Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 04, 2017 | |
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 Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,897,463 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 722.1 | $ 721 |
Cost of sales | 435.5 | 430 |
Gross profit | 286.6 | 291 |
Selling and marketing expenses | 153.7 | 150.1 |
General, administrative and other expenses | 66.5 | 71.7 |
Customer termination charges, net | 14.4 | 0 |
Equity income in earnings of unconsolidated affiliates | (2.7) | (2.8) |
Royalty income, net of royalty expense | (4.8) | (4.7) |
Operating income | 59.5 | 76.7 |
Other expense, net: | ||
Interest expense, net | 22.1 | 21.4 |
Other income, net | (9.2) | (1) |
Total other expense, net | 12.9 | 20.4 |
Income before income taxes | 46.6 | 56.3 |
Income tax provision | (14.6) | (17.3) |
Net income before non-controlling interests | 32 | 39 |
Less: Net loss attributable to non-controlling interests | (1.9) | (0.6) |
Net income attributable to Tempur Sealy International, Inc. | $ 33.9 | $ 39.6 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.63 | $ 0.64 |
Diluted (in dollars per share) | $ 0.62 | $ 0.63 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 53.9 | 62 |
Diluted (in shares) | 54.6 | 62.6 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income before non-controlling interests | $ 32 | $ 39 |
Other comprehensive income before tax, net of tax | ||
Foreign currency translation adjustments | 8.8 | 19.1 |
Unrealized loss on cash flow hedging derivatives, net of tax | (0.5) | (4.9) |
Other comprehensive income, net of tax | 8.3 | 14.2 |
Comprehensive income | 40.3 | 53.2 |
Less: Comprehensive loss attributable to non-controlling interests | (1.9) | (0.6) |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ 42.2 | $ 53.8 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 42.5 | $ 65.7 |
Accounts receivable, net | 344.1 | 345.1 |
Inventories, net | 192.2 | 196.8 |
Prepaid expenses and other current assets | 62 | 63.9 |
Total Current Assets | 640.8 | 671.5 |
Property, plant and equipment, net | 420.1 | 422.2 |
Goodwill | 724.2 | 722.5 |
Other intangible assets, net | 675.4 | 678.7 |
Deferred income taxes | 24 | 22.5 |
Other non-current assets | 195.8 | 185.2 |
Total Assets | 2,680.3 | 2,702.6 |
Current Liabilities: | ||
Accounts payable | 228.7 | 219.3 |
Accrued expenses and other current liabilities | 239.6 | 250.1 |
Income taxes payable | 15.5 | 5.8 |
Current portion of long-term debt | 66.9 | 70.3 |
Total Current Liabilities | 550.7 | 545.5 |
Long-term debt, net | 1,789.8 | 1,817.8 |
Deferred income taxes | 170.2 | 174.6 |
Other non-current liabilities | 180.9 | 169.3 |
Total Liabilities | 2,691.6 | 2,707.2 |
Commitments and contingencies—see Note 7 | ||
Redeemable non-controlling interest | 6.5 | 7.6 |
Total Stockholders' Deficit | (17.8) | (12.2) |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | $ 2,680.3 | $ 2,702.6 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income before non-controlling interests | $ 32 | $ 39 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 19.6 | 17.6 |
Amortization of stock-based compensation | (3.4) | 6.1 |
Amortization of deferred financing costs | 0.5 | 1.8 |
Bad debt expense | 2.4 | 1.5 |
Deferred income taxes | (5.3) | (1.7) |
Dividends received from unconsolidated affiliates | 1.3 | 2.1 |
Equity income in earnings of unconsolidated affiliates | (2.7) | (2.8) |
Non-cash interest expense on 8.0% Sealy Notes | 0 | 1.8 |
Loss on sale of assets | 0.3 | 0.2 |
Foreign currency adjustments and other | (0.1) | (1.6) |
Changes in operating assets and liabilities | 22.6 | (82.8) |
Net cash provided by (used in) operating activities | 67.2 | (18.8) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (12.9) | (12.6) |
Other | 0.9 | (0.2) |
Net cash used in investing activities | (12) | (12.8) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from borrowings under long-term debt obligations | 302.9 | 101.5 |
Repayments of borrowings under long-term debt obligations | (331.8) | (87) |
Proceeds from exercise of stock options | 0.1 | 3 |
Excess tax benefit from stock-based compensation | 0 | 1.2 |
Treasury stock repurchased | (43.8) | (102) |
Other | (3.4) | 0.4 |
Net cash used in financing activities | (76) | (82.9) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2.4) | (2.3) |
Decrease in cash and cash equivalents | (23.2) | (116.8) |
CASH AND CASH EQUIVALENTS, beginning of period | 65.7 | 153.9 |
CASH AND CASH EQUIVALENTS, end of period | 42.5 | 37.1 |
Cash paid during the period for: | ||
Interest | 6.6 | 5.4 |
Income taxes, net of refunds | $ 11.2 | $ 18.6 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Mar. 31, 2017 | Mar. 31, 2016 |
Sealy notes | ||
Stated percentage | 8.00% | 8.00% |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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: Wholesale and Direct. The Company’s Condensed Consolidated Financial Statements include the results of Comfort Revolution, LLC ("Comfort Revolution"), a 45.0% owned joint venture. Comfort Revolution constitutes a variable interest entity 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. The operations of Comfort Revolution are not material to the Company's Condensed 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 Company’s ownership interest in these joint ventures is 50.0% . The equity method of accounting is used for these joint ventures, over which the Company has significant influence but does not have control, and consolidation is not otherwise required. The Company's carrying value in its equity method investments of $17.3 million and $15.5 million at March 31, 2017 and December 31, 2016 , respectively, is recorded in other non-current assets within the accompanying Condensed Consolidated Balance Sheets. The Company’s equity in the net income and losses of these investments is recorded as equity income in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Income. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States ("U.S. GAAP" or "GAAP") for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2016 , included in the Company’s Annual Report on Form 10-K filed on February 24, 2017 . The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. It is the opinion of management that all necessary adjustments for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. (b) Inventories . Inventories are stated at the lower of cost or market, determined by the first-in, first-out method, and consist of the following: March 31, December 31, (in millions) 2017 2016 Finished goods $ 129.4 $ 130.1 Work-in-process 11.5 10.7 Raw materials and supplies 51.3 56.0 $ 192.2 $ 196.8 For the three months ended March 31, 2017, the Company wrote off $5.4 million of inventory that was unique to Mattress Firm Inc. ("Mattress Firm"). See Note 1(h) in Notes to Condensed Consolidation Financial Statements for additional information. (c) Accrued Sales Returns . The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. Accrued sales returns are included in accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets. The Company had the following activity for sales returns from December 31, 2016 to March 31, 2017 : (in millions) Balance as of December 31, 2016 $ 30.3 Amounts accrued 34.3 Returns charged to accrual (34.9 ) Balance as of March 31, 2017 $ 29.7 (d) Warranties . The Company provides warranties on certain products, which vary 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. The Company considers the impact of recoverable salvage value on warranty costs 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 its accrued warranty expense from December 31, 2016 to March 31, 2017 : (in millions) Balance as of December 31, 2016 $ 29.9 Amounts accrued 14.8 Warranties charged to accrual (7.5 ) Balance as of March 31, 2017 $ 37.2 As of March 31, 2017 and December 31, 2016 , $16.3 million and $14.3 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $20.9 million and $15.6 million of accrued warranty expense is included in other non-current liabilities on the Company’s accompanying Condensed Consolidated Balance Sheets, respectively. For the three months ended March 31, 2017, the Company accrued $6.1 million related to warranty costs associated with claims historically retained by Mattress Firm. See Note 1(h) in Notes to Condensed Consolidation Financial Statements for additional information. (e) 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 accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance 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 Condensed Consolidated Balance Sheets was $21.3 million and $22.1 million as of March 31, 2017 and December 31, 2016 , respectively. (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 Condensed 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, depending on whether the derivative is designated and is effective as a hedged transaction, and on the type of hedging relationship. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of accumulated other comprehensive loss (“AOCL”) in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded in 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 March 31, 2017 , 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 $12.8 million . These foreign exchange forward contracts have maturities ranging from April 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 Company expects to reclassify a gain of approximately $0.1 million , net of tax, over the next 6 months based on March 31, 2017 exchange rates. 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. The fair value of the Company's financial instruments that are recorded on a recurring basis at fair value is not material. (g) 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 any such change is enacted. 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. (h) Customer Contract Termination. During the week of January 23, 2017, the Company was unexpectedly notified by the senior management of Mattress Firm and representatives of Steinhoff International Holdings Ltd. ("Steinhoff"), its parent company, of Mattress Firm's intent to terminate its business relationship with the Company if the Company did not agree to considerable changes to its agreements with Mattress Firm, including significant economic concessions. The Company engaged in discussions to facilitate a mutually agreeable supply arrangement with Mattress Firm. However, the parties were unable to reach an agreement, and on January 27, 2017, Tempur-Pedic North America, LLC. ("Tempur-Pedic") and Sealy Mattress Company ("Sealy Mattress") issued formal termination notices for all of their products to Mattress Firm. On January 30, 2017, Tempur-Pedic and Sealy Mattress entered into transition agreements with Mattress Firm in which they agreed, among other things, to continue supplying Mattress Firm until April 3, 2017, at which time the parties’ business relationship ended. In the first quarter of 2017, the Company took steps to manage its cost structure as a result of the termination of the contracts with Mattress Firm. For the three months ended March 31, 2017, the Company recognized $25.9 million of net charges associated with the termination of the relationship with Mattress Firm. This amount includes $11.5 million of charges within cost of sales and $14.4 million of charges within customer termination charges, net on the Condensed Consolidated Statements of Income for the three months ended March 31, 2017. The following amounts are recognized in cost of sales: $5.4 million of charges related to the write-off of customer-unique inventory and $6.1 million of increased warranty costs associated with claims historically retained by Mattress Firm. The following amounts are recognized in customer termination charges, net: $22.8 million of charges related to the write-off of Mattress Firm incentives and marketing assets, employee-related expenses and professional fees; and $0.9 million of accelerated stock-based compensation expense. These charges are offset by $9.3 million of benefit related to the change in estimate associated with performance-based stock compensation that is no longer probable of payout as a result of the termination of the contracts with Mattress Firm. In the three months ended March 31, 2017, the Company also recognized $9.3 million related to the payments received pursuant to the transition agreements with Mattress Firm. This amount is included within other income, net on the Condensed Consolidated Statements of Income. The termination of the Mattress Firm relationship was identified by the Company as an indicator of potential impairment. The Company conducted an interim impairment analysis as of March 31, 2017 of its North America reporting unit and indefinite-lived intangible assets, which indicated that the fair values were substantially in excess of their carrying values. The Company also conducted a recoverability analysis of its long-lived assets and did not identify an impairment. