Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 17, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-31922 | ||
Entity Registrant Name | TEMPUR SEALY INTERNATIONAL, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 33-1022198 | ||
Entity Address, Address Line One | 1000 Tempur Way | ||
Entity Address, City or Town | Lexington | ||
Entity Address, State or Province | KY | ||
Entity Address, Postal Zip Code | 40511 | ||
City Area Code | 800 | ||
Local Phone Number | 878-8889 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | TPX | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,360,947,634 | ||
Entity Common Stock, Shares Outstanding | 53,863,131 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2020 Annual Meeting of Stockholders, which is to be filed subsequent to the date hereof, are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001206264 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net sales | $ 3,106 | $ 2,702.9 | $ 2,700.6 |
Cost of sales | 1,763.8 | 1,582.2 | 1,579.6 |
Gross profit | 1,342.2 | 1,120.7 | 1,121 |
Selling and marketing expenses | 666.3 | 587.8 | 586.1 |
General, administrative and other expenses | 315.3 | 273 | 261.4 |
Customer-related charges | 29.8 | 21.2 | 14.4 |
Equity income in earnings of unconsolidated affiliates | (15.9) | (17.6) | (15.6) |
Royalty income, net of royalty expense | 0 | 0 | (20.8) |
Operating (loss) income | 346.7 | 256.3 | 295.5 |
Other expense, net: | |||
Interest expense, net | 85.7 | 92.3 | 87.3 |
Other income, net | (4.5) | (1) | (7.2) |
Total other expense, net | 81.2 | 91.3 | 80.1 |
Income from continuing operations before income taxes | 265.5 | 165 | 215.4 |
Income tax provision | (74.7) | (49.6) | (43.8) |
Income from continuing operations | 190.8 | 115.4 | 171.6 |
Loss from discontinued operations, net of tax | (1.4) | (17.8) | (30.9) |
Net income before non-controlling interests | 189.4 | 97.6 | 140.7 |
Less: Net loss attributable to non-controlling interests | (0.1) | (2.9) | (10.7) |
Net income attributable to Tempur Sealy International, Inc. | $ 189.5 | $ 100.5 | $ 151.4 |
Basic | |||
Earnings per share for continuing operations, basic (in dollars per share) | $ 3.50 | $ 2.17 | $ 3.37 |
Loss per share for discontinued operations, basic (in dollars per share) | (0.02) | (0.32) | (0.57) |
Basic (in dollars per share) | 3.48 | 1.85 | 2.80 |
Diluted | |||
Earnings per share for continuing operations, diluted (in dollars per share) | 3.45 | 2.15 | 3.33 |
Loss per share for discontinued operations, diluted (in dollars per share) | (0.03) | (0.33) | (0.56) |
Diluted (in dollars per share) | $ 3.42 | $ 1.82 | $ 2.77 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 54.5 | 54.4 | 54 |
Diluted (in shares) | 55.4 | 55.1 | 54.7 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interests | $ 189.4 | $ 97.6 | $ 140.7 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 9.5 | (18.9) | 29.1 |
Net change in pension benefits, net of tax | (1.9) | (0.9) | (0.5) |
Unrealized loss on cash flow hedging derivatives, net of tax | 0 | 0 | (0.6) |
Total other comprehensive income | 7.6 | (19.8) | 28 |
Comprehensive income | 197 | 77.8 | 168.7 |
Less: Comprehensive loss attributable to non-controlling interests | (0.1) | (2.9) | (10.7) |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ 197.1 | $ 80.7 | $ 179.4 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 64.9 | $ 45.8 |
Accounts receivable, net | 372 | 321.5 |
Inventories | 260.5 | 222.3 |
Prepaid expenses and other current assets | 202.8 | 215.8 |
Total Current Assets | 900.2 | 805.4 |
Property, plant and equipment, net | 435.8 | 420.8 |
Goodwill | 732.3 | 723 |
Other intangible assets, net | 641.4 | 649.3 |
Operating lease right-of-use assets | 245.4 | 0 |
Deferred income taxes | 14.1 | 22.6 |
Other non-current assets | 92.6 | 94.3 |
Total Assets | 3,061.8 | 2,715.4 |
Current Liabilities: | ||
Accounts payable | 251.7 | 253 |
Accrued expenses and other current liabilities | 473.2 | 359.2 |
Income taxes payable | 11 | 9.7 |
Current portion of long-term debt | 37.4 | 47.1 |
Total Current Liabilities | 773.3 | 669 |
Long-term debt, net | 1,502.6 | 1,599.1 |
Long-term operating lease obligations | 205.4 | 0 |
Deferred income taxes | 102.1 | 117.5 |
Other non-current liabilities | 118 | 112.3 |
Total Liabilities | 2,701.4 | 2,497.9 |
Stockholders' Equity: | ||
Common stock, $0.01 par value, 300.0 million shares authorized; 99.2 million shares issued as of December 31, 2019 and 2018 | 1 | 1 |
Additional paid in capital | 575.7 | 532.1 |
Retained earnings | 1,703.3 | 1,513.8 |
Accumulated other comprehensive loss | (87.7) | (95.3) |
Treasury stock at cost; 45.4 million and 44.7 million shares as of December 31, 2019 and 2018, respectively | (1,832.8) | (1,737) |
Total stockholders' equity, net of non-controlling interest in subsidiaries | 359.5 | 214.6 |
Non-controlling interest in subsidiaries | 0.9 | 2.9 |
Total Stockholders' Equity | 360.4 | 217.5 |
Total Liabilities and Stockholders' Equity | $ 3,061.8 | $ 2,715.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity: | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 99,200,000 | 99,200,000 |
Treasury stock, shares (in shares) | 45,400,000 | 44,700,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interest in Subsidiaries |
Balance at beginning of period at Dec. 31, 2016 | $ 7.6 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income (loss) attributable to noncontrolling interests | (5.4) | ||||||
Balance at end of period at Dec. 31, 2017 | 2.2 | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | 99.2 | 44.8 | |||||
Balance at beginning of period at Dec. 31, 2016 | (41.9) | $ 1 | $ (1,700) | $ 492.8 | $ 1,264.8 | $ (103.5) | $ 3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 151.4 | 151.4 | |||||
Net loss attributable to non-controlling interests | (5.3) | (5.3) | |||||
Acquisition of non-controlling interest in subsidiary | (0.9) | (3.2) | 2.3 | ||||
Adjustment to pension liability, net of tax | (0.5) | (0.5) | |||||
Unrealized loss on cash flow hedging derivatives, net of tax | (0.6) | (0.6) | |||||
Foreign currency adjustments | 29.1 | 29.1 | |||||
Exercise of stock options (in shares) | (0.3) | ||||||
Exercise of stock options | 12.8 | $ 4.5 | 8.3 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | (0.2) | ||||||
Issuances of PRSUs, RSUs, and DSUs | $ 0 | $ 3.2 | (3.2) | ||||
Treasury stock repurchased (in shares) | 0.6 | 0.6 | |||||
Treasury stock repurchased | $ (40.1) | $ (40.1) | |||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 0.1 | ||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | (4.8) | $ (4.8) | |||||
Amortization of unearned stock-based compensation | 13.3 | 13.3 | |||||
Balance at end of period (in shares) at Dec. 31, 2017 | 99.2 | 45 | |||||
Balance at ending of period at Dec. 31, 2017 | 112.5 | $ 1 | $ (1,737.2) | 508 | 1,416.2 | (75.5) | 0 |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income (loss) attributable to noncontrolling interests | (2.7) | ||||||
Acquisition of non-controlling interest in subsidiary | 3.1 | 3.1 | |||||
Balance at end of period at Dec. 31, 2018 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 100.5 | 100.5 | |||||
Net loss attributable to non-controlling interests | (0.2) | (0.2) | |||||
Acquisition of non-controlling interest in subsidiary | (0.5) | (0.5) | |||||
Adjustment to pension liability, net of tax | (0.4) | (0.4) | |||||
Unrealized loss on cash flow hedging derivatives, net of tax | 0 | ||||||
Foreign currency adjustments | (18.9) | (18.9) | |||||
Exercise of stock options (in shares) | (0.2) | ||||||
Exercise of stock options | 4.6 | $ 2.1 | 2.5 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | (0.2) | ||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | $ 2.7 | (2.7) | ||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 0.1 | ||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | (4.6) | $ (4.6) | |||||
Amortization of unearned stock-based compensation | 24.8 | 24.8 | |||||
Acquisition of non-controlling interest | 0.5 | ||||||
Balance at end of period (in shares) at Dec. 31, 2018 | 99.2 | 44.7 | |||||
