 2015 2014 Revenue $ 155.2 $ 131.6 $ 99.2 Gross profit 101.7 85.0 62.1 Income from operations 32.2 26.2 16.8 Net income 24.8 20.1 13.1 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt for the Company consists of the following: (in millions) December 31, 2016 December 31, 2015 Debt: Amount Rate Amount Rate Maturity Date 2016 Credit Agreement: Term A Facility $ 585.0 (1) $ — N/A April 6, 2021 Revolving Credit Facility 156.9 (1) — N/A April 6, 2021 2012 Credit Agreement: Term A Facility — N/A 409.4 (2) Term B Facility — N/A 100.1 (3) 2026 Senior Notes 600.0 5.500% — N/A June 15, 2026 2023 Senior Notes 450.0 5.625% 450.0 5.625% October 15, 2023 2020 Senior Notes — N/A 375.0 6.875% 8.0% Sealy Notes — 8.0% 111.1 8.0% Capital lease obligations (4) 73.3 21.2 Various Other 35.8 12.8 Total debt 1,901.0 1,479.6 Less: deferred financing costs (12.9 ) (24.8 ) Total debt, net 1,888.1 1,454.8 Less: current portion (70.3 ) (181.5 ) Total long term debt, net $ 1,817.8 $ 1,273.3 (1) Interest at LIBOR plus applicable margin of 1.50% as of December 31, 2016. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2015. (3) Interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2015. (4) Capital lease obligations are a non-cash financing activity. 2016 Credit Agreement On April 6, 2016, the Company entered into a senior secured credit agreement ("2016 Credit Agreement") with a syndicate of banks. The 2016 Credit Agreement replaced the Company’s 2012 Senior Secured Credit Agreement ("2012 Credit Agreement"). The 2016 Credit Agreement provides for a $500.0 million revolving credit facility, a $500.0 million initial term loan facility and a $100.0 million delayed draw term loan facility. At any time, the Company may also elect to request the establishment of one or more incremental term loan facilities and/or increase commitments under the revolving credit facility in an aggregate amount of up to $500.0 million . A portion of the revolving credit facility of up to $250.0 million is available in Canadian Dollars, Pounds Sterling, the Euro and any additional currencies determined by mutual agreement of the Company, the Agent and the lenders under the revolving credit facility. A portion of the revolving credit facility of up to $100.0 million is available for the issuance of letters of credit for the account of the Company and a portion of the revolving credit facility of up to $50.0 million is available for swing line loans to the Company. Borrowings under the 2016 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. The applicable margins are determined by a pricing grid based on the consolidated total net leverage ratio of the Company following the delivery of the Consolidated Financial Statements of the Company for the most recent quarter. The delayed draw term loan facility has identical pricing to the revolving credit facility and initial term loan facility. For the period ended December 31, 2016 , the margin was either (i) LIBOR plus 1.50% per annum, or (ii) Base Rate plus 0.50% . Obligations under the 2016 Credit Agreement are guaranteed by the Company’s existing and future direct and indirect wholly-owned domestic subsidiaries, subject to certain exceptions. The 2016 Credit Agreement is secured by a security interest in substantially all of 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 2016 Credit Agreement requires compliance with certain financial covenants providing for maintenance of a minimum consolidated interest coverage ratio, maintenance of a maximum consolidated total net leverage ratio, and maintenance of a maximum consolidated secured 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 other short-term debt. The Company is allowed to subtract from consolidated funded debt an amount equal to 100.0% of 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, 2016 , domestic qualified cash was $12.7 million and foreign qualified cash was $31.8 million . As of December 31, 2016, the Company's consolidated total net leverage ratio was 3.60 times, within the covenant in our debt agreements which limits this ratio to 5.00 times for the year ended December 31, 2016. The 2016 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 2016 Credit Agreement also contains certain customary affirmative covenants and events of default, including upon a change of control. The Company is in compliance with all applicable covenants in the 2016 Credit Agreement at December 31, 2016 . The Company is required to pay a commitment fee on the unused portion of the revolving credit facility. The commitment fee rate is determined by a pricing grid based on the consolidated total net leverage ratio of the Company. The commitment fee is payable quarterly in arrears following the delivery of Consolidated Financial Statements for the most recent quarter and on the date of termination or expiration of the commitments under the revolving credit facility. The Company and the other borrowers also pay customary letter of credit issuance and other fees under the 2016 Credit Agreement. For the period ended December 31, 2016, the Company's commitment fee rate was 0.25% . The Company also borrowed $100.0 million using the delayed draw term loan facility under the Company's 2016 Credit Agreement in connection with the repayment of the 8.0% Sealy Notes. The commitment to provide the delayed draw term loan facility terminated with its funding. As a result of the Company’s 2016 Credit Agreement, $3.6 million of deferred financing costs were capitalized in the second quarter of 2016 and will be amortized as interest expense over the respective debt instrument period, 5 years , using the effective interest method. In addition, the Company expensed $1.9 million of lender fees associated with this transaction in the second quarter of 2016, which is included in loss on extinguishment of debt in the Consolidated Statements of Income. 2012 Credit Agreement The Company used the proceeds from the 2016 Credit Agreement to repay in full and terminate the 2012 Credit Agreement. The 2012 Credit Agreement initially provided for (i) a revolving credit facility of $350.0 million , (ii) a term A facility of $550.0 million and (iii) a term B facility of $870.0 million. In conjunction with the repayment of all outstanding borrowings on the 2012 Credit Agreement, the Company expensed approximately $11.0 million of deferred financing costs in the second quarter of 2016, which is included in loss on extinguishment of debt in the Consolidated Statements of Income. Senior Notes 2026 Senior Notes On May 24, 2016, Tempur Sealy International issued $600.0 million aggregate principal amount of 5.500% 2026 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 2026 Senior Notes were issued pursuant to an indenture, dated as of May 24, 2016 (the "2026 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 2026 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 2026 Senior Notes mature on June 15, 2026, and interest is payable semi-annually in arrears on each June 15 and December 15, beginning on December 15, 2016. The gross proceeds from the 2026 Senior Notes were used to refinance the $375.0 million aggregate principal amount of 6.875% 2020 Senior Notes and to pay related fees and expenses, and the remaining funds were used for share repurchases and general corporate purposes. Tempur Sealy International has the option to redeem all or a portion of the 2026 Senior Notes at any time on or after June 15, 2021. The initial redemption price is 102.750% of the principal amount, plus accrued and unpaid interest, if any. The redemption price will decline each year after 2021 until it becomes 100.0% of the principal amount beginning on June 15, 2024. In addition, Tempur Sealy International has the option at any time prior to June 15, 2021 to redeem some or all of the 2026 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 2026 Senior Notes prior to June 15, 2019, under certain circumstances with the net cash proceeds from certain equity offerings, at 105.500% 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 2026 Senior Notes issued remains outstanding. The 2026 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 assets, directly or indirectly; (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 2026 Senior Notes, Tempur Sealy International and the Combined Guarantor Subsidiaries agreed through a Registration Rights Agreement to exchange the 2026 Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act (the "Exchange Offer"). On October 18, 2016, Tempur Sealy International completed the Exchange Offer, with 100% of the outstanding notes tendered and received for new 2026 Senior Notes registered under the Securities Act. As a result of the issuance of the 2026 Senior Notes, $3.1 million of deferred financing costs were capitalized in the second quarter of 2016 and will be amortized as interest expense over the respective debt instrument period, 10 years , using the effective interest method. In addition, the Company expensed $5.9 million of lender fees associated with this transaction in the second quarter of 2016, which is included in loss on extinguishment of debt in the Consolidated Statements of Income. 2023 Senior Notes On September 24, 2015, Tempur Sealy International issued $450.0 million aggregate principal amount of 5.625% 2023 Senior Notes in a private offering to qualified institutional buyers pursuant to Rule 144A of 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, the Combined Guarantor Subsidiaries (the Combined Guarantor Subsidiaries are the same under the 2026 Indenture, the 2023 Indenture and the 2020 Indenture), 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 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 (the "2023 Exchange Offer"). On April 4, 2016, Tempur Sealy International completed the 2023 Exchange Offer, with 100% of the outstanding notes tendered and received for new 2023 Senior Notes registered under the Securities Act. 2020 Senior Notes On December 19, 2012, Tempur Sealy International issued $375.0 million aggregate principal amount of 6.875% 2020 Senior Notes to qualified institutional buyers pursuant to Rule 144A of the Securities Act 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 2026 Indenture and the 2023 Indenture, the "Indentures"), among the Company, the Combined Guarantor Subsidiaries (the Combined Guarantor Subsidiaries are the same under all the Indentures, 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. The Company used the proceeds from the 2026 Senior Notes to refinance the 2020 Senior Notes and to pay related fees and expenses. The 2020 Senior Notes were redeemed at a price equal to the principal amount thereof and the applicable "make-whole" premium, $23.6 million , which is included in loss on extinguishment of debt in the Consolidated Statements of Income. In conjunction with the refinancing of the 2020 Senior Notes, the Company wrote off approximately $4.8 million of deferred financing costs in the second quarter of 2016, which is included in loss on extinguishment of debt in the Consolidated Statements of Income. 8.0% Sealy Notes In July 2016, the Company retired the 8.0% Senior Secured Third Lien Convertible Notes issued by Sealy Corporation and Sealy Mattress Company (the “8.0% Sealy Notes”) by paying a total of $115.0 million in cash to holders of the 8.0% Sealy Notes who properly converted their 8.0% Sealy Notes in advance of the maturity date, pursuant to the terms of the 8.0% Sealy Notes. In connection with the repayment of the 8.0% Sealy Notes, on July 14, 2016, the Company also borrowed $100.0 million using the delayed draw term loan facility under the Company's 2016 Credit Agreement. The commitment to provide the delayed draw term loan facility terminated with its funding. Fair Value Borrowings under the 2016 Credit Agreement and 2012 Credit Agreement are at variable interest rates and accordingly their carrying amounts approximate fair value. The fair value of the following material financial instruments were based on Level 2 inputs estimated using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of debt instruments. The fair values of material financial instruments are as follows: Fair Value (in millions) December 31, 2016 December 31, 2015 2020 Senior Notes $ — $ 393.8 2023 Senior Notes 468.5 453.4 2026 Senior Notes 606.8 — 8.0% Sealy Notes — 112.7 Capital Leases The Company is party to capital leases as of December 31, 2016 and 2015. The approximate remaining life of the leases ranges from 2 to 15 years as of December 31, 2016 , with several including an option to extend the contract term. 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 in 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. Future Obligations As of December 31, 2016 , 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) 2017 $ 70.3 2018 34.9 2019 42.9 2020 58.5 2021 598.6 Thereafter 1,095.8 Total $ 1,901.0 |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
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 85.0% of their pay subject to certain limitations as defined by the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan upon hire and are eligible to receive matching contributions upon six months of continuous 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. The match for union employees is based on the applicable collective bargaining arrangement. All matching contributions vest immediately. The Company incurred $6.7 million , $7.3 million and $5.0 million of expenses associated with the 401(k) Plan for the years ended December 31, 2016 , 2015 and 2014 , respectively, which are included in the Consolidated Statements of Income. Company Defined Benefit Pension Plans The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at only two of its active Sealy plants and ten 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. The Plans' 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 Plans' 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 formulas, 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) 2016 2015 2014 Service cost $ 0.8 $ 0.8 $ 0.9 Interest cost 1.2 1.9 1.8 Expected return on assets (1.3 ) (2.2 ) (2.1 ) Curtailment loss — — 0.1 Amortization of net gain — — (0.1 ) Settlement loss 0.2 1.3 — Net periodic pension cost $ 0.9 $ 1.8 $ 0.6 The other changes in plan assets and benefit obligations recognized in other comprehensive loss (income) for the years ended December 31 were: (in millions) 2016 2015 2014 Net loss $ 1.5 $ 0.2 $ 9.0 Amortization of prior service cost — — (0.2 ) Amortization or settlement recognition of net (loss) gain (0.2 ) (1.3 ) 0.1 New prior service cost — 0.1 0.1 Total recognized in other comprehensive loss (income) $ 1.3 $ (1.0 ) $ 9.0 The following assumptions, calculated on a weighted-average basis, were used to determine net periodic pension cost for the Company’s Plans for the years ended December 31: 2016 2015 2014 Discount rate (a) 4.27 % 4.12 % 4.01 % Expected long-term return on plan assets 6.71 % 7.05 % 7.00 % (a) The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.26% and 4.30% , respectively. The discount rates used in 2015 to determine the expenses for the U.S. 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 U.S. retirement plan and Canadian retirement plan were 3.94% and 5.00% , 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 was as follows: (in millions) 2016 2015 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 28.2 $ 47.1 Service cost 0.8 0.8 Interest cost 1.2 1.9 Plan amendments — 0.1 Actuarial loss (gain) 0.8 (3.3 ) Settlements (2.0 ) (16.9 ) Benefits paid (1.1 ) (0.8 ) Expenses paid — (0.1 ) Foreign currency exchange rate changes 0.1 (0.6 ) Projected benefit obligation at end of year $ 28.0 $ 28.2 Change in Plan Assets: Fair value of plan assets at beginning of year $ 13.9 $ 32.5 Actual return (loss) on assets 0.6 (1.3 ) Employer contribution 10.2 1.1 Settlements (2.0 ) (16.9 ) Benefits paid (1.1 ) (0.8 ) Expenses paid — (0.1 ) Foreign currency exchange rate changes 0.1 (0.6 ) Fair value of plan assets at end of year $ 21.7 $ 13.9 Funded status $ (6.3 ) $ (14.3 ) The Company’s defined benefit pension plan for U.S. Sealy employees is underfunded. As of December 31, 2016 , the projected benefit obligation and fair value of plan assets were $24.9 million and $18.6 million , respectively. 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, 2016 , the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $3.1 million and $3.1 million , respectively. 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. During 2016, the Company contributed $10.0 million to the defined benefit pension plan for U.S. employees. 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 accumulated benefit obligation for all pension plans was $28.0 million at December 31, 2016 and $28.2 million at December 31, 2015. The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2016 2015 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 6.3 $ 14.5 Non-current benefit asset — 0.2 The following assumption, calculated on a weighted-average basis, was used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: 2016 2015 Discount rate (a) 4.06 % 4.44 % (a) The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.06% and 4.10% , respectively. The discount rates used in 2015 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 4.26% and 4.30% , respectively. No material amounts are expected to be reclassified from AOCL to be recognized as components of net income during 2017 . Plan Contributions and Expected Benefit Payments During 2017 , the Company expects to contribute $0.5 million to the Company's Plans from available cash and cash equivalents. The following table presents estimated future benefit payments: (in millions) Fiscal 2017 $ 1.0 Fiscal 2018 1.0 Fiscal 2019 1.0 Fiscal 2020 1.0 Fiscal 2021 1.1 Fiscal 2022 ‑ Fiscal 2026 6.6 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: 2016 2016 Common/collective trust consisting primarily of: Equity securities 60.00 % 74.51 % Debt securities 40.00 % 22.53 % Other — % 2.96 % 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 the 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 against these guidelines to ensure adherence. Expected Long-Term Return on Plan Assets The expected long-term return assumption at December 31, 2016 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 the Company's investment strategy by plan. The investments in plan assets primarily consist of common collective trusts and money market funds. Investments in common collective trusts and money market funds are valued at the net asset value ("NAV") per share or unit multiplied by the number of shares or units held as of the measurement date. Common/collective trusts are valued at the NAV per share multiplied by the number of shares held as of the measurement date. The determination of NAV 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 common collective trusts at December 31, 2016 and 2015, 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. 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. The fair value of the Company’s plan assets at December 31 by asset category was as follows: (in millions) 2016 2015 Asset Category Common/collective trust U.S. equity $ 12.5 $ 7.7 International equity 3.7 2.7 Total equity based funds 16.2 10.4 Common/collective trust - fixed income 4.9 2.9 Money market funds 0.6 0.6 Total $ 21.7 $ 13.9 Multi‑Employer Benefit Plans Approximately 32.0% of the Company’s domestic employees are represented by various labor unions with separate collective bargaining agreements. Hourly employees working at nine 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 receive 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 was follows: (in millions) 2016 2015 2014 Multi‑employer retirement plan expense $ 4.9 $ 5.0 $ 4.7 Multi‑employer health and welfare plan expense 2.8 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) contributions to the multi‑employer plan by one employer may be used to provide benefits to employees of other participating employers; 2) if a participating employer ceases its contributions to the plan, the unfunded obligations of the plan allocable to the withdrawing employer may be borne by the remaining participant employers; and 3) if the Company withdraws from the multi‑employer pension plans in which it participates, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan. The following table presents information regarding the multi‑employer pension plans that are significant to the Company for the years ended December 31, 2016 and 2015, respectively: (in millions) Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2016 FIP/RP Status (2) Contributions of the Company 2016 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 2/29/16 Red Implemented $ 1.2 Yes, 10.0% 2017 2014, 2015, 2016 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/15 Red Implemented $ 1.3 Yes, 10.0% 2019 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/15 Red Implemented $ 0.3 Yes, 10.0% 2018 N/A (in millions) Pension Fund EIN/Pension Plan Number Date of Plan Year-End 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 2/28/15 Red Implemented $ 1.1 Yes, 10.0% 2016 2013, 2014, 2015 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/14 Red Implemented $ 1.2 Yes, 10.0% 2016 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/14 Red Implemented $ 0.5 Yes, 10.0% 2016 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 of 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 Employee Retirement Income 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. For year ended December 31, 2014, the Company contributed $0.9 million to the plan. |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' (Deficit) Equity | Stockholders' (Deficit) 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) Shareholder Rights Agreement. On February 8, 2017, the Board of Directors of the Company authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of common stock, par value $0.01 per share (the “Common Shares”), of the Company to stockholders of record at the close of business on February 20, 2017 (the “Record Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company at an exercise price of $90 per one one-thousandth of a Preferred Share, subject to adjustment (the “Exercise Price”). Generally, the Rights become exercisable in the event any person or group (including a group of persons that are acting in concert with each other) acquires 20% or more of the Common Shares without the approval of the Board of Directors, and until such time are inseparable from and trade with the Company's common stock. The Rights have a de minimus fair value. The Rights are issued pursuant to the Rights Agreement dated as of February 8, 2017, between the Company and American Stock Transfer & Trust Company, LLC, the Company's rights agent. These Rights expire February 7, 2018 or upon an earlier redemption or exchange as provided in the Rights Agreement. (c) AOCL. AOCL consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Foreign Currency Translation Balance at beginning of period $ (115.4 ) $ (54.0 ) $ (15.6 ) Other comprehensive loss: Foreign currency translation adjustments (1) (4.5 ) (61.4 ) (38.4 ) Tax benefit (1) — — — Balance at end of period $ (119.9 ) $ (115.4 ) $ (54.0 ) Interest Rate Swap Agreement Balance at beginning of period $ — $ (0.7 ) $ (1.4 ) Other comprehensive income: Net change from period revaluation: — 3.1 3.0 Tax expense (2) — (1.2 ) (1.2 ) Total other comprehensive income before reclassifications, net of tax — 1.9 1.8 Net amount reclassified to earnings (3) — (1.9 ) (1.9 ) Tax benefit (2) — 0.7 0.8 Total amount reclassified from accumulated other comprehensive loss, net of tax — (1.2 ) (1.1 ) Total other comprehensive income — 0.7 0.7 Balance at end of period $ — $ — $ (0.7 ) Pension Benefits Balance at beginning of period $ (1.4 ) $ (2.4 ) $ 3.2 Other comprehensive (loss) income: Net change from period revaluation: (1.5 ) 0.2 (9.0 ) Tax benefit (2) 0.6 — 3.4 Total other comprehensive (loss) income before reclassifications, net of tax (0.9 ) 0.2 (5.6 ) Net amount reclassified to earnings 0.2 1.3 — Tax expense (2) (0.1 ) (0.5 ) — Total amount reclassified from accumulated other comprehensive loss, net of tax 0.1 0.8 — Total other comprehensive (loss) income (0.8 ) 1.0 (5.6 ) Balance at end of period $ (2.2 ) $ (1.4 ) $ (2.4 ) Foreign Exchange Forward Contracts Balance at beginning of period $ 6.6 $ 1.3 $ — Other comprehensive (loss) income: Net change from period revaluation: (3.6 ) 14.6 3.4 Tax benefit (expense) (2) 1.0 (3.8 ) (0.9 ) Total other comprehensive (loss) income before reclassifications, net of tax (2.6 ) 10.8 2.5 Net amount reclassified to earnings (4) (4.6 ) (7.4 ) (1.6 ) Tax benefit (2) 1.2 1.9 0.4 Total amount reclassified from accumulated other comprehensive loss, net of tax (3.4 ) (5.5 ) (1.2 ) Total other comprehensive (loss) income (6.0 ) 5.3 1.3 Balance at end of period $ 0.6 $ 6.6 $ 1.3 (1) In 2016, 2015 and 2014, there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. (2) These amounts were included in the income tax provision in the accompanying Consolidated Statements of Income. (3) This amount was included in interest expense, net in the accompanying Consolidated Statements of Income. (4) This amount was included in cost of sales, net in the accompanying Consolidated Statements of Income . |