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("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 is evaluating the effect of the adoption of this standard on its financial position and results of operations. The Company has conducted a risk assessment and has developed a transition plan that will enable the Company to meet the implementation requirement. The Company is performing an analysis to quantify the adoption impact of the provisions of the new standard. The Company anticipates using the modified retrospective method of adoption as of January 1, 2018 and having enhanced disclosures surrounding revenue recognition. 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 annual periods beginning after December 15, 2018, 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 Condensed 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. The Company adopted this ASU as of January 1, 2017. As a result of the adoption of this ASU, the Company implemented the following simplification initiatives in the Condensed Consolidated Financial Statements: • The Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit in the Condensed Consolidated Statement of Income. The Company recognized a $1.0 million deficiency in the three months ended March 31, 2017. • The Company is prospectively presenting these excess tax benefits and tax deficiencies as an operating activity on the Condensed Consolidated Statement of Cash Flows. • The Company adopted a change in accounting policy to recognize forfeitures of awards as they occur instead of estimating potential forfeitures. Historically, the Company estimated the number of awards expected to be forfeited and adjusted the estimate when it was no longer probable that employees would fulfill their service conditions. The effect of this change in accounting policy is not material. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which is accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Condensed Consolidated Statements of Income. This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Condensed Consolidated Statements of Income as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively and will become effective for the Company on January 1, 2018. The Company expects this guidance will result in a reclassification of pension and other postretirement plan non-service income and remeasurement adjustments, net from within operating income to non-operating income. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following summarizes changes to the Company’s goodwill, by segment: (in millions) North America International Consolidated Balance as of December 31, 2016 $ 572.0 $ 150.5 $ 722.5 Foreign currency translation 0.6 1.1 1.7 Balance as of March 31, 2017 $ 572.6 $ 151.6 $ 724.2 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt for the Company consists of the following: March 31, 2017 December 31, 2016 (in millions, except percentages) Amount Rate Amount Rate Maturity Date 2016 Credit Agreement Term A Facility $ 577.5 (1) $ 585.0 (2) April 6, 2021 Revolver 136.9 (1) 156.9 (2) April 6, 2021 2026 Senior Notes 600.0 5.500% 600.0 5.500% June 15, 2026 2023 Senior Notes 450.0 5.625% 450.0 5.625% October 15, 2023 Capital lease obligations (3) 72.4 73.3 Various Other 32.3 35.8 Total debt 1,869.1 1,901.0 Less: deferred financing costs (12.4 ) (12.9 ) Total debt, net 1,856.7 1,888.1 Less: current portion (66.9 ) (70.3 ) Total long-term debt, net $ 1,789.8 $ 1,817.8 (1) Interest at LIBOR plus applicable margin of 1.75% as of March 31, 2017. (2) Interest at LIBOR plus applicable margin of 1.50% as of December 31, 2016. (3) 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. 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 Condensed 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 March 31, 2017 , domestic qualified cash was $11.5 million and foreign qualified cash was $18.6 million . The Company is in compliance with all applicable covenants as of March 31, 2017 . Fair Value of Financial Instruments Financial instruments, although not recorded at fair value on a recurring basis, include cash and cash equivalents, accounts receivable, accounts payable, and the Company's debt obligations. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value using Level 1 inputs because of the short-term maturity of those instruments. Borrowings under the 2016 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 these material financial instruments are as follows: Fair Value (in millions) March 31, 2017 December 31, 2016 2023 Senior Notes $ 454.2 $ 468.5 2026 Senior Notes 591.9 606.8 Accounts Receivable Securitization On April 12, 2017, the Company and certain of its subsidiaries entered into a securitization transaction with respect to certain accounts receivable due to the Company and certain of its subsidiaries (the "Accounts Receivable Securitization"). In connection with this transaction, the Company and its wholly-owned special purpose subsidiary, Tempur Sealy Receivables, LLC, entered into a credit agreement that provides for revolving loans to be made from time to time in a maximum amount that varies over the course of the year based on seasonality subject to an overall limit of $120.0 million . The revolving loans will bear interest at a floating rate equal to a one month LIBOR index plus 80 basis points. The obligations of the Company under the Accounts Receivable Securitization are secured by the accounts receivable and certain related rights and contain customary events of default. The accounts receivable will continue to be owned by the Company and its subsidiaries and will continue to be reflected as assets on the Company’s Condensed Consolidated Balance Sheets. Borrowings under this facility will be classified as long-term debt within the Condensed Consolidated Balance Sheets. The Accounts Receivable Securitization matures on April 12, 2019. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholder's 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 the common stock are entitled to receive ratably such dividends as may be declared from time to time by the Board of Directors ("Board") out of funds legally available for that purpose. In the event of liquidation, dissolution or winding up, the holders of the 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 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, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. (b) Treasury Stock. In February 2017, the Board authorized an increase of $200.0 million to its existing share repurchase authorization for repurchases of Tempur Sealy International's common stock. For the three months ended March 31, 2017 , the Company repurchased 0.6 million shares for approximately $40.1 million . As of March 31, 2017 , the Company had approximately $226.9 million remaining under the existing share repurchase authorization. In addition, the Company acquired 0.1 million shares upon the vesting of certain performance restricted stock units ("PRSUs"), which were withheld to satisfy tax withholding obligations during each of the three months ended March 31, 2017 and 2016 . The shares withheld were valued at the closing price of the common stock on the New York Stock Exchange on the vesting date or first business day thereafter, resulting in approximately $3.7 million and $2.0 million in treasury stock acquired during the three months ended March 31, 2017 and 2016 , respectively. (c) Shareholder Rights Agreement . On February 8, 2017, the Board 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, and until such time are inseparable from and trade with the Company's common stock. The Rights have a de minimis fair value. The Rights were issued pursuant to the Rights Agreement dated as of February 8, 2017 (the "Original Rights Agreement"), between the Company and American Stock Transfer & Trust Company, LLC ("AST"), the Company's rights agent. These Rights expire February 7, 2018 or upon an earlier redemption or exchange as provided in the Rights Agreement. On March 14, 2017, the Company entered into an Amended and Restated Rights Agreement (the "Amended Rights Agreement") with AST, as rights agent, to amend certain provisions of the Original Rights Agreement. The primary purpose of the amendment and restatement of the Original Rights Agreement is to provide the holders of the Common Shares and the attached Rights issued under the Original Rights Agreement with the ability to exempt an offer to acquire, or engage in another business combination transaction involving, the Company that is deemed a "Qualifying Offer" (as defined in the Amended and Restated Rights Agreement) from the terms of the Amended and Restated Rights Agreement. The Amended Rights Agreement has a de minimis fair value as of March 31, 2017. (d) AOCL. AOCL consisted of the following: Three Months Ended March 31, (in millions) 2017 2016 Foreign Currency Translation Balance at beginning of period $ (119.9 ) $ (115.4 ) Other comprehensive income: Foreign currency translation adjustments (1) 8.8 19.1 Balance at end of period $ (111.1 ) $ (96.3 ) Pensions Balance at beginning of period $ (2.2 ) $ (1.4 ) Other comprehensive income (loss): Net change from period revaluations, net of tax — — Balance at end of period $ (2.2 ) $ (1.4 ) Foreign Exchange Forward Contracts Balance at beginning of period $ 0.6 $ 6.6 Other comprehensive loss: Net change from period revaluations (0.3 ) (5.0 ) Tax benefit (2) 0.1 1.3 Total other comprehensive loss before reclassifications, net of tax $ (0.2 ) $ (3.7 ) Net amount reclassified to earnings (3) (0.4 ) (1.6 ) Tax benefit (2) 0.1 0.4 Total amount reclassified from AOCL, net of tax $ (0.3 ) $ (1.2 ) Total other comprehensive loss (0.5 ) (4.9 ) Balance at end of period $ 0.1 $ 1.7 (1) In 2017 and 2016, 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 on the accompanying Condensed Consolidated Statements of Income. (3) This amount was included in cost of sales on the accompanying Condensed Consolidated Statements of Income. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation expense for the three months ended March 31, 2017 and 2016 included PRSUs, non-qualified stock options, restricted stock units ("RSUs") and deferred stock units ("DSUs"). A summary of the Company’s stock-based compensation expense is presented in the following table. Three Months Ended (in millions) 2017 2016 PRSU (benefit) expense $ (9.3 ) $ 2.5 Option expense 2.0 1.7 RSU/DSU expense 3.9 1.9 Total stock-based compensation expense $ (3.4 ) $ 6.1 In the three months ended March 31, 2017 , the Company recorded a $9.3 million benefit in the Condensed Consolidated Statements of Income related to a change in estimate associated with performance-based stock compensation that is no longer probable of payout as a result of the termination of the Mattress Firm relationship. Additionally, in the three months ended March 31, 2017 and 2016 , the Company recorded $0.9 million and $2.0 million of accelerated stock-based compensation expense. The Company has 1.2 million PRSUs outstanding that will vest if the Company achieves more than $650.0 million of adjusted earnings before interest, tax, depreciation and amortization ("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 $650.0 million . In addition, if this target is not met in 2017 but the Company achieves more than $650.0 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 $650.0 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 2016 Credit Agreement. The Company did not record any stock-based compensation expense related to the 2017 Aspirational Plan PRSUs during the three months ended March 31, 2017 or during 2016 , as it is not considered probable 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 in future periods and record the appropriate expense if necessary. Based on the price of the Company’s common stock on the grant date, the total unrecognized compensation expense related to this award if the performance target is met for 2017 is $84.1 million , which would be expensed over the remaining service period if achievement of the performance condition becomes probable. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Alvin Todd, and Henry and Mary Thompson, individually and on behalf of all others similarly situated, Plaintiffs v. Tempur Sealy International, Inc., formerly known as Tempur-Pedic International, Inc. and Tempur-Pedic North America, LLC, Defendants; filed October 25, 2013. On October 25, 2013, a suit was filed against Tempur Sealy International and one of its domestic subsidiaries in the United States District Court for the Northern District of California, purportedly on behalf of a proposed class of “consumers” as defined by Cal. Civ. Code § 1761(d) who purchased, not for resale, a Tempur-Pedic mattress or pillow in the State of California. On November 19, 2013, the Company was served for the first time in the case but with an amended petition adding additional class representatives for additional states. The purported classes seek certification of claims under applicable state laws. The complaint alleges that the Company engaged in unfair business practices, false advertising, and misrepresentations or omissions related to the sale of certain products. The plaintiffs seek restitution, injunctive relief and all other relief allowed under applicable state laws, interest, attorneys’ fees and costs. The purported classes do not seek damages for physical injuries. The Company believes the case lacks merit and intends to defend against the claims vigorously. The Court was scheduled to consider class certification motions in the fourth quarter of 2015; however, the 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 on August 18, 2016, and on September 30, 2016, denied the Plaintiffs’ motion for class certification. In December 2016, the Ninth Circuit Court of Appeals affirmed the lower court’s decision. The Company filed a Motion to Sever the Claims made by each of the Plaintiffs on March 22, 2017 following the denial of class certification by the District Court and affirmed by the Ninth Circuit Court of Appeals. The Plaintiffs then filed a Motion for Reconsideration with respect to the denial of class certification on April 12, 2017. The Court granted the Plaintiffs’ Motion for Reconsideration and requested briefs from the parties on whether the prior Order denying class certification should be modified. 