Balance at ending of period at Dec. 31, 2018 | 217.5 | $ 1 | $ (1,737) | 532.1 | 1,513.8 | (95.3) | 2.9 |
Balance at end of period at Dec. 31, 2019 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 189.5 | 189.5 | |||||
Net loss attributable to non-controlling interests | (0.1) | (0.1) | |||||
Acquisition of non-controlling interest in subsidiary | (1.9) | (1.9) | |||||
Adjustment to pension liability, net of tax | (1.9) | (1.9) | |||||
Unrealized loss on cash flow hedging derivatives, net of tax | 0 | ||||||
Foreign currency adjustments | 9.5 | 9.5 | |||||
Exercise of stock options (in shares) | (0.3) | ||||||
Exercise of stock options | 17.8 | $ 4.8 | 13 | ||||
Issuances of PRSUs, RSUs and DSUs (shares) | (0.3) | ||||||
Issuances of PRSUs, RSUs, and DSUs | $ 0 | $ 3.7 | (3.7) | ||||
Treasury stock repurchased (in shares) | 1.3 | 1.3 | |||||
Treasury stock repurchased | $ (102.3) | $ (102.3) | |||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 0.1 | ||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | (3.4) | $ (3.4) | |||||
Amortization of unearned stock-based compensation | 26.8 | 26.8 | |||||
Charitable stock donation | 8.9 | $ 1.4 | 7.5 | ||||
Charitable stock donation (in shares) | (0.1) | ||||||
Balance at end of period (in shares) at Dec. 31, 2019 | 99.2 | 45.4 | |||||
Balance at ending of period at Dec. 31, 2019 | $ 360.4 | $ 1 | $ (1,832.8) | $ 575.7 | $ 1,703.3 | $ (87.7) | $ 0.9 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Adjustment to pension liability, tax | $ (0.7) | $ (0.1) | $ (0.3) |
Derivative instruments accounted for as hedges, tax | $ (0.1) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Cash Flows [Abstract] | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations | $ 64.9 | $ 45.8 | $ 41.9 |
CASH FLOWS FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Net income before non-controlling interests | 189.4 | 97.6 | 140.7 |
Loss from discontinued operations, net of tax | 1.4 | 17.8 | 30.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 89.7 | 87.1 | 80.7 |
Amortization of stock-based compensation | 26.8 | 24.8 | 13.3 |
Amortization of deferred financing costs | 2.4 | 2.3 | 2.2 |
Bad debt expense | 29.3 | 31.3 | 9.8 |
Charitable stock donation | 8.9 | 0 | 0 |
Deferred income taxes | (7.1) | 6 | (61.1) |
Dividends received from unconsolidated affiliates | 13.4 | 14.8 | 11.3 |
Equity income in earnings of unconsolidated affiliates | (15.9) | (17.6) | (15.6) |
Loss on sale of assets | 1 | 3.3 | 2.2 |
Foreign currency adjustments and other | (5.2) | (2.1) | (2.9) |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | (76) | (46.3) | 21 |
Inventories | (28.2) | (44.6) | 16.3 |
Prepaid expenses and other assets | 11.3 | (14.4) | (15.2) |
Operating leases, net | 8.6 | 0 | 0 |
Accounts payable | (4.8) | 28.7 | 3.8 |
Accrued expenses and other liabilities | 67.3 | 43.2 | (4.9) |
Income taxes, net | 2.5 | (24.4) | 24 |
Net cash provided by operating activities from continuing operations | 314.8 | 207.5 | 256.5 |
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Purchases of property, plant and equipment | (88.2) | (73.6) | (66.6) |
Acquisitions, net of cash acquired | (17.1) | 0 | 0 |
Other | 15.1 | 2.4 | 0.9 |
Net cash used in investing activities from continuing operations | (90.2) | (71.2) | (65.7) |
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Proceeds from borrowings under long-term debt obligations | 1,242.8 | 1,094.9 | 1,332.9 |
Repayments of borrowings under long-term debt obligations | (1,347.1) | (1,195.8) | (1,471.5) |
Proceeds from exercise of stock options | 17.8 | 4.6 | 12.8 |
Treasury stock repurchased | (105.7) | (4.6) | (44.9) |
Payment of deferred financing costs | (3.2) | 0 | (0.5) |
Repayments of finance lease obligations and other | (7.8) | (6.1) | (4) |
Net cash used in financing activities from continuing operations | (203.2) | (107) | (175.2) |
Net cash provided by continuing operations | 21.4 | 29.3 | 15.6 |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | (2) | (24.4) | (33.6) |
Investing cash flows | 0 | 2.1 | 3.6 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | (2) | (22.3) | (30) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.3) | (3.1) | (9.4) |
Increase (decrease) in cash and cash equivalents | 19.1 | 3.9 | (23.8) |
CASH AND CASH EQUIVALENTS, beginning of period | 45.8 | 41.1 | |
CASH AND CASH EQUIVALENTS, end of period | 64.9 | 45.8 | 41.1 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0 | 0 | 0.8 |
Cash paid during the period for: | |||
Interest | 89 | 91.8 | 86.6 |
Income taxes, net of refunds | $ 73.8 | $ 32.5 | $ 79.8 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Dec. 31, 2019 |
8.0% Sealy Notes | |
Stated percentage | 8.00% |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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. (b) Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International and its controlled subsidiaries. Intercompany balances and transactions have been eliminated. The Company's Consolidated Financial Statements include the results of Comfort Revolution, LLC ("Comfort Revolution"). Prior to July 11, 2018, Comfort Revolution constituted a variable interest entity for which the Company was 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. On July 11, 2018, the Company acquired the remaining 55% equity interest in Comfort Revolution, which did not result in a material impact to the Company's Consolidated Financial Statements. The Company has ownership interests in a group of Asia-Pacific joint ventures to develop markets for Sealy® branded products in those regions. The equity method of accounting is used for these joint ventures, over which the Company has significant influence but does not have effective control, and consolidation is not otherwise required. The Company’s equity in the net income and losses of these investments is reported in equity income in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Income. The Company’s Asia-Pacific joint ventures are more fully described in Note 7 , "Unconsolidated Affiliate Companies." (c) Use of Estimates. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. (d) Adoption of New Accounting Standards. Revenue Recognition. On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" using the modified retrospective method. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying the new revenue standard as a decrease to the opening balance of retained earnings. Topic 606 required additional qualitative and quantitative disclosures. Other presentation and disclosure changes include the classification of royalty income to net sales and changes in the balance sheet classification and measurement for accrued sales returns. For additional information, see Note 4 , " Revenue Recognition " of the Consolidated Financial Statements. Pensions. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost", which is accounting guidance that changed how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the 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 Consolidated Statements of Income as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost are presented separately outside of the operating income caption. The Company adopted ASU No. 2017-07 as of January 1, 2018 and applied the accounting guidance retrospectively. Adoption of this guidance resulted in a reclassification of pension and other postretirement plan non-service income and remeasurement adjustments, net, from within operating income to non-operating income. The adoption of this guidance was not material to the Consolidated Statement of Income for any periods presented. Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" , which allows entities to reclassify tax effects stranded in accumulated other comprehensive loss ("AOCL") as a result of the Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform Act") to retained earnings. The Company early adopted ASU No. 2018-02 on March 31, 2018. The impact of adoption was not material to the Company's Consolidated Financial Statements. Derivatives and Hedging. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which simplifies hedge accounting by better aligning a company's financial reporting for hedging relationships with its risk management activities. This guidance expands an entity’s ability to hedge non-financial and financial risk components and reduces complexity in fair value hedges of interest rate risk; eliminates the requirement to separately measure and report hedge ineffectiveness and present the entire change in the fair value of a hedging instrument in the same income statement line as the hedged item; eases certain documentation and assessment requirements; and modifies the accounting for components excluded from the assessment of hedge effectiveness. The Company early adopted this ASU in the third quarter of 2018. There were no adjustments to the Company's Consolidated Financial Statements as a result of the adoption. Leases. Effective January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases ("ASC 842"). ASC 842 consists of a comprehensive lease accounting standard requiring most leases to be recognized on the Consolidated Balance Sheet and significant new disclosures. The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed it to carry forward the historical lease classification. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded within the Consolidated Balance Sheet and are expensed on a straight-line basis over the lease term within the Consolidated Statement of Income. The lease term is determined by assuming the exercise of renewal options that are reasonably certain. As most leases do not provide an implicit interest rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. The adoption of ASC 842 resulted in the recognition of right-of-use assets, net of prepaid lease payments and lease incentives, of $197.2 million and operating lease liabilities of $203.3 million as of January 1, 2019. Results for reporting periods beginning prior to January 1, 2019 continue to be reported in accordance with our historical accounting treatment. The adoption of ASC 842 did not have a material impact on the Company's results of operations, cash flows or debt covenants. For additional information, see Note 9 , " Leases " of the Consolidated Financial Statements. (e) Foreign Currency. Assets and liabilities of non-U.S. subsidiaries, whose functional currency is the local currency, are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the financial statements of foreign subsidiaries are included in accumulated other comprehensive loss (“AOCL”), a component of stockholders’ equity, and included in net earnings only upon sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and on the settlement date. These amounts are not considered material to the Consolidated Financial Statements. (f) Derivative Financial Instruments. Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the Consolidated Balance Sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows or a hedge of a net investment in a foreign operation. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of AOCL and subsequently recognized in the Consolidated Statements of Comprehensive Income when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge is recognized in income immediately. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of AOCL in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. 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. 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 forward exchange contract assets and liabilities as of December 31, 2019 and 2018 were not material in any period presented. (g) Cash and Cash Equivalents. Cash and cash equivalents consist of all highly liquid investments with initial maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of those instruments. (h) Inventories. Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method and consist of the following: December 31, (in millions) 2019 2018 Finished goods $ 157.4 $ 148.9 Work-in-process 10.8 11.8 Raw materials and supplies 92.3 61.6 $ 260.5 $ 222.3 (i) Property, Plant and Equipment. Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Estimated Useful Lives (in years) Buildings 25-30 Computer equipment and software 3-7 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 The Company records depreciation and amortization in cost of sales for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or seven years . Assets under finance leases are included within property, plant and equipment and represent non-cash investing activities. Property, plant and equipment, net consisted of the following: December 31, (in millions) 2019 2018 Machinery and equipment $ 350.7 $ 319.3 Land and buildings 317.8 328.5 Computer equipment and software 155.2 142.2 Furniture and fixtures 52.5 50.4 Construction in progress 65.0 52.4 Total property, plant, and equipment 941.2 892.8 Accumulated depreciation (505.4 ) (472.0 ) Total property, plant and equipment, net $ 435.8 $ 420.8 Depreciation expense, which includes depreciation expense for finance and capital lease assets, for the Company was $73.8 million , $71.8 million and $64.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. (j) Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value generally is determined from estimated discounted future net cash flows (for assets held for use) or net realizable value (for assets held for sale). The Company did not identify any impairments for the years ended December 31, 2019 , 2018 and 2017 . (k) Goodwill and Other Intangible Assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate impairment may have occurred. The Company performs an annual impairment test on goodwill and indefinite-lived intangible assets on October 1 of each year and whenever events or circumstances make it more likely than not that impairment may have occurred. In conducting the impairment test for the North America and International reporting units, the fair value of each of the Company's reporting units is compared to its respective carrying amount including goodwill. If the fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the fair value, further analysis is performed to assess impairment. The Company’s determination of fair value of the reporting units is based on a discounted cash flow approach, with an appropriate risk-adjusted discount rate, and a market approach. Any identified impairment would result in an adjustment to the Company’s results of operations. The Company also tests its indefinite-lived intangible assets, principally the Tempur and Sealy trade names. The Company tested both trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2019 , 2018 and 2017 , none of which resulted in the recognition of impairment charges. The most recent annual impairment tests performed as of October 1, 2019 , indicated that the fair values of each of the Company's reporting units and indefinite-lived intangible assets were substantially in excess of their carrying values. For further information on goodwill and other intangible assets, refer to Note 6 , “ Goodwill and Other Intangible Assets .” (l) Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. The Company considers the impact of recoverable salvage value on sales returns by segment in determining its estimate of future sales returns. Effective January 1, 2018 with the Company's adoption of Topic 606, the Company recognizes a return asset for the right to recover the goods returned by the customer. The right of return asset is recognized on a gross basis outside of the accrued sales returns and is not material to the Company's Consolidated Balance Sheets. The Company had the following activity for accrued sales returns from December 31, 2017 to December 31, 2019 : (in millions) Balance as of December 31, 2017 $ 30.0 Reclassification and remeasurement of sales return asset under Topic 606 1.7 Balance as of January 1, 2018 31.7 Amounts accrued 83.8 Returns charged to accrual (81.2 ) Balance as of December 31, 2018 34.3 Amounts accrued 112.4 Returns charged to accrual (107.4 ) Balance as of December 31, 2019 $ 39.3 As of December 31, 2019 and 2018 , $26.2 million and $22.0 million of accrued sales returns is included as a component of accrued expenses and other current liabilities and $13.1 million and $12.3 million of accrued sales