Other Items
Other Items | 12 Months Ended |
Dec. 31, 2016 | |
Other Items [Abstract] | |
Other Items | Other Items Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following: December 31, December 31, (in millions) 2016 2015 Wages and benefits $ 65.5 $ 72.4 Advertising 48.6 48.4 Sales returns 30.3 28.5 Rebates 8.4 11.5 Warranty 14.3 14.9 Other 83.0 78.3 $ 250.1 $ 254.0 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
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 of Directors 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 may 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, RSUs and PRSUs. Shares with respect to the PRSUs will be granted and vest following the end of the applicable performance period and achievement of applicable performance metrics as determined by the Compensation Committee of the Board of Directors. The Company’s stock-based compensation expense for the year ended December 31, 2016 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: Year Ended December 31, (in millions) 2016 2015 2014 PRSU expense $ 3.9 $ 13.7 $ 3.5 Stock option expense 5.3 6.6 7.0 RSU/DSU expense 7.0 2.2 2.9 Total stock-based compensation expense $ 16.2 $ 22.5 $ 13.4 The Company granted PRSUs during the years ended December 31, 2016 , 2015 and 2014 . 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 $3.8 million for the year ended December 31, 2016 after the change in estimate to reduce accumulated performance based stock compensation amortization to actual cost based on final financial results. The Company did not record any similar benefits in 2015. 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. A summary of the Company’s PRSU activity and related information for the years ended December 31, 2016 and 2015 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value 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 Granted 0.2 60.78 Vested (0.1 ) 51.87 Forfeited (0.3 ) 70.43 Awards unvested at December 31, 2016 1.7 $ 68.02 In addition to the PRSUs noted above, during 2015, the Company granted the CEO and certain other senior executives and key employees a total of 1,390,000 PRSUs that vest if the Company achieves more than $650 million in 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 respective grant dates during 2015, the total unrecognized compensation expense related to these awards if the performance target is met for 2017 is $101.1 million , which would be expensed over the service period if it becomes probable of achieving the performance condition. During 2016, the Company granted certain other senior executives and key employees a total of 72,000 2017 Aspirational Plan PRSUs with substantially the same terms as the 2017 Aspirational Plan PRSUs as described above. Based on the price of the Company’s common stock on the respective grant dates during 2016, the total unrecognized compensation expense related to these awards if the performance target is met for 2017 is $4.4 million , which would be expensed over the service period if it becomes probable of achieving the performance condition. The Company has not recorded any stock-based compensation expense related to the 2017 Aspirational Plan PRSUs during the year ended December 31, 2016, 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 when the awards are probable of vesting. 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 year ended December 31, 2016 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 0.1 0.1 December 31, 2017 (1) December 31, 2017 (1) 0.1 0.1 December 31, 2016 Five annual installments beginning on each applicable grant date (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 of the PRSUs will vest, and the remaining PRSUs shall be forfeited. During the year ended December 31, 2016 , shares granted in 2014 with an aggregate intrinsic value of $5.6 million were paid out from treasury stock following the satisfaction of certain financial metrics over the two year performance period that ended December 31, 2015. The PRSUs were paid out from treasury stock at 79.0% of the target award, out of a maximum potential payout of 200% . During the year ended December 31, 2015, no shares were issued from treasury stock to satisfy payouts under the PRSUs. During the year ended 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 that ended December 31, 2013. The shares were issued from treasury stock to satisfy payouts under the PRSUs at 100.0% of the target award, the maximum payout. The aggregate intrinsic value of PRSUs outstanding as of December 31, 2016 was $121.2 million . A summary of the Company’s unvested shares relating to stock options as of December 31, 2016 and 2015 , and changes during the years ended December 31, 2016 and 2015 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value 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 Granted — — Vested (0.3 ) 61.28 Forfeited 0.0 58.37 Options unvested at December 31, 2016 0.5 $ 63.09 The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options granted. During the year ended December 31, 2016 , no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2015 and 2014 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, 2016 2015 2014 Expected volatility range of stock N/A 34.0% - 36.2% 56.7% - 66.5% Expected life of option, range in years N/A 3 - 5 2 - 4 Risk-free interest range rate N/A 0.9% - 1.5% 0.4% - 1.4% Expected dividend yield on stock N/A 0.0% - 0.0% 0.6% - 0.7% A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2016 and 2015 is presented below: (in millions, except per share amounts) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value 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 Granted — — Released (0.6 ) 24.72 Forfeited 0.0 58.37 Options outstanding at December 31, 2016 1.5 $ 50.46 6.71 $ 19.1 Options exercisable at December 31, 2016 1.0 $ 44.45 5.98 $ 23.6 The aggregate intrinsic value of options exercised during the years ended December 31, 2016 , 2015 and 2014 was $23.9 million , $71.8 million and $6.7 million , respectively. A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2016 and 2015 is presented below: (in millions, except per share amounts) Shares Weighted Average Release Price Aggregate Intrinsic Value 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 Granted 0.3 53.77 Vested 0.0 60.17 Terminated 0.0 53.45 Awards outstanding at December 31, 2016 0.4 $ 59.37 $ 27.1 At December 31, 2016 , the Company had 0.4 million of unvested DSUs/RSUs. The aggregate intrinsic value of RSUs and DSUs vested during the year ended December 31, 2016 was $0.7 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 stock options, DSUs, RSUs and PRSUs for the year ended December 31, 2016 is presented below: (in millions, except years) December 31, 2016 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense 5.3 1.51 Unrecognized DSU/RSU expense 11.9 2.97 Unrecognized PRSU expense 14.2 2.56 Total unrecognized stock-based compensation expense $ 31.4 2.54 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, 2016 , 2015 and 2014 , was $15.7 million , $20.4 million , and $4.3 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
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 $33.5 million , $41.4 million , and $32.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Future minimum lease payments at December 31, 2016 under these non-cancelable leases are as follows: (in millions) Year Ended December 31, 2017 $ 24.6 2018 18.8 2019 15.1 2020 9.6 2021 8.2 Thereafter 12.3 $ 88.6 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, 2016 and 2015 . (c) 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 U.S. 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 Plaintiffs 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 Court considered class certification motions in August 2016, and in September 2016 denied the Plaintiffs’ motion for class certification. In December 2016, the Ninth Circuit Court of Appeals affirmed the lower court’s decision. It is unclear what additional actions the Plaintiffs may take in light of the denial of class certification. As a result, the outcome of the case remains unclear, and 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. (d) 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, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following sets forth the amount of income before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2016, 2015 and 2014: Year Ended December 31, (in millions) 2016 2015 2014 Income before income taxes: United States $ 179.0 $ 120.2 $ 46.9 Rest of the world 104.3 79.9 128.0 $ 283.3 $ 200.1 $ 174.9 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, 2016 2015 2014 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 99.2 35.0 % $ 70.0 35.0 % $ 61.2 35.0 % State income taxes, net of federal benefit 8.0 2.8 % 1.1 0.6 % 1.1 0.6 % Foreign repatriation, net of foreign tax credits (4.3 ) (1.5 )% 0.0 0.0 % 13.5 7.7 % Foreign tax differential (11.9 ) (4.2 )% (10.0 ) (5.0 )% (12.6 ) (7.2 )% Change in valuation allowances 20.2 7.1 % 2.5 1.2 % (17.7 ) (10.0 )% Uncertain tax positions (27.1 ) (9.6 )% 59.7 29.8 % 10.9 6.1 % Subpart F income 2.0 0.7 % 1.9 1.0 % 1.9 1.1 % Manufacturing deduction (4.2 ) (1.5 )% (1.6 ) (0.8 )% (3.7 ) (2.1 )% Goodwill on disposal of business 0.0 0.0 % 0.0 0.0 % 7.5 4.2 % Permanent and other 4.9 1.8 % 1.8 0.9 % 2.8 1.7 % Effective income tax provision $ 86.8 30.6 % $ 125.4 62.7 % $ 64.9 37.1 % 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. The income tax provision consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Current provision Federal $ 73.5 $ 107.1 $ 50.7 State 4.5 7.2 4.5 Foreign 39.9 32.4 36.9 Total current $ 117.9 $ 146.7 $ 92.1 Deferred provision Federal $ (21.4 ) $ (12.3 ) $ (25.2 ) State 1.6 (3.7 ) (1.2 ) Foreign (11.3 ) (5.3 ) (0.8 ) Total deferred (31.1 ) (21.3 ) (27.2 ) Total income tax provision $ 86.8 $ 125.4 $ 64.9 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 net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets consisted of the following: December 31, (in millions) 2016 2015 Deferred tax assets: Stock-based compensation $ 18.4 $ 16.0 Accrued expenses and other 49.9 57.6 Net operating losses, foreign tax credits and other tax attribute carryforwards 98.5 33.1 Inventories 7.2 5.1 Transaction costs 10.2 22.0 Property, plant and equipment 3.4 2.9 Total deferred tax assets 187.6 136.7 Valuation allowances (45.2 ) (24.2 ) Total net deferred tax assets $ 142.4 $ 112.5 Deferred tax liabilities: Intangible assets $ (242.4 ) $ (247.8 ) Property, plant and equipment (42.4 ) (42.0 ) Accrued expenses and other (9.7 ) (5.9 ) Total deferred tax liabilities (294.5 ) (295.7 ) Net deferred tax liabilities $ (152.1 ) $ (183.2 ) At December 31, 2016, the Company’s book tax basis in its top tier foreign subsidiary exceeded the Company’s tax basis in this subsidiary in the hands of the top tier foreign subsidiary's U.S. shareholder. It is the Company’s intent to permanently reinvest the earnings of this foreign subsidiary back into this subsidiary's 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 to 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 such foreign subsidiaries' shareholders. By operation of the tax laws of the various countries in which these subsidiaries are domiciled, earnings of lower tier foreign subsidiaries are not subject to tax, in all material respects, when distributed to a foreign shareholder. It is the Company’s intent that the earnings of each lower tier foreign subsidiary, with the exception of its Danish subsidiary and one of its Canadian subsidiaries, will be permanently reinvested in each such foreign subsidiaries' own operations. As it relates to the Danish subsidiary, its earnings may be distributed without any income tax impact. Thus, no tax is provided for with respect to the book to tax basis difference of its stock. With respect to the Canadian subsidiary, Canadian income tax withholding applies to any distribution it makes to its foreign parent company. The Company has concluded that the Canadian subsidiary has accumulated earnings in excess of its operating needs. Consequently, the earnings in excess of the Canadian subsidiary's operating needs is not permanently reinvested in the Canadian subsidiary's operations, and as such the Company has provided for Canadian withholding tax on the excess amount (which would be available for distribution to its foreign parent). Any such distribution is not taxable to the recipient. Consequently, no further tax would result from the distribution by the Canadian subsidiary. The Company has the following gross income tax attributes available at December 31, 2016 and 2015 , respectively: (in millions) 2016 2015 State net operating losses (“SNOLs”) $ 131.2 $ 128.8 U.S. federal foreign tax credits (“FTCs”) 12.2 7.8 U.S. state income tax credits ("SITCs") 4.0 5.5 Foreign net operating losses (“FNOLs”) 34.1 38.0 Charitable contribution carryover ("CCCs") 38.4 23.7 The SNOLs, FTCs, SITCs, FNOLs 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 certain 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 $118.9 million of the SNOLs, $12.2 million of the FTCs, and $3.5 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. 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, 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 Additions based on tax positions related to 2016 2.5 Additions for tax positions of prior years 29.2 Expiration of statutes of limitations (5.0 ) Settlements of uncertain tax positions with tax authorities (24.8 ) Balance as of December 31, 2016 $ 71.7 The amount of unrecognized tax benefits that would impact the effective tax rate if recognized at December 31, 2016, 2015 and 2014 would be $21.4 million, $67.7 million and $44.6 million , respectively. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. During the years ended December 31, 2016, 2015 and 2014, the Company recognized approximately $1.6 million , $33.5 million , and $1.9 million in interest and penalties, respectively, in income tax expense. The Company had approximately $52.3 million , $43.8 million , and $10.3 million of accrued interest and penalties at December 31, 2016, 2015, and 2014, respectively. The Company has received income tax assessments from the Danish Tax Authority ("SKAT") with respect to the tax years 2001 through 2008 relating to the royalty paid by a U.S. subsidiary of Tempur Sealy International to a Danish subsidiary (the "Danish Assessments"). 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 process. 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 for the Danish Assessments at December 31, 2016 for all years for which an assessment has been received (2001 - 2008) is approximately Danish Krone ("DKK") 1,547.3 million , including interest and penalties ( $219.3 million , based on the DKK to USD exchange rate on December 31, 2016). The cumulative total tax assessment at December 31, 2015 for all years for which an assessment had been received up through that date (2001 - 2008), including interest and penalties, was approximately DKK 1,363.1 million ( $199.6 million , based on the DKK to USD exchange rate on December 31, 2015). If SKAT continues to issue assessments for each year not currently assessed, the Company expects the aggregate assessments for such years (2009 - 2016) to be in excess of the amounts described above as assessed for the years 2001 - 2008 (collectively the years 2001 through 2016 are referred to as the "Danish Tax Matter"). During 2015, the Company engaged third-party advisors to assist the Company in further evaluating the Danish Tax 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 SKAT’s view of this matter 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. 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. 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. As the result of the negotiations, 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 recorded a change in estimate to increase the uncertain tax liability for the Danish Tax Matter by approximately $60.7 million in 2015. At December 31, 2016, the Company had accrued Danish tax and interest for the Danish Tax Matter of approximately DKK 850 million (approximately $120.6 million using the December 31, 2016 exchange rate) as an uncertain income tax liability. Approximately DKK 835 million (approximately $118.5 million using December 31, 2016 exchange rate) represents the amount that the Company and SKAT preliminarily agreed to in a non-binding proposed resolution for the years 2001 through 2011. The balance of approximately DKK 15 million (approximately $2.1 million using the December 31, 2016 exchange rate) may be subject to further negotiation in the future as part of an Advanced Pricing Agreement the Company may choose to pursue for years after 2011. The amount accrued is included in other non-current liabilities on the Company's Consolidated Balance Sheets. In addition, at December 31, 2016 the Company had recorded a deferred tax asset of approximately $43.5 million for the U.S. correlative benefit related to this matter. The Company has recorded a valuation allowance with respect to this benefit of approximately $17.6 million related to years for which relief may not be realized. Because the Company is in a net deferred tax liability position, the deferred tax asset referred to herein is netted with the Company’s deferred tax liabilities as reflected on the Consolidated Balance Sheets at December 31, 2016. At December 31, 2015, the Company had accrued approximately DKK 856.0 million of Danish tax and interest for the Danish Tax Matter (approximately $125.6 million using the December 31, 2015 exchange rate) as well as approximately $46.0 million of U.S. correlative benefit related to this matter. Both were reflected in other non-current liabilities on the Consolidated Balance Sheets at December 31, 2015. The Company’s uncertain tax liability associated with the Danish Tax Matter is derived using the cumulative probability analysis 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. Both the uncertain tax liability and the deferred tax asset discussed herein reflects the Company’s best judgment of the facts, circumstances and information available through December 31, 2016. If the Company is not successful in defending its position before the Danish National Tax Tribunal (the "Tribunal"), the appeals division within SKAT, or in the Danish courts or in negotiating a mutually acceptable settlement, there is significant risk that the Company could be required to pay a significant amount to SKAT in excess of any related reserve. Such an outcome 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. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. It is reasonably possible that there could be material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues, reassessment of existing uncertain tax positions, including the Danish tax matter, or the expiration of applicable statute of limitations; however, the Company is not able to estimate the impact of these items at this time. From June 2012 through December 31, 2016, SKAT withheld Value Added Tax refunds otherwise owed to the Company, pending resolution of this matter. Total withheld refunds at December 31, 2016 and 2015 are approximately DKK 258.0 million (approximately $36.6 million ) and DKK 176.4 million (approximately $26.0 million ), respectively. In July 2016, the Company paid a deposit to SKAT in the amount of approximately DKK 615.2 (approximately $87.2 million using the exchange rate at December 31, 2016) (the “Tax Deposit”) and applied approximately DKK 224.6 million (approximately $31.8 million using the exchange rate at December 31, 2016) of its Value Added Tax refund (the “VAT Refund Applied”) to the aforementioned potential Danish income tax liability, consistent with the Company’s reserve position for this royalty matter. The deposit was made to mitigate additional interest and foreign exchange exposure. The Tax Deposit and the VAT Refund Applied are included within other non-current assets on the Consolidated Balance Sheets. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. 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. That examination was settled and finalized in the fourth quarter of 2016 commensurate with the Company’s expectations. With few exceptions, the Company is no longer subject to tax examinations by the U.S. state and local municipalities for periods prior to 2011, and in non-U.S. jurisdictions for periods prior to 2001. Generally Sealy’s state and local jurisdiction income tax returns are no longer subject to examination for years prior to 2011. 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 year ended December 31, 2016. |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers Mattress Firm, a customer within the North America segment, is our largest customer. In February 2016, Mattress Firm acquired all of the outstanding equity interests in HMK Mattress Holdings, LLC ("Sleepy’s"). Sleepy’s has historically been one of the Company's top five customers and, as a result of this acquisition, the combined companies represented approximately 20.2% and approximately 22.9% of the Company's sales for the three months ended December 31, 2016 , and 2015, respectively. Sales for the combined companies represented 21.4% and 23.7% of the Company's sales for the year ended December 31, 2016 , and 2015 , respectively. Further information regarding the termination of the Company's commercial relationship with Mattress Firm in January 2017 can be found in Note 1 , “ Summary of Significant Accounting Policies .” The top five customers, including the impact of the Mattress Firm acquisition of Sleepy's and its prior acquisitions, accounted for approximately 38.7% and 40.5% of the Company’s sales for the years ended December 31, 2016 and 2015, respectively. The top five customers, including the impact of the Mattress Firm acquisitions, accounted for approximately 28.9% and 35.6% of the Company's accounts receivable as of December 31, 2016 and 2015, respectively. |