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. (b) David Buehring, Individually and on Behalf of All Others Similarly Situated v. Tempur Sealy International, Inc., Scott L. Thompson, and Barry A. Hytinen, filed March 24, 2017. On March 24, 2017, a suit was filed against Tempur Sealy International, Inc., and two of its officers in the U.S. District Court for the Southern District of New York, purportedly on behalf of a proposed class of stockholders who purchased Tempur Sealy common stock between July 28, 2016 and January 27, 2017. The complaint alleges that the Company made materially false and misleading statements regarding its then existing and future financial prospects, including those with one of its retailers, Mattress Firm, allegedly in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Company does not believe the claims have merit and intends to vigorously defend against these claims. The case is in the early stages of litigation. As a result, the outcome of the case is unclear and the Company is unable to reasonably estimate the possible loss or range of loss, if any. 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. (c) Mattress Firm, Inc. v. Tempur-Pedic North America, LLC and Sealy Mattress Company, filed March 30, 2017. On March 30, 2017, a suit was filed against Tempur-Pedic and Sealy Mattress ( two wholly-owned subsidiaries of the Company) in the District Court of Harris County, Texas by Mattress Firm. The complaint alleges breach of contract, tortious interference and seeks a declaratory judgment with respect to the interpretation of its agreements with the Company. On April 7, 2017, the Company's subsidiaries named above filed suit against Mattress Firm, Inc. in the U.S. District Court for the Southern District of Texas, Houston Division seeking injunctive relief and damages for trademark infringement, unfair competition and trademark dilution in violation of the Lanham Act, and breach of contract and other state law violations. The complaint alleges that Mattress Firm violated the parties' transition agreements dated January 30, 2017, and consequently, federal and state law, by its use of the Company’s trademarks after April 3, 2017. On April 28, 2017, the complaint was amended to add a claim by Sealy Mattress for nonpayment by Mattress Firm for products sold and delivered. The Company does not believe the claims asserted by Mattress Firm have merit and intends to vigorously defend against them. The cases are in the early stages of litigation. As a result, the outcome remains unclear and the Company is unable to reasonably estimate the possible loss or range of loss, if any. Accordingly, the Company can give no assurance that these matters will not have a material adverse effect on the Company’s financial position or results of operations. (d) 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 other 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 | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three months ended March 31, 2017 and 2016 was 31.3% and 30.7% , respectively. The Company’s income tax rate for the three months ended March 31, 2017 and 2016 differed from the U.S. federal statutory rate of 35.0% principally due to certain foreign income tax rate differentials, state and local income taxes, the production activities deduction, certain other permanent differences, changes in the Company’s uncertain tax positions, and for the three months ended March 31, 2017, the excess tax deficiency related to stock-based compensation. 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 at March 31, 2017 for all years for which an assessment has been received (2001 - 2008) is approximately Danish Krone ("DKK") 1,570.1 million , including interest and penalties ( $225.5 million , based on the DKK to USD exchange rate on March 31, 2017). The cumulative total tax assessment at December 31, 2016 for all years for which an assessment had been received up through that date (2001 - 2008) including interest and penalties was approximately DKK 1,547.3 million ( $219.3 million ), based on the DKK to USD exchange rate on December 31, 2016). 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"). At March 31, 2017 and December 31, 2016 the Company had accrued Danish tax and interest for the Danish Tax Matter of approximately DKK 852 million (approximately $122.7 million using the March 31, 2017 exchange rate) and DKK 850 million (approximately $120.6 million using the December 31, 2016 exchange rate), respectively, as an uncertain income tax liability. On both March 31, 2017 and December 31, 2016 approximately DKK 835 million (approximately $120.5 million using March 31, 2017 exchange rate and $118.5 million using the 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 at March 31, 2017 and December 31, 2016, respectively, of approximately DKK 17 million (approximately $2.5 million using the March 31, 2017 exchange rate) and 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 Condensed Consolidated Balance Sheets. In addition, at March 31, 2017 and December 31, 2016 the Company had recorded a deferred tax asset of approximately $44.3 million and $43.5 million , respectively, 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 for both periods related to years for which relief may not be realized. 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 March 31, 2017. 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 significant amounts 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. From June 2012 through March 31, 2017, SKAT withheld Value Added Tax refunds otherwise owed to the Company, pending resolution of the Danish Tax Matter. Total withheld refunds at March 31, 2017 and December 31, 2016 are approximately DKK 276.3 million (approximately $39.9 at the March 31, 2017 exchange rate) and DKK 258.0 million (approximately $36.6 million at the December 31, 2016 exchange rate), respectively. In July 2016, the Company paid a deposit to SKAT in the amount of approximately DKK 615.2 (approximately $88.8 million using the exchange rate at March 31, 2017) (the “Tax Deposit”) and applied approximately DKK 224.6 million (approximately $32.4 million using the exchange rate at March 31, 2017) 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 the Danish Tax 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 Condensed Consolidated Balance Sheets. The amount of unrecognized tax benefits that would impact the effective tax rate if recognized at March 31, 2017 and December 31, 2016 would be $21.8 and $21.4 million (exclusive of interest and penalties), respectively. Interest and penalties related to unrecognized tax benefits are recorded in income tax provision. 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. There were no significant changes to the liability for unrecognized tax benefits during the three months ended March 31, 2017. |
Major Customers
Major Customers | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers Mattress Firm, our largest customer in 2016 and the first quarter of 2017, represented 13.1% and 20.8% of the Company's sales for the three months ended March 31, 2017 and 2016 , respectively. In January 2017, two of the Company's subsidiaries entered into transition agreements terminating their business relationships with Mattress Firm effective April 3, 2017. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
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. Three Months Ended March 31, (in millions, except per common share amounts) 2017 2016 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 33.9 $ 39.6 Denominator: Denominator for basic earnings per common share-weighted average shares 53.9 62.0 Effect of dilutive securities: Employee stock-based compensation 0.7 0.6 Denominator for diluted earnings per common share-adjusted weighted average shares 54.6 62.6 Basic earnings per common share $ 0.63 $ 0.64 Diluted earnings per common share $ 0.62 $ 0.63 The Company excluded 1.5 million and 0.5 million shares issuable upon exercise of outstanding stock options for the three months ended March 31, 2017 and 2016 , 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 maintain voting rights or maintain rights to receive any dividends thereon. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
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 Condensed Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable and payable. The following table summarizes total assets by segment: March 31, December 31, (in millions) 2017 2016 North America $ 2,614.4 $ 2,581.4 International 590.0 572.6 Corporate 664.3 658.7 Inter-segment eliminations (1,188.4 ) (1,110.1 ) Total assets $ 2,680.3 $ 2,702.6 The following table summarizes property, plant and equipment, net by segment: March 31, December 31, (in millions) 2017 2016 North America $ 296.8 $ 297.4 International 54.4 54.9 Corporate 68.9 69.9 Total property, plant and equipment, net $ 420.1 $ 422.2 The following table summarizes segment information for the three months ended March 31, 2017 : (in millions) North America International Corporate Eliminations Consolidated Net sales $ 582.3 $ 139.8 $ — $ — $ 722.1 Inter-segment sales $ 0.9 $ 0.1 $ — $ (1.0 ) $ — Inter-segment royalty expense (income) 1.7 (1.7 ) — — — Gross profit 214.5 72.1 — — 286.6 Operating income (loss) 51.4 25.9 (17.8 ) — 59.5 Income (loss) before income taxes 59.4 23.7 (36.5 ) — 46.6 Depreciation and amortization (1) $ 12.3 $ 3.7 $ 0.2 $ — $ 16.2 Capital expenditures 8.6 1.5 2.8 — 12.9 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the three months ended March 31, 2016 : (in millions) North America International Corporate Eliminations Consolidated Net sales $ 580.0 $ 141.0 $ — $ — $ 721.0 Inter-segment sales $ 1.2 $ 0.1 $ — $ (1.3 ) $ — Inter-segment royalty expense (income) 1.7 (1.7 ) — — — Gross profit 214.5 76.5 — — 291.0 Operating income (loss) 77.3 27.3 (27.9 ) — 76.7 Income (loss) before income taxes 77.0 24.4 (45.1 ) — 56.3 Depreciation and amortization (1) $ 10.4 $ 3.8 $ 9.5 $ — $ 23.7 Capital expenditures 5.6 2.3 4.7 — 12.6 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes property, plant and equipment, net by geographic region: March 31, December 31, (in millions) 2017 2016 United States $ 358.9 $ 360.7 Canada 6.8 6.6 Other International 54.4 54.9 Total property, plant and equipment, net $ 420.1 $ 422.2 Total International $ 61.2 $ 61.5 The following table summarizes net sales by geographic region: Three Months Ended March 31, (in millions) 2017 2016 United States $ 533.5 $ 537.1 Canada 48.8 42.9 Other International 139.8 141.0 Total net sales $ 722.1 $ 721.0 Total International $ 188.6 $ 183.9 |
Guarantor_Non-Guarantor Financi
Guarantor/Non-Guarantor Financial Information | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