returns is included in other non-current liabilities on the Company’s accompanying Consolidated Balance Sheets, respectively. (m) 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-Pedic 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-Pedic 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-Pedic pillows have a warranty term of 3 years, non-prorated. The Company had the following activity for its accrued warranty expense from December 31, 2017 to December 31, 2019 : (in millions) Balance as of December 31, 2017 $ 36.7 Remeasurement of obligations under Topic 606 2.8 Balance as of January 1, 2018 39.5 Amounts accrued 21.9 Warranties charged to accrual (25.0 ) Balance as of December 31, 2018 36.4 Amounts accrued 29.4 Warranties charged to accrual (24.2 ) Balance as of December 31, 2019 $ 41.6 As of December 31, 2019 and 2018 , $19.4 million and $14.9 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $22.2 million and $21.5 million of accrued warranty expense is included in other non-current liabilities on the Company’s accompanying Consolidated Balance Sheets, respectively. (n) Allowance for Doubtful Accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience and current economic conditions and also considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a customer receivable is reasonably assured. Account balances are charged off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts included in accounts receivable, net in the accompanying Consolidated Balance Sheets was $71.9 million and $47.6 million as of December 31, 2019 and 2018 , respectively. (o) Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carry forwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain foreign and domestic tax positions utilizing a proscribed recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. (p) Cost of Sales . Costs associated with net sales are recorded in cost of sales. Cost of sales includes the costs of receiving, producing, inspecting, warehousing, insuring, and shipping goods during the period, as well as depreciation and amortization of long-lived assets used in these processes. Cost of sales also includes shipping and handling costs associated with the delivery of goods to customers and costs associated with internal transfers between plant locations. Amounts included in cost of sales for shipping and handling were $192.5 million , $169.1 million and $155.9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Additionally, cost of sales for 2019 and 2018 include royalties that the Company pays to other entities for the use of their names on products produced by the Company. Prior to the adoption of Topic 606 as of January 1, 2018, royalty income, net of royalty expense was an operating expense line item presented separately on the Company's Consolidated Statements of Income. For additional information, please refer to Note 4 , “ Revenue Recognition .” Royalty expense is not material to the Company's Consolidated Statements of Income. (q) Cooperative Advertising, Rebate and Other Promotional Programs. The Company enters into programs with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these programs. The Company periodically assesses these liabilities based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer or whether the customer will meet the requirements to receive rebate funds. The Company generally negotiates these programs on a customer-by-customer basis. Some of these agreements extend over several years. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to the estimates are recorded and charged to earnings in the period in which they are identified. Rebates and cooperative advertising are classified as a reduction of revenue and presented within net sales in the accompanying Consolidated Statements of Income. Certain cooperative advertising expenses are reported as components of selling and marketing expenses in the accompanying Consolidated Statements of Income because the Company receives an identifiable benefit and the fair value of the advertising benefit can be reasonably estimated. (r) Advertising Costs. The Company expenses advertising costs as incurred except for production costs and advance payments, which are deferred and expensed when advertisements run for the first time. Direct response advance payments are deferred and amortized over the life of the program. Advertising costs are included in selling and marketing expenses in the accompanying Consolidated Statements of Income. Advertising costs charged to expense were $280.5 million , $259.3 million and $283.5 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. Advertising costs include expenditures for shared advertising costs that the Company reimburses to customers under its integrated and cooperative advertising programs. Cooperative advertising costs paid to customers are recorded as a component of selling and marketing expenses within the Consolidated Statements of Income to the extent the fair value of the distinct good or service can reasonably be estimated. The Company periodically assesses the liabilities recorded for cooperative advertising based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer. Advertising costs deferred and included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets were $3.6 million and $8.5 million as of December 31, 2019 and 2018 , respectively. (s) Research and Development Expenses. Research and development expenses for new products are expensed as they are incurred and are included in general, administrative and other expenses in the accompanying Consolidated Statements of Income. Research and development costs charged to expense were $23.0 million , $21.9 million and $21.7 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. (t) Stock-based Compensation. The Company accounts for stock-based payment transactions in which the Company receives employee services in exchange for equity instruments of the Company. Stock-based compensation cost for restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and deferred stock units (“DSUs”) is measured based on the closing fair market value of the Company’s common stock on the date of grant. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair value as calculated by the Black-Scholes option-pricing model. The Company recognizes stock-based compensation cost as expense for awards other than its PRSUs ratably on a straight-line basis over the requisite service period. The Company recognizes stock-based compensation cost associated with its PRSUs over the requisite service period if it is probable that the performance conditions will be satisfied. The Company recognizes forfeitures of awards as they occur. Further information regarding stock-based compensation can be found in Note 13 , “ Stock-based Compensation .” (u) Treasury Stock. Subject to Delaware law, and the limitations in the 2019 Credit Agreement (as defined in Note 8 , "Debt") and the Company's other debt agreements, the Board of Directors may authorize share repurchases of the Company’s common stock. Purchases made pursuant to these authorizations may be carried out through open market transactions, negotiated purchases or otherwise, at times and in such amounts as the Company deems appropriate. Shares repurchased under such authorizations are held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. On February 1, 2016, the Board of Directors authorized a share repurchase program pursuant to which the Company was permitted to repurchase shares of Tempur Sealy International's common stock. The Board of Directors authorized an increase in the amount of shares available for repurchase under this program in February 2020. Treasury stock is accounted for under the cost method and reported as a reduction of stockholders’ equity. The authority provided under the share repurchase program may be suspended, limited or terminated at any time without notice. Please refer to Note 11 , "Stockholders' Equity", for additional information. (v) Pension Obligations. The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at two of its active Sealy plants and ten previously-closed Sealy U.S. facilities. Sealy Canada, Ltd. (a 100.0% owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities. Both plans provide retirement and survivorship benefits based on the employees' credited years of service. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date. The benefit obligation is the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which requires entities to estimate expected lifetime credit losses on financial assets and provide expanded disclosures. The ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations The Company sold its operations in the Latin American region in 2018. The operating results from these divested businesses and subsequent adjustments related to ongoing assessments and activities of certain retained liabilities and tax items are reflected within discontinued operations for all periods presented. Components of amounts reflected in the Consolidated Statements of Income related to discontinued operations are presented in the following table for the years ended December 31. Twelve Months Ended December 31, 2019 2018 2017 Net sales $ — $ 31.1 $ 53.8 Cost of sales — 23.0 34.1 Gross profit — 8.1 19.7 Selling and marketing expenses 0.1 12.4 15.2 General, administrative and other expenses 2.6 6.8 11.6 Operating loss (2.7 ) (11.1 ) (7.1 ) Interest (income) expense, net and other (1.5 ) 7.7 19.9 Loss from discontinued operations before income taxes (1.2 ) (18.8 ) (27.0 ) Income tax provision (0.2 ) — (3.9 ) Loss generated from discontinued operations, net of tax (1.4 ) (18.8 ) (30.9 ) Gain on disposal of business — 1.0 — Loss from discontinued operations, net of tax $ (1.4 ) $ (17.8 ) $ (30.9 ) |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue The following table presents the Company's disaggregated revenue by channel, product and geographical region, including a reconciliation of disaggregated revenue by segment, for the years ended December 31. Twelve Months Ended December 31, 2019 Twelve Months Ended December 31, 2018 (in millions) North America International Consolidated North America International Consolidated Channel Wholesale $ 2,273.5 $ 443.6 $ 2,717.1 $ 1,989.1 $ 463.0 $ 2,452.1 Direct 259.8 129.1 388.9 147.1 103.7 250.8 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 North America International Consolidated North America International Consolidated Product Bedding $ 2,379.6 $ 455.7 $ 2,835.3 $ 2,002.1 $ 453.2 $ 2,455.3 Other 153.7 117.0 270.7 134.1 113.5 247.6 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 North America International Consolidated North America International Consolidated Geographical region United States $ 2,312.3 $ — $ 2,312.3 $ 1,928.9 $ — $ 1,928.9 Canada 221.0 — 221.0 207.3 — 207.3 International — 572.7 572.7 — 566.7 566.7 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 The North America and International segments sell product through two channels: Wholesale and Direct. The Wholesale channel includes all product sales to third party retailers, including third party distribution, hospitality and healthcare. The Direct channel includes product sales to company-owned stores, e-commerce and call centers. The North America and International segments classify products into two major categories: Bedding and Other. Bedding products include mattresses, foundations and adjustable foundations. Other products include pillows, mattress covers, sheets, cushions and various other comfort products. The Wholesale channel also includes income from royalties derived by licensing Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. The licenses include rights for the licensees to use trademarks as well as current proprietary or patented technology that the Company utilizes. The Company also provides its licensees with product specifications, research and development, statistical services and marketing programs. The Company recognizes royalty income based on the occurrence of sales of Sealy® and Stearns & Foster® branded products by various licensees. Royalty income was $22.6 million , $20.9 million and $20.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. For product sales in each of the Company's channels, the Company recognizes a sale when the obligations under the terms of the contract with the customer are satisfied, which is generally when control of the product has transferred to the customer. Transferring control of each product sold is considered a separate performance obligation. The Company transfers control and recognizes a sale when the customer receives the product. Each unit sold is considered an independent, unbundled performance obligation. The Company does not have any additional performance obligations other than product sales that are material in the context of the contract. The Company also offers assurance type warranties on certain of its products, which is not accounted for as separate performance obligations under the revenue model. The transaction price is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The amount of consideration the Company receives, and correspondingly, the revenue that is recognized, varies due to sales incentives and returns the Company offers to its Wholesale and Direct channel customers. Specifically, the Company extends volume discounts, as well as promotional allowances, floor sample discounts, commissions paid to retail associates and slotting fees to its Wholesale channel customers and reflects these amounts as a reduction of sales at the time revenue is recognized based on historical experience. The Company allows returns following a sale, depending on the channel and promotion. The Company reduces revenue and cost of sales for its estimate of the expected returns, which is primarily based on the level of historical sales returns. The Company does not offer extended payment terms beyond one year to customers. As such, the Company does not adjust its consideration for financing arrangements. In certain jurisdictions, the Company is subject to certain non-income taxes including, but not limited to, sales tax, value added tax, excise tax and other taxes. These taxes are excluded from the transaction price, and therefore, excluded from revenue. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by Topic 606. Accordingly, the Company reflects all amounts billed to customers for shipping and handling in revenue and the costs of fulfillment in cost of sales. Amounts included in net sales for shipping and handling were $19.3 million , $13.6 million and $11.3 million for the years ended December 31, 2019 , 2018 and 2017 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisition of Innovative Mattress Solutions, LLC ("iMS") On January 11, 2019, iMS filed for bankruptcy and the Company provided debtor-in-possession financing in connection with the iMS Chapter 11 proceedings. On April 1, 2019, the Company acquired substantially all of the net assets of iMS in a transaction valued at approximately $24 million , including assumed liabilities of approximately $11 million as of March 31, 2019 (referred to as the "Sleep Outfitters Acquisition"). The acquisition of this regional bedding retailer furthers the Company’s North American retail strategy, which is focused on meeting customer demand through geographic representation and sales expertise. The Company accounted for this transaction as a business combination. Total cash consideration was $13.2 million , less cash acquired of $5.1 million , resulting in a purchase price of $8.1 million . The final allocation of the purchase price is based on the fair values of the assets acquired and liabilities assumed as of April 1, 2019, which includes the following: (in millions) Working capital (accounts receivable and inventory, net of accounts payable and accrued liabilities) $ (1.4 ) Property and equipment 5.0 Goodwill 2.4 Other intangible assets 2.1 Operating lease right-of-use assets 28.5 Long-term operating lease liabilities (28.5 ) Net purchase price $ 8.1 Goodwill is calculated as the excess of the purchase price over the net assets acquired and primarily represents the growth opportunities and synergistic benefits to be realized from the acquisition. The goodwill is deductible for income tax purposes and will be included within the North American reporting unit for goodwill impairment assessments. As a result of the acquisition, the Company acquired trade names and customer database of $2.1 million . Acquisition of Sherwood Bedding On January 31, 2020, the Company acquired an 80% ownership interest in a newly formed limited liability company containing substantially all of the assets of the Sherwood Bedding business for a cash purchase price of approximately $40 million . The Company will account for this transaction as a business combination in 2020. The purchase price allocation will principally include working capital, property plant and equipment, and goodwill. Any excess of the purchase price over the fair value of the net assets acquired will be recorded as goodwill, which will be deductible for income tax purposes. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following summarizes the Company's goodwill by reportable segment: (in millions) North America International Consolidated Balance as of December 31, 2017 $ 576.6 $ 156.1 $ 732.7 Foreign currency translation adjustments and other (5.5 ) (4.2 ) (9.7 ) Balance as of December 31, 2018 $ 571.1 $ 151.9 $ 723.0 Goodwill resulting from acquisitions 2.4 5.4 7.8 Foreign currency translation adjustments and other 3.1 (1.6 ) 1.5 Balance as of December 31, 2019 $ 576.6 $ 155.7 $ 732.3 The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2019 December 31, 2018 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 559.5 $ — $ 559.5 $ 556.5 $ — $ 556.5 Amortized intangible assets: Contractual distributor relationships 15 85.5 38.7 46.8 84.7 32.7 52.0 Technology and other 4-10 91.1 68.7 22.4 90.2 61.1 29.1 Patents, other trademarks and other trade names 5-20 27.9 18.6 9.3 32.0 21.0 11.0 Customer databases, relationships and reacquired rights 2-5 30.9 27.5 3.4 21.3 20.6 0.7 Total $ 794.9 $ 153.5 $ 641.4 $ 784.7 $ 135.4 $ 649.3 Amortization expense relating to intangible assets for the Company was $15.9 million , $15.3 million and $16.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, and is recorded in general, administrative and other expenses in the Company's Consolidated Statements of Income. No impairments of goodwill or other intangible assets have adjusted the gross carrying amount of these assets in any period. Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31: (in millions) 2020 $ 17.1 2021 15.9 2022 15.1 2023 8.3 2024 6.4 Thereafter 19.1 Total $ 81.9 |
Unconsolidated Affiliate Compan
Unconsolidated Affiliate Companies | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Unconsolidated Affiliate Companies | Unconsolidated Affiliate Companies The Company has ownership interests in a group of Asia-Pacific joint ventures to develop markets for Sealy® branded products in those regions. The Company’s ownership interest in these joint ventures is 50.0% and is accounted for under the equity method. The Company’s investment of $22.5 million at December 31, 2019 and 2018 , is recorded in other non-current assets in the accompanying Consolidated Balance Sheets. The Company’s share of earnings for the years ended December 31, 2019 , 2018 and 2017 respectively, are recorded in equity income in earnings of unconsolidated affiliates in the accompanying Consolidated Statements of Income. The tables below present summarized financial information for joint ventures as of and for the years ended December 31: (in millions) 2019 2018 Current assets $ 81.0 $ 81.8 Non-current assets 15.3 18.6 Total liabilities 55.4 59.0 Equity 40.9 41.4 (in millions) 2019 2018 2017 Net sales $ 212.6 $ 220.5 $ 195.1 Gross profit 147.2 147.8 129.9 Income from operations 44.6 46.6 43.3 Net income 32.4 33.5 31.7 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt for the Company consists of the following: (in millions) December 31, 2019 December 31, 2018 Debt: Amount Rate Amount Rate Maturity Date 2019 Credit Agreement: Term A Facility $ 425.0 (1) $ — N/A October 16, 2024 Revolver — (1) — N/A October 16, 2024 2016 Credit Agreement: Term A Facility — N/A 525.0 (2) Revolver — N/A — (2) 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 Securitized debt — (3) 9.1 (3) April 6, 2021 Finance lease obligations (4) 64.1 66.7 Various Other 7.9 3.0 Various Total debt 1,547.0 1,653.8 Less: Deferred financing costs 7.0 7.6 Total debt, net 1,540.0 1,646.2 Less: Current portion 37.4 47.1 Total long-term debt, net $ 1,502.6 $ 1,599.1 (1) Interest at LIBOR plus applicable margin of 1.625% as of December 31, 2019. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2018. (3) Interest at one month LIBOR index plus 80 basis points. (4) Finance lease obligations are a non-cash financing activity. Refer to Note 9, "Leases." 2019 Credit Agreement On October 16, 2019, the Company entered into the 2019 Credit Agreement with a syndicate of banks. The 2019 Credit Agreement replaced the Company's 2016 Credit Agreement. The 2019 Credit Agreement provides for a $425.0 million revolving credit facility, a $425.0 million term loan facility, and an incremental facility in an aggregate amount of up to $550.0 million plus the amount of certain prepayments plus an additional unlimited amount subject to compliance with a maximum consolidated secured leverage ratio test. The 2019 Credit Agreement has a $60.0 million sub-facility for the issuance of letters of credit. Total availability under the revolving facility was $402.8 million , after giving effect to letters of credit outstanding of $22.2 million , as of December 31, 2019. Borrowings under the 2019 Credit Agreement will generally bear interest, at the election of Tempur Sealy International and the other subsidiary borrowers, at either (i) Base Rate plus the applicable margin or (ii) LIBOR plus the applicable margin. For the revolving credit facility and the term loan facility (a) the initial applicable margin for Base Rate advances was 0.625% per annum and the initial applicable margin for LIBOR advances was 1.625% per annum, and (b) following the delivery of financial statements for the fiscal quarter ending December 31, 2019 , such applicable margins will be determined by a pricing grid based on the consolidated total net leverage ratio of the Company. Obligations under the 2019 Credit Agreement are guaranteed by the Company’s existing and future direct and indirect wholly-owned domestic subsidiaries, subject to certain exceptions and are secured by a security interest in substantially all of Tempur Sealy International’s and the other subsidiary borrowers’ domestic assets and the domestic assets of each subsidiary guarantor, whether owned as of the closing or thereafter acquired, including a pledge of 100.0% of the equity interests of each subsidiary owned by the Company or a subsidiary guarantor that is a domestic entity (subject to certain limited exceptions) and 65.0% of the voting equity interests of any direct first tier foreign entity owned by the Company or a subsidiary guarantor. The 2019 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 indebtedness less netted cash (as defined below). Consolidated indebtedness includes debt recorded on the Consolidated Balance Sheets as of the reporting date, plus letters of credit outstanding in excess of $40.0 million and other short-term debt. The Company is allowed to subtract from consolidated indebtedness an amount equal to 100.0% of the domestic and foreign unrestricted cash ("netted cash"), the aggregate of which cannot exceed $200.0 million at the end of the reporting period. As of December 31, 2019 , netted cash was $63.4 million . As of December 31, 2019 , the Company's consolidated total net leverage ratio was 2.92 times , within the covenant in the Company's debt agreements which limits this ratio to 5.00 times. The 2019 Credit Agreement contains certain customary negative covenants, which include limitations on liens, investments, indebtedness, dispositions, mergers and acquisitions, the making of restricted payments, changes in the nature of business, changes in fiscal year, transactions with affiliates, use of proceeds, prepayments of certain indebtedness, entry into burdensome agreements and changes to governing