Non-controlling Interests
Non-controlling Interests | 12 Months Ended |
Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interest s The Company's call arrangement with Comfort Revolution 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 limited liability company ("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 Sheets 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, 2016 and 2015, the accumulated earnings exceeded the redemption value and, accordingly, a redemption value adjustment was not necessary. During the year ended December 31, 2016, the Company acquired 51% of the outstanding equity of an entity included in the North America segment. The remaining 49% represents a non-controlling interest. The non-controlling interest was originally recorded at its acquisition date fair value in “Stockholders’ (deficit) equity” in the Consolidated Balance Sheets at December 31, 2016 as the non-controlling interest is not redeemable currently or in future periods. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 2014 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 202.1 $ 73.5 $ 108.9 Denominator: Denominator for basic earnings per common share—weighted average shares 59.0 61.7 60.8 Effect of dilutive securities: Employee stock-based compensation 0.8 0.9 1.3 Denominator for diluted earnings per common share—adjusted weighted average shares 59.8 62.6 62.1 Basic earnings per common share $ 3.43 $ 1.19 $ 1.79 Diluted earnings per common share $ 3.38 $ 1.17 $ 1.75 The Company excluded 0.4 million , 0.2 million and 0.3 million shares issuable upon exercise of outstanding stock options for the years ended December 31, 2016 , 2015 , and 2014 , 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, 2016 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information 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 payable. The following table summarizes total assets by segment: December 31, December 31, (in millions) 2016 2015 North America $ 2,581.4 $ 2,533.1 International 572.6 477.1 Corporate 658.7 775.0 Inter-segment eliminations (1,110.1 ) (1,129.7 ) Total assets $ 2,702.6 $ 2,655.5 The following table summarizes property, plant and equipment, net by segment: December 31, December 31, (in millions) 2016 2015 North America $ 297.4 $ 239.2 International 54.9 54.8 Corporate 69.9 67.7 Total property, plant and equipment, net $ 422.2 $ 361.7 The following table summarizes segment information for the year ended December 31, 2016 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,447.8 $ 443.7 $ — $ — $ 2,891.5 Other sales 122.3 113.5 — — 235.8 Net sales 2,570.1 557.2 — — 3,127.3 Inter-segment sales $ 4.6 $ 0.4 $ — $ (5.0 ) $ — Gross profit 1,017.4 292.0 — — 1,309.4 Inter-segment royalty expense (income) 7.2 (7.2 ) — — — Operating income (loss) 411.8 102.7 (99.0 ) — 415.5 Income (loss) before income taxes 406.8 94.0 (217.5 ) — 283.3 Depreciation and amortization (1) $ 43.7 $ 15.6 $ 30.2 $ — $ 89.5 Capital expenditures 32.8 15.3 14.3 — 62.4 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year 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 year 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 property, plant and equipment, net by geographic region: December 31, December 31, (in millions) 2016 2015 United States $ 360.7 $ 300.1 Canada 6.6 6.8 Other International 54.9 54.8 Total property, plant and equipment, net $ 422.2 $ 361.7 Total International $ 61.5 $ 61.6 The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2016 2015 2014 United States $ 2,361.8 $ 2,374.7 $ 2,188.8 Canada 208.3 202.5 216.1 Other International 557.2 574.0 584.9 Total net sales $ 3,127.3 $ 3,151.2 $ 2,989.8 Total International $ 765.5 $ 776.5 $ 801.0 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) Quarterly results of operations for the years ended December 31, 2016 and 2015 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2016 Net sales $ 721.0 $ 804.4 $ 832.4 $ 769.5 Gross profit 291.0 336.9 362.1 319.4 Operating income 76.7 100.2 131.1 107.5 Net income 39.6 21.3 77.8 63.4 Basic earnings per common share $ 0.64 $ 0.35 $ 1.34 $ 1.14 Diluted earnings per common share $ 0.63 $ 0.35 $ 1.32 $ 1.12 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 ) In the second quarter of 2016, the Company recognized a $47.2 million loss on extinguishment of debt. As described in Note 12 , "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 the Company recognized $9.5 million 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, 2016 | |
Guarantor/Non-Guarantor Financial Information | |
Guarantor/Non-Guarantor Financial Information | Guarantor/Non-Guarantor Financial Information The $450.0 million and $600.0 million aggregate principal amount of 2023 Senior Notes and 2026 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 the Combined Guarantor Subsidiaries. The $375.0 million aggregate principal amount of 2020 Senior Notes were general unsecured senior obligations at December 31, 2015 but were redeemed in full in 2016. 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 2016 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, 2016 and December 31, 2015 , and the related Consolidated Statements of Income and Comprehensive Income and Cash Flows for the years ended December 31, 2016 , 2015 and 2014 for Tempur Sealy International, Combined Guarantor Subsidiaries and Combined Non-Guarantor Subsidiaries. TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 2,355.9 $ 835.9 $ (64.5 ) $ 3,127.3 Cost of sales — 1,409.4 473.0 (64.5 ) 1,817.9 Gross profit — 946.5 362.9 — 1,309.4 Selling and marketing expenses 2.9 458.6 187.0 — 648.5 General, administrative and other expenses 14.8 186.8 76.6 — 278.2 Equity income in earnings of unconsolidated affiliates — — (13.3 ) — (13.3 ) Royalty income, net of royalty expense — (19.5 ) — — (19.5 ) Operating (loss) income (17.7 ) 320.6 112.6 — 415.5 Other expense, net: Third party interest expense, net 66.0 15.4 3.8 — 85.2 Intercompany interest (income) expense, net (4.1 ) (0.1 ) 4.2 — — Interest expense, net 61.9 15.3 8.0 — 85.2 Loss on extinguishment of debt 34.3 12.9 — — 47.2 Other (income) expense, net — (1.4 ) 1.2 — (0.2 ) Total other expense 96.2 26.8 9.2 — 132.2 Income from equity investees 271.6 76.8 — (348.4 ) — Income before income taxes 157.7 370.6 103.4 (348.4 ) 283.3 Income tax benefit (provision) 38.8 (99.0 ) (26.6 ) — (86.8 ) Net income before non-controlling interest 196.5 271.6 76.8 (348.4 ) 196.5 Less: net loss attributable to non-controlling interests (5.6 ) — (5.6 ) 5.6 (5.6 ) Net income attributable to Tempur Sealy International, Inc. $ 202.1 $ 271.6 $ 82.4 $ (354.0 ) $ 202.1 Comprehensive income $ 190.8 $ 271.7 $ 71.2 $ (342.9 ) $ 190.8 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 before non-controlling interest 74.7 132.9 64.7 (197.6 ) 74.7 Less: net income attributable to non-controlling interests 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 (loss) $ 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 before non-controlling interest 110.0 159.2 98.7 (257.9 ) 110.0 Less: net income attributable to non-controlling interests 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 Balance Sheets December 31, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 7.9 $ 57.8 $ — $ 65.7 Accounts receivable, net — 197.7 147.4 — 345.1 Inventories — 117.1 79.7 — 196.8 Income tax receivable 234.2 — — (234.2 ) — Prepaid expenses and other current assets — 48.9 15.0 — 63.9 Total Current Assets 234.2 371.6 299.9 (234.2 ) 671.5 Property, plant and equipment, net — 346.9 75.3 — 422.2 Goodwill — 500.2 222.3 — 722.5 Other intangible assets, net — 589.8 88.9 — 678.7 Deferred income taxes 20.6 — 22.5 (20.6 ) 22.5 Other non-current assets — 41.7 143.5 — 185.2 Net investment in subsidiaries 2,207.4 77.7 — (2,285.1 ) — Due from affiliates 168.4 1,874.7 14.3 (2,057.4 ) — Total Assets $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 0.1 $ 157.0 $ 62.2 $ — $ 219.3 Accrued expenses and other current liabilities 6.8 172.6 70.7 — 250.1 Income taxes payable — 235.9 4.1 (234.2 ) 5.8 Current portion of long-term debt — 34.4 35.9 — 70.3 Total Current Liabilities 6.9 599.9 172.9 (234.2 ) 545.5 Long-term debt, net 1,040.4 776.5 0.9 — 1,817.8 Deferred income taxes — 174.9 20.3 (20.6 ) 174.6 Other non-current liabilities — 43.3 126.0 — 169.3 Due to affiliates 1,587.9 0.6 468.9 (2,057.4 ) — Total Liabilities 2,635.2 1,595.2 789.0 (2,312.2 ) 2,707.2 Redeemable non-controlling interest 7.6 — 7.6 (7.6 ) 7.6 Total stockholders’ (deficit) equity, net of non-controlling interests in subsidiaries (15.2 ) 2,207.4 67.1 (2,274.5 ) (15.2 ) Non-controlling interest in subsidiaries 3.0 — 3.0 (3.0 ) 3.0 Total Stockholder's (Deficit) Equity (12.2 ) 2,207.4 70.1 (2,277.5 ) (12.2 ) Total Liabilities and Stockholders’ (Deficit) Equity $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 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 $ — $ 119.7 $ 34.2 $ — $ 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 — 45.6 31.0 — 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’ (Deficit) Equity 290.2 1,948.1 (95.0 ) (1,853.1 ) 290.2 Total Liabilities and Stockholders’ (Deficit) Equity $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2016 (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 $ (63.1 ) $ 110.7 $ 117.9 $ — $ 165.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (76.7 ) 76.7 — — Purchases of property, plant and equipment — (43.0 ) (19.4 ) (62.4 ) Net cash (used in) provided by investing activities — (119.7 ) 57.3 — (62.4 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations 600.0 1,523.6 109.7 — 2,233.3 Repayments of borrowings under long-term debt obligations (375.0 ) (1,406.2 ) (86.5 ) — (1,867.7 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 383.1 (212.5 ) (170.6 ) — — Proceeds from exercise of stock options 15.7 — — — 15.7 Excess tax benefit from stock-based compensation 7.0 — — — 7.0 Treasury stock repurchased (535.0 ) — — — (535.0 ) Payment of deferred financing costs (3.1 ) (3.8 ) — — (6.9 ) Fees paid to lenders (6.0 ) (1.8 ) — — (7.8 ) Call premium on 2020 Senior Notes (23.6 ) — — — (23.6 ) Other — (2.1 ) 2.0 — (0.1 ) Net cash provided by (used in) financing activities 63.1 (102.8 ) (145.4 ) — (185.1 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (6.2 ) — (6.2 ) (Decrease) increase in cash and cash equivalents — (111.8 ) 23.6 — (88.2 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD — 119.7 34.2 — 153.9 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 7.9 $ 57.8 $ — $ 65.7 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 borrowings under long-term debt obligations 450.0 402.9 10.6 — 863.5 Repayments of borrowings under long-term debt obligations — (988.3 ) — — (988.3 ) 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 purchase of treasury shares 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 (Decrease) increase in cash and cash equivalents (0.4 ) 96.3 (4.5 ) — 91.4 CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD 0.4 23.4 38.7 — 62.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 119.7 $ 34.2 $ — $ 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 Purchases 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 borrowings under long-term debt obligations — 271.5 — — 271.5 Repayments of borrowings under long-term debt obligations — (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 — 28.8 52.2 — 81.0 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 0.4 $ 23.4 $ 38.7 $ — $ 62.5 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 , 2015 AND 2014 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, 2014 $ 19.3 4.9 — (4.7 ) $ 19.5 Year Ended December 31, 2015 $ 19.5 6.9 — (3.1 ) $ 23.3 Year Ended December 31, 2016 $ 23.3 4.2 — (5.4 ) $ 22.1 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, 2014 $ 39.4 2.2 — (19.9 ) $ 21.7 Year Ended December 31, 2015 $ 21.7 4.6 — (2.1 ) $ 24.2 Year Ended December 31, 2016 $ 24.2 20.2 0.8 — $ 45.2 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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 and its controlled subsidiaries and the results of Comfort Revolution, LLC ("Comfort Revolution"). Intercompany balances and transactions have been eliminated. Comfort Revolution is 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 Company is party to put and call arrangements with respect to the common securities that represent the 55.0% non-controlling interest in Comfort Revolution not owned by the Company. The operations of Comfort Revolution are not material to the Company’s Consolidated Financial Statements. 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 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. The Company’s Asia-Pacific joint ventures are more fully described in Note 5 , "Unconsolidated Affiliate Companies." |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“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 Consolidated 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 Consolidated 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. 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 measurements. There were no transfers between levels for the years ended December 31, 2016 or 2015. 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.The fair value of the Company's financial instruments that are recorded on a recurring basis at fair value are not material. |
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’ (deficit) 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 exchange rates on the transaction date and on the settlement date. These amounts are not considered material to the Consolidated Financial Statements. |
Derivative Financial Instruments | Derivative Financial Instruments. Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. 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. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. 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 income ("OCI"), 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' (deficit) 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. The Company manages a portion of 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. As of December 31, 2016, 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 $25.4 million . These foreign exchange forward contracts have maturities ranging from January 2017 to September 2017. The effectiveness of the cash flow hedge contracts, including time value, is assessed prospectively and retrospectively on a monthly basis using regression analysis, as well as other timing and probability criteria. 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 $0.6 million , net of tax, over the next 12 months based on December 31, 2016 exchange rates. The fair value of foreign exchange forward contract assets was $1.7 million and $12.5 million as of December 31, 2016 and 2015, respectively. There was no forward exchange liability as of December 31, 2016. The fair value of foreign exchange forward contract liabilities was $1.2 million as of December 31, 2015. The fair value of these financial instruments were based on Level 2 inputs. The Company is also exposed to foreign currency risk related to intercompany debt and associated interest payments and certain intercompany 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. |
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. During 2016, the Company revised how its reporting units are managed and determined its reporting units to be the North America and International segments. The Company tested goodwill for impairment for both the historical reporting units, as well as the new reporting units, noting no impairment at October 1, 2016. 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 both trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2016 , 2015 and 2014 , 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 programs with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these programs. 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 programs 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 in 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 $352.7 million , $360.5 million and $326.7 million for the years ended December 31, 2016 , 2015 and 2014 , 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. |
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 of 1986, as amended (the "Code"). |
Treasury Stock | Treasury Stock. Subject to Delaware law, and the limitations in the Company's 2016 Credit Agreement (as defined in Note 6 , "Debt") and the Company's other debt agreements, the Board of Directors may authorize share repurchases of the Company’s common stock (“Stock Repurchase Authorizations”). Purchases made pursuant to Stock Repurchase Authorizations may be carried out through open market transactions, negotiated purchases or otherwise, at times and in such amounts as the Company deems appropriate. Stock repurchased under Stock Repurchase Authorizations is held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. On February 1, 2016 , the Board of Directors authorized a new share repurchase authorization of up to $200.0 million of Tempur Sealy International's common stock. On both June 7, 2016 and July 27, 2016 , the Board of Directors increased the authorization under the Company's share repurchase program by an additional $200.0 million . As of December 31, 2016 , the Company had repurchased 8.7 million shares for approximately $533.0 million under the share repurchase authorization. As of December 31, 2016 , the Company had approximately $67.0 million remaining under the existing share repurchase authorization. In addition, the Company acquired 0.0 million shares upon the vesting of certain PRSUs, which were withheld to satisfy tax withholding obligations during the year ended December 31, 2016 and 2015 , respectively. The shares withheld were valued at the closing price of the common stock on the New York Stock Exchange on the vesting date or last business day prior to, resulting in approximately $2.0 million and $1.3 million in treasury stock acquired during the year ended December 31, 2016 and 2015 , respectively. Treasury stock is accounted for under the cost method and reported as a reduction of stockholders’ (deficit) 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 Consolidated 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. |
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 ten 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. |