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 all of Tempur Sealy International’s 100% directly or indirectly owned current and future domestic subsidiaries (the "Combined Guarantor Subsidiaries"). The foreign subsidiaries (the "Combined Non-Guarantor Subsidiaries") represent the foreign operations of the Company and do not guarantee the Senior Notes. A subsidiary guarantor will be released from its obligations under the applicable indenture governing the Senior Notes when: (a) the subsidiary guarantor is sold or sells all or substantially all of its assets; (b) the subsidiary is declared "unrestricted" under the applicable indenture governing the Senior Notes; (c) the subsidiary’s guarantee of indebtedness under the 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 supplemental financial information presents the Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2017 and 2016 , the Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016 , and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 for Tempur Sealy International, Combined Guarantor Subsidiaries and Combined Non-Guarantor Subsidiaries. Supplemental Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 529.8 $ 212.7 $ (20.4 ) $ 722.1 Cost of sales — 330.3 125.6 (20.4 ) 435.5 Gross profit — 199.5 87.1 — 286.6 Selling and marketing expenses 1.4 104.9 47.4 — 153.7 General, administrative and other expenses 4.0 44.3 18.2 — 66.5 Customer termination charges, net (8.4 ) 21.8 1.0 — 14.4 Equity income in earnings of unconsolidated affiliates — — (2.7 ) — (2.7 ) Royalty income, net of royalty expense — (4.8 ) — — (4.8 ) Operating income 3.0 33.3 23.2 — 59.5 Other expense, net: Third party interest expense, net 14.9 6.5 0.7 — 22.1 Intercompany interest (income) expense, net (1.2 ) (0.3 ) 1.5 — — Interest expense, net 13.7 6.2 2.2 — 22.1 Other (income) expense, net — (9.3 ) 0.1 — (9.2 ) Total other expense (income), net 13.7 (3.1 ) 2.3 — 12.9 Income from equity investees 40.6 15.6 — (56.2 ) — Income before income taxes 29.9 52.0 20.9 (56.2 ) 46.6 Income tax benefit (provision) 2.1 (11.4 ) (5.3 ) — (14.6 ) Net income before non-controlling interests 32.0 40.6 15.6 (56.2 ) 32.0 Less: Net loss attributable to non-controlling interests (1.9 ) — (1.9 ) 1.9 (1.9 ) Net income attributable to Tempur Sealy International, Inc. $ 33.9 $ 40.6 $ 17.5 $ (58.1 ) $ 33.9 Comprehensive income attributable to Tempur Sealy International, Inc. $ 42.2 $ 36.1 $ 30.4 $ (66.5 ) $ 42.2 Supplemental Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended March 31, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 550.7 $ 184.1 $ (13.8 ) $ 721.0 Cost of sales — 348.4 95.4 (13.8 ) 430.0 Gross profit — 202.3 88.7 — 291.0 Selling and marketing expenses 1.8 102.1 46.2 — 150.1 General, administrative and other expenses 4.8 50.9 16.0 — 71.7 Equity income in earnings of unconsolidated affiliates — — (2.8 ) — (2.8 ) Royalty income, net of royalty expense — (4.7 ) — — (4.7 ) Operating (loss) income (6.6 ) 54.0 29.3 — 76.7 Other expense, net: Third party interest expense, net 20.0 0.8 0.6 — 21.4 Intercompany interest (income) expense, net (1.1 ) — 1.1 — — Interest expense, net 18.9 0.8 1.7 — 21.4 Other (income) expense, net — (1.7 ) 0.7 — (1.0 ) Total other expense (income), net 18.9 (0.9 ) 2.4 — 20.4 Income from equity investees 56.5 22.0 — (78.5 ) — Income before income taxes 31.0 76.9 26.9 (78.5 ) 56.3 Income tax benefit (provision) 8.0 (20.4 ) (4.9 ) — (17.3 ) Net income before non-controlling interests 39.0 56.5 22.0 (78.5 ) 39.0 Less: Net loss attributable to non-controlling interests (0.6 ) (0.6 ) — 0.6 (0.6 ) Net income attributable to Tempur Sealy International, Inc. $ 39.6 $ 57.1 $ 22.0 $ (79.1 ) $ 39.6 Comprehensive income attributable to Tempur Sealy International, Inc. $ 53.8 $ 57.3 $ 45.2 $ (102.5 ) $ 53.8 Supplemental Condensed Consolidated Balance Sheets March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 5.6 $ 36.9 $ — $ 42.5 Accounts receivable, net — 193.4 150.7 — 344.1 Inventories, net — 107.6 84.6 — 192.2 Income taxes receivable 241.9 — — (241.9 ) — Prepaid expenses and other current assets 0.7 43.0 18.3 — 62.0 Total Current Assets 242.6 349.6 290.5 (241.9 ) 640.8 Property, plant and equipment, net — 345.0 75.1 — 420.1 Goodwill — 500.2 224.0 — 724.2 Other intangible assets, net — 586.7 88.7 — 675.4 Deferred income taxes 14.9 — 24.0 (14.9 ) 24.0 Other non-current assets — 45.4 150.4 — 195.8 Net investment in subsidiaries 2,310.3 — — (2,310.3 ) — Due from affiliates 129.3 2,071.4 11.8 (2,212.5 ) — Total Assets $ 2,697.1 $ 3,898.3 $ 864.5 $ (4,779.6 ) $ 2,680.3 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current Liabilities: Accounts payable $ — $ 163.8 $ 64.9 $ — $ 228.7 Accrued expenses and other current liabilities 21.4 152.5 65.7 — 239.6 Income taxes payable — 254.4 3.0 (241.9 ) 15.5 Current portion of long-term debt — 34.5 32.4 — 66.9 Total Current Liabilities 21.4 605.2 166.0 (241.9 ) 550.7 Long-term debt, net 1,040.7 748.1 1.0 — 1,789.8 Deferred income taxes — 164.4 20.7 (14.9 ) 170.2 Other non-current liabilities — 47.6 133.3 — 180.9 Due to affiliates 1,646.3 22.7 565.6 (2,234.6 ) — Total Liabilities 2,708.4 1,588.0 886.6 (2,491.4 ) 2,691.6 Redeemable non-controlling interest 6.5 — 6.5 (6.5 ) 6.5 Total Stockholders' (Deficit) Equity (17.8 ) 2,310.3 (28.6 ) (2,281.7 ) (17.8 ) Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ (Deficit) Equity $ 2,697.1 $ 3,898.3 $ 864.5 $ (4,779.6 ) $ 2,680.3 Supplemental Condensed 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, net — 117.1 79.7 — 196.8 Income taxes 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’ (DEFICIT) 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 (12.2 ) 2,207.4 70.1 (2,277.5 ) (12.2 ) Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ (Deficit) Equity $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 Supplemental Condensed Consolidated Statements of Cash Flows Three Months Ended March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 0.1 $ 55.1 $ 12.0 $ — $ 67.2 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment — (10.6 ) (2.3 ) — (12.9 ) Other — 0.8 0.1 — 0.9 Net cash used in investing activities — (9.8 ) (2.2 ) — (12.0 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 251.4 51.5 — 302.9 Repayments of borrowings under long-term debt obligations — (278.9 ) (52.9 ) — (331.8 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 43.6 (19.0 ) (24.6 ) — — Proceeds from exercise of stock options 0.1 — — — 0.1 Treasury stock repurchased (43.8 ) — — — (43.8 ) Other — (1.1 ) (2.3 ) — (3.4 ) Net cash used in financing activities (0.1 ) (47.6 ) (28.3 ) — (76.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (2.4 ) — (2.4 ) Decrease in cash and cash equivalents — (2.3 ) (20.9 ) — (23.2 ) CASH AND CASH EQUIVALENTS, beginning of period — 7.9 57.8 — 65.7 CASH AND CASH EQUIVALENTS, end of period $ — $ 5.6 $ 36.9 $ — $ 42.5 Supplemental Condensed Consolidated Statements of Cash Flows Three Months Ended March 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 $ (1.3 ) $ (37.4 ) $ 19.9 $ — $ (18.8 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment — (10.2 ) (2.4 ) — (12.6 ) Other — (0.2 ) — — (0.2 ) Net cash used in investing activities — (10.4 ) (2.4 ) — (12.8 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 96.3 5.2 — 101.5 Repayments of borrowings under long-term debt obligations — (76.5 ) (10.5 ) — (87.0 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 99.1 (86.9 ) (12.2 ) — — Proceeds from exercise of stock options 3.0 — — — 3.0 Excess tax benefit from stock-based compensation 1.2 — — — 1.2 Treasury stock repurchased (102.0 ) — — — (102.0 ) Other — (0.6 ) 1.0 — 0.4 Net cash provided by (used in) financing activities 1.3 (67.7 ) (16.5 ) — (82.9 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (2.3 ) — (2.3 ) Decrease in cash and cash equivalents — (115.5 ) (1.3 ) — (116.8 ) CASH AND CASH EQUIVALENTS, beginning of period — 119.7 34.2 — 153.9 CASH AND CASH EQUIVALENTS, end of period $ — $ 4.2 $ 32.9 $ — $ 37.1 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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: Wholesale and Direct. The Company’s Condensed Consolidated Financial Statements include the results of Comfort Revolution, LLC ("Comfort Revolution"), a 45.0% owned joint venture. Comfort Revolution constitutes a variable interest entity 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. The operations of Comfort Revolution are not material to the Company's Condensed 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 Company’s ownership interest in these joint ventures is 50.0% . The equity method of accounting is used for these joint ventures, over which the Company has significant influence but does not have control, and consolidation is not otherwise required. The Company's carrying value in its equity method investments of $17.3 million and $15.5 million at March 31, 2017 and December 31, 2016 , respectively, is recorded in other non-current assets within the accompanying Condensed Consolidated Balance Sheets. The Company’s equity in the net income and losses of these investments is recorded as equity income in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Income. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States ("U.S. GAAP" or "GAAP") for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2016 , included in the Company’s Annual Report on Form 10-K filed on February 24, 2017 . The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. It is the opinion of management that all necessary adjustments for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. |
Inventories | Inventories . Inventories are stated at the lower of cost or market, determined by the first-in, first-out method |
Accrued Sales Returns | Accrued Sales Returns . The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. Accrued sales returns are included in accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets. |
Warranties | Warranties . The Company provides warranties on certain products, which vary 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. The Company considers the impact of recoverable salvage value on warranty costs 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. |
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. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance 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. |
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 Condensed 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, depending on whether the derivative is designated and is effective as a hedged transaction, and on the type of hedging relationship. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of accumulated other comprehensive loss (“AOCL”) in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded in 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. |
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 any such change is enacted. 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. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("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 is evaluating the effect of the adoption of this standard on its financial position and results of operations. The Company has conducted a risk assessment and has developed a transition plan that will enable the Company to meet the implementation requirement. The Company is performing an analysis to quantify the adoption impact of the provisions of the new standard. The Company anticipates using the modified retrospective method of adoption as of January 1, 2018 and having enhanced disclosures surrounding revenue recognition. 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 annual periods beginning after December 15, 2018, 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 Condensed 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. The Company adopted this ASU as of January 1, 2017. As a result of the adoption of this ASU, the Company implemented the following simplification initiatives in the Condensed Consolidated Financial Statements: • The Company recognized all excess tax benefits and tax deficiencies as income tax expense or benefit in the Condensed Consolidated Statement of Income. The Company recognized a $1.0 million deficiency in the three months ended March 31, 2017. • The Company is prospectively presenting these excess tax benefits and tax deficiencies as an operating activity on the Condensed Consolidated Statement of Cash Flows. • The Company adopted a change in accounting policy to recognize forfeitures of awards as they occur instead of estimating potential forfeitures. Historically, the Company estimated the number of awards expected to be forfeited and adjusted the estimate when it was no longer probable that employees would fulfill their service conditions. The effect of this change in accounting policy is not material. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which is accounting guidance that will change how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the Condensed Consolidated Statements of Income. This guidance requires employers to present the service cost component of net periodic benefit cost in the same caption within the Condensed Consolidated Statements of Income as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost will be presented separately outside of the operating income caption. This guidance must be applied retrospectively and will become effective for the Company on January 1, 2018. The Company expects this guidance will result in a reclassification of pension and other postretirement plan non-service income and remeasurement adjustments, net from within operating income to non-operating income. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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: March 31, December 31, (in millions) 2017 2016 Finished goods $ 129.4 $ 130.1 Work-in-process 11.5 10.7 Raw materials and supplies 51.3 56.0 $ 192.2 $ 196.8 |
Changes in accrued sales returns | The Company had the following activity for sales returns from December 31, 2016 to March 31, 2017 : (in millions) Balance as of December 31, 2016 $ 30.3 Amounts accrued 34.3 Returns charged to accrual (34.9 ) Balance as of March 31, 2017 $ 29.7 |