documents. The 2019 Credit Agreement also contains certain customary affirmative covenants and events of default, including upon a change of control. The Company was in compliance with all applicable covenants in the 2019 Credit Agreement at December 31, 2019 . The Company is required to pay a commitment fee on the unused portion of the revolving credit facility, which initially will be 0.25% per annum and following the delivery of financial statements for the fiscal quarter ending December 31, 2019 , such fees as determined by a pricing grid based on the consolidated total net leverage ratio of the Company. This unused commitment fee is payable quarterly in arrears and on the date of termination or expiration of the commitments under the revolving credit facility. The Company and the other borrowers also pay customary letter of credit issuance and other fees under the 2019 Credit Agreement. The maturity date of the 2019 Credit Agreement is October 16, 2024 . Amounts under the revolving credit facility may be borrowed, repaid and re-borrowed from time to time until the maturity date. The term loan facility is subject to quarterly amortization as set forth in the 2019 Credit Agreement. In addition, the term loan facility is subject to mandatory prepayment in connection with certain debt issuances, asset sales and casualty events, subject to certain reinvestment rights. Voluntary prepayments and commitment reductions under the 2019 Credit Agreement are permitted at any time without payment of any prepayment premiums. 2016 Credit Agreement The Company used the proceeds from the 2019 Credit Agreement to refinance outstanding borrowings under the 2016 Credit Agreement and terminated the existing revolving credit commitments. The 2016 Credit Agreement initially provided for a $500.0 million revolving credit facility, a $500.0 million initial term loan facility and a $100.0 million delayed draw term loan facility. During the twelve months ended December 31, 2019 , the Company prepaid $75.0 million on the Term A facility under the 2016 Credit Agreement. Senior Notes 2026 Senior Notes On May 24, 2016, Tempur Sealy International issued $600.0 million aggregate principal amount of 5.500% 2026 Senior Notes in a private offering to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 2026 Senior Notes were issued pursuant to an indenture, dated as of May 24, 2016 (the "2026 Indenture"), among Tempur Sealy International, certain subsidiaries of Tempur Sealy International as guarantors (the "Combined Guarantor Subsidiaries"), and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2026 Senior Notes are general unsecured senior obligations of Tempur Sealy International and are guaranteed on a senior unsecured basis by the Combined Guarantor Subsidiaries. The 2026 Senior Notes mature on June 15, 2026, and interest is payable semi-annually in arrears on each June 15 and December 15, which began on December 15, 2016. The gross proceeds from the 2026 Senior Notes were used to refinance the $375.0 million aggregate principal amount of 2020 Senior Notes and to pay related fees and expenses, and the remaining funds were used for share repurchases and general corporate purposes. Tempur Sealy International has the option to redeem all or a portion of the 2026 Senior Notes at any time on or after June 15, 2021. The initial redemption price is 102.750% of the principal amount, plus accrued and unpaid interest, if any. The redemption price will decline each year after 2021 until it becomes 100.0% of the principal amount beginning on June 15, 2024. In addition, Tempur Sealy International has the option at any time prior to June 15, 2021 to redeem some or all of the 2026 Senior Notes at 100.0% of the original principal amount plus a “make-whole” premium and accrued and unpaid interest, if any. Tempur Sealy International had the option to redeem up to 35.0% of the 2026 Senior Notes prior to June 15, 2019, under certain circumstances with the net cash proceeds from certain equity offerings, at 105.500% of the principal amount plus accrued and unpaid interest, if any. Tempur Sealy International could have made such redemptions as described in the preceding sentence only if, after any such redemption, at least 65.0% of the original aggregate principal amount of the 2026 Senior Notes issued remains outstanding. The 2026 Indenture restricts the ability of Tempur Sealy International and the ability of certain of its subsidiaries to, among other things: (i) incur, directly or indirectly, debt; (ii) make, directly or indirectly, certain investments and restricted payments; (iii) incur or suffer to exist, directly or indirectly, liens on its properties or assets; (iv) sell or otherwise dispose of assets, directly or indirectly; (v) create or otherwise cause or suffer to exist any consensual restriction on the right of certain of the subsidiaries of Tempur Sealy International to pay dividends or make any other distributions on or in respect of their capital stock; (vi) enter into transactions with affiliates; (vii) engage in sale-leaseback transactions; (viii) purchase or redeem capital stock or subordinated indebtedness; (ix) issue or sell stock of restricted subsidiaries; and (x) effect a consolidation or merger. These covenants are subject to a number of exceptions and qualifications. In conjunction with the issuance and sale of the 2026 Senior Notes, Tempur Sealy International and the Combined Guarantor Subsidiaries agreed through a Registration Rights Agreement to exchange the 2026 Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act (the "Exchange Offer"). On October 18, 2016, Tempur Sealy International completed the Exchange Offer, with 100% of the outstanding notes tendered and received for new 2026 Senior Notes registered under the Securities Act. 2023 Senior Notes On September 24, 2015, Tempur Sealy International issued $450.0 million aggregate principal amount of 5.625% 2023 Senior Notes in a private offering to qualified institutional buyers pursuant to Rule 144A of the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 2023 Senior Notes were issued pursuant to an indenture, dated as of September 24, 2015 (the “2023 Indenture”), among Tempur Sealy International, the Combined Guarantor Subsidiaries (the Combined Guarantor Subsidiaries are the same under the 2026 Indenture, the 2023 Indenture and the 2020 Indenture), and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2023 Senior Notes are general unsecured senior obligations of Tempur Sealy International and are guaranteed on a senior unsecured basis by the Combined Guarantor Subsidiaries. The 2023 Senior Notes mature on October 15, 2023, and interest is payable semi-annually in arrears on each April 15 and October 15, which began on April 15, 2016. The gross proceeds from the 2023 Senior Notes were used to refinance a portion of the term loan debt under the 2012 Credit Agreement and to pay related fees and expenses. Since October 15, 2018, Tempur Sealy International has had the option to redeem all or a portion of the 2023 Senior Notes at any time. The initial redemption price is 104.219% of the principal amount, plus accrued and unpaid interest, if any. The redemption price will decline each year after 2018 until it becomes 100.0% of the principal amount beginning on October 15, 2021. The 2023 Indenture restricts the ability of Tempur Sealy International and the ability of certain of its subsidiaries to, among other things: (i) incur, directly or indirectly, debt; (ii) make, directly or indirectly, certain investments and restricted payments; (iii) incur or suffer to exist, directly or indirectly, liens on its properties or assets; (iv) sell or otherwise dispose of, directly or indirectly, assets; (v) create or otherwise cause or suffer to exist any consensual restriction on the right of certain of the subsidiaries of Tempur Sealy International to pay dividends or make any other distributions on or in respect of their capital stock; (vi) enter into transactions with affiliates; (vii) engage in sale-leaseback transactions; (viii) purchase or redeem capital stock or subordinated indebtedness; (ix) issue or sell