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. The new standard is effective for the Company beginning January 1, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently anticipates adopting the standard using the modified retrospective method as of January 1, 2018. The Company is evaluating the effect of the adoption of this standard on our financial position and results of operations. In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) , which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The Company adopted this ASU as of December 31, 2016. Accordingly, the fair value hierarchy of pension plan assets, which are measured using the net asset value per share practical expedient, is removed from Note 7 , " Retirement Plans ." In February 2016, the FASB issued ASU No. 2016-02, Leases , that requires lessees to recognize most leases on the balance sheet and provides for expanded disclosures on key information about leasing arrangements. This ASU is effective for interim and the Company on January 1, 2019, however early adoption is permitted. In transition, entities are required to use a modified retrospective approach for the adoption of this ASU. The Company is currently evaluating this ASU to determine the impact it will have on the Company's Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Entities should use a modified retrospective approach when adopting amendments related to the timing of excess tax benefit recognition, minimum statutory withholding requirements and forfeitures, and a retrospective approach when adopting amendments related to recognition of excess tax benefits and tax deficiencies in the income statement. In addition, entities have the option of using a prospective or a retrospective transition approach when adopting amendments related to the presentation of excess tax benefits on the statement of cash flows. This ASU is effective for the Company on January 1, 2017. The Company currently anticipates adopting the provisions of the presentation of excess tax benefits on the statement of cash flows using the retrospective transition approach. Further, the Company anticipates most of the simplification initiatives will not have a material impact on the Company’s Consolidated Financial Statements; however, upon adoption, the Company expects increased volatility in income tax expense. If adopted in the current period, the income tax benefit associated with excess tax benefits would have been $7.0 million for the year ended December 31, 2016. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 Finished goods $ 130.1 $ 126.7 Work-in-process 10.7 14.0 Raw materials and supplies 56.0 58.5 $ 196.8 $ 199.2 |
Schedule of Property, Plant and Equipment | Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Estimated Useful Lives (in years) Buildings 25-30 Computer equipment and software 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. Assets under capital lease are included within property, plant and equipment and represent non-cash investing activities. Property, plant and equipment, net consisted of the following: December 31, (in millions) 2016 2015 Machinery and equipment $ 283.9 $ 257.0 Land and buildings 302.6 243.7 Computer equipment and software 97.2 78.2 Furniture and fixtures 50.4 52.3 Construction in progress 52.9 57.4 Total property, plant, and equipment 787.0 688.6 Accumulated depreciation (364.8 ) (326.9 ) Total property, plant and equipment, net $ 422.2 $ 361.7 |
Changes in Accrued Sales Returns | The Company had the following activity for accrued sales returns from December 31, 2014 to December 31, 2016 : (in millions) 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 Amounts accrued 130.6 Returns charged to accrual (128.8 ) Balance as of December 31, 2016 $ 30.3 |
Warranty Activity | The Company had the following activity for warranties from December 31, 2014 to December 31, 2016 : (in millions) 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 Amounts accrued 33.3 Warranties charged to accrual (33.0 ) Balance as of December 31, 2016 $ 29.9 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Reportable Business Segment | The following summarizes the Company's goodwill by reportable segment: (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 Goodwill resulting from acquisition 7.4 — 7.4 Foreign currency translation adjustments and other 1.8 3.9 5.7 Balance as of December 31, 2016 $ 572.0 $ 150.5 $ 722.5 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2016 December 31, 2015 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 $ 559.8 $ — $ 559.8 $ 558.1 $ — $ 558.1 Amortized intangible assets: Contractual distributor relationships 15 $ 85.0 $ 21.5 $ 63.5 $ 84.8 $ 15.8 $ 69.0 Technology and other 4-10 90.4 46.5 43.9 90.8 39.2 51.6 Patents, other trademarks and other trade names 5-20 27.1 19.2 7.9 27.2 16.9 10.3 Customer databases, relationships and reacquired rights 2-5 24.2 20.6 3.6 24.5 18.1 6.4 Total $ 786.5 $ 107.8 $ 678.7 $ 785.4 $ 90.0 $ 695.4 |
Schedule of Indefinite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2016 December 31, 2015 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 $ 559.8 $ — $ 559.8 $ 558.1 $ — $ 558.1 Amortized intangible assets: Contractual distributor relationships 15 $ 85.0 $ 21.5 $ 63.5 $ 84.8 $ 15.8 $ 69.0 Technology and other 4-10 90.4 46.5 43.9 90.8 39.2 51.6 Patents, other trademarks and other trade names 5-20 27.1 19.2 7.9 27.2 16.9 10.3 Customer databases, relationships and reacquired rights 2-5 24.2 20.6 3.6 24.5 18.1 6.4 Total $ 786.5 $ 107.8 $ 678.7 $ 785.4 $ 90.0 $ 695.4 |
Expected Future Amortization Expense | Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31: (in millions) 2017 $ 18.7 2018 16.1 2019 14.3 2020 14.6 2021 11.9 |
Unconsolidated Affiliate Comp32
Unconsolidated Affiliate Companies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 Current assets $ 58.6 $ 50.0 Non-current assets 14.2 15.7 Current liabilities 41.8 37.3 Equity 31.0 28.4 (in millions) 2016 2015 2014 Revenue $ 155.2 $ 131.6 $ 99.2 Gross profit 101.7 85.0 62.1 Income from operations 32.2 26.2 16.8 Net income 24.8 20.1 13.1 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | Debt for the Company consists of the following: (in millions) December 31, 2016 December 31, 2015 Debt: Amount Rate Amount Rate Maturity Date 2016 Credit Agreement: Term A Facility $ 585.0 (1) $ — N/A April 6, 2021 Revolving Credit Facility 156.9 (1) — N/A April 6, 2021 2012 Credit Agreement: Term A Facility — N/A 409.4 (2) Term B Facility — N/A 100.1 (3) 2026 Senior Notes 600.0 5.500% — N/A June 15, 2026 2023 Senior Notes 450.0 5.625% 450.0 5.625% October 15, 2023 2020 Senior Notes — N/A 375.0 6.875% 8.0% Sealy Notes — 8.0% 111.1 8.0% Capital lease obligations (4) 73.3 21.2 Various Other 35.8 12.8 Total debt 1,901.0 1,479.6 Less: deferred financing costs (12.9 ) (24.8 ) Total debt, net 1,888.1 1,454.8 Less: current portion (70.3 ) (181.5 ) Total long term debt, net $ 1,817.8 $ 1,273.3 (1) Interest at LIBOR plus applicable margin of 1.50% as of December 31, 2016. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2015. (3) Interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2015. (4) Capital lease obligations are a non-cash financing activity. |
Schedule of Estimated Fair Values of Debt Instruments | The fair values of material financial instruments are as follows: Fair Value (in millions) December 31, 2016 December 31, 2015 2020 Senior Notes $ — $ 393.8 2023 Senior Notes 468.5 453.4 2026 Senior Notes 606.8 — 8.0% Sealy Notes — 112.7 |
Schedule of Maturities of Long-term Debt | As of December 31, 2016 , 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) 2017 $ 70.3 2018 34.9 2019 42.9 2020 58.5 2021 598.6 Thereafter 1,095.8 Total $ 1,901.0 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 2014 Service cost $ 0.8 $ 0.8 $ 0.9 Interest cost 1.2 1.9 1.8 Expected return on assets (1.3 ) (2.2 ) (2.1 ) Curtailment loss — — 0.1 Amortization of net gain — — (0.1 ) Settlement loss 0.2 1.3 — Net periodic pension cost $ 0.9 $ 1.8 $ 0.6 |
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 loss (income) for the years ended December 31 were: (in millions) 2016 2015 2014 Net loss $ 1.5 $ 0.2 $ 9.0 Amortization of prior service cost — — (0.2 ) Amortization or settlement recognition of net (loss) gain (0.2 ) (1.3 ) 0.1 New prior service cost — 0.1 0.1 Total recognized in other comprehensive loss (income) $ 1.3 $ (1.0 ) $ 9.0 |
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 Plans for the years ended December 31: 2016 2015 2014 Discount rate (a) 4.27 % 4.12 % 4.01 % Expected long-term return on plan assets 6.71 % 7.05 % 7.00 % (a) The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.26% and 4.30% , respectively. The discount rates used in 2015 to determine the expenses for the U.S. 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 U.S. 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 was as follows: (in millions) 2016 2015 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 28.2 $ 47.1 Service cost 0.8 0.8 Interest cost 1.2 1.9 Plan amendments — 0.1 Actuarial loss (gain) 0.8 (3.3 ) Settlements (2.0 ) (16.9 ) Benefits paid (1.1 ) (0.8 ) Expenses paid — (0.1 ) Foreign currency exchange rate changes 0.1 (0.6 ) Projected benefit obligation at end of year $ 28.0 $ 28.2 Change in Plan Assets: Fair value of plan assets at beginning of year $ 13.9 $ 32.5 Actual return (loss) on assets 0.6 (1.3 ) Employer contribution 10.2 1.1 Settlements (2.0 ) (16.9 ) Benefits paid (1.1 ) (0.8 ) Expenses paid — (0.1 ) Foreign currency exchange rate changes 0.1 (0.6 ) Fair value of plan assets at end of year $ 21.7 $ 13.9 Funded status $ (6.3 ) $ (14.3 ) |
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) 2016 2015 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 6.3 $ 14.5 Non-current benefit asset — 0.2 |
Schedule of Weighted-Average Assumptions Used in Calculating Benefit Obligations | The following assumption, calculated on a weighted-average basis, was used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: 2016 2015 Discount rate (a) 4.06 % 4.44 % (a) The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.06% and 4.10% , respectively. The discount rates used in 2015 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 4.26% and 4.30% , respectively. |
Schedule of Estimated Future Benefit Payments | The following table presents estimated future benefit payments: (in millions) Fiscal 2017 $ 1.0 Fiscal 2018 1.0 Fiscal 2019 1.0 Fiscal 2020 1.0 Fiscal 2021 1.1 Fiscal 2022 ‑ Fiscal 2026 6.6 |
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations are as follows: 2016 2016 Common/collective trust consisting primarily of: Equity securities 60.00 % 74.51 % Debt securities 40.00 % 22.53 % Other — % 2.96 % 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) 2016 2015 Asset Category Common/collective trust U.S. equity $ 12.5 $ 7.7 International equity 3.7 2.7 Total equity based funds 16.2 10.4 Common/collective trust - fixed income 4.9 2.9 Money market funds 0.6 0.6 Total $ 21.7 $ 13.9 |
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 was follows: (in millions) 2016 2015 2014 Multi‑employer retirement plan expense $ 4.9 $ 5.0 $ 4.7 Multi‑employer health and welfare plan expense 2.8 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 years ended December 31, 2016 and 2015, respectively: (in millions) Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2016 FIP/RP Status (2) Contributions of the Company 2016 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 2/29/16 Red Implemented $ 1.2 Yes, 10.0% 2017 2014, 2015, 2016 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/15 Red Implemented $ 1.3 Yes, 10.0% 2019 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/15 Red Implemented $ 0.3 Yes, 10.0% 2018 N/A (in millions) Pension Fund EIN/Pension Plan Number Date of Plan Year-End 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 2/28/15 Red Implemented $ 1.1 Yes, 10.0% 2016 2013, 2014, 2015 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/14 Red Implemented $ 1.2 Yes, 10.0% 2016 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/14 Red Implemented $ 0.5 Yes, 10.0% 2016 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 of 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 Employee Retirement Income 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. For year ended December 31, 2014, the Company contributed $0.9 million to the plan. |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Changes in accumulated other comprehensive income | AOCL consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Foreign Currency Translation Balance at beginning of period $ (115.4 ) $ (54.0 ) $ (15.6 ) Other comprehensive loss: Foreign currency translation adjustments (1) (4.5 ) (61.4 ) (38.4 ) Tax benefit (1) — — — Balance at end of period $ (119.9 ) $ (115.4 ) $ (54.0 ) Interest Rate Swap Agreement Balance at beginning of period $ — $ (0.7 ) $ (1.4 ) Other comprehensive income: Net change from period revaluation: — 3.1 3.0 Tax expense (2) — (1.2 ) (1.2 ) Total other comprehensive income before reclassifications, net of tax — 1.9 1.8 Net amount reclassified to earnings (3) — (1.9 ) (1.9 ) Tax benefit (2) — 0.7 0.8 Total amount reclassified from accumulated other comprehensive loss, net of tax — (1.2 ) (1.1 ) Total other comprehensive income — 0.7 0.7 Balance at end of period $ — $ — $ (0.7 ) Pension Benefits Balance at beginning of period $ (1.4 ) $ (2.4 ) $ 3.2 Other comprehensive (loss) income: Net change from period revaluation: (1.5 ) 0.2 (9.0 ) Tax benefit (2) 0.6 — 3.4 Total other comprehensive (loss) income before reclassifications, net of tax (0.9 ) 0.2 (5.6 ) Net amount reclassified to earnings 0.2 1.3 — Tax expense (2) (0.1 ) (0.5 ) — Total amount reclassified from accumulated other comprehensive loss, net of tax 0.1 0.8 — Total other comprehensive (loss) income (0.8 ) 1.0 (5.6 ) Balance at end of period $ (2.2 ) $ (1.4 ) $ (2.4 ) Foreign Exchange Forward Contracts Balance at beginning of period $ 6.6 $ 1.3 $ — Other comprehensive (loss) income: Net change from period revaluation: (3.6 ) 14.6 3.4 Tax benefit (expense) (2) 1.0 (3.8 ) (0.9 ) Total other comprehensive (loss) income before reclassifications, net of tax (2.6 ) 10.8 2.5 Net amount reclassified to earnings (4) (4.6 ) (7.4 ) (1.6 ) Tax benefit (2) 1.2 1.9 0.4 Total amount reclassified from accumulated other comprehensive loss, net of tax (3.4 ) (5.5 ) (1.2 ) Total other comprehensive (loss) income (6.0 ) 5.3 1.3 Balance at end of period $ 0.6 $ 6.6 $ 1.3 (1) In 2016, 2015 and 2014, there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. (2) These amounts were included in the income tax provision in the accompanying Consolidated Statements of Income. (3) This amount was included in interest expense, net in the accompanying Consolidated Statements of Income. (4) This amount was included in cost of sales, net in the accompanying Consolidated Statements of Income . |
Other Items (Tables)
Other Items (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 Wages and benefits $ 65.5 $ 72.4 Advertising 48.6 48.4 Sales returns 30.3 28.5 Rebates 8.4 11.5 Warranty 14.3 14.9 Other 83.0 78.3 $ 250.1 $ 254.0 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: Year Ended December 31, (in millions) 2016 2015 2014 PRSU expense $ 3.9 $ 13.7 $ 3.5 Stock option expense 5.3 6.6 7.0 RSU/DSU expense 7.0 2.2 2.9 Total stock-based compensation expense $ 16.2 $ 22.5 $ 13.4 |
Summary of PRSU Activity and Related Information | A summary of the Company’s PRSU activity and related information for the years ended December 31, 2016 and 2015 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value 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 Granted 0.2 60.78 Vested (0.1 ) 51.87 Forfeited (0.3 ) 70.43 Awards unvested at December 31, 2016 1.7 $ 68.02 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 year ended December 31, 2016 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 0.1 0.1 December 31, 2017 (1) December 31, 2017 (1) 0.1 0.1 December 31, 2016 Five annual installments beginning on each applicable grant date (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 of the PRSUs will vest, and the remaining PRSUs shall be forfeited. |
Schedule of Stock Option Activity | A summary of the Company’s unvested shares relating to stock options as of December 31, 2016 and 2015 , and changes during the years ended December 31, 2016 and 2015 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value 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 Granted — — Vested (0.3 ) 61.28 Forfeited 0.0 58.37 Options unvested at December 31, 2016 0.5 $ 63.09 A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2016 and 2015 is presented below: (in millions, except per share amounts) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value 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 Granted — — Released (0.6 ) 24.72 Forfeited 0.0 58.37 Options outstanding at December 31, 2016 1.5 $ 50.46 6.71 $ 19.1 Options exercisable at December 31, 2016 1.0 $ 44.45 5.98 $ 23.6 |
Stock Options Valuation Assumptions | The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options granted. During the year ended December 31, 2016 , no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2015 and 2014 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, 2016 2015 2014 Expected volatility range of stock N/A 34.0% - 36.2% 56.7% - 66.5% Expected life of option, range in years N/A 3 - 5 2 - 4 Risk-free interest range rate N/A 0.9% - 1.5% 0.4% - 1.4% Expected dividend yield on stock N/A 0.0% - 0.0% 0.6% - 0.7% |
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, 2016 and 2015 is presented below: (in millions, except per share amounts) Shares Weighted Average Release Price Aggregate Intrinsic Value 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 Granted 0.3 53.77 Vested 0.0 60.17 Terminated 0.0 53.45 Awards outstanding at December 31, 2016 0.4 $ 59.37 $ 27.1 |
Schedule of Unrecognized Compensation Expense | 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 stock options, DSUs, RSUs and PRSUs for the year ended December 31, 2016 is presented below: (in millions, except years) December 31, 2016 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense 5.3 1.51 Unrecognized DSU/RSU expense 11.9 2.97 Unrecognized PRSU expense 14.2 2.56 Total unrecognized stock-based compensation expense $ 31.4 2.54 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum Rental Payments for Operating Leases | Future minimum lease payments at December 31, 2016 under these non-cancelable leases are as follows: (in millions) Year Ended December 31, 2017 $ 24.6 2018 18.8 2019 15.1 2020 9.6 2021 8.2 Thereafter 12.3 $ 88.6 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Pre-tax Income Attributable to Operating Segments | The following sets forth the amount of income before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2016, 2015 and 2014: Year Ended December 31, (in millions) 2016 2015 2014 Income before income taxes: United States $ 179.0 $ 120.2 $ 46.9 Rest of the world 104.3 79.9 128.0 $ 283.3 $ 200.1 $ 174.9 |
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, 2016 2015 2014 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 99.2 35.0 % $ 70.0 35.0 % $ 61.2 35.0 % State income taxes, net of federal benefit 8.0 2.8 % 1.1 0.6 % 1.1 0.6 % Foreign repatriation, net of foreign tax credits (4.3 ) (1.5 )% 0.0 0.0 % 13.5 7.7 % Foreign tax differential (11.9 ) (4.2 )% (10.0 ) (5.0 )% (12.6 ) (7.2 )% Change in valuation allowances 20.2 7.1 % 2.5 1.2 % (17.7 ) (10.0 )% Uncertain tax positions (27.1 ) (9.6 )% 59.7 29.8 % 10.9 6.1 % Subpart F income 2.0 0.7 % 1.9 1.0 % 1.9 1.1 % Manufacturing deduction (4.2 ) (1.5 )% (1.6 ) (0.8 )% (3.7 ) (2.1 )% Goodwill on disposal of business 0.0 0.0 % 0.0 0.0 % 7.5 4.2 % Permanent and other 4.9 1.8 % 1.8 0.9 % 2.8 1.7 % Effective income tax provision $ 86.8 30.6 % $ 125.4 62.7 % $ 64.9 37.1 % |
Tax Provision Summary | The income tax provision consisted of the following: Year Ended December 31, (in millions) 2016 2015 2014 Current provision Federal $ 73.5 $ 107.1 $ 50.7 State 4.5 7.2 4.5 Foreign 39.9 32.4 36.9 Total current $ 117.9 $ 146.7 $ 92.1 Deferred provision Federal $ (21.4 ) $ (12.3 ) $ (25.2 ) State 1.6 (3.7 ) (1.2 ) Foreign (11.3 ) (5.3 ) (0.8 ) Total deferred (31.1 ) (21.3 ) (27.2 ) Total income tax provision $ 86.8 $ 125.4 $ 64.9 |
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) 2016 2015 Deferred tax assets: Stock-based compensation $ 18.4 $ 16.0 Accrued expenses and other 49.9 57.6 Net operating losses, foreign tax credits and other tax attribute carryforwards 98.5 33.1 Inventories 7.2 5.1 Transaction costs 10.2 22.0 Property, plant and equipment 3.4 2.9 Total deferred tax assets 187.6 136.7 Valuation allowances (45.2 ) (24.2 ) Total net deferred tax assets $ 142.4 $ 112.5 Deferred tax liabilities: Intangible assets $ (242.4 ) $ (247.8 ) Property, plant and equipment (42.4 ) (42.0 ) Accrued expenses and other (9.7 ) (5.9 ) Total deferred tax liabilities (294.5 ) (295.7 ) Net deferred tax liabilities $ (152.1 ) $ (183.2 ) |
Operating Loss and Tax Credit Carryforwards | The Company has the following gross income tax attributes available at December 31, 2016 and 2015 , respectively: (in millions) 2016 2015 State net operating losses (“SNOLs”) $ 131.2 $ 128.8 U.S. federal foreign tax credits (“FTCs”) 12.2 7.8 U.S. state income tax credits ("SITCs") 4.0 5.5 Foreign net operating losses (“FNOLs”) 34.1 38.0 Charitable contribution carryover ("CCCs") 38.4 23.7 |
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, 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 Additions based on tax positions related to 2016 2.5 Additions for tax positions of prior years 29.2 Expiration of statutes of limitations (5.0 ) Settlements of uncertain tax positions with tax authorities (24.8 ) Balance as of December 31, 2016 $ 71.7 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 2014 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 202.1 $ 73.5 $ 108.9 Denominator: Denominator for basic earnings per common share—weighted average shares 59.0 61.7 60.8 Effect of dilutive securities: Employee stock-based compensation 0.8 0.9 1.3 Denominator for diluted earnings per common share—adjusted weighted average shares 59.8 62.6 62.1 Basic earnings per common share $ 3.43 $ 1.19 $ 1.79 Diluted earnings per common share $ 3.38 $ 1.17 $ 1.75 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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) 2016 2015 North America $ 2,581.4 $ 2,533.1 International 572.6 477.1 Corporate 658.7 775.0 Inter-segment eliminations (1,110.1 ) (1,129.7 ) Total assets $ 2,702.6 $ 2,655.5 The following table summarizes property, plant and equipment, net by segment: December 31, December 31, (in millions) 2016 2015 North America $ 297.4 $ 239.2 International 54.9 54.8 Corporate 69.9 67.7 Total property, plant and equipment, net $ 422.2 $ 361.7 |