Warranty activity | The Company had the following activity for its accrued warranty expense from December 31, 2016 to March 31, 2017 : (in millions) Balance as of December 31, 2016 $ 29.9 Amounts accrued 14.8 Warranties charged to accrual (7.5 ) Balance as of March 31, 2017 $ 37.2 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by business segment | The following summarizes changes to the Company’s goodwill, by segment: (in millions) North America International Consolidated Balance as of December 31, 2016 $ 572.0 $ 150.5 $ 722.5 Foreign currency translation 0.6 1.1 1.7 Balance as of March 31, 2017 $ 572.6 $ 151.6 $ 724.2 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | Debt for the Company consists of the following: March 31, 2017 December 31, 2016 (in millions, except percentages) Amount Rate Amount Rate Maturity Date 2016 Credit Agreement Term A Facility $ 577.5 (1) $ 585.0 (2) April 6, 2021 Revolver 136.9 (1) 156.9 (2) April 6, 2021 2026 Senior Notes 600.0 5.500% 600.0 5.500% June 15, 2026 2023 Senior Notes 450.0 5.625% 450.0 5.625% October 15, 2023 Capital lease obligations (3) 72.4 73.3 Various Other 32.3 35.8 Total debt 1,869.1 1,901.0 Less: deferred financing costs (12.4 ) (12.9 ) Total debt, net 1,856.7 1,888.1 Less: current portion (66.9 ) (70.3 ) Total long-term debt, net $ 1,789.8 $ 1,817.8 (1) Interest at LIBOR plus applicable margin of 1.75% as of March 31, 2017. (2) Interest at LIBOR plus applicable margin of 1.50% as of December 31, 2016. (3) Capital lease obligations are a non-cash financing activity. |
Fair Value of Financial Instruments | The fair values of these material financial instruments are as follows: Fair Value (in millions) March 31, 2017 December 31, 2016 2023 Senior Notes $ 454.2 $ 468.5 2026 Senior Notes 591.9 606.8 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Changes in accumulated other comprehensive loss | AOCL consisted of the following: Three Months Ended March 31, (in millions) 2017 2016 Foreign Currency Translation Balance at beginning of period $ (119.9 ) $ (115.4 ) Other comprehensive income: Foreign currency translation adjustments (1) 8.8 19.1 Balance at end of period $ (111.1 ) $ (96.3 ) Pensions Balance at beginning of period $ (2.2 ) $ (1.4 ) Other comprehensive income (loss): Net change from period revaluations, net of tax — — Balance at end of period $ (2.2 ) $ (1.4 ) Foreign Exchange Forward Contracts Balance at beginning of period $ 0.6 $ 6.6 Other comprehensive loss: Net change from period revaluations (0.3 ) (5.0 ) Tax benefit (2) 0.1 1.3 Total other comprehensive loss before reclassifications, net of tax $ (0.2 ) $ (3.7 ) Net amount reclassified to earnings (3) (0.4 ) (1.6 ) Tax benefit (2) 0.1 0.4 Total amount reclassified from AOCL, net of tax $ (0.3 ) $ (1.2 ) Total other comprehensive loss (0.5 ) (4.9 ) Balance at end of period $ 0.1 $ 1.7 (1) In 2017 and 2016, 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 on the accompanying Condensed Consolidated Statements of Income. (3) This amount was included in cost of sales on the accompanying Condensed Consolidated Statements of Income. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | A summary of the Company’s stock-based compensation expense is presented in the following table. Three Months Ended (in millions) 2017 2016 PRSU (benefit) expense $ (9.3 ) $ 2.5 Option expense 2.0 1.7 RSU/DSU expense 3.9 1.9 Total stock-based compensation expense $ (3.4 ) $ 6.1 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
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. Three Months Ended March 31, (in millions, except per common share amounts) 2017 2016 Numerator: Net income attributable to Tempur Sealy International, Inc. $ 33.9 $ 39.6 Denominator: Denominator for basic earnings per common share-weighted average shares 53.9 62.0 Effect of dilutive securities: Employee stock-based compensation 0.7 0.6 Denominator for diluted earnings per common share-adjusted weighted average shares 54.6 62.6 Basic earnings per common share $ 0.63 $ 0.64 Diluted earnings per common share $ 0.62 $ 0.63 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Total assets and long-lived assets by segment | The following table summarizes total assets by segment: March 31, December 31, (in millions) 2017 2016 North America $ 2,614.4 $ 2,581.4 International 590.0 572.6 Corporate 664.3 658.7 Inter-segment eliminations (1,188.4 ) (1,110.1 ) Total assets $ 2,680.3 $ 2,702.6 The following table summarizes property, plant and equipment, net by segment: March 31, December 31, (in millions) 2017 2016 North America $ 296.8 $ 297.4 International 54.4 54.9 Corporate 68.9 69.9 Total property, plant and equipment, net $ 420.1 $ 422.2 |
Segment financial information | The following table summarizes segment information for the three months ended March 31, 2017 : (in millions) North America International Corporate Eliminations Consolidated Net sales $ 582.3 $ 139.8 $ — $ — $ 722.1 Inter-segment sales $ 0.9 $ 0.1 $ — $ (1.0 ) $ — Inter-segment royalty expense (income) 1.7 (1.7 ) — — — Gross profit 214.5 72.1 — — 286.6 Operating income (loss) 51.4 25.9 (17.8 ) — 59.5 Income (loss) before income taxes 59.4 23.7 (36.5 ) — 46.6 Depreciation and amortization (1) $ 12.3 $ 3.7 $ 0.2 $ — $ 16.2 Capital expenditures 8.6 1.5 2.8 — 12.9 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the three months ended March 31, 2016 : (in millions) North America International Corporate Eliminations Consolidated Net sales $ 580.0 $ 141.0 $ — $ — $ 721.0 Inter-segment sales $ 1.2 $ 0.1 $ — $ (1.3 ) $ — Inter-segment royalty expense (income) 1.7 (1.7 ) — — — Gross profit 214.5 76.5 — — 291.0 Operating income (loss) 77.3 27.3 (27.9 ) — 76.7 Income (loss) before income taxes 77.0 24.4 (45.1 ) — 56.3 Depreciation and amortization (1) $ 10.4 $ 3.8 $ 9.5 $ — $ 23.7 Capital expenditures 5.6 2.3 4.7 — 12.6 (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: March 31, December 31, (in millions) 2017 2016 United States $ 358.9 $ 360.7 Canada 6.8 6.6 Other International 54.4 54.9 Total property, plant and equipment, net $ 420.1 $ 422.2 Total International $ 61.2 $ 61.5 |
Net sales by geographic region | The following table summarizes net sales by geographic region: Three Months Ended March 31, (in millions) 2017 2016 United States $ 533.5 $ 537.1 Canada 48.8 42.9 Other International 139.8 141.0 Total net sales $ 722.1 $ 721.0 Total International $ 188.6 $ 183.9 |
Guarantor_Non-Guarantor Finan27
Guarantor/Non-Guarantor Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of supplemental condensed consolidated statements of income and comprehensive income | Supplemental Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 529.8 $ 212.7 $ (20.4 ) $ 722.1 Cost of sales — 330.3 125.6 (20.4 ) 435.5 Gross profit — 199.5 87.1 — 286.6 Selling and marketing expenses 1.4 104.9 47.4 — 153.7 General, administrative and other expenses 4.0 44.3 18.2 — 66.5 Customer termination charges, net (8.4 ) 21.8 1.0 — 14.4 Equity income in earnings of unconsolidated affiliates — — (2.7 ) — (2.7 ) Royalty income, net of royalty expense — (4.8 ) — — (4.8 ) Operating income 3.0 33.3 23.2 — 59.5 Other expense, net: Third party interest expense, net 14.9 6.5 0.7 — 22.1 Intercompany interest (income) expense, net (1.2 ) (0.3 ) 1.5 — — Interest expense, net 13.7 6.2 2.2 — 22.1 Other (income) expense, net — (9.3 ) 0.1 — (9.2 ) Total other expense (income), net 13.7 (3.1 ) 2.3 — 12.9 Income from equity investees 40.6 15.6 — (56.2 ) — Income before income taxes 29.9 52.0 20.9 (56.2 ) 46.6 Income tax benefit (provision) 2.1 (11.4 ) (5.3 ) — (14.6 ) Net income before non-controlling interests 32.0 40.6 15.6 (56.2 ) 32.0 Less: Net loss attributable to non-controlling interests (1.9 ) — (1.9 ) 1.9 (1.9 ) Net income attributable to Tempur Sealy International, Inc. $ 33.9 $ 40.6 $ 17.5 $ (58.1 ) $ 33.9 Comprehensive income attributable to Tempur Sealy International, Inc. $ 42.2 $ 36.1 $ 30.4 $ (66.5 ) $ 42.2 Supplemental Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended March 31, 2016 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 550.7 $ 184.1 $ (13.8 ) $ 721.0 Cost of sales — 348.4 95.4 (13.8 ) 430.0 Gross profit — 202.3 88.7 — 291.0 Selling and marketing expenses 1.8 102.1 46.2 — 150.1 General, administrative and other expenses 4.8 50.9 16.0 — 71.7 Equity income in earnings of unconsolidated affiliates — — (2.8 ) — (2.8 ) Royalty income, net of royalty expense — (4.7 ) — — (4.7 ) Operating (loss) income (6.6 ) 54.0 29.3 — 76.7 Other expense, net: Third party interest expense, net 20.0 0.8 0.6 — 21.4 Intercompany interest (income) expense, net (1.1 ) — 1.1 — — Interest expense, net 18.9 0.8 1.7 — 21.4 Other (income) expense, net — (1.7 ) 0.7 — (1.0 ) Total other expense (income), net 18.9 (0.9 ) 2.4 — 20.4 Income from equity investees 56.5 22.0 — (78.5 ) — Income before income taxes 31.0 76.9 26.9 (78.5 ) 56.3 Income tax benefit (provision) 8.0 (20.4 ) (4.9 ) — (17.3 ) Net income before non-controlling interests 39.0 56.5 22.0 (78.5 ) 39.0 Less: Net loss attributable to non-controlling interests (0.6 ) (0.6 ) — 0.6 (0.6 ) Net income attributable to Tempur Sealy International, Inc. $ 39.6 $ 57.1 $ 22.0 $ (79.1 ) $ 39.6 Comprehensive income attributable to Tempur Sealy International, Inc. $ 53.8 $ 57.3 $ 45.2 $ (102.5 ) $ 53.8 |
Schedule of supplemental condensed consolidated balance sheets | Supplemental Condensed Consolidated Balance Sheets March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ — $ 5.6 $ 36.9 $ — $ 42.5 Accounts receivable, net — 193.4 150.7 — 344.1 Inventories, net — 107.6 84.6 — 192.2 Income taxes receivable 241.9 — — (241.9 ) — Prepaid expenses and other current assets 0.7 43.0 18.3 — 62.0 Total Current Assets 242.6 349.6 290.5 (241.9 ) 640.8 Property, plant and equipment, net — 345.0 75.1 — 420.1 Goodwill — 500.2 224.0 — 724.2 Other intangible assets, net — 586.7 88.7 — 675.4 Deferred income taxes 14.9 — 24.0 (14.9 ) 24.0 Other non-current assets — 45.4 150.4 — 195.8 Net investment in subsidiaries 2,310.3 — — (2,310.3 ) — Due from affiliates 129.3 2,071.4 11.8 (2,212.5 ) — Total Assets $ 2,697.1 $ 3,898.3 $ 864.5 $ (4,779.6 ) $ 2,680.3 LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY Current Liabilities: Accounts payable $ — $ 163.8 $ 64.9 $ — $ 228.7 Accrued expenses and other current liabilities 21.4 152.5 65.7 — 239.6 Income taxes payable — 254.4 3.0 (241.9 ) 15.5 Current portion of long-term debt — 34.5 32.4 — 66.9 Total Current Liabilities 21.4 605.2 166.0 (241.9 ) 550.7 Long-term debt, net 1,040.7 748.1 1.0 — 1,789.8 Deferred income taxes — 164.4 20.7 (14.9 ) 170.2 Other non-current liabilities — 47.6 133.3 — 180.9 Due to affiliates 1,646.3 22.7 565.6 (2,234.6 ) — Total Liabilities 2,708.4 1,588.0 886.6 (2,491.4 ) 2,691.6 Redeemable non-controlling interest 6.5 — 6.5 (6.5 ) 6.5 Total Stockholders' (Deficit) Equity (17.8 ) 2,310.3 (28.6 ) (2,281.7 ) (17.8 ) Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ (Deficit) Equity $ 2,697.1 $ 3,898.3 $ 864.5 $ (4,779.6 ) $ 2,680.3 Supplemental Condensed 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, net — 117.1 79.7 — 196.8 Income taxes 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’ (DEFICIT) 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 (12.2 ) 2,207.4 70.1 (2,277.5 ) (12.2 ) Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ (Deficit) Equity $ 2,630.6 $ 3,802.6 $ 866.7 $ (4,597.3 ) $ 2,702.6 |
Schedule of supplemental condensed consolidated statements of cash flows | Supplemental Condensed Consolidated Statements of Cash Flows Three Months Ended March 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Eliminations Consolidated Net cash provided by operating activities $ 0.1 $ 55.1 $ 12.0 $ — $ 67.2 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment — (10.6 ) (2.3 ) — (12.9 ) Other — 0.8 0.1 — 0.9 Net cash used in investing activities — (9.8 ) (2.2 ) — (12.0 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 251.4 51.5 — 302.9 Repayments of borrowings under long-term debt obligations — (278.9 ) (52.9 ) — (331.8 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 43.6 (19.0 ) (24.6 ) — — Proceeds from exercise of stock options 0.1 — — — 0.1 Treasury stock repurchased (43.8 ) — — — (43.8 ) Other — (1.1 ) (2.3 ) — (3.4 ) Net cash used in financing activities (0.1 ) (47.6 ) (28.3 ) — (76.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (2.4 ) — (2.4 ) Decrease in cash and cash equivalents — (2.3 ) (20.9 ) — (23.2 ) CASH AND CASH EQUIVALENTS, beginning of period — 7.9 57.8 — 65.7 CASH AND CASH EQUIVALENTS, end of period $ — $ 5.6 $ 36.9 $ — $ 42.5 Supplemental Condensed Consolidated Statements of Cash Flows Three Months Ended March 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 $ (1.3 ) $ (37.4 ) $ 19.9 $ — $ (18.8 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment — (10.2 ) (2.4 ) — (12.6 ) Other — (0.2 ) — — (0.2 ) Net cash used in investing activities — (10.4 ) (2.4 ) — (12.8 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 96.3 5.2 — 101.5 Repayments of borrowings under long-term debt obligations — (76.5 ) (10.5 ) — (87.0 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 99.1 (86.9 ) (12.2 ) — — Proceeds from exercise of stock options 3.0 — — — 3.0 Excess tax benefit from stock-based compensation 1.2 — — — 1.2 Treasury stock repurchased (102.0 ) — — — (102.0 ) Other — (0.6 ) 1.0 — 0.4 Net cash provided by (used in) financing activities 1.3 (67.7 ) (16.5 ) — (82.9 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (2.3 ) — (2.3 ) Decrease in cash and cash equivalents — (115.5 ) (1.3 ) — (116.8 ) CASH AND CASH EQUIVALENTS, beginning of period — 119.7 34.2 — 153.9 CASH AND CASH EQUIVALENTS, end of period $ — $ 4.2 $ 32.9 $ — $ 37.1 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Basis of presentation and description of business (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)channel | Dec. 31, 2016USD ($) | |
Business Acquisition [Line Items] | ||
Number of products sales channels | channel | 2 | |
Ownership percentage | 50.00% | |
Net investment | $ | $ 17.3 | $ 15.5 |
Comfort Revolution | ||
Business Acquisition [Line Items] | ||
Equity method investment, ownership percentage | 45.00% |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Inventory, warranty and other (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Inventory [Abstract] | |||
Finished goods | $ 129.4 | $ 130.1 | |
Work-in-process | 11.5 | 10.7 | |
Raw materials and supplies | 51.3 | 56 | |
Total | 192.2 | 196.8 | |
Write-off of inventory | 5.4 | ||
Revenue Recognition [Abstract] | |||
Allowance for doubtful accounts included in accounts receivable, net | 21.3 | $ 22.1 | |
Accelerated amortization | 0.9 | $ 2 | |
Tax benefit recognized | 9.3 | ||
Payments received | 722.1 | $ 721 | |
Foreign Exchange Forward | |||
Revenue Recognition [Abstract] | |||
Notional amount | 12.8 | ||
Gain on derivative | $ 0.1 | ||
North America | Pillows | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 3 years | ||
Non-prorated | International | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 5 years | ||
Prorated | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 10 years | ||
Minimum | North America | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 10 years | ||
Minimum | International | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 5 years | ||
Minimum | Non-prorated | North America | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 10 years | ||
Maximum | North America | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 25 years | ||
Maximum | International | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 15 years | ||
Maximum | Non-prorated | North America | Mattresses | |||
Warranty Term [Abstract] | |||
Warranty term (in years) | 15 years | ||
Sales Returns | |||
Sales returns [Roll Forward] | |||
Beginning balance | $ 30.3 | ||
Amounts accrued | 34.3 | ||
Returns charged to accrual | (34.9) | ||
Ending balance | 29.7 | ||
Warranty Reserves | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | 29.9 | ||
Amounts accrued | 14.8 | ||
Warranties charged to accrual | (7.5) | ||
Ending balance | 37.2 | ||
Accounts Payable and Accrued Liabilities | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | 14.3 | ||
Ending balance | 16.3 | ||
Other Noncurrent Liabilities | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | 15.6 | ||
Ending balance | 20.9 | ||
Mattress Firm | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Ending balance | 6.1 | ||
Revenue Recognition [Abstract] | |||
Restructuring charges | 25.9 | ||
Tax benefit recognized | 9.3 | ||
Payments received | 9.3 | ||
Mattress Firm | Cost of Sales | |||
Inventory [Abstract] | |||
Write-off of inventory | 5.4 | ||
Revenue Recognition [Abstract] | |||
Restructuring charges | 11.5 | ||
Warranty costs | 6.1 | ||
Mattress Firm | Customer Termination Charges, Net | |||
Revenue Recognition [Abstract] | |||
Restructuring charges | 14.4 | ||
Write off of incentives and marketing assets, employee-related costs, and professional fees | 22.8 | ||
Accelerated amortization | $ 0.9 |
Recently Issued Accounting Pr30
Recently Issued Accounting Pronouncements 1 (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Income tax deficiency | $ 1 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 722.5 |
Foreign currency translation | 1.7 |
Ending balance | 724.2 |
North America | |
Goodwill [Roll Forward] | |
Beginning balance | 572 |
Foreign currency translation | 0.6 |
Ending balance | 572.6 |
International | |
Goodwill [Roll Forward] | |
Beginning balance | 150.5 |
Foreign currency translation | 1.1 |
Ending balance | $ 151.6 |
Debt (Details)
Debt (Details) - USD ($) | Apr. 12, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Other | $ 32,300,000 | $ 35,800,000 | |
Total debt | 1,869,100,000 | 1,901,000,000 | |
Less: deferred financing costs | (12,400,000) | (12,900,000) | |
Total debt, net | 1,856,700,000 | 1,888,100,000 | |
Less: current portion | (66,900,000) | (70,300,000) | |
Total long-term debt, net | 1,789,800,000 | 1,817,800,000 | |
2026 Senior Notes | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Senior notes | $ 600,000,000 | $ 600,000,000 | |
Stated percentage | 5.50% | 5.50% | |
2023 Senior Notes | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Senior notes | $ 450,000,000 | $ 450,000,000 | |
Stated percentage | 5.625% | 5.625% | |
Capital lease obligations | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Capital lease obligations | $ 72,400,000 | $ 73,300,000 | |
2016 Credit Agreement | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Line of credit | $ 136,900,000 | $ 156,900,000 | |
2016 Credit Agreement | London Interbank Offered Rate (LIBOR) | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Index rate or LIBOR plus (as a percent) | 1.75% | 1.50% | |
2016 Credit Agreement | Term A Facility | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Line of credit | $ 577,500,000 | $ 585,000,000 | |
2016 Credit Agreement | Term A Facility | London Interbank Offered Rate (LIBOR) | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Index rate or LIBOR plus (as a percent) | 1.75% | 1.50% | |
Line of Credit | 2016 Credit Agreement | |||
Line of Credit Facility [Abstract] | |||
Maximum percentage of domestic qualified cash allowed to be subtracted from consolidated funded debt | 100.00% | ||
Maximum percentage of foreign qualified cash allowed to be subtracted from consolidated funded debt | 60.00% | ||
Maximum amount of domestic and foreign qualified cash allowed to be subtracted from consolidated funded debt | $ 150,000,000 | ||
Domestic qualified cash | 11,500,000 | ||
Foreign qualified cash | 18,600,000 | ||
Fair Value, Inputs, Level 2 | 2026 Senior Notes | |||
Line of Credit Facility [Abstract] | |||
Notes, fair value | 591,900,000 | $ 606,800,000 | |
Fair Value, Inputs, Level 2 | 2023 Senior Notes | |||
Line of Credit Facility [Abstract] | |||
Notes, fair value | $ 454,200,000 | $ 468,500,000 | |
Subsequent Event | Revolving Credit Facility | |||
Line of Credit Facility [Abstract] | |||
Maximum borrowing capacity | $ 120,000,000 | ||
Subsequent Event | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Long-term Debt, by Current and Noncurrent [Abstract] | |||
Index rate or LIBOR plus (as a percent) | 0.80% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | |||
Mar. 31, 2017USD ($)vote$ / sharesshares | Mar. 31, 2016USD ($)shares | Feb. 08, 2017right$ / sharesshares | Feb. 01, 2017USD ($) | |
Capital stock [Abstract] | ||||
Common stock shares authorized (in shares) | shares | 300,000,000 | |||
Common stock par value (USD 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, number of votes granted per common share held | vote | 1 | |||
Number of rights authorized per share of outstanding common stock | right | 1 | |||
Percentage ownership of common stock outstanding required to exercise rights | 20.00% | |||
Other comprehensive income: | ||||
Foreign currency translation adjustments | $ 8,800,000 | $ 19,100,000 | ||
Total other comprehensive income, net of tax | 8,300,000 | 14,200,000 | ||
Income tax provision | 14,600,000 | 17,300,000 | ||
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (119,900,000) | (115,400,000) | ||
Other comprehensive income: | ||||
Foreign currency translation adjustments | 8,800,000 | 19,100,000 | ||
Balance at end of period | (111,100,000) | (96,300,000) | ||
Income tax provision | 0 | 0 | ||
Pensions | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (2,200,000) | (1,400,000) | ||
Other comprehensive income: | ||||
Net change from period revaluations | 0 | 0 | ||
Balance at end of period | (2,200,000) | (1,400,000) | ||
Foreign Exchange Forward Contracts | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 600,000 | 6,600,000 | ||
Other comprehensive income: | ||||
Net change from period revaluations | (300,000) | (5,000,000) | ||
Tax (expense) benefit | 100,000 | 1,300,000 | ||
Total other comprehensive income before reclassifications, net of tax | (200,000) | (3,700,000) | ||
Net amount reclassified to earnings | (400,000) | (1,600,000) | ||
Tax benefit | 100,000 | 400,000 | ||
Total amount reclassified from AOCL, net of tax | (300,000) | (1,200,000) | ||
Total other comprehensive income, net of tax | (500,000) | (4,900,000) | ||
Balance at end of period | 100,000 | 1,700,000 | ||
Performance-based Restricted Stock Units | ||||
Capital stock [Abstract] | ||||
Value of treasury stock acquired (in shares) | $ 3,700,000 | $ 2,000,000 | ||
Repurchase of shares upon vesting of PRSUs withheld to satisfy tax withholding obligations (in shares) | shares | 100,000 | 100,000 | ||
February 2016 Program | ||||
Capital stock [Abstract] | ||||
Maximum authorized amount under stock repurchase program | $ 200,000,000 | |||
Treasury stock acquired (in shares) | shares | 600,000 | |||
Value of treasury stock acquired (in shares) | $ 40,100,000 | |||
Remaining shares under share repurchase authorization (in shares) | shares | 226,900,000 | |||
Series A Preferred Stock | ||||
Capital stock [Abstract] | ||||
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 right (in dollars per share) | $ / shares | $ 90 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense (benefit) | $ (3.4) | $ 6.1 |
Tax benefit recognized | 9.3 | |
Accelerated amortization | 0.9 | 2 |
PRSU (benefit) expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense (benefit) | $ (9.3) | 2.5 |
PRSU (benefit) expense | Aspirational Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 1.2 | |
Minimum Adjusted EBITDA (more than) | $ 650 | |
Option expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense (benefit) | 2 | 1.7 |
RSU/DSU expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense (benefit) | $ 3.9 | $ 1.9 |
2018 if target is met | PRSU (benefit) expense | Aspirational Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target shares to vest | 33.33% | |
If 2017 target is met | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized stock-based compensation expense | $ 84.1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 30, 2017subsidiary | Mar. 24, 2017officer |
David Buehring Case | ||
Loss Contingencies [Line Items] | ||
Number of defendants | officer | 2 | |
Mattress Firm Case | ||
Loss Contingencies [Line Items] | ||
Number of defendants | subsidiary | 2 |
Income Taxes (Details)
Income Taxes (Details) DKK in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | |||||
Jul. 31, 2016DKK | Jul. 31, 2016USD ($) | Mar. 31, 2017DKK | Mar. 31, 2016 | Mar. 31, 2017USD ($) | Dec. 31, 2016DKK | Dec. 31, 2016USD ($) | |
Income Tax Examination [Line Items] | |||||||
Effective income tax provision (as a percent) | 31.30% | 30.70% | |||||
Statutory U.S. federal income tax (as a percent) | 35.00% | 35.00% | |||||
Deposit paid to SKAT | DKK 615.2 | $ 88.8 | |||||
Unrecognized tax benefits that would impact effective tax rate | $ 21.8 | $ 21.4 | |||||
Danish tax authority | |||||||
Income Tax Examination [Line Items] | |||||||
Royalty rate (as a percent) | 20.00% | ||||||
Cumulative total tax assessment | DKK 1,570.1 | 225.5 | DKK 1,547.3 | 219.3 | |||
Unrecognized tax benefits | 852 | 122.7 | 850 | 120.6 | |||
Deferred tax assets | 44.3 | 43.5 | |||||
Valuation allowance | 17.6 | 17.6 | |||||
VAT Taxes Withheld by Tax Authority | 276.3 | 39.9 | 258 | 36.6 | |||
VAT refund applied to income tax liability | DKK 224.6 | $ 32.4 | |||||
Tax Years 2001-2011 | Danish tax authority | |||||||
Income Tax Examination [Line Items] | |||||||
Unrecognized tax benefits | 835 | 120.5 | 835 | 118.5 | |||
Tax Years After 2011 | Danish tax authority | |||||||
Income Tax Examination [Line Items] | |||||||
Unrecognized tax benefits | DKK 17 | $ 2.5 | DKK 15 | $ 2.1 |
Major Customers (Details)
Major Customers (Details) - subsidiary | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Concentration Risk [Line Items] | |||
Number of subsidiaries in transition agreements | 2 | ||
Credit Concentration Risk | Sales Revenue, Goods, Net | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) (more than for 10.0%) | 13.10% | 20.80% |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income attributable to Tempur Sealy International, Inc. | $ 33.9 | $ 39.6 |
Denominator: | ||
Denominator for basic earnings per common share-weighted average shares (in shares) | 53.9 | 62 |
Effect of dilutive securities: | ||
Employee stock-based compensation (in shares) | 0.7 | 0.6 |
Denominator for diluted earnings per common share-adjusted weighted average shares | 54.6 | 62.6 |
Basic earnings per common share (in dollars per share) | $ 0.63 | $ 0.64 |
Diluted earnings per common share (in dollars per share) | $ 0.62 | $ 0.63 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 1.5 | 0.5 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of business segments | segment | 2 | ||
Segment information [Abstract] | |||