Segment Financial Information | The following table summarizes segment information for the year ended December 31, 2016 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,447.8 $ 443.7 $ — $ — $ 2,891.5 Other sales 122.3 113.5 — — 235.8 Net sales 2,570.1 557.2 — — 3,127.3 Inter-segment sales $ 4.6 $ 0.4 $ — $ (5.0 ) $ — Gross profit 1,017.4 292.0 — — 1,309.4 Inter-segment royalty expense (income) 7.2 (7.2 ) — — — Operating income (loss) 411.8 102.7 (99.0 ) — 415.5 Income (loss) before income taxes 406.8 94.0 (217.5 ) — 283.3 Depreciation and amortization (1) $ 43.7 $ 15.6 $ 30.2 $ — $ 89.5 Capital expenditures 32.8 15.3 14.3 — 62.4 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year 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 year 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. |
Long-lived assets by geographic region | The following table summarizes property, plant and equipment, net by geographic region: December 31, December 31, (in millions) 2016 2015 United States $ 360.7 $ 300.1 Canada 6.6 6.8 Other International 54.9 54.8 Total property, plant and equipment, net $ 422.2 $ 361.7 Total International $ 61.5 $ 61.6 |
Net sales by geographic region | The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2016 2015 2014 United States $ 2,361.8 $ 2,374.7 $ 2,188.8 Canada 208.3 202.5 216.1 Other International 557.2 574.0 584.9 Total net sales $ 3,127.3 $ 3,151.2 $ 2,989.8 Total International $ 765.5 $ 776.5 $ 801.0 |
Quarterly Financial Data (una42
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly results of operations for the years ended December 31, 2016 and 2015 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2016 Net sales $ 721.0 $ 804.4 $ 832.4 $ 769.5 Gross profit 291.0 336.9 362.1 319.4 Operating income 76.7 100.2 131.1 107.5 Net income 39.6 21.3 77.8 63.4 Basic earnings per common share $ 0.64 $ 0.35 $ 1.34 $ 1.14 Diluted earnings per common share $ 0.63 $ 0.35 $ 1.32 $ 1.12 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 ) |
Guarantor_Non-Guarantor Finan43
Guarantor/Non-Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 2,355.9 $ 835.9 $ (64.5 ) $ 3,127.3 Cost of sales — 1,409.4 473.0 (64.5 ) 1,817.9 Gross profit — 946.5 362.9 — 1,309.4 Selling and marketing expenses 2.9 458.6 187.0 — 648.5 General, administrative and other expenses 14.8 186.8 76.6 — 278.2 Equity income in earnings of unconsolidated affiliates — — (13.3 ) — (13.3 ) Royalty income, net of royalty expense — (19.5 ) — — (19.5 ) Operating (loss) income (17.7 ) 320.6 112.6 — 415.5 Other expense, net: Third party interest expense, net 66.0 15.4 3.8 — 85.2 Intercompany interest (income) expense, net (4.1 ) (0.1 ) 4.2 — — Interest expense, net 61.9 15.3 8.0 — 85.2 Loss on extinguishment of debt 34.3 12.9 — — 47.2 Other (income) expense, net — (1.4 ) 1.2 — (0.2 ) Total other expense 96.2 26.8 9.2 — 132.2 Income from equity investees 271.6 76.8 — (348.4 ) — Income before income taxes 157.7 370.6 103.4 (348.4 ) 283.3 Income tax benefit (provision) 38.8 (99.0 ) (26.6 ) — (86.8 ) Net income before non-controlling interest 196.5 271.6 76.8 (348.4 ) 196.5 Less: net loss attributable to non-controlling interests (5.6 ) — (5.6 ) 5.6 (5.6 ) Net income attributable to Tempur Sealy International, Inc. $ 202.1 $ 271.6 $ 82.4 $ (354.0 ) $ 202.1 Comprehensive income $ 190.8 $ 271.7 $ 71.2 $ (342.9 ) $ 190.8 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 before non-controlling interest 74.7 132.9 64.7 (197.6 ) 74.7 Less: net income attributable to non-controlling interests 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 (loss) $ 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 before non-controlling interest 110.0 159.2 98.7 (257.9 ) 110.0 Less: net income attributable to non-controlling interests 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 |
Schedule of Supplemental Condensed Consolidating Balance Sheets | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 7.9 $ 57.8 $ — $ 65.7 Accounts receivable, net — 197.7 147.4 — 345.1 Inventories — 117.1 79.7 — 196.8 Income tax receivable 234.2 — — (234.2 ) — Prepaid expenses and other current assets — 48.9 15.0 — 63.9 Total Current Assets 234.2 371.6 299.9 (234.2 ) 671.5 Property, plant and equipment, net — 346.9 75.3 — 422.2 Goodwill — 500.2 222.3 — 722.5 Other intangible assets, net — 589.8 88.9 — 678.7 Deferred income taxes 20.6 — 22.5 (20.6 ) 22.5 Other non-current assets — 41.7 143.5 — 185.2 Net investment in subsidiaries 2,207.4 77.7 — (2,285.1 ) — Due from affiliates 168.4 1,874.7 14.3 (2,057.4 ) — Total Assets $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 0.1 $ 157.0 $ 62.2 $ — $ 219.3 Accrued expenses and other current liabilities 6.8 172.6 70.7 — 250.1 Income taxes payable — 235.9 4.1 (234.2 ) 5.8 Current portion of long-term debt — 34.4 35.9 — 70.3 Total Current Liabilities 6.9 599.9 172.9 (234.2 ) 545.5 Long-term debt, net 1,040.4 776.5 0.9 — 1,817.8 Deferred income taxes — 174.9 20.3 (20.6 ) 174.6 Other non-current liabilities — 43.3 126.0 — 169.3 Due to affiliates 1,587.9 0.6 468.9 (2,057.4 ) — Total Liabilities 2,635.2 1,595.2 789.0 (2,312.2 ) 2,707.2 Redeemable non-controlling interest 7.6 — 7.6 (7.6 ) 7.6 Total stockholders’ (deficit) equity, net of non-controlling interests in subsidiaries (15.2 ) 2,207.4 67.1 (2,274.5 ) (15.2 ) Non-controlling interest in subsidiaries 3.0 — 3.0 (3.0 ) 3.0 Total Stockholder's (Deficit) Equity (12.2 ) 2,207.4 70.1 (2,277.5 ) (12.2 ) Total Liabilities and Stockholders’ (Deficit) Equity $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 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 $ — $ 119.7 $ 34.2 $ — $ 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 — 45.6 31.0 — 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’ (Deficit) Equity 290.2 1,948.1 (95.0 ) (1,853.1 ) 290.2 Total Liabilities and Stockholders’ (Deficit) Equity $ 2,717.7 $ 3,635.5 $ 680.1 $ (4,377.8 ) $ 2,655.5 |
Schedule of Supplemental Condensed Consolidating Statements of Cash Flows | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2016 (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 $ (63.1 ) $ 110.7 $ 117.9 $ — $ 165.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (76.7 ) 76.7 — — Purchases of property, plant and equipment — (43.0 ) (19.4 ) (62.4 ) Net cash (used in) provided by investing activities — (119.7 ) 57.3 — (62.4 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations 600.0 1,523.6 109.7 — 2,233.3 Repayments of borrowings under long-term debt obligations (375.0 ) (1,406.2 ) (86.5 ) — (1,867.7 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 383.1 (212.5 ) (170.6 ) — — Proceeds from exercise of stock options 15.7 — — — 15.7 Excess tax benefit from stock-based compensation 7.0 — — — 7.0 Treasury stock repurchased (535.0 ) — — — (535.0 ) Payment of deferred financing costs (3.1 ) (3.8 ) — — (6.9 ) Fees paid to lenders (6.0 ) (1.8 ) — — (7.8 ) Call premium on 2020 Senior Notes (23.6 ) — — — (23.6 ) Other — (2.1 ) 2.0 — (0.1 ) Net cash provided by (used in) financing activities 63.1 (102.8 ) (145.4 ) — (185.1 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (6.2 ) — (6.2 ) (Decrease) increase in cash and cash equivalents — (111.8 ) 23.6 — (88.2 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD — 119.7 34.2 — 153.9 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 7.9 $ 57.8 $ — $ 65.7 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 borrowings under long-term debt obligations 450.0 402.9 10.6 — 863.5 Repayments of borrowings under long-term debt obligations — (988.3 ) — — (988.3 ) 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 purchase of treasury shares 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 (Decrease) increase in cash and cash equivalents (0.4 ) 96.3 (4.5 ) — 91.4 CASH AND CASH EQUIVALENTS, BEGININNG OF PERIOD 0.4 23.4 38.7 — 62.5 CASH AND CASH EQUIVALENTS, END OF PERIOD $ — $ 119.7 $ 34.2 $ — $ 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 Purchases 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 borrowings under long-term debt obligations — 271.5 — — 271.5 Repayments of borrowings under long-term debt obligations — (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 — 28.8 52.2 — 81.0 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 0.4 $ 23.4 $ 38.7 $ — $ 62.5 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Additional Information (Details) shares in Millions | 12 Months Ended | |||||
Dec. 31, 2016USD ($)channelfacilityshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) | Jul. 27, 2016USD ($) | Jun. 07, 2016USD ($) | Feb. 01, 2016USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of products sales channels | channel | 2 | |||||
Depreciation expense | $ 56,100,000 | $ 53,500,000 | $ 57,700,000 | |||
Allowance for doubtful accounts included in accounts receivable, net | 22,100,000 | 23,300,000 | ||||
Shipping and handling included in net sales | 11,700,000 | 11,100,000 | 14,700,000 | |||
Shipping and handling included in cost of sales | 155,100,000 | 161,600,000 | 169,200,000 | |||
Other income, net of expense | 9,500,000 | 15,600,000 | ||||
Advertising costs charged to expense | 352,700,000 | 360,500,000 | 326,700,000 | |||
Advertising costs deferred and included in Prepaid expenses and other current assets | 7,400,000 | 13,700,000 | ||||
Research and development costs charged to expense | 26,700,000 | 28,700,000 | 21,600,000 | |||
Royalty revenue, net of royalty expense | 19,500,000 | 18,300,000 | 18,100,000 | |||
Treasury stock repurchased | 533,000,000 | 1,300,000 | $ 2,200,000 | |||
Self insurance reserve, excess loss coverage per claim per year | 800,000 | |||||
Self insurance reserve, current | 8,600,000 | 6,600,000 | ||||
Self insurance reserve, noncurrent | 12,300,000 | 11,500,000 | ||||
Self insurance, recoveries | $ 14,200,000 | |||||
Number of active plants | facility | 2 | |||||
Number of previously closed US facilities | facility | 10 | |||||
Restructuring expenses | $ 8,300,000 | 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% | |||||
Accounts Payable and Accrued Liabilities [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Standard product warranty accrual | $ 14,300,000 | 14,900,000 | ||||
Other Noncurrent Liabilities [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Standard product warranty accrual | 15,600,000 | 14,700,000 | ||||
Foreign Exchange Forward | ||||||
Business Acquisition [Line Items] | ||||||
Notional amount | 25,400,000 | |||||
Gain on derivative | 600,000 | |||||
Foreign exchange forward contracts | 1,700,000 | 12,500,000 | ||||
Foreign exchange forward contracts | $ 0 | 1,200,000 | ||||
Comfort Revolution | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of noncontrolling interest from the acquisition | 55.00% | |||||
February 2016 Program | ||||||
Business Acquisition [Line Items] | ||||||
Amount of shares authorized to be repurchased | $ 200,000,000 | |||||
Stock repurchase program, increase in authorized amount | $ 200,000,000 | $ 200,000,000 | ||||
Treasury stock repurchased (in shares) | shares | 8.7 | |||||
Treasury stock repurchased | $ 2,000,000 | $ 1,300,000 | ||||
Stock repurchase program, amount remaining under share repurchase authorization | shares | 67 | |||||
Performance-based Restricted Stock Units | ||||||
Business Acquisition [Line Items] | ||||||
Shares paid for tax withholding for share based compensation | shares | 0 | 0 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Finished goods | $ 130.1 | $ 126.7 |
Work-in-process | 10.7 | 14 |
Raw materials and supplies | 56 | 58.5 |
Total | $ 196.8 | $ 199.2 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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 Accoun47
Summary of Significant Accounting Policies - Property, Plant and Equipment Summary (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 787 | $ 688.6 |
Accumulated depreciation | (364.8) | (326.9) |
Total property, plant and equipment, net | 422.2 | 361.7 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 283.9 | 257 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 302.6 | 243.7 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 97.2 | 78.2 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 50.4 | 52.3 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 52.9 | $ 57.4 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Changes in Accrued Sales Returns (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in Accrued Sales Returns [Roll Forward] | ||
Beginning balance | $ 28.5 | $ 32.3 |
Amounts accrued | 130.6 | 123 |
Returns charged to accrual | (128.8) | (126.8) |
Ending balance | $ 30.3 | $ 28.5 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Warranty Terms (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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 Accoun50
Summary of Significant Accounting Policies - Warranty Activity (Details) - Warranty Reserves - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Extended Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 29.6 | $ 31.3 |
Amounts accrued | 33.3 | 28.8 |
Warranties charged to accrual | (33) | (30.5) |
Balance at end of period | $ 29.9 | $ 29.6 |
Recently Issued Accounting Pr51
Recently Issued Accounting Pronouncements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |
Effective income tax rate reconciliation, share-based compensation, pro forma excess tax benefit | $ 7 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) $ in Millions | Oct. 03, 2016USD ($) | Jun. 30, 2014USD ($)facility | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016 |
U.S. Innerspring | |||||
Business Acquisition [Line Items] | |||||
Number of divestitures | facility | 3 | ||||
Total consideration | $ 47.8 | $ 45 | |||
Other non-cash consideration | 1.5 | ||||
Working capital adjustment | $ 2.8 | ||||
Assets of disposal group | $ 66.8 | ||||
Gain (loss) on disposal | $ (23.2) | ||||
Transaction costs | $ 1.4 | ||||
Tempur North America | |||||
Business Acquisition [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 51.00% | 51.00% | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 49.00% | ||||
Net consideration transferred | $ 7.7 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Goodwill by Reportable Business Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | $ 709.4 | $ 736.5 |
Goodwill resulting from acquisition | 7.4 | |
Foreign currency translation adjustments | 5.7 | (27.1) |
Goodwill, Ending balance | 722.5 | 709.4 |
Tempur North America | Tempur Sealy U.S. | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 562.8 | 574.5 |
Goodwill resulting from acquisition | 7.4 | |
Foreign currency translation adjustments | 1.8 | (11.7) |
Goodwill, Ending balance | 572 | 562.8 |
Tempur International | Sealy Canada | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 146.6 | 162 |
Goodwill resulting from acquisition | 0 | |
Foreign currency translation adjustments | 3.9 | (15.4) |
Goodwill, Ending balance | $ 150.5 | $ 146.6 |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Other Intangible Assets and Expected Future Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount, total | $ 786.5 | $ 785.4 | |
Accumulated Amortization | 107.8 | 90 | |
Net Carrying Amount | 678.7 | 695.4 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense relating to intangible assets | 17.2 | 17.9 | $ 18.5 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2,017 | 18.7 | ||
2,018 | 16.1 | ||
2,019 | 14.3 | ||
2,020 | 14.6 | ||
2,021 | 11.9 | ||
Trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - indefinite life intangible assets | 559.8 | 558.1 | |
Net Carrying Amount | $ 559.8 | 558.1 | |
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 | $ 85 | 84.8 | |
Accumulated Amortization | 21.5 | 15.8 | |
Net Carrying Amount | 63.5 | 69 | |
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 | 90.4 | 90.8 | |
Accumulated Amortization | 46.5 | 39.2 | |
Net Carrying Amount | $ 43.9 | 51.6 | |
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 | $ 27.1 | 27.2 | |
Accumulated Amortization | 19.2 | 16.9 | |
Net Carrying Amount | $ 7.9 | 10.3 | |
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 | $ 24.2 | 24.5 | |
Accumulated Amortization | 20.6 | 18.1 | |
Net Carrying Amount | $ 3.6 | $ 6.4 | |
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 Comp55
Unconsolidated Affiliate Companies (Details) - Joint Ventures - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unconsolidated Affiliate Companies | |||
Ownership percentage | 50.00% | ||
Net investment | $ 15.5 | $ 13.6 | |
Current assets | 58.6 | 50 | |
Non-current assets | 14.2 | 15.7 | |
Current liabilities | 41.8 | 37.3 | |
Equity | 31 | 28.4 | |
Revenue | 155.2 | 131.6 | $ 99.2 |
Gross profit | 101.7 | 85 | 62.1 |
Income from operations | 32.2 | 26.2 | 16.8 |
Net income | $ 24.8 | $ 20.1 | $ 13.1 |
Debt - Schedule of Borrowings O
Debt - Schedule of Borrowings Outstanding (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2016 | Jul. 14, 2016 | Jun. 30, 2016 | May 24, 2016 | Sep. 24, 2015 | Dec. 19, 2012 | |
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Other | $ 35,800,000 | $ 12,800,000 | ||||||
Total debt | 1,901,000,000 | 1,479,600,000 | ||||||
Less: deferred financing costs | (12,900,000) | (24,800,000) | ||||||
Total debt, net | 1,888,100,000 | 1,454,800,000 | ||||||
Less: current portion | (70,300,000) | (181,500,000) | ||||||
Total long term debt, net | 1,817,800,000 | 1,273,300,000 | ||||||
2026 Senior Notes | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Senior notes, noncurrent | $ 600,000,000 | 0 | $ 600,000,000 | |||||
Line of Credit Facility [Abstract] | ||||||||
Stated percentage | 5.50% | 5.50% | ||||||
2023 Senior Notes | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Senior notes, noncurrent | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | |||||
Line of Credit Facility [Abstract] | ||||||||
Stated percentage | 5.625% | 5.625% | 5.625% | |||||
2020 Senior Notes | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | $ 375,000,000 | |||||
8.0% Sealy Notes | $ 0 | |||||||
Line of Credit Facility [Abstract] | ||||||||
Stated percentage | 6.875% | 6.875% | 6.875% | |||||
8.0% Sealy Notes | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
8.0% Sealy Notes | $ 0 | $ 111,100,000 | ||||||
Line of Credit Facility [Abstract] | ||||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||||
Capital lease obligations | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Capital lease obligations | $ 73,300,000 | $ 21,200,000 | ||||||
Credit Facility 2016 | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Less: deferred financing costs | $ (3,600,000) | |||||||
Credit Facility 2016 | Term A Facility | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Line of credit | $ 585,000,000 | 0 | ||||||
Credit Facility 2016 | Term A Facility | LIBOR | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Index rate or LIBOR plus (percentage) | 1.50% | |||||||
Credit Facility 2016 | Revolving Credit Facility | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Line of credit | $ 156,900,000 | 0 | ||||||
2012 Credit Agreement | Term A Facility | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Line of credit | 0 | $ 409,400,000 | ||||||
2012 Credit Agreement | Term A Facility | LIBOR | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Index rate or LIBOR plus (percentage) | 2.00% | |||||||
2012 Credit Agreement | Term B facility | ||||||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||||||
Line of credit | $ 0 | $ 100,100,000 | ||||||
2012 Credit Agreement | Term B facility | LIBOR | ||||||||
Line of Credit Facility [Abstract] | ||||||||
Index rate or LIBOR plus (percentage) | 2.75% | |||||||
Interest rate floor (as a percent) | 0.75% |
Debt - Credit Facilities and Ot
Debt - Credit Facilities and Other Additional Information (Details) - USD ($) | Jul. 14, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 31, 2016 |
Line of Credit Facility [Line Items] | ||||||
Debt issuance cost | $ 12,900,000 | $ 24,800,000 | ||||
Loss on extinguishment of debt | $ 47,200,000 | $ 47,200,000 | $ 0 | $ 0 | ||
Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Remaining lease term (in years) | 2 years | |||||
Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Remaining lease term (in years) | 15 years | |||||
2012 Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 350,000,000 | |||||
Write-off of deferred financing costs | 11,000,000 | |||||
2012 Credit Agreement | Term A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | 550,000,000 | |||||
2012 Credit Agreement | Term B facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | 870,000,000 | |||||
Credit Facility 2016 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt issuance cost | $ 3,600,000 | |||||
Debt instrument amortization period deferred financing costs (in years | 5 years | |||||
Loss on extinguishment of debt | $ 1,900,000 | |||||
Credit Facility 2016 | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | 500,000,000 | |||||
Line of credit facility, increase (decrease) | 500,000,000 | |||||
Line of credit facility, maximum borrowing capacity in other currencies | 250,000,000 | |||||
Line of credit facility, capacity available for issuance of letters of credit | 100,000,000 | |||||
Line of credit facility, capacity available for swing line loans | $ 50,000,000 | |||||
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 | 12,700,000 | |||||
Foreign qualified cash | $ 31,800,000 | |||||
Total net leverage ratio | 3.60 | |||||
Line of credit facility, commitment fee percentage | 0.25% | |||||
Credit Facility 2016 | Line of Credit | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Total net leverage ratio | 5 | |||||