Total assets | $ 2,680.3 | $ 2,702.6 | |
Total property, plant and equipment, net | 420.1 | 422.2 | |
Net sales | 722.1 | $ 721 | |
Inter-segment sales | 0 | 0 | |
Inter-segment royalty expense (income) | 0 | 0 | |
Gross profit | 286.6 | 291 | |
Operating income (loss) | 59.5 | 76.7 | |
Income (loss) before income taxes | 46.6 | 56.3 | |
Depreciation and amortization (including stock-based compensation amortization) | 16.2 | 23.7 | |
Capital expenditures | 12.9 | 12.6 | |
United States | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 358.9 | 360.7 | |
Net sales | 533.5 | 537.1 | |
Canada | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 6.8 | 6.6 | |
Net sales | 48.8 | 42.9 | |
Other International | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 54.4 | 54.9 | |
Net sales | 139.8 | 141 | |
Total International | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 61.2 | 61.5 | |
Net sales | 188.6 | 183.9 | |
Operating Segments | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 420.1 | 422.2 | |
Operating Segments | North America | |||
Segment information [Abstract] | |||
Total assets | 2,614.4 | 2,581.4 | |
Total property, plant and equipment, net | 296.8 | 297.4 | |
Net sales | 582.3 | 580 | |
Inter-segment sales | 0.9 | 1.2 | |
Inter-segment royalty expense (income) | 1.7 | 1.7 | |
Gross profit | 214.5 | 214.5 | |
Operating income (loss) | 51.4 | 77.3 | |
Income (loss) before income taxes | 59.4 | 77 | |
Depreciation and amortization (including stock-based compensation amortization) | 12.3 | 10.4 | |
Capital expenditures | 8.6 | 5.6 | |
Operating Segments | International | |||
Segment information [Abstract] | |||
Total assets | 590 | 572.6 | |
Total property, plant and equipment, net | 54.4 | 54.9 | |
Net sales | 139.8 | 141 | |
Inter-segment sales | 0.1 | 0.1 | |
Inter-segment royalty expense (income) | (1.7) | (1.7) | |
Gross profit | 72.1 | 76.5 | |
Operating income (loss) | 25.9 | 27.3 | |
Income (loss) before income taxes | 23.7 | 24.4 | |
Depreciation and amortization (including stock-based compensation amortization) | 3.7 | 3.8 | |
Capital expenditures | 1.5 | 2.3 | |
Corporate | |||
Segment information [Abstract] | |||
Total assets | 664.3 | 658.7 | |
Total property, plant and equipment, net | 68.9 | 69.9 | |
Net sales | 0 | 0 | |
Inter-segment sales | 0 | 0 | |
Inter-segment royalty expense (income) | 0 | 0 | |
Gross profit | 0 | 0 | |
Operating income (loss) | (17.8) | (27.9) | |
Income (loss) before income taxes | (36.5) | (45.1) | |
Depreciation and amortization (including stock-based compensation amortization) | 0.2 | 9.5 | |
Capital expenditures | 2.8 | 4.7 | |
Inter-segment eliminations | |||
Segment information [Abstract] | |||
Total assets | (1,188.4) | $ (1,110.1) | |
Net sales | 0 | 0 | |
Inter-segment sales | (1) | (1.3) | |
Inter-segment royalty expense (income) | 0 | 0 | |
Gross profit | 0 | 0 | |
Operating income (loss) | 0 | 0 | |
Income (loss) before income taxes | 0 | 0 | |
Depreciation and amortization (including stock-based compensation amortization) | 0 | 0 | |
Capital expenditures | $ 0 | $ 0 |
Guarantor_Non-Guarantor Finan40
Guarantor/Non-Guarantor Financial Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | $ 722,100,000 | $ 721,000,000 | ||
Cost of sales | 435,500,000 | 430,000,000 | ||
Gross profit | 286,600,000 | 291,000,000 | ||
Selling and marketing expenses | 153,700,000 | 150,100,000 | ||
General, administrative and other expenses | 66,500,000 | 71,700,000 | ||
Customer termination charges, net | 14,400,000 | 0 | ||
Equity income in earnings of unconsolidated affiliates | (2,700,000) | (2,800,000) | ||
Royalty income, net of royalty expense | (4,800,000) | (4,700,000) | ||
Operating income | 59,500,000 | 76,700,000 | ||
Other expense, net: | ||||
Interest expense, net | 22,100,000 | 21,400,000 | ||
Other (income) expense, net | (9,200,000) | (1,000,000) | ||
Total other expense, net | 12,900,000 | 20,400,000 | ||
Income before income taxes | 46,600,000 | 56,300,000 | ||
Income tax benefit (provision) | (14,600,000) | (17,300,000) | ||
Net income before non-controlling interests | 32,000,000 | 39,000,000 | ||
Less: Net income attributable to non-controlling interest | (1,900,000) | (600,000) | ||
Net income attributable to Tempur Sealy International, Inc. | 33,900,000 | 39,600,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 40,300,000 | 53,200,000 | ||
Current Assets: | ||||
Cash and cash equivalents | 65,700,000 | 153,900,000 | $ 42,500,000 | $ 65,700,000 |
Accounts receivable, net | 344,100,000 | 345,100,000 | ||
Inventories, net | 192,200,000 | 196,800,000 | ||
Total Current Assets | 640,800,000 | 671,500,000 | ||
Property, plant and equipment, net | 420,100,000 | 422,200,000 | ||
Goodwill | 724,200,000 | 722,500,000 | ||
Other intangible assets, net | 675,400,000 | 678,700,000 | ||
Deferred income taxes | 24,000,000 | 22,500,000 | ||
Other non-current assets | 195,800,000 | 185,200,000 | ||
Total Assets | 2,680,300,000 | 2,702,600,000 | ||
Current Liabilities: | ||||
Accounts payable | 228,700,000 | 219,300,000 | ||
Accrued expenses and other current liabilities | 239,600,000 | 250,100,000 | ||
Income taxes payable | 15,500,000 | 5,800,000 | ||
Current portion of long-term debt | 66,900,000 | 70,300,000 | ||
Total Current Liabilities | 550,700,000 | 545,500,000 | ||
Long-term debt, net | 1,789,800,000 | 1,817,800,000 | ||
Deferred income taxes | 170,200,000 | 174,600,000 | ||
Other non-current liabilities | 180,900,000 | 169,300,000 | ||
Total Liabilities | 2,691,600,000 | 2,707,200,000 | ||
Redeemable non-controlling interest | 6,500,000 | 7,600,000 | ||
Total Stockholders' Deficit | (17,800,000) | (12,200,000) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | $ 2,680,300,000 | 2,702,600,000 | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 67,200,000 | (18,800,000) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | (12,900,000) | (12,600,000) | ||
Other | 900,000 | (200,000) | ||
Net cash used in investing activities | (12,000,000) | (12,800,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 302,900,000 | 101,500,000 | ||
Repayments of borrowings under long-term debt obligations | (331,800,000) | (87,000,000) | ||
Proceeds from exercise of stock options | 100,000 | 3,000,000 | ||
Excess tax benefit from stock-based compensation | 0 | 1,200,000 | ||
Treasury stock repurchased | (43,800,000) | (102,000,000) | ||
Other | (3,400,000) | 400,000 | ||
Net cash used in financing activities | (76,000,000) | (82,900,000) | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2,400,000) | (2,300,000) | ||
Decrease in cash and cash equivalents | (23,200,000) | (116,800,000) | ||
CASH AND CASH EQUIVALENTS, beginning of period | 65,700,000 | 153,900,000 | ||
CASH AND CASH EQUIVALENTS, end of period | 42,500,000 | 37,100,000 | ||
Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Ownership percentage by parent (in hundredths) | 100.00% | |||
Consolidated | ||||
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | 722,100,000 | 721,000,000 | ||
Cost of sales | 435,500,000 | 430,000,000 | ||
Gross profit | 286,600,000 | 291,000,000 | ||
Selling and marketing expenses | 153,700,000 | 150,100,000 | ||
General, administrative and other expenses | 66,500,000 | 71,700,000 | ||
Customer termination charges, net | 14,400,000 | |||
Equity income in earnings of unconsolidated affiliates | (2,700,000) | (2,800,000) | ||
Royalty income, net of royalty expense | (4,800,000) | (4,700,000) | ||
Operating income | 59,500,000 | 76,700,000 | ||
Other expense, net: | ||||
Third party interest expense, net | 22,100,000 | 21,400,000 | ||
Intercompany interest (income) expense, net | 0 | 0 | ||
Interest expense, net | 22,100,000 | 21,400,000 | ||
Other (income) expense, net | (9,200,000) | (1,000,000) | ||
Total other expense, net | 12,900,000 | 20,400,000 | ||
Income from equity investees | 0 | 0 | ||
Income before income taxes | 46,600,000 | 56,300,000 | ||
Income tax benefit (provision) | (14,600,000) | (17,300,000) | ||
Net income before non-controlling interests | 32,000,000 | 39,000,000 | ||
Less: Net income attributable to non-controlling interest | (1,900,000) | (600,000) | ||
Net income attributable to Tempur Sealy International, Inc. | 33,900,000 | 39,600,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 42,200,000 | 53,800,000 | ||
Current Assets: | ||||
Cash and cash equivalents | 65,700,000 | 153,900,000 | $ 42,500,000 | 65,700,000 |
Accounts receivable, net | 344,100,000 | 345,100,000 | ||
Inventories, net | 192,200,000 | 196,800,000 | ||
Income taxes receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 62,000,000 | 63,900,000 | ||
Total Current Assets | 640,800,000 | 671,500,000 | ||
Property, plant and equipment, net | 420,100,000 | 422,200,000 | ||
Goodwill | 724,200,000 | 722,500,000 | ||
Other intangible assets, net | 675,400,000 | 678,700,000 | ||
Deferred income taxes | 24,000,000 | 22,500,000 | ||
Other non-current assets | 195,800,000 | 185,200,000 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Total Assets | 2,680,300,000 | 2,702,600,000 | ||
Current Liabilities: | ||||
Accounts payable | 228,700,000 | 219,300,000 | ||
Accrued expenses and other current liabilities | 239,600,000 | 250,100,000 | ||
Income taxes payable | 15,500,000 | 5,800,000 | ||
Current portion of long-term debt | 66,900,000 | 70,300,000 | ||
Total Current Liabilities | 550,700,000 | 545,500,000 | ||
Long-term debt, net | 1,789,800,000 | 1,817,800,000 | ||
Deferred income taxes | 170,200,000 | 174,600,000 | ||
Other non-current liabilities | 180,900,000 | 169,300,000 | ||
Due to affiliates | 0 | 0 | ||
Total Liabilities | 2,691,600,000 | 2,707,200,000 | ||
Redeemable non-controlling interest | 6,500,000 | 7,600,000 | ||
Total Stockholders' Deficit | (17,800,000) | (12,200,000) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | 2,680,300,000 | 2,702,600,000 | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 67,200,000 | (18,800,000) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | (12,900,000) | (12,600,000) | ||
Other | 900,000 | (200,000) | ||
Net cash used in investing activities | (12,000,000) | (12,800,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 302,900,000 | 101,500,000 | ||
Repayments of borrowings under long-term debt obligations | (331,800,000) | (87,000,000) | ||
Net activity in investment in and advances from (to) subsidiaries and affiliates | 0 | 0 | ||
Proceeds from exercise of stock options | 3,000,000 | |||
Excess tax benefit from stock-based compensation | 1,200,000 | |||
Proceeds from issuance of treasury shares | 100,000 | |||
Treasury stock repurchased | (43,800,000) | (102,000,000) | ||
Other | (3,400,000) | 400,000 | ||
Net cash used in financing activities | (76,000,000) | (82,900,000) | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2,400,000) | (2,300,000) | ||
Decrease in cash and cash equivalents | (23,200,000) | (116,800,000) | ||
CASH AND CASH EQUIVALENTS, beginning of period | 65,700,000 | 153,900,000 | ||
CASH AND CASH EQUIVALENTS, end of period | 42,500,000 | 37,100,000 | ||
2023 Senior Notes | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Senior notes | 450,000,000 | 450,000,000 | ||
2026 Senior Notes | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Senior notes | 600,000,000 | 600,000,000 | ||
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | 0 | 0 | ||
Cost of sales | 0 | 0 | ||
Gross profit | 0 | 0 | ||
Selling and marketing expenses | 1,400,000 | 1,800,000 | ||
General, administrative and other expenses | 4,000,000 | 4,800,000 | ||
Customer termination charges, net | (8,400,000) | |||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | ||
Royalty income, net of royalty expense | 0 | 0 | ||
Operating income | 3,000,000 | (6,600,000) | ||
Other expense, net: | ||||
Third party interest expense, net | 14,900,000 | 20,000,000 | ||
Intercompany interest (income) expense, net | (1,200,000) | (1,100,000) | ||
Interest expense, net | 13,700,000 | 18,900,000 | ||
Other (income) expense, net | 0 | 0 | ||
Total other expense, net | 13,700,000 | 18,900,000 | ||
Income from equity investees | 40,600,000 | 56,500,000 | ||
Income before income taxes | 29,900,000 | 31,000,000 | ||
Income tax benefit (provision) | 2,100,000 | 8,000,000 | ||
Net income before non-controlling interests | 32,000,000 | 39,000,000 | ||
Less: Net income attributable to non-controlling interest | (1,900,000) | (600,000) | ||
Net income attributable to Tempur Sealy International, Inc. | 33,900,000 | 39,600,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 42,200,000 | 53,800,000 | ||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Income taxes receivable | 241,900,000 | 234,200,000 | ||
Prepaid expenses and other current assets | 700,000 | 0 | ||
Total Current Assets | 242,600,000 | 234,200,000 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred income taxes | 14,900,000 | 20,600,000 | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | 2,310,300,000 | 2,207,400,000 | ||
Due from affiliates | 129,300,000 | 168,400,000 | ||
Total Assets | 2,697,100,000 | 2,630,600,000 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 100,000 | ||
Accrued expenses and other current liabilities | 21,400,000 | 6,800,000 | ||