Credit Facility 2016 | Line of Credit | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 500,000,000 | |||||
Credit Facility 2016 | Line of Credit | Delayed Draw Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 100,000,000 | |||||
Proceeds from lines of credit | $ 100,000,000 | |||||
LIBOR | Credit Facility 2016 | Term A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 1.50% | |||||
LIBOR | Credit Facility 2016 | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 1.50% | |||||
Base Rate | Credit Facility 2016 | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 0.50% | |||||
Sealy Notes | ||||||
Line of Credit Facility [Line Items] | ||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% |
Debt - Notes Payable (Details)
Debt - Notes Payable (Details) - USD ($) | Jul. 14, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 18, 2016 | May 24, 2016 | Sep. 24, 2015 | Dec. 19, 2012 |
Debt Instrument [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 47,200,000 | $ 47,200,000 | $ 0 | $ 0 | ||||||
2026 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior notes, noncurrent | $ 600,000,000 | 0 | $ 600,000,000 | |||||||
Stated percentage | 5.50% | 5.50% | ||||||||
Percentage of principal amount that may be redeemed | 105.50% | |||||||||
Minimum percentage of notes not eligible for early redemption | 65.00% | |||||||||
Senior notes, percent exchanged | 100.00% | |||||||||
Deferred financing costs | 3,100,000 | |||||||||
Debt instrument amortization period deferred financing costs (in years | 10 years | |||||||||
Loss on extinguishment of debt | 5,900,000 | |||||||||
2026 Senior Notes | Any time on or after June 15, 2021 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 102.75% | |||||||||
2026 Senior Notes | Beginning on June 15, 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
2026 Senior Notes | Any time prior to June 15, 2021 with a 'make-whole' premium and accrued and unpaid interest, if any | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of redemption on notes | 100.00% | |||||||||
2026 Senior Notes | Any time prior to June 15, 2019 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% | |||||||||
2020 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% | |||||||
Loss on extinguishment of debt | $ 23,600,000 | |||||||||
Write-off of deferred financing costs | $ 4,800,000 | |||||||||
8.0% Sealy Notes | 0 | |||||||||
2023 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior notes, noncurrent | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | |||||||
Stated percentage | 5.625% | 5.625% | 5.625% | |||||||
Percentage of principal amount that may be redeemed | 105.625% | |||||||||
Minimum percentage of notes not eligible for early redemption | 65.00% | |||||||||
Senior notes, percent exchanged | 100.00% | |||||||||
2023 Senior Notes | Any time on or after October 15, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 104.219% | |||||||||
2023 Senior Notes | Beginning on October 15, 2021 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
2023 Senior 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 Senior 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% | |||||||||
8.0% Sealy Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated percentage | 8.00% | 8.00% | 8.00% | 8.00% | ||||||
8.0% Sealy Notes | $ 0 | $ 111,100,000 | ||||||||
Cash paid to holders of convertible notes upon conversion | $ 115,000,000 | |||||||||
Credit Facility 2016 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument amortization period deferred financing costs (in years | 5 years | |||||||||
Loss on extinguishment of debt | $ 1,900,000 | |||||||||
Line of Credit | Delayed Draw Term Loan Facility | Credit Facility 2016 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from lines of credit | $ 100,000,000 | |||||||||
Significant Other Observable Inputs (Level 2) | 2026 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes, fair value | 606,800,000 | 0 | ||||||||
Significant Other Observable Inputs (Level 2) | 2020 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes, fair value | 0 | 393,800,000 | ||||||||
Significant Other Observable Inputs (Level 2) | 2023 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes, fair value | 468,500,000 | 453,400,000 | ||||||||
Significant Other Observable Inputs (Level 2) | 8.0% Sealy Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notes, fair value | $ 0 | $ 112,700,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 70.3 |
2,017 | 34.9 |
2,018 | 42.9 |
2,019 | 58.5 |
2,020 | 598.6 |
Thereafter | 1,095.8 |
Total | $ 1,901 |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution Plans (Details) - 401k Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Eligible employee contribution maximum (percentage) | 85.00% | ||
Defined contribution plan, employment eligibility to receive matching contributions, minimum (in years) | 6 months | ||
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 | $ 6.7 | $ 7.3 | $ 5 |
Retirement Plans - Defined Bene
Retirement Plans - Defined Benefit Plans (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
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 | 10 | |||
Components of net periodic pension cost for employees | ||||
Service cost | $ 0.8 | $ 0.8 | $ 0.9 | |
Interest cost | 1.2 | 1.9 | 1.8 | |
Expected return on assets | (1.3) | (2.2) | (2.1) | |
Curtailment loss | 0 | 0 | 0.1 | |
Amortization of net gain | 0 | 0 | (0.1) | |
Settlement loss | $ 1.3 | 0.2 | 1.3 | 0 |
Net periodic pension cost | 0.9 | 1.8 | 0.6 | |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income | ||||
Net loss | 1.5 | 0.2 | 9 | |
Amortization of prior service cost | 0 | 0 | (0.2) | |
Amortization or settlement recognition of net (loss) gain | (0.2) | (1.3) | 0.1 | |
New prior service cost | 0 | 0.1 | 0.1 | |
Total recognized in other comprehensive loss (income) | $ 1.3 | $ (1) | $ 9 | |
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 4.27% | 4.12% | 4.01% | |
Expected long term return on plan assets (as a percent) | 6.71% | 7.05% | 7.00% | |
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | $ 28.2 | $ 47.1 | ||
Service cost | 0.8 | 0.8 | $ 0.9 | |
Interest cost | 1.2 | 1.9 | 1.8 | |
Plan amendments | 0 | 0.1 | ||
Actuarial loss (gain) | 0.8 | (3.3) | ||
Settlements | (2) | (16.9) | ||
Benefits paid | (1.1) | (0.8) | ||
Expenses paid | 0 | (0.1) | ||
Foreign currency exchange rate changes | 0.1 | (0.6) | ||
Projected benefit obligation at end of year | 28.2 | 28 | 28.2 | 47.1 |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 13.9 | 32.5 | ||
Actual return (loss) on assets | 0.6 | (1.3) | ||
Employer contribution | 10.2 | 1.1 | ||
Settlements | (2) | (16.9) | ||
Benefits paid | (1.1) | (0.8) | ||
Expenses paid | 0 | (0.1) | ||
Foreign currency exchange rate changes | 0.1 | (0.6) | ||
Fair value of plan assets at end of year | 13.9 | 21.7 | 13.9 | $ 32.5 |
Funded status | (14.3) | (6.3) | (14.3) | |
Decrease in benefit obligation | 17 | |||
Decrease in plan assets | 17 | |||
Amounts recognized in the Consolidated Balance Sheets: | ||||
Non-current benefit liability | 14.5 | 6.3 | 14.5 | |
Non-current benefit asset | $ 0.2 | $ 0 | $ 0.2 | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.44% | 4.06% | 4.44% | |
United States Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 4.26% | 3.94% | 3.94% | |
Change in Plan Assets: | ||||
Employer contribution | $ 10 | |||
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.26% | 4.06% | 4.26% | |
Canadian Retirement Plan | ||||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | ||||
Discount rate (as a percent) | 4.30% | 4.20% | 5.00% | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | ||||
Discount rate (percentage) | 4.30% | 4.10% | 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 | $ 25.3 | |||
Projected benefit obligation at end of year | $ 25.3 | 24.9 | $ 25.3 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 10.8 | |||
Fair value of plan assets at end of year | 10.8 | 18.6 | 10.8 | |
Sealy | Canadian Retirement Plan | ||||
Change in Benefit Obligation: | ||||
Projected benefit obligation at beginning of year | 2.9 | |||
Projected benefit obligation at end of year | 2.9 | 3.1 | 2.9 | |
Change in Plan Assets: | ||||
Fair value of plan assets at beginning of year | 3.1 | |||
Fair value of plan assets at end of year | $ 3.1 | $ 3.1 | $ 3.1 |
Retirement Plans - Plan Assets
Retirement Plans - Plan Assets and Estimated Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Retirement plans | |||
Expected contribution in next fiscal year | $ 0.5 | ||
Estimated future benefit payments | |||
Fiscal 2,017 | 1 | ||
Fiscal 2,018 | 1 | ||
Fiscal 2,019 | 1 | ||
Fiscal 2,020 | 1 | ||
Fiscal 2,021 | 1.1 | ||
Fiscal 2022 ‑ Fiscal 2026 | $ 6.6 | ||
Target and actual asset allocations | |||
Total target plan assets | 100.00% | ||
Total actual plan assets | 100.00% | ||
Total assets | $ 21.7 | $ 13.9 | $ 32.5 |
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% | ||
Equity securities | |||
Target and actual asset allocations | |||
Total target plan assets | 60.00% | ||
Total actual plan assets | 74.51% | ||
Debt securities | |||
Target and actual asset allocations | |||
Total target plan assets | 40.00% | ||
Total actual plan assets | 22.53% | ||
Other | |||
Target and actual asset allocations | |||
Total target plan assets | 0.00% | ||
Total actual plan assets | 2.96% | ||
U.S. equity | |||
Target and actual asset allocations | |||
Total assets | $ 12.5 | 7.7 | |
International equity | |||
Target and actual asset allocations | |||
Total assets | 3.7 | 2.7 | |
Total equity based funds | |||
Target and actual asset allocations | |||
Total assets | 16.2 | 10.4 | |
Common/collective trust - fixed income | |||
Target and actual asset allocations | |||
Total assets | 4.9 | 2.9 | |
Money market funds | |||
Target and actual asset allocations | |||
Total assets | $ 0.6 | $ 0.6 |
Retirement Plans - Multi-employ
Retirement Plans - Multi-employer Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)facility | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Multi-Employer Benefit Plans | |||
Domestic employees represented by various labor unions with separate collective bargaining agreements (percentage) | 32.00% | ||
Expenses recognized for contributions | $ 0.9 | ||
Total contributions for most recent plan year available (percentage) | 5.00% | ||
Red Zone | |||
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 | |||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 80.00% | 80.00% | |
Number of years in which a multi-employer plan is projected to be a credit balance | 7 years | ||
Green Zone | |||
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% | |
Number of years in which a multi-employer plan is projected not to be a credit balance | 7 years | ||
Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | facility | 9 | ||
Expenses recognized for contributions | $ 4.9 | $ 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 | $ 2.8 | $ 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 | $ 1.2 | $ 1.1 | |
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 | $ 1.3 | $ 1.2 | |
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 | $ 0.3 | $ 0.5 |
Stockholders' (Deficit) Equit64
Stockholders' (Deficit) Equity (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)vote$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | Feb. 08, 2017right$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common stock shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | ||
Common stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred stock authorized shares (in shares) | shares | 10,000 | |||
Preferred stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | |||
Common stock, voting rights per share held | vote | 1 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ (110,100,000) | |||
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (4,500,000) | $ (61,400,000) | $ (38,400,000) | |
Tax benefit (expense) | (86,800,000) | (125,400,000) | (64,900,000) | |
Other comprehensive loss, net of tax | (11,300,000) | (54,400,000) | (42,000,000) | |
Balance at end of period | (121,400,000) | (110,100,000) | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (115,400,000) | (54,000,000) | (15,600,000) | |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (4,500,000) | (61,400,000) | (38,400,000) | |
Tax benefit (expense) | 0 | 0 | 0 | |
Balance at end of period | (119,900,000) | (115,400,000) | (54,000,000) | |
Interest Rate Swap Agreement | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | (700,000) | (1,400,000) | |
Other comprehensive (loss) income: | ||||
Net change from period revaluations: | 0 | 3,100,000 | 3,000,000 | |
Tax benefit (expense) | 0 | (1,200,000) | (1,200,000) | |
Total other comprehensive (loss) income before reclassifications, net of tax | 0 | 1,900,000 | 1,800,000 | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 1,200,000 | 1,100,000 | |
Other comprehensive loss, net of tax | 0 | 700,000 | 700,000 | |
Balance at end of period | 0 | 0 | (700,000) | |
Interest Rate Swap Agreement | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive (loss) income: | ||||
Tax benefit (expense) | 0 | 700,000 | 800,000 | |
Net amount reclassified to earnings | 0 | (1,900,000) | (1,900,000) | |
Pension Benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1,400,000) | (2,400,000) | 3,200,000 | |
Other comprehensive (loss) income: | ||||
Net change from period revaluations: | (1,500,000) | 200,000 | (9,000,000) | |
Tax benefit (expense) | 600,000 | 0 | 3,400,000 | |
Total other comprehensive (loss) income before reclassifications, net of tax | (900,000) | 200,000 | (5,600,000) | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | (100,000) | (800,000) | 0 | |
Other comprehensive loss, net of tax | (800,000) | 1,000,000 | (5,600,000) | |
Balance at end of period | (2,200,000) | (1,400,000) | (2,400,000) | |
Pension Benefits | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive (loss) income: | ||||
Tax benefit (expense) | (100,000) | (500,000) | 0 | |
Net amount reclassified to earnings | 200,000 | 1,300,000 | 0 | |
Foreign Exchange Forward Contracts | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 6,600,000 | 1,300,000 | 0 | |
Other comprehensive (loss) income: | ||||
Net change from period revaluations: | (3,600,000) | 14,600,000 | 3,400,000 | |
Tax benefit (expense) | 1,000,000 | (3,800,000) | (900,000) | |
Total other comprehensive (loss) income before reclassifications, net of tax | (2,600,000) | 10,800,000 | 2,500,000 | |
Total amount reclassified from accumulated other comprehensive income (loss), net of tax | 3,400,000 | 5,500,000 | 1,200,000 | |
Other comprehensive loss, net of tax | (6,000,000) | 5,300,000 | 1,300,000 | |
Balance at end of period | 600,000 | 6,600,000 | 1,300,000 | |
Foreign Exchange Forward Contracts | Reclassification out of Accumulated Other Comprehensive Income | ||||
Other comprehensive (loss) income: | ||||
Tax benefit (expense) | 1,200,000 | 1,900,000 | 400,000 | |
Net amount reclassified to earnings | $ (4,600,000) | $ (7,400,000) | $ (1,600,000) | |
Subsequent Event | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Common stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | |||
Number of rights authorized per share of outstanding common stock | right | 1 | |||
Percentage ownership of common stock outstanding required to exercise rights | 20.00% | |||
Subsequent Event | Series A Preferred Stock | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Preferred stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | |||
Number of shares called by each right | shares | 0.001 | |||
Exercise price of rights (in dollars per share) | $ / shares | $ 90 |
Other Items - Accrued Expenses
Other Items - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other Items [Abstract] | |||
Wages and benefits | $ 65.5 | $ 72.4 | |
Advertising | 48.6 | 48.4 | |
Sales returns | 30.3 | 28.5 | $ 32.3 |
Rebates | 8.4 | 11.5 | |
Warranty | 14.3 | 14.9 | |
Other | 83 | 78.3 | |
Total accrued expenses and other current liabilities | $ 250.1 | $ 254 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($)plan$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / 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 | $ | $ 16,200,000 | $ 22,500,000 | $ 13,400,000 | ||
Fair value assumptions and methodology [Abstract] | |||||
Expected volatility range of stock, minimum (in hundredths) | 34.00% | 56.70% | |||
Expected volatility range of stock, maximum (in hundredths) | 36.20% | 66.50% | |||
Expected life of option, range in years, minimum | 3 years | 2 years | |||
Expected life of option, range in years, maximum | 5 years | 4 years | |||
Risk-free interest rate range, minimum (in hundredths) | 0.90% | 0.40% | |||
Risk-free interest rate range, maximum (in hundredths) | 1.50% | 1.40% | |||
Expected dividend yield on stock, minimum (in hundredths) | 0.00% | 0.60% | |||
Expected dividend yield on stock, maximum (in hundredths) | 0.00% | 0.70% | |||
Weighted Average Exercise Price | |||||
Total intrinsic value of options exercised | $ | 23,900,000 | $ 71,800,000 | $ 6,700,000 | ||
Total unrecognized stock-based compensation expense | $ | $ 31,400,000 | ||||
Weighted Average Remaining Vesting Period (in years) | 2 years 6 months 15 days | ||||
Cash received from exercise of stock options | $ | $ 15,700,000 | $ 20,400,000 | $ 4,300,000 | ||
Treasury Stock | |||||
Shares | |||||
Released (in shares) | (600,000) | (1,300,000) | (200,000) | ||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense | $ | $ 5,300,000 | $ 6,600,000 | $ 7,000,000 | ||
Shares | |||||
Granted (in shares) | 0 | ||||
Weighted Average Exercise Price | |||||
Total unrecognized stock-based compensation expense | $ | $ 5,300,000 | ||||
Weighted Average Remaining Vesting Period (in years) | 1 year 6 months 4 days | ||||
Performance-based Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense | $ | $ 3,900,000 | 13,700,000 | 3,500,000 | ||
Revaluation benefit from PRSU Granted | $ | $ 3,800,000 | $ 0 | $ 3,000,000 | ||
Shares | |||||
Beginning balance (in shares) | 1,900,000 | 300,000 | |||
Granted (in shares) | 200,000 | 1,700,000 | |||
Vested (in shares) | (100,000) | 0 | |||
Forfeited/Terminated (in shares) | (300,000) | (100,000) | |||
Ending balance (in shares) | 1,700,000 | 1,900,000 | 300,000 | ||
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in dollars per share) | $ / shares | $ 68.17 | $ 53.45 | |||
Granted (in dollars per share) | $ / shares | 60.78 | 70.43 | |||
Vested (in dollars per share) | $ / shares | 51.87 | 0 | |||
Forfeited/Terminated (in dollars per share) | $ / shares | 70.43 | 56.74 | |||
Ending balance (in dollars per share) | $ / shares | $ 68.02 | $ 68.17 | $ 53.45 | ||
Outstanding intrinsic value | $ | $ 121,200,000 | ||||
Weighted Average Exercise Price | |||||
Total unrecognized stock-based compensation expense | $ | $ 14,200,000 | ||||
Weighted Average Remaining Vesting Period (in years) | 2 years 6 months 22 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% | ||||
Performance-based Restricted Stock Units | Treasury Stock | |||||
Weighted Average Grant Date Fair Value | |||||
Grant date intrinsic value | $ | $ 5,600,000 | $ 0 | $ 1,400,000 | ||
Performance period (in years) | 2 years | 1 year | |||
Percentage of stock units released | 79.00% | 100.00% | |||
Maximum payout (percent) | 200.00% | ||||
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 if target is met | |||||
Weighted Average Grant Date Fair Value | |||||
Number of Shares Granted | 100,000 | ||||
Maximum Number of Shares to be Awarded | 100,000 | ||||
Performance-based Restricted Stock Units | Five annual installments beginning on each applicable grant date | |||||
Weighted Average Grant Date Fair Value | |||||
Number of Shares Granted | 100,000 | ||||
Maximum Number of Shares to be Awarded | 100,000 | ||||
Restricted Stock Units and Deferred Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation expense | $ | $ 7,000,000 | $ 2,200,000 | $ 2,900,000 | ||
Shares | |||||
Beginning balance (in shares) | 100,000 | 100,000 | |||
Granted (in shares) | 300,000 | 100,000 | |||
Vested (in shares) | 0 | (100,000) | |||
Forfeited/Terminated (in shares) | 0 | 0 | |||
Ending balance (in shares) | 400,000 | 100,000 | 100,000 | ||
Weighted Average Grant Date Fair Value | |||||
Beginning balance (in dollars per share) | $ / shares | $ 66.41 | $ 50.41 | |||
Granted (in dollars per share) | $ / shares | 53.77 | 70.44 | |||
Vested (in dollars per share) | $ / shares | 60.17 | 58.73 | |||
Forfeited/Terminated (in dollars per share) | $ / shares | 53.45 | 49.63 | |||
Ending balance (in dollars per share) | $ / shares | $ 59.37 | $ 66.41 | $ 50.41 | ||
Weighted Average Exercise Price | |||||
Aggregate intrinsic value of units outstanding | $ | $ 27,100,000 | ||||
Aggregate intrinsic value of RSUs and DSUs vested during the period | $ | 700,000 | ||||
Total unrecognized stock-based compensation expense | $ | $ 11,900,000 | ||||
Weighted Average Remaining Vesting Period (in years) | 2 years 11 months 19 days | ||||
Unvested Stock Options | |||||
Shares | |||||
Beginning balance (in shares) | 800,000 | 500,000 | |||
Granted (in shares) | 0 | 800,000 | |||
Vested (in shares) | (300,000) | (400,000) | |||
Forfeited (in shares) | 0 | (100,000) | |||
Ending balance (in shares) | 500,000 | 800,000 | 500,000 | ||
Weighted Average Grant Date Fair Value | |||||
Beginning of period weighted average grant date fair value (dollars per share) | $ / shares | $ 62.34 | $ 46.23 | |||
Granted weighted average grant date fair value (dollars per share) | $ / shares | 0 | 63.55 | |||
Vested weighted average grant date fair value (dollars per share) | $ / shares | 61.28 | 44.25 | |||
Forfeited weighted average grant date fair value (dollars per share) | $ / shares | 58.37 | 57.12 | |||
Ending of period weighted average grant date fair value (dollars per share) | $ / shares | $ 63.09 | $ 62.34 | $ 46.23 | ||
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 Option | |||||
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 | |||||
Weighted Average Grant Date Fair Value | |||||
Minimum Adjusted EBITDA (more than) | $ | $ 650,000,000 | ||||
Unrecognized compensation expense | $ | $ 4,400,000 | $ 101,100,000 | |||
Aspirational Plan | Performance-based Restricted Stock Units | Executive Officer | |||||
Shares | |||||
Granted (in shares) | 72,000 | 1,390,000 | |||
Stock Option Plans 2002, 2003 and 2013 | |||||
Shares | |||||
Beginning balance (in shares) | 2,100,000 | 2,800,000 | |||
Granted (in shares) | 0 | 800,000 | |||
Released (in shares) | (600,000) | (1,400,000) | |||
Forfeited (in shares) | 0 | (100,000) | |||
Ending balance (in shares) | 1,500,000 | 2,100,000 | 2,800,000 | ||
Options exercisable (in shares) | 1,000,000 | ||||
Weighted Average Exercise Price | |||||
Beginning balance weighted average exercise price (dollars per share) | $ / shares | $ 42.75 | $ 24.18 | |||
Granted weighted average exercise price (dollars per share) | $ / shares | 0 | 63.55 | |||
Released weighted average exercise price (in dollars per share) | $ / shares | 24.72 | 14.70 | |||
Forfeited weighted average exercise price (dollars per share) | $ / shares | 58.37 | 57.12 | |||
Ending balance weighted average exercise price (dollars per share) | $ / shares | 50.46 | $ 42.75 | $ 24.18 | ||
Options exercisable weighted average exercise price (dollars per share) | $ / shares | $ 44.45 | ||||
Ending balance weighted average remaining contractual term (in years) | 6 years 8 months 16 days | ||||
Options exercisable weighted average remaining contractual term (in years) | 5 years 11 months 23 days | ||||
Ending balance aggregate intrinsic value | $ | $ 19,100,000 | ||||
Options exercisable aggregate intrinsic value | $ | $ 23,600,000 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expenses | $ 33.5 | $ 41.4 | $ 32.3 |
Operating leases future minimum lease payments [Abstract] | |||
2,017 | 24.6 | ||
2,018 | 18.8 | ||
2,019 | 15.1 | ||
2,020 | 9.6 | ||
2,021 | 8.2 | ||
Thereafter | 12.3 | ||
Total | $ 88.6 |
Income Taxes - Pre-tax Income A
Income Taxes - Pre-tax Income Attributable to Operating Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income before income taxes: | |||
United States | $ 179 | $ 120.2 | $ 46.9 |
Rest of the world | 104.3 | 79.9 | 128 |
Income before income taxes | $ 283.3 | $ 200.1 | $ 174.9 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation in dollars [Abstract] | |||
Statutory U.S. federal income tax | $ 99.2 | $ 70 | $ 61.2 |
State income taxes, net of federal benefit | 8 | 1.1 | 1.1 |
Foreign repatriation, net of foreign tax credits | (4.3) | 0 | 13.5 |
Foreign tax differential | (11.9) | (10) | (12.6) |
Change in valuation allowances | 20.2 | 2.5 | (17.7) |
Uncertain tax positions | (27.1) | 59.7 | 10.9 |
Subpart F income | 2 | 1.9 | 1.9 |
Manufacturing deduction | (4.2) | (1.6) | (3.7) |
Goodwill on disposal of business | 0 | 0 | 7.5 |
Permanent and other | 4.9 | 1.8 | 2.8 |
Effective income tax provision | $ 86.8 | $ 125.4 | $ 64.9 |
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) | 2.80% | 0.60% | 0.60% |
Foreign repatriation, net of foreign tax credits (percentage) | (1.50%) | 0.00% | 7.70% |
Foreign tax differential (percentage) | (4.20%) | (5.00%) | (7.20%) |
Change in valuation allowance (percentage) | 7.10% | 1.20% | (10.00%) |
Uncertain tax positions (percentage) | (9.60%) | 29.80% | 6.10% |
Subpart F income (percentage) | 0.70% | 1.00% | 1.10% |
Manufacturing deduction (percentage) | (1.50%) | (0.80%) | (2.10%) |
Goodwill on disposal of business (percentage) | 0.00% | 0.00% | 4.20% |
Permanent and other (percentage) | 1.80% | 0.90% | 1.70% |
Effective income tax provision (percentage) | 30.60% | 62.70% | 37.10% |
Income Taxes - Tax Provision Su
Income Taxes - Tax Provision Summary (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current provision | |||
Federal | $ 73.5 | $ 107.1 | $ 50.7 |
State | 4.5 | 7.2 | 4.5 |
Foreign | 39.9 | 32.4 | 36.9 |
Total current | 117.9 | 146.7 | 92.1 |
Deferred provision | |||
Federal | (21.4) | (12.3) | (25.2) |
State | 1.6 | (3.7) | (1.2) |
Foreign | (11.3) | (5.3) | (0.8) |
Total deferred | (31.1) | (21.3) | (27.2) |
Effective income tax provision | $ 86.8 | $ 125.4 | $ 64.9 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Stock-based compensation | $ 18.4 | $ 16 |
Accrued expenses and other | 49.9 | 57.6 |
Net operating losses, foreign tax credits and charitable contribution carryforward | 98.5 | 33.1 |
Inventories | 7.2 | 5.1 |
Transaction costs | 10.2 | 22 |
Property, plant and equipment | 3.4 | 2.9 |
Total deferred tax assets | 187.6 | 136.7 |
Valuation allowances | (45.2) | (24.2) |
Total net deferred tax assets | 142.4 | 112.5 |
Deferred tax liabilities: | ||
Intangible assets | (242.4) | (247.8) |
Property, plant and equipment | (42.4) | (42) |
Accrued expenses and other | (9.7) | (5.9) |
Total deferred tax liabilities | (294.5) | (295.7) |
Net deferred tax liabilities | $ (152.1) | $ (183.2) |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Tax Credit Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Operating Loss Carryforwards [Line Items] | ||
Charitable contribution carryover (CCCs) | $ 38.4 | $ 23.7 |
US State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 131.2 | 128.8 |
Tax credit carryforwards | 4 | 5.5 |
US Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforwards | 12.2 | 7.8 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 34.1 | $ 38 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) DKK in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jul. 31, 2016USD ($) | Jul. 31, 2016DKK | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016DKK | Dec. 31, 2015DKK | |
Income Tax Examination [Line Items] | ||||||||
Valuation allowance | $ 24.2 | $ 45.2 | $ 24.2 | |||||
Uncertain tax liability | 69.8 | 71.7 | 69.8 | $ 47.6 | ||||
Tax benefit (expense) | (86.8) | (125.4) | $ (64.9) | |||||
Deferred tax asset | 112.5 | 142.4 | 112.5 | |||||
Tax deposit paid | $ 87.2 | DKK 615.2 | ||||||
US Federal | ||||||||
Income Tax Examination [Line Items] | ||||||||
Tax benefit (expense) | 46 | |||||||
Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Valuation allowance | $ 17.6 | |||||||
Royalty rate assessed on Danish earnings (percentage) | 20.00% | |||||||
Cumulative Assessment Amount Including Interest And Penalties | 199.6 | $ 219.3 | 199.6 | DKK 1,547.3 | DKK 1,363.1 | |||
Increase in uncertain tax liability | 60.7 | 60.7 | ||||||
Uncertain tax liability | 125.6 | 120.6 | 125.6 | 850 | 856 | |||
Deferred tax asset | 43.5 | |||||||
VAT Taxes Withheld by Tax Authority | $ 26 | 36.6 | $ 26 | 258 | DKK 176.4 | |||
VAT refund applied to income tax liability | $ 31.8 | DKK 224.6 | ||||||
Valuation Allowance, Operating Loss Carryforwards | US State | ||||||||
Income Tax Examination [Line Items] | ||||||||
Valuation allowance | 118.9 | |||||||
Valuation Allowance, Tax Credit Carryforward | US State | ||||||||
Income Tax Examination [Line Items] | ||||||||
Valuation allowance | 3.5 | |||||||
Valuation Allowance, Tax Credit Carryforward | US Federal | ||||||||
Income Tax Examination [Line Items] | ||||||||
Valuation allowance | 12.2 | |||||||
Tax Years 2001-2011 | Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Uncertain tax liability | 118.5 | 835 | ||||||
Tax Years After 2011 | Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Uncertain tax liability | $ 2.1 | DKK 15 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unrecognized tax benefits [Roll Forward] | |||
Balance as of beginning of period | $ 69.8 | $ 47.6 | |
Additions based on tax positions related to current period | 2.5 | 0.9 | |
Additions for tax positions of prior years | 29.2 | 25.7 | |
Expiration of statutes of limitations | (5) | (2.1) | |
Settlements of uncertain tax positions with tax authorities | (24.8) | (2.3) | |
Balance as of end of period | 71.7 | 69.8 | $ 47.6 |
Unrecognized tax benefits that would impact effective tax rate | 21.4 | 67.7 | 44.6 |
Interest and penalties related to unrecognized tax benefits recorded in income tax expense | 1.6 | 33.5 | 1.9 |
Accrued interest and penalties | $ 52.3 | $ 43.8 | $ 10.3 |
Major Customers (Details)
Major Customers (Details) - customer | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Customer Concentration Risk | Sales Revenue, Goods, Net | ||||
Concentration Risk [Line Items] | ||||
Number of customers being disclosed | 5 | 5 | ||
Customer Concentration Risk | Accounts Receivable | ||||
Concentration Risk [Line Items] | ||||
Number of customers being disclosed | 5 | 5 | ||
Credit Concentration Risk | Sales Revenue, Goods, Net | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage\ | 38.70% | 40.50% | ||
Credit Concentration Risk | Accounts Receivable | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage\ | 28.90% | 35.60% | ||
Tempur North America | Sales Revenue, Goods, Net | ||||
Concentration Risk [Line Items] | ||||
Number of customers being disclosed | 1 | 1 | 1 | 1 |
Tempur North America | Customer Concentration Risk | Sales Revenue, Goods, Net | ||||
Concentration Risk [Line Items] | ||||
Number of customers being disclosed | 5 | 5 | 5 | 5 |
Concentration risk, percentage\ | 20.20% | 22.90% | 21.40% | 23.70% |
Non-controlling Interests (Deta
Non-controlling Interests (Details) | 12 Months Ended | |
Dec. 31, 2016 | Oct. 03, 2016 | |
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% | |
Tempur North America | ||
Redeemable Noncontrolling Interest | ||
Noncontrolling interest, ownership percentage by parent | 51.00% | 51.00% |
Noncontrolling interest, ownership percentage by noncontrolling owners | 49.00% |
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, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | $ 63.4 | $ 77.8 | $ 21.3 | $ 39.6 | $ (11.3) | $ 40.2 | $ 21.2 | $ 23.4 | $ 202.1 | $ 73.5 | $ 108.9 |
Denominator: | |||||||||||
Denominator for basic earnings per common share—weighted average shares | 59 | 61.7 | 60.8 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock based compensation (in shares) | 0.8 | 0.9 | 1.3 | ||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares | 59.8 | 62.6 | 62.1 | ||||||||
Basic earnings per common share (in dollars per share) | $ 1.14 | $ 1.34 | $ 0.35 | $ 0.64 | $ (0.18) | $ 0.65 | $ 0.35 | $ 0.38 | $ 3.43 | $ 1.19 | $ 1.79 |
Diluted earnings per common share (in dollars per share) | $ 1.12 | $ 1.32 | $ 0.35 | $ 0.63 | $ (0.18) | $ 0.64 | $ 0.34 | $ 0.38 | $ 3.38 | $ 1.17 | $ 1.75 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 0.4 | 0.2 | 0.3 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of business segments | segment | 2 | ||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $ 2,702.6 | $ 2,655.5 | $ 2,702.6 | $ 2,655.5 | |||||||
Total property, plant and equipment, net | 422.2 | 361.7 | 422.2 | 361.7 | |||||||
Net sales | 769.5 | $ 832.4 | $ 804.4 | $ 721 | 767.3 | $ 880 | $ 764.4 | $ 739.5 | 3,127.3 | 3,151.2 | $ 2,989.8 |
Inter-segment sales | 0 | 0 | 0 | ||||||||
Gross profit | 319.4 | 362.1 | 336.9 | 291 | 313.1 | 359.6 | 297.5 | 278.7 | 1,309.4 | 1,248.9 | 1,150.4 |
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Operating income (loss) | 107.5 | $ 131.1 | $ 100.2 | $ 76.7 | 91.8 | $ 110.9 | $ 52 | $ 54.4 | 415.5 | 309.1 | 276.3 |
Income (loss) before income taxes | 283.3 | 200.1 | 174.9 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 89.5 | 93.9 | 89.7 | ||||||||
Capital expenditures | 62.4 | 65.9 | 47.5 | ||||||||
Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,891.5 | 2,887.2 | 2,726.5 | ||||||||
Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 235.8 | 264 | 263.3 | ||||||||
United States | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 360.7 | 300.1 | 360.7 | 300.1 | |||||||
Net sales | 2,361.8 | 2,374.7 | 2,188.8 | ||||||||
Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 6.6 | 6.8 | 6.6 | 6.8 | |||||||
Net sales | 208.3 | 202.5 | 216.1 | ||||||||
Other International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 54.9 | 54.8 | 54.9 | 54.8 | |||||||
Net sales | 557.2 | 574 | 584.9 | ||||||||
Total International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 61.5 | 61.6 | 61.5 | 61.6 | |||||||
Net sales | 765.5 | 776.5 | 801 | ||||||||
Operating Segments | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 422.2 | 361.7 | 422.2 | 361.7 | |||||||
Operating Segments | Tempur North America | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 2,581.4 | 2,533.1 | 2,581.4 | 2,533.1 | |||||||
Total property, plant and equipment, net | 297.4 | 239.2 | 297.4 | 239.2 | |||||||
Net sales | 2,570.1 | 2,577.2 | 2,404.9 | ||||||||
Inter-segment sales | 4.6 | 5.9 | 5.1 | ||||||||
Gross profit | 1,017.4 | 954.6 | 834.8 | ||||||||
Inter-segment royalty expense (income) | 7.2 | 7.1 | 6.1 | ||||||||
Operating income (loss) | 411.8 | 335.6 | 255 | ||||||||
Income (loss) before income taxes | 406.8 | 324.4 | 228 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 43.7 | 43.3 | 47.9 | ||||||||
Capital expenditures | 32.8 | 28.9 | 17.8 | ||||||||
Operating Segments | Tempur North America | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,447.8 | 2,428.9 | 2,261.9 | ||||||||
Operating Segments | Tempur North America | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 122.3 | 148.3 | 143 | ||||||||
Operating Segments | Tempur International | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 572.6 | 477.1 | 572.6 | 477.1 | |||||||
Total property, plant and equipment, net | 54.9 | 54.8 | 54.9 | 54.8 | |||||||
Net sales | 557.2 | 574 | 584.9 | ||||||||
Inter-segment sales | 0.4 | 0.7 | 0.3 | ||||||||
Gross profit | 292 | 294.3 | 315.6 | ||||||||
Inter-segment royalty expense (income) | (7.2) | (7.1) | (6.1) | ||||||||
Operating income (loss) | 102.7 | 98.9 | 118.8 | ||||||||
Income (loss) before income taxes | 94 | 73.2 | 112.2 | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 15.6 | 16 | 16.3 | ||||||||
Capital expenditures | 15.3 | 14.8 | 15.6 | ||||||||
Operating Segments | Tempur International | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 443.7 | 458.3 | 464.6 | ||||||||
Operating Segments | Tempur International | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 113.5 | 115.7 | 120.3 | ||||||||
Corporate | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 658.7 | 775 | 658.7 | 775 | |||||||
Total property, plant and equipment, net | 69.9 | 67.7 | 69.9 | 67.7 | |||||||
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) | (99) | (125.4) | (97.5) | ||||||||
Income (loss) before income taxes | (217.5) | (197.5) | (165.3) | ||||||||
Depreciation and amortization (including stock-based compensation amortization) | 30.2 | 34.6 | 25.5 | ||||||||
Capital expenditures | 14.3 | 22.2 | 14.1 | ||||||||
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 | $ (1,110.1) | $ (1,129.7) | (1,110.1) | (1,129.7) | |||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment sales | (5) | (6.6) | (5.4) | ||||||||
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 (una79
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Examination [Line Items] | |||||||||||
Net sales | $ 769.5 | $ 832.4 | $ 804.4 | $ 721 | $ 767.3 | $ 880 | $ 764.4 | $ 739.5 | $ 3,127.3 | $ 3,151.2 | $ 2,989.8 |
Gross profit | 319.4 | 362.1 | 336.9 | 291 | 313.1 | 359.6 | 297.5 | 278.7 | 1,309.4 | 1,248.9 | 1,150.4 |
Operating income | 107.5 | 131.1 | 100.2 | 76.7 | 91.8 | 110.9 | 52 | 54.4 | 415.5 | 309.1 | 276.3 |
Net income | $ 63.4 | $ 77.8 | $ 21.3 | $ 39.6 | $ (11.3) | $ 40.2 | $ 21.2 | $ 23.4 | $ 202.1 | $ 73.5 | $ 108.9 |
Basic earnings (loss) per common share (in dollars per share) | $ 1.14 | $ 1.34 | $ 0.35 | $ 0.64 | $ (0.18) | $ 0.65 | $ 0.35 | $ 0.38 | $ 3.43 | $ 1.19 | $ 1.79 |
Diluted earnings (loss) per common share (in dollars per share) | $ 1.12 | $ 1.32 | $ 0.35 | $ 0.63 | $ (0.18) | $ 0.64 | $ 0.34 | $ 0.38 | $ 3.38 | $ 1.17 | $ 1.75 |
Loss on extinguishment of debt | $ 47.2 | $ 47.2 | $ 0 | $ 0 | |||||||
Other nonrecurring income | $ 9.5 | ||||||||||
Danish Tax Authority | |||||||||||
Income Tax Examination [Line Items] | |||||||||||
Increase in uncertain tax liability | $ 60.7 | $ 60.7 |
Guarantor_Non-Guarantor Finan80
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Income and Comprehensive Income (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 24, 2016 | Sep. 24, 2015 | Dec. 19, 2012 | |
Supplemental condensed consolidating statements of operations | ||||||||||||||
Net sales | $ 769,500,000 | $ 832,400,000 | $ 804,400,000 | $ 721,000,000 | $ 767,300,000 | $ 880,000,000 | $ 764,400,000 | $ 739,500,000 | $ 3,127,300,000 | $ 3,151,200,000 | $ 2,989,800,000 | |||
Cost of sales | 1,817,900,000 | 1,902,300,000 | 1,839,400,000 | |||||||||||
Gross profit | 319,400,000 | 362,100,000 | 336,900,000 | 291,000,000 | 313,100,000 | 359,600,000 | 297,500,000 | 278,700,000 | 1,309,400,000 | 1,248,900,000 | 1,150,400,000 | |||
Selling and marketing expenses | 648,500,000 | 648,000,000 | 619,900,000 | |||||||||||
General, administrative and other expenses | 278,200,000 | 322,000,000 | 280,600,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | (13,300,000) | (11,900,000) | (8,300,000) | |||||||||||
Royalty income, net of royalty expense | (19,500,000) | (18,300,000) | (18,100,000) | |||||||||||
Operating (loss) income | 107,500,000 | 131,100,000 | 100,200,000 | 76,700,000 | 91,800,000 | 110,900,000 | 52,000,000 | 54,400,000 | 415,500,000 | 309,100,000 | 276,300,000 | |||
Other expense, net: | ||||||||||||||
Interest expense, net | 85,200,000 | 96,100,000 | 91,900,000 | |||||||||||
Loss on extinguishment of debt | 47,200,000 | 47,200,000 | 0 | 0 | ||||||||||
Loss on disposal, net | 0 | 0 | 23,200,000 | |||||||||||
Other (income) expense, net | (200,000) | 12,900,000 | (13,700,000) | |||||||||||
Total other expense | 132,200,000 | 109,000,000 | 101,400,000 | |||||||||||
Income before income taxes | 283,300,000 | 200,100,000 | 174,900,000 | |||||||||||
Income tax benefit (provision) | (86,800,000) | (125,400,000) | (64,900,000) | |||||||||||
Net income before non-controlling interests | 196,500,000 | 74,700,000 | 110,000,000 | |||||||||||
Less: net (loss) income attributable to non-controlling interests | (800,000) | |||||||||||||
Net income attributable to Tempur Sealy International, Inc. | 63,400,000 | $ 77,800,000 | 21,300,000 | $ 39,600,000 | (11,300,000) | $ 40,200,000 | $ 21,200,000 | $ 23,400,000 | 202,100,000 | 73,500,000 | 108,900,000 | |||
Comprehensive income | 190,800,000 | 19,100,000 | 66,900,000 | |||||||||||
Tempur Sealy International, Inc. (Ultimate Parent) | ||||||||||||||
Other expense, net: | ||||||||||||||
Loss on extinguishment of debt | 34,300,000 | |||||||||||||
Combined Guarantor Subsidiaries | ||||||||||||||
Other expense, net: | ||||||||||||||
Loss on extinguishment of debt | 12,900,000 | |||||||||||||
Combined Non-Guarantor Subsidiaries | ||||||||||||||
Other expense, net: | ||||||||||||||
Loss on extinguishment of debt | 0 | |||||||||||||
Consolidated | ||||||||||||||
Supplemental condensed consolidating statements of operations | ||||||||||||||
Net sales | 3,127,300,000 | 3,151,200,000 | 2,989,800,000 | |||||||||||
Cost of sales | 1,817,900,000 | 1,902,300,000 | 1,839,400,000 | |||||||||||
Gross profit | 1,309,400,000 | 1,248,900,000 | 1,150,400,000 | |||||||||||
Selling and marketing expenses | 648,500,000 | 648,000,000 | 619,900,000 | |||||||||||
General, administrative and other expenses | 278,200,000 | 322,000,000 | 280,600,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | (13,300,000) | (11,900,000) | (8,300,000) | |||||||||||
Royalty income, net of royalty expense | (19,500,000) | (18,300,000) | (18,100,000) | |||||||||||
Operating (loss) income | 415,500,000 | 309,100,000 | 276,300,000 | |||||||||||
Other expense, net: | ||||||||||||||
Third party interest expense, net | 85,200,000 | 96,100,000 | 91,900,000 | |||||||||||
Intercompany interest (income) expense, net | 0 | 0 | 0 | |||||||||||
Interest expense, net | 85,200,000 | 96,100,000 | 91,900,000 | |||||||||||
Loss on disposal, net | 23,200,000 | |||||||||||||
Other (income) expense, net | (200,000) | 12,900,000 | (13,700,000) | |||||||||||
Total other expense | 132,200,000 | 109,000,000 | 101,400,000 | |||||||||||
Income from equity investees | 0 | 0 | 0 | |||||||||||
Income before income taxes | 283,300,000 | 200,100,000 | 174,900,000 | |||||||||||
Income tax benefit (provision) | (86,800,000) | (125,400,000) | (64,900,000) | |||||||||||
Net income before non-controlling interests | 196,500,000 | 74,700,000 | 110,000,000 | |||||||||||
Less: net (loss) income attributable to non-controlling interests | (5,600,000) | 1,200,000 | 1,100,000 | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | 202,100,000 | 73,500,000 | 108,900,000 | |||||||||||
Comprehensive income | 190,800,000 | 19,100,000 | 66,900,000 | |||||||||||
2023 Senior Notes | ||||||||||||||
Guarantor/non-guarantor financial information | ||||||||||||||
Senior notes, noncurrent | 450,000,000 | 450,000,000 | 450,000,000 | 450,000,000 | $ 450,000,000 | |||||||||
2026 Senior Notes | ||||||||||||||
Guarantor/non-guarantor financial information | ||||||||||||||
Senior notes, noncurrent | 600,000,000 | 0 | 600,000,000 | 0 | $ 600,000,000 | |||||||||
Other expense, net: | ||||||||||||||
Loss on extinguishment of debt | $ 5,900,000 | |||||||||||||
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 | |||||||||
Other expense, net: | ||||||||||||||
Loss on extinguishment of debt | 23,600,000 | |||||||||||||
Reportable Legal Entities | 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 | 2,900,000 | 4,100,000 | 2,400,000 | |||||||||||
General, administrative and other expenses | 14,800,000 | 20,800,000 | 13,400,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | |||||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | |||||||||||
Operating (loss) income | (17,700,000) | (24,900,000) | (15,800,000) | |||||||||||
Other expense, net: | ||||||||||||||
Third party interest expense, net | 66,000,000 | 27,200,000 | 27,000,000 | |||||||||||
Intercompany interest (income) expense, net | (4,100,000) | 32,900,000 | 32,700,000 | |||||||||||
Interest expense, net | 61,900,000 | 60,100,000 | 59,700,000 | |||||||||||
Loss on disposal, net | 0 | |||||||||||||