Income taxes payable | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | 21,400,000 | 6,900,000 | ||
Long-term debt, net | 1,040,700,000 | 1,040,400,000 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | 1,646,300,000 | 1,587,900,000 | ||
Total Liabilities | 2,708,400,000 | 2,635,200,000 | ||
Redeemable non-controlling interest | 6,500,000 | 7,600,000 | ||
Total Stockholders' Deficit | (17,800,000) | (12,200,000) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | 2,697,100,000 | 2,630,600,000 | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 100,000 | (1,300,000) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | 0 | 0 | ||
Other | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 0 | 0 | ||
Repayments of borrowings under long-term debt obligations | 0 | 0 | ||
Net activity in investment in and advances from (to) subsidiaries and affiliates | 43,600,000 | 99,100,000 | ||
Proceeds from exercise of stock options | 3,000,000 | |||
Excess tax benefit from stock-based compensation | 1,200,000 | |||
Proceeds from issuance of treasury shares | 100,000 | |||
Treasury stock repurchased | (43,800,000) | (102,000,000) | ||
Other | 0 | 0 | ||
Net cash used in financing activities | (100,000) | 1,300,000 | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
Decrease in cash and cash equivalents | 0 | 0 | ||
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0 | ||
CASH AND CASH EQUIVALENTS, end of period | 0 | 0 | ||
Reportable Legal Entities | Combined Guarantor Subsidiaries | ||||
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | 529,800,000 | 550,700,000 | ||
Cost of sales | 330,300,000 | 348,400,000 | ||
Gross profit | 199,500,000 | 202,300,000 | ||
Selling and marketing expenses | 104,900,000 | 102,100,000 | ||
General, administrative and other expenses | 44,300,000 | 50,900,000 | ||
Customer termination charges, net | 21,800,000 | |||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | ||
Royalty income, net of royalty expense | (4,800,000) | (4,700,000) | ||
Operating income | 33,300,000 | 54,000,000 | ||
Other expense, net: | ||||
Third party interest expense, net | 6,500,000 | 800,000 | ||
Intercompany interest (income) expense, net | (300,000) | 0 | ||
Interest expense, net | 6,200,000 | 800,000 | ||
Other (income) expense, net | (9,300,000) | (1,700,000) | ||
Total other expense, net | (3,100,000) | (900,000) | ||
Income from equity investees | 15,600,000 | 22,000,000 | ||
Income before income taxes | 52,000,000 | 76,900,000 | ||
Income tax benefit (provision) | (11,400,000) | (20,400,000) | ||
Net income before non-controlling interests | 40,600,000 | 56,500,000 | ||
Less: Net income attributable to non-controlling interest | 0 | (600,000) | ||
Net income attributable to Tempur Sealy International, Inc. | 40,600,000 | 57,100,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 36,100,000 | 57,300,000 | ||
Current Assets: | ||||
Cash and cash equivalents | 7,900,000 | 119,700,000 | 5,600,000 | 7,900,000 |
Accounts receivable, net | 193,400,000 | 197,700,000 | ||
Inventories, net | 107,600,000 | 117,100,000 | ||
Income taxes receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 43,000,000 | 48,900,000 | ||
Total Current Assets | 349,600,000 | 371,600,000 | ||
Property, plant and equipment, net | 345,000,000 | 346,900,000 | ||
Goodwill | 500,200,000 | 500,200,000 | ||
Other intangible assets, net | 586,700,000 | 589,800,000 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current assets | 45,400,000 | 41,700,000 | ||
Net investment in subsidiaries | 0 | 77,700,000 | ||
Due from affiliates | 2,071,400,000 | 1,874,700,000 | ||
Total Assets | 3,898,300,000 | 3,802,600,000 | ||
Current Liabilities: | ||||
Accounts payable | 163,800,000 | 157,000,000 | ||
Accrued expenses and other current liabilities | 152,500,000 | 172,600,000 | ||
Income taxes payable | 254,400,000 | 235,900,000 | ||
Current portion of long-term debt | 34,500,000 | 34,400,000 | ||
Total Current Liabilities | 605,200,000 | 599,900,000 | ||
Long-term debt, net | 748,100,000 | 776,500,000 | ||
Deferred income taxes | 164,400,000 | 174,900,000 | ||
Other non-current liabilities | 47,600,000 | 43,300,000 | ||
Due to affiliates | 22,700,000 | 600,000 | ||
Total Liabilities | 1,588,000,000 | 1,595,200,000 | ||
Redeemable non-controlling interest | 0 | 0 | ||
Total Stockholders' Deficit | 2,310,300,000 | 2,207,400,000 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | 3,898,300,000 | 3,802,600,000 | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 55,100,000 | (37,400,000) | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | (10,600,000) | (10,200,000) | ||
Other | 800,000 | (200,000) | ||
Net cash used in investing activities | (9,800,000) | (10,400,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 251,400,000 | 96,300,000 | ||
Repayments of borrowings under long-term debt obligations | (278,900,000) | (76,500,000) | ||
Net activity in investment in and advances from (to) subsidiaries and affiliates | (19,000,000) | (86,900,000) | ||
Proceeds from exercise of stock options | 0 | |||
Excess tax benefit from stock-based compensation | 0 | |||
Proceeds from issuance of treasury shares | 0 | |||
Treasury stock repurchased | 0 | 0 | ||
Other | (1,100,000) | (600,000) | ||
Net cash used in financing activities | (47,600,000) | (67,700,000) | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
Decrease in cash and cash equivalents | (2,300,000) | (115,500,000) | ||
CASH AND CASH EQUIVALENTS, beginning of period | 7,900,000 | 119,700,000 | ||
CASH AND CASH EQUIVALENTS, end of period | 5,600,000 | 4,200,000 | ||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | ||||
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | 212,700,000 | 184,100,000 | ||
Cost of sales | 125,600,000 | 95,400,000 | ||
Gross profit | 87,100,000 | 88,700,000 | ||
Selling and marketing expenses | 47,400,000 | 46,200,000 | ||
General, administrative and other expenses | 18,200,000 | 16,000,000 | ||
Customer termination charges, net | 1,000,000 | |||
Equity income in earnings of unconsolidated affiliates | (2,700,000) | (2,800,000) | ||
Royalty income, net of royalty expense | 0 | 0 | ||
Operating income | 23,200,000 | 29,300,000 | ||
Other expense, net: | ||||
Third party interest expense, net | 700,000 | 600,000 | ||
Intercompany interest (income) expense, net | 1,500,000 | 1,100,000 | ||
Interest expense, net | 2,200,000 | 1,700,000 | ||
Other (income) expense, net | 100,000 | 700,000 | ||
Total other expense, net | 2,300,000 | 2,400,000 | ||
Income from equity investees | 0 | 0 | ||
Income before income taxes | 20,900,000 | 26,900,000 | ||
Income tax benefit (provision) | (5,300,000) | (4,900,000) | ||
Net income before non-controlling interests | 15,600,000 | 22,000,000 | ||
Less: Net income attributable to non-controlling interest | (1,900,000) | 0 | ||
Net income attributable to Tempur Sealy International, Inc. | 17,500,000 | 22,000,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 30,400,000 | 45,200,000 | ||
Current Assets: | ||||
Cash and cash equivalents | 57,800,000 | 34,200,000 | 36,900,000 | 57,800,000 |
Accounts receivable, net | 150,700,000 | 147,400,000 | ||
Inventories, net | 84,600,000 | 79,700,000 | ||
Income taxes receivable | 0 | 0 | ||
Prepaid expenses and other current assets | 18,300,000 | 15,000,000 | ||
Total Current Assets | 290,500,000 | 299,900,000 | ||
Property, plant and equipment, net | 75,100,000 | 75,300,000 | ||
Goodwill | 224,000,000 | 222,300,000 | ||
Other intangible assets, net | 88,700,000 | 88,900,000 | ||
Deferred income taxes | 24,000,000 | 22,500,000 | ||
Other non-current assets | 150,400,000 | 143,500,000 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 11,800,000 | 14,300,000 | ||
Total Assets | 864,500,000 | 866,700,000 | ||
Current Liabilities: | ||||
Accounts payable | 64,900,000 | 62,200,000 | ||
Accrued expenses and other current liabilities | 65,700,000 | 70,700,000 | ||
Income taxes payable | 3,000,000 | 4,100,000 | ||
Current portion of long-term debt | 32,400,000 | 35,900,000 | ||
Total Current Liabilities | 166,000,000 | 172,900,000 | ||
Long-term debt, net | 1,000,000 | 900,000 | ||
Deferred income taxes | 20,700,000 | 20,300,000 | ||
Other non-current liabilities | 133,300,000 | 126,000,000 | ||
Due to affiliates | 565,600,000 | 468,900,000 | ||
Total Liabilities | 886,600,000 | 789,000,000 | ||
Redeemable non-controlling interest | 6,500,000 | 7,600,000 | ||
Total Stockholders' Deficit | (28,600,000) | 70,100,000 | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | 864,500,000 | 866,700,000 | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 12,000,000 | 19,900,000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | (2,300,000) | (2,400,000) | ||
Other | 100,000 | 0 | ||
Net cash used in investing activities | (2,200,000) | (2,400,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 51,500,000 | 5,200,000 | ||
Repayments of borrowings under long-term debt obligations | (52,900,000) | (10,500,000) | ||
Net activity in investment in and advances from (to) subsidiaries and affiliates | (24,600,000) | (12,200,000) | ||
Proceeds from exercise of stock options | 0 | |||
Excess tax benefit from stock-based compensation | 0 | |||
Proceeds from issuance of treasury shares | 0 | |||
Treasury stock repurchased | 0 | 0 | ||
Other | (2,300,000) | 1,000,000 | ||
Net cash used in financing activities | (28,300,000) | (16,500,000) | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (2,400,000) | (2,300,000) | ||
Decrease in cash and cash equivalents | (20,900,000) | (1,300,000) | ||
CASH AND CASH EQUIVALENTS, beginning of period | 57,800,000 | 34,200,000 | ||
CASH AND CASH EQUIVALENTS, end of period | 36,900,000 | 32,900,000 | ||
Eliminations | ||||
Supplemental condensed consolidated statements of income and comprehensive income [Abstract] | ||||
Net sales | (20,400,000) | (13,800,000) | ||
Cost of sales | (20,400,000) | (13,800,000) | ||
Gross profit | 0 | 0 | ||
Selling and marketing expenses | 0 | 0 | ||
General, administrative and other expenses | 0 | 0 | ||
Customer termination charges, net | 0 | |||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | ||
Royalty income, net of royalty expense | 0 | 0 | ||
Operating income | 0 | 0 | ||
Other expense, net: | ||||
Third party interest expense, net | 0 | 0 | ||
Intercompany interest (income) expense, net | 0 | 0 | ||
Interest expense, net | 0 | 0 | ||
Other (income) expense, net | 0 | 0 | ||
Total other expense, net | 0 | 0 | ||
Income from equity investees | (56,200,000) | (78,500,000) | ||
Income before income taxes | (56,200,000) | (78,500,000) | ||
Income tax benefit (provision) | 0 | 0 | ||
Net income before non-controlling interests | (56,200,000) | (78,500,000) | ||
Less: Net income attributable to non-controlling interest | 1,900,000 | 600,000 | ||
Net income attributable to Tempur Sealy International, Inc. | (58,100,000) | (79,100,000) | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | (66,500,000) | (102,500,000) | ||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Income taxes receivable | (241,900,000) | (234,200,000) | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total Current Assets | (241,900,000) | (234,200,000) | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Deferred income taxes | (14,900,000) | (20,600,000) | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | (2,310,300,000) | (2,285,100,000) | ||
Due from affiliates | (2,212,500,000) | (2,057,400,000) | ||
Total Assets | (4,779,600,000) | (4,597,300,000) | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 0 | 0 | ||
Income taxes payable | (241,900,000) | (234,200,000) | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | (241,900,000) | (234,200,000) | ||
Long-term debt, net | 0 | 0 | ||
Deferred income taxes | (14,900,000) | (20,600,000) | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | (2,234,600,000) | (2,057,400,000) | ||
Total Liabilities | (2,491,400,000) | (2,312,200,000) | ||
Redeemable non-controlling interest | (6,500,000) | (7,600,000) | ||
Total Stockholders' Deficit | (2,281,700,000) | (2,277,500,000) | ||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Deficit | $ (4,779,600,000) | $ (4,597,300,000) | ||
Supplemental condensed consolidated statements of cash flows [Abstract] | ||||
Net cash provided by operating activities | 0 | 0 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of property, plant and equipment | 0 | 0 | ||
Other | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from borrowings under long-term debt obligations | 0 | 0 | ||
Repayments of borrowings under long-term debt obligations | 0 | 0 | ||
Net activity in investment in and advances from (to) subsidiaries and affiliates | 0 | 0 | ||
Proceeds from exercise of stock options | 0 | |||
Excess tax benefit from stock-based compensation | 0 | |||
Proceeds from issuance of treasury shares | 0 | |||
Treasury stock repurchased | 0 | 0 | ||
Other | 0 | 0 | ||
Net cash used in financing activities | 0 | 0 | ||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | ||
Decrease in cash and cash equivalents | 0 | 0 | ||
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0 | ||
CASH AND CASH EQUIVALENTS, end of period | $ 0 | $ 0 |