Other (income) expense, net | 0 | 0 | 0 | |||||||||||
Total other expense | 96,200,000 | 60,100,000 | 59,700,000 | |||||||||||
Income from equity investees | 271,600,000 | 132,900,000 | 159,200,000 | |||||||||||
Income before income taxes | 157,700,000 | 47,900,000 | 83,700,000 | |||||||||||
Income tax benefit (provision) | 38,800,000 | 26,800,000 | 26,300,000 | |||||||||||
Net income before non-controlling interests | 196,500,000 | 74,700,000 | 110,000,000 | |||||||||||
Less: net (loss) income attributable to non-controlling interests | (5,600,000) | 1,200,000 | 1,100,000 | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | 202,100,000 | 73,500,000 | 108,900,000 | |||||||||||
Comprehensive income | 190,800,000 | 19,100,000 | 66,900,000 | |||||||||||
Reportable Legal Entities | Combined Guarantor Subsidiaries | ||||||||||||||
Supplemental condensed consolidating statements of operations | ||||||||||||||
Net sales | 2,355,900,000 | 2,422,900,000 | 2,229,500,000 | |||||||||||
Cost of sales | 1,409,400,000 | 1,532,600,000 | 1,465,300,000 | |||||||||||
Gross profit | 946,500,000 | 890,300,000 | 764,200,000 | |||||||||||
Selling and marketing expenses | 458,600,000 | 460,100,000 | 431,200,000 | |||||||||||
General, administrative and other expenses | 186,800,000 | 232,600,000 | 200,500,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | |||||||||||
Royalty income, net of royalty expense | (19,500,000) | (18,300,000) | (18,100,000) | |||||||||||
Operating (loss) income | 320,600,000 | 215,900,000 | 150,600,000 | |||||||||||
Other expense, net: | ||||||||||||||
Third party interest expense, net | 15,400,000 | 66,200,000 | 62,400,000 | |||||||||||
Intercompany interest (income) expense, net | (100,000) | (35,500,000) | (34,600,000) | |||||||||||
Interest expense, net | 15,300,000 | 30,700,000 | 27,800,000 | |||||||||||
Loss on disposal, net | 23,200,000 | |||||||||||||
Other (income) expense, net | (1,400,000) | (8,100,000) | (17,200,000) | |||||||||||
Total other expense | 26,800,000 | 22,600,000 | 33,800,000 | |||||||||||
Income from equity investees | 76,800,000 | 64,700,000 | 98,700,000 | |||||||||||
Income before income taxes | 370,600,000 | 258,000,000 | 215,500,000 | |||||||||||
Income tax benefit (provision) | (99,000,000) | (125,100,000) | (56,300,000) | |||||||||||
Net income before non-controlling interests | 271,600,000 | 132,900,000 | 159,200,000 | |||||||||||
Less: net (loss) income attributable to non-controlling interests | 0 | 1,200,000 | 1,100,000 | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | 271,600,000 | 131,700,000 | 158,100,000 | |||||||||||
Comprehensive income | 271,700,000 | 130,900,000 | 163,300,000 | |||||||||||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | ||||||||||||||
Supplemental condensed consolidating statements of operations | ||||||||||||||
Net sales | 835,900,000 | 778,900,000 | 802,900,000 | |||||||||||
Cost of sales | 473,000,000 | 420,300,000 | 416,700,000 | |||||||||||
Gross profit | 362,900,000 | 358,600,000 | 386,200,000 | |||||||||||
Selling and marketing expenses | 187,000,000 | 183,800,000 | 186,300,000 | |||||||||||
General, administrative and other expenses | 76,600,000 | 68,600,000 | 66,700,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | (13,300,000) | (11,900,000) | (8,300,000) | |||||||||||
Royalty income, net of royalty expense | 0 | 0 | 0 | |||||||||||
Operating (loss) income | 112,600,000 | 118,100,000 | 141,500,000 | |||||||||||
Other expense, net: | ||||||||||||||
Third party interest expense, net | 3,800,000 | 2,700,000 | 2,500,000 | |||||||||||
Intercompany interest (income) expense, net | 4,200,000 | 2,600,000 | 1,900,000 | |||||||||||
Interest expense, net | 8,000,000 | 5,300,000 | 4,400,000 | |||||||||||
Loss on disposal, net | 0 | |||||||||||||
Other (income) expense, net | 1,200,000 | 21,000,000 | 3,500,000 | |||||||||||
Total other expense | 9,200,000 | 26,300,000 | 7,900,000 | |||||||||||
Income from equity investees | 0 | 0 | 0 | |||||||||||
Income before income taxes | 103,400,000 | 91,800,000 | 133,600,000 | |||||||||||
Income tax benefit (provision) | (26,600,000) | (27,100,000) | (34,900,000) | |||||||||||
Net income before non-controlling interests | 76,800,000 | 64,700,000 | 98,700,000 | |||||||||||
Less: net (loss) income attributable to non-controlling interests | (5,600,000) | 0 | 0 | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | 82,400,000 | 64,700,000 | 98,700,000 | |||||||||||
Comprehensive income | 71,200,000 | (3,300,000) | 60,300,000 | |||||||||||
Eliminations | ||||||||||||||
Supplemental condensed consolidating statements of operations | ||||||||||||||
Net sales | (64,500,000) | (50,600,000) | (42,600,000) | |||||||||||
Cost of sales | (64,500,000) | (50,600,000) | (42,600,000) | |||||||||||
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 (income) expense, net | 0 | 0 | 0 | |||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||
Loss on extinguishment of debt | 0 | |||||||||||||
Loss on disposal, net | 0 | |||||||||||||
Other (income) expense, net | 0 | 0 | 0 | |||||||||||
Total other expense | 0 | 0 | 0 | |||||||||||
Income from equity investees | (348,400,000) | (197,600,000) | (257,900,000) | |||||||||||
Income before income taxes | (348,400,000) | (197,600,000) | (257,900,000) | |||||||||||
Income tax benefit (provision) | 0 | 0 | 0 | |||||||||||
Net income before non-controlling interests | (348,400,000) | (197,600,000) | (257,900,000) | |||||||||||
Less: net (loss) income attributable to non-controlling interests | 5,600,000 | (1,200,000) | (1,100,000) | |||||||||||
Net income attributable to Tempur Sealy International, Inc. | (354,000,000) | (196,400,000) | (256,800,000) | |||||||||||
Comprehensive income | $ (342,900,000) | $ (127,600,000) | $ (223,600,000) |
Guarantor_Non-Guarantor Finan81
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||||
Cash and cash equivalents | $ 65.7 | $ 153.9 | $ 62.5 | $ 81 |
Accounts receivable, net | 345.1 | 379.4 | ||
Inventories | 196.8 | 199.2 | ||
Prepaid expenses and other current assets | 63.9 | 76.6 | ||
Total Current Assets | 671.5 | 809.1 | ||
Property, plant and equipment, net | 422.2 | 361.7 | ||
Goodwill | 722.5 | 709.4 | 736.5 | |
Other intangible assets, net | 678.7 | 695.4 | ||
Deferred income taxes | 22.5 | 12.2 | ||
Other non-current assets | 185.2 | 67.7 | ||
Total Assets | 2,702.6 | 2,655.5 | ||
Current Liabilities: | ||||
Accounts payable | 219.3 | 266.3 | ||
Accrued expenses and other current liabilities | 250.1 | 254 | ||
Income taxes payable | 5.8 | 11.2 | ||
Current portion of long-term debt | 70.3 | 181.5 | ||
Total Current Liabilities | 545.5 | 713 | ||
Long-term debt, net | 1,817.8 | 1,273.3 | ||
Deferred income taxes | 174.6 | 195.4 | ||
Other non-current liabilities | 169.3 | 171.2 | ||
Total Liabilities | 2,707.2 | 2,352.9 | ||
Redeemable non-controlling interest | 7.6 | 12.4 | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | (15.2) | 290.2 | ||
Non-controlling interest in subsidiaries | 3 | 0 | ||
Total Stockholders' (Deficit) Equity | (12.2) | 290.2 | 202.7 | 118.6 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | 2,702.6 | 2,655.5 | ||
Consolidated | ||||
Current Assets: | ||||
Cash and cash equivalents | 65.7 | 153.9 | 62.5 | 81 |
Accounts receivable, net | 345.1 | 379.4 | ||
Inventories | 196.8 | 199.2 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 63.9 | 76.6 | ||
Total Current Assets | 671.5 | 809.1 | ||
Property, plant and equipment, net | 422.2 | 361.7 | ||
Goodwill | 722.5 | 709.4 | ||
Other intangible assets, net | 678.7 | 695.4 | ||
Deferred income taxes | 22.5 | 12.2 | ||
Other non-current assets | 185.2 | 67.7 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Total Assets | 2,702.6 | 2,655.5 | ||
Current Liabilities: | ||||
Accounts payable | 219.3 | 266.3 | ||
Accrued expenses and other current liabilities | 250.1 | 254 | ||
Income taxes payable | 5.8 | 11.2 | ||
Current portion of long-term debt | 70.3 | 181.5 | ||
Total Current Liabilities | 545.5 | 713 | ||
Long-term debt, net | 1,817.8 | 1,273.3 | ||
Deferred income taxes | 174.6 | 195.4 | ||
Other non-current liabilities | 169.3 | 171.2 | ||
Due to affiliates | 0 | 0 | ||
Total Liabilities | 2,707.2 | 2,352.9 | ||
Redeemable non-controlling interest | 7.6 | 12.4 | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | (15.2) | |||
Non-controlling interest in subsidiaries | 3 | |||
Total Stockholders' (Deficit) Equity | (12.2) | 290.2 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | 2,702.6 | 2,655.5 | ||
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | 0.4 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income tax receivable | 234.2 | 193.1 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total Current Assets | 234.2 | 193.1 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred income taxes | 20.6 | 16 | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | 2,207.4 | 1,960.5 | ||
Due from affiliates | 168.4 | 548.1 | ||
Total Assets | 2,630.6 | 2,717.7 | ||
Current Liabilities: | ||||
Accounts payable | 0.1 | 0 | ||
Accrued expenses and other current liabilities | 6.8 | 1.4 | ||
Income taxes payable | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | 6.9 | 1.4 | ||
Long-term debt, net | 1,040.4 | 811.9 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | 1,587.9 | 1,601.8 | ||
Total Liabilities | 2,635.2 | 2,415.1 | ||
Redeemable non-controlling interest | 7.6 | 12.4 | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | (15.2) | |||
Non-controlling interest in subsidiaries | 3 | |||
Total Stockholders' (Deficit) Equity | (12.2) | 290.2 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | 2,630.6 | 2,717.7 | ||
Reportable Legal Entities | Combined Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 7.9 | 119.7 | 23.4 | 28.8 |
Accounts receivable, net | 197.7 | 231.9 | ||
Inventories | 117.1 | 145.3 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 48.9 | 45.6 | ||
Total Current Assets | 371.6 | 542.5 | ||
Property, plant and equipment, net | 346.9 | 300.1 | ||
Goodwill | 500.2 | 501.4 | ||
Other intangible assets, net | 589.8 | 612.9 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current assets | 41.7 | 23.3 | ||
Net investment in subsidiaries | 77.7 | 0 | ||
Due from affiliates | 1,874.7 | 1,655.3 | ||
Total Assets | 3,802.6 | 3,635.5 | ||
Current Liabilities: | ||||
Accounts payable | 157 | 212.2 | ||
Accrued expenses and other current liabilities | 172.6 | 183.8 | ||
Income taxes payable | 235.9 | 196 | ||
Current portion of long-term debt | 34.4 | 168.7 | ||
Total Current Liabilities | 599.9 | 760.7 | ||
Long-term debt, net | 776.5 | 461.4 | ||
Deferred income taxes | 174.9 | 189.8 | ||
Other non-current liabilities | 43.3 | 166.6 | ||
Due to affiliates | 0.6 | 96.5 | ||
Total Liabilities | 1,595.2 | 1,675 | ||
Redeemable non-controlling interest | 0 | 12.4 | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | 2,207.4 | |||
Non-controlling interest in subsidiaries | 0 | |||
Total Stockholders' (Deficit) Equity | 2,207.4 | 1,948.1 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | 3,802.6 | 3,635.5 | ||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 57.8 | 34.2 | 38.7 | 52.2 |
Accounts receivable, net | 147.4 | 147.5 | ||
Inventories | 79.7 | 53.9 | ||
Income tax receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 15 | 31 | ||
Total Current Assets | 299.9 | 266.6 | ||
Property, plant and equipment, net | 75.3 | 61.6 | ||
Goodwill | 222.3 | 208 | ||
Other intangible assets, net | 88.9 | 82.5 | ||
Deferred income taxes | 22.5 | 12.2 | ||
Other non-current assets | 143.5 | 44.4 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 14.3 | 4.8 | ||
Total Assets | 866.7 | 680.1 | ||
Current Liabilities: | ||||
Accounts payable | 62.2 | 54.1 | ||
Accrued expenses and other current liabilities | 70.7 | 68.8 | ||
Income taxes payable | 4.1 | 8.3 | ||
Current portion of long-term debt | 35.9 | 12.8 | ||
Total Current Liabilities | 172.9 | 144 | ||
Long-term debt, net | 0.9 | 0 | ||
Deferred income taxes | 20.3 | 21.6 | ||
Other non-current liabilities | 126 | 4.6 | ||
Due to affiliates | 468.9 | 604.9 | ||
Total Liabilities | 789 | 775.1 | ||
Redeemable non-controlling interest | 7.6 | 0 | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | 67.1 | |||
Non-controlling interest in subsidiaries | 3 | |||
Total Stockholders' (Deficit) Equity | 70.1 | (95) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | 866.7 | 680.1 | ||
Eliminations | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Income tax receivable | (234.2) | (193.1) | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total Current Assets | (234.2) | (193.1) | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred income taxes | (20.6) | (16) | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | (2,285.1) | (1,960.5) | ||
Due from affiliates | (2,057.4) | (2,208.2) | ||
Total Assets | (4,597.3) | (4,377.8) | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 0 | 0 | ||
Income taxes payable | (234.2) | (193.1) | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | (234.2) | (193.1) | ||
Long-term debt, net | 0 | 0 | ||
Deferred income taxes | (20.6) | (16) | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | (2,057.4) | (2,303.2) | ||
Total Liabilities | (2,312.2) | (2,512.3) | ||
Redeemable non-controlling interest | (7.6) | (12.4) | ||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries | (2,274.5) | |||
Non-controlling interest in subsidiaries | (3) | |||
Total Stockholders' (Deficit) Equity | (2,277.5) | (1,853.1) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity | $ (4,597.3) | $ (4,377.8) |
Guarantor_Non-Guarantor Finan82
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | $ 165.5 | $ 234.2 | $ 225.2 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of businesses, net of cash acquired | 0 | 0 | (8.5) |
Proceeds from disposition of business | 0 | 7.2 | 43.5 |
Purchases of property, plant and equipment | (62.4) | (65.9) | (47.5) |
Other | 0 | (1) | 2.1 |
Net cash used in investing activities | (62.4) | (59.7) | (10.4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 2,233.3 | 863.5 | 271.5 |
Repayments of borrowings under long-term debt obligations | (1,867.7) | (988.3) | (510.9) |
Proceeds from exercise of stock options | 15.7 | 20.4 | 4.3 |
Excess tax benefit from stock-based compensation | 7 | 21.8 | 1.7 |
Proceeds from purchase of treasury shares by CEO | 0 | 5 | 0 |
Treasury stock repurchased | (535) | (1.3) | (2.2) |
Payment of deferred financing costs | (6.9) | (8) | (3.1) |
Fees paid to lenders | (7.8) | 0 | 0 |
Call premium on 2020 Senior Notes | (23.6) | 0 | 0 |
Other | (0.1) | (3.8) | 0.6 |
Net cash used in financing activities | (185.1) | (90.7) | (238.1) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (6.2) | 7.6 | 4.8 |
(Decrease) increase in cash and cash equivalents | (88.2) | 91.4 | (18.5) |
CASH AND CASH EQUIVALENTS, beginning of period | 153.9 | 62.5 | 81 |
CASH AND CASH EQUIVALENTS, end of period | 65.7 | 153.9 | 62.5 |
Consolidated | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 165.5 | 234.2 | 225.2 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | ||
Acquisition of businesses, net of cash acquired | (8.5) | ||
Proceeds from disposition of business | 7.2 | 43.5 | |
Purchases of property, plant and equipment | (62.4) | (65.9) | (47.5) |
Other | (1) | 2.1 | |
Net cash used in investing activities | (62.4) | (59.7) | (10.4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 2,233.3 | 863.5 | 271.5 |
Repayments of borrowings under long-term debt obligations | (1,867.7) | (988.3) | (510.9) |
Net activity in investment in and advances from (to) subsidiaries and affiliates | 0 | 0 | 0 |
Proceeds from exercise of stock options | 15.7 | 20.4 | 4.3 |
Excess tax benefit from stock-based compensation | 7 | 21.8 | 1.7 |
Proceeds from purchase of treasury shares by CEO | 5 | ||
Treasury stock repurchased | (535) | (1.3) | (2.2) |
Payment of deferred financing costs | (6.9) | (8) | (3.1) |
Fees paid to lenders | (7.8) | ||
Call premium on 2020 Senior Notes | (23.6) | ||
Other | (0.1) | (3.8) | 0.6 |
Net cash used in financing activities | (185.1) | (90.7) | (238.1) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (6.2) | 7.6 | 4.8 |
(Decrease) increase in cash and cash equivalents | (88.2) | 91.4 | (18.5) |
CASH AND CASH EQUIVALENTS, beginning of period | 153.9 | 62.5 | 81 |
CASH AND CASH EQUIVALENTS, end of period | 65.7 | 153.9 | 62.5 |
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | (63.1) | (87) | (62.7) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | ||
Acquisition of businesses, net of cash acquired | 0 | ||
Proceeds from disposition of business | 0 | 0 | |
Purchases of property, plant and equipment | 0 | 0 | 0 |
Other | 0 | 0 | |
Net cash used in investing activities | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 600 | 450 | 0 |
Repayments of borrowings under long-term debt obligations | (375) | 0 | 0 |
Net activity in investment in and advances from (to) subsidiaries and affiliates | 383.1 | (401.3) | 59.3 |
Proceeds from exercise of stock options | 15.7 | 20.4 | 4.3 |
Excess tax benefit from stock-based compensation | 7 | 21.8 | 1.7 |
Proceeds from purchase of treasury shares by CEO | 5 | ||
Treasury stock repurchased | (535) | (1.3) | (2.2) |
Payment of deferred financing costs | (3.1) | (8) | 0 |
Fees paid to lenders | (6) | ||
Call premium on 2020 Senior Notes | (23.6) | ||
Other | 0 | 0 | 0 |
Net cash used in financing activities | 63.1 | 86.6 | 63.1 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
(Decrease) increase in cash and cash equivalents | 0 | (0.4) | 0.4 |
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0.4 | 0 |
CASH AND CASH EQUIVALENTS, end of period | 0 | 0 | 0.4 |
Reportable Legal Entities | Combined Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 110.7 | 274.7 | 191.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | (76.7) | ||
Acquisition of businesses, net of cash acquired | 0 | ||
Proceeds from disposition of business | 7.2 | 43.5 | |
Purchases of property, plant and equipment | (43) | (49.9) | (31.3) |
Other | (0.7) | 3 | |
Net cash used in investing activities | (119.7) | (43.4) | 15.2 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 1,523.6 | 402.9 | 271.5 |
Repayments of borrowings under long-term debt obligations | (1,406.2) | (988.3) | (510.9) |
Net activity in investment in and advances from (to) subsidiaries and affiliates | (212.5) | 453.4 | 32.1 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock-based compensation | 0 | 0 | 0 |
Proceeds from purchase of treasury shares by CEO | 0 | ||
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | (3.8) | 0 | (3.1) |
Fees paid to lenders | (1.8) | ||
Call premium on 2020 Senior Notes | 0 | ||
Other | (2.1) | (3) | (1.7) |
Net cash used in financing activities | (102.8) | (135) | (212.1) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
(Decrease) increase in cash and cash equivalents | (111.8) | 96.3 | (5.4) |
CASH AND CASH EQUIVALENTS, beginning of period | 119.7 | 23.4 | 28.8 |
CASH AND CASH EQUIVALENTS, end of period | 7.9 | 119.7 | 23.4 |
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 117.9 | 46.5 | 96.4 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 76.7 | ||
Acquisition of businesses, net of cash acquired | (8.5) | ||
Proceeds from disposition of business | 0 | 0 | |
Purchases of property, plant and equipment | (19.4) | (16) | (16.2) |
Other | (0.3) | (0.9) | |
Net cash used in investing activities | 57.3 | (16.3) | (25.6) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 109.7 | 10.6 | 0 |
Repayments of borrowings under long-term debt obligations | (86.5) | 0 | 0 |
Net activity in investment in and advances from (to) subsidiaries and affiliates | (170.6) | (52.1) | (91.4) |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Excess tax benefit from stock-based compensation | 0 | 0 | 0 |
Proceeds from purchase of treasury shares by CEO | 0 | ||
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | 0 | 0 | 0 |
Fees paid to lenders | 0 | ||
Call premium on 2020 Senior Notes | 0 | ||
Other | 2 | (0.8) | 2.3 |
Net cash used in financing activities | (145.4) | (42.3) | (89.1) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (6.2) | 7.6 | 4.8 |
(Decrease) increase in cash and cash equivalents | 23.6 | (4.5) | (13.5) |
CASH AND CASH EQUIVALENTS, beginning of period | 34.2 | 38.7 | 52.2 |
CASH AND CASH EQUIVALENTS, end of period | 57.8 | 34.2 | 38.7 |
Eliminations | |||
Supplemental condensed consolidating statements of cash flows | |||
Net cash (used in) provided by operating activities | 0 | 0 | 0 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | ||
Acquisition of businesses, net of cash acquired | 0 | ||
Proceeds from disposition of business | 0 | 0 | |
Purchases of property, plant and equipment | 0 | 0 | |
Other | 0 | 0 | |
Net cash used in investing activities | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 0 | 0 | 0 |
Repayments of borrowings under long-term debt obligations | 0 | 0 | 0 |
Net activity in investment in and advances from (to) 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 |
Proceeds from purchase of treasury shares by CEO | 0 | ||
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | 0 | 0 | 0 |
Fees paid to lenders | 0 | ||
Call premium on 2020 Senior Notes | 0 | ||
Other | 0 | 0 | 0 |
Net cash used in financing activities | 0 | 0 | 0 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
(Decrease) increase 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 ACCO83
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 23.3 | $ 19.5 | $ 19.3 |
Additions - Charges to Costs and Expenses | 4.2 | 6.9 | 4.9 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (5.4) | (3.1) | (4.7) |
Balance at End of Period | 22.1 | 23.3 | 19.5 |
Valuation Allowance of Deferred Tax Assets | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 24.2 | 21.7 | 39.4 |
Additions - Charges to Costs and Expenses | 20.2 | 4.6 | 2.2 |
Additions - Charged to Other Accounts | 0.8 | 0 | 0 |
Deductions | 0 | (2.1) | (19.9) |
Balance at End of Period | $ 45.2 | $ 24.2 | $ 21.7 |