stock of restricted subsidiaries; and (x) effect a consolidation or merger. These covenants are subject to a number of exceptions and qualifications. In conjunction with the issuance and sale of the 2023 Senior Notes, Tempur Sealy International and the Combined Guarantor Subsidiaries agreed through a Registration Rights Agreement to exchange the 2023 Senior Notes for a new issue of substantially identical senior notes registered under the Securities Act (the "2023 Exchange Offer"). On April 4, 2016, Tempur Sealy International completed the 2023 Exchange Offer, with 100% of the outstanding notes tendered and received for new 2023 Senior Notes registered under the Securities Act. Securitized Debt 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 (as amended the "Accounts Receivable Securitization"). In connection with this transaction, Tempur Sealy International 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 the seasonality of the Company's accounts receivable and is subject to an overall limit of $120.0 million . On April 5, 2019, the Company and its subsidiaries entered into a new amendment to the Accounts Receivables Securitization. The amendment, among other things, extended the maturity date of the Accounts Receivable Securitization to April 6, 2021. The obligations of the Company and its relevant subsidiaries under the Accounts Receivable Securitization are secured by the accounts receivable and certain related rights and the facility agreements contain customary events of default. The accounts receivable continue to be owned by the Company and its subsidiaries and continue to be reflected as assets on the Company’s Consolidated Balance Sheets and represent collateral up to the amount of the borrowings under this facility. Borrowings under this facility are classified as long-term debt within the Consolidated Balance Sheets. Fair Value 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 because of the short-term maturity of those instruments. Borrowings under the 2019 Credit Agreement and the securitized debt 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 observable 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) December 31, 2019 December 31, 2018 2023 Senior Notes $ 464.2 $ 435.6 2026 Senior Notes 634.9 549.3 Deferred Financing Costs The Company capitalizes costs associated with the issuance of debt and amortizes these costs as additional interest expense over the lives of the debt instruments using the effective interest method. These costs are recorded as deferred financing costs as a direct reduction from the carrying amount of the corresponding debt liability in the accompanying Consolidated Balance Sheets and the related amortization is included in interest expense, net in the accompanying Consolidated Statements of Income. Upon the prepayment of the related debt, the Company accelerates the recognition of an appropriate amount of the costs. Future Obligations As of December 31, 2019 , the scheduled maturities of long-term debt outstanding, excluding finance lease obligations, for each of the next five years and thereafter are as follows: (in millions) 2020 $ 29.2 2021 21.3 2022 21.3 2023 481.8 2024 329.3 Thereafter 600.0 Total $ 1,482.9 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating lease agreements. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to several years, with the longest renewal period extending through 2042. The exercise of lease renewal options are at the Company's sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Consolidated Balance Sheet as of December 31, 2019 : (in millions) December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 245.4 Finance lease assets Property, plant and equipment, net 54.4 Total leased assets $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 50.8 Finance lease obligations Current portion of long-term debt 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 205.4 Finance lease obligations Long-term debt, net 55.9 Total lease obligations $ 320.3 The following table summarizes the classification of lease expense in the Company's Consolidated Statement of Income for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Operating lease expense: Operating lease expense $ 63.8 Short-term lease expense 9.0 Variable lease expense 18.8 Finance lease expense: Amortization of right-of-use assets 8.5 Interest on lease obligations 4.7 Total lease expense $ 104.8 The following table sets forth the scheduled maturities of lease obligations as of December 31, 2019 : (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2020 $ 62.1 $ 12.3 $ 74.4 2021 54.5 12.0 66.5 2022 46.6 9.8 56.4 2023 36.2 7.8 44.0 2024 29.0 6.2 35.2 Thereafter 74.5 36.3 110.8 Total lease payments 302.9 84.4 387.3 Less: Interest (46.7 ) (20.3 ) (67.0 ) Present value of lease obligations $ 256.2 $ 64.1 $ 320.3 The following table provides lease term and discount rate information related to operating and finance leases as of December 31, 2019 : December 31, 2019 Weighted average remaining lease term (years): Operating leases 6.43 Finance leases 9.03 Weighted average discount rate: Operating leases 5.42 % Finance leases 6.27 % The following table provides supplemental information related to the Company's Consolidated Statement of Cash Flows for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases $ 62.7 Operating cash flows paid for finance leases $ 3.7 Financing cash flows paid for finance leases $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 4.1 |
Leases | Leases The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating lease agreements. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to several years, with the longest renewal period extending through 2042. The exercise of lease renewal options are at the Company's sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Consolidated Balance Sheet as of December 31, 2019 : (in millions) December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 245.4 Finance lease assets Property, plant and equipment, net 54.4 Total leased assets $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 50.8 Finance lease obligations Current portion of long-term debt 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 205.4 Finance lease obligations Long-term debt, net 55.9 Total lease obligations $ 320.3 The following table summarizes the classification of lease expense in the Company's Consolidated Statement of Income for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Operating lease expense: Operating lease expense $ 63.8 Short-term lease expense 9.0 Variable lease expense 18.8 Finance lease expense: Amortization of right-of-use assets 8.5 Interest on lease obligations 4.7 Total lease expense $ 104.8 The following table sets forth the scheduled maturities of lease obligations as of December 31, 2019 : (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2020 $ 62.1 $ 12.3 $ 74.4 2021 54.5 12.0 66.5 2022 46.6 9.8 56.4 2023 36.2 7.8 44.0 2024 29.0 6.2 35.2 Thereafter 74.5 36.3 110.8 Total lease payments 302.9 84.4 387.3 Less: Interest (46.7 ) (20.3 ) (67.0 ) Present value of lease obligations $ 256.2 $ 64.1 $ 320.3 The following table provides lease term and discount rate information related to operating and finance leases as of December 31, 2019 : December 31, 2019 Weighted average remaining lease term (years): Operating leases 6.43 Finance leases 9.03 Weighted average discount rate: Operating leases 5.42 % Finance leases 6.27 % The following table provides supplemental information related to the Company's Consolidated Statement of Cash Flows for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases $ 62.7 Operating cash flows paid for finance leases $ 3.7 Financing cash flows paid for finance leases $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 4.1 |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans 401(k) Plan The Company has a defined contribution plan ("the 401(k) Plan") whereby eligible employees may contribute up to 85.0% of their pay subject to certain limitations as defined by the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan upon hire and are eligible to receive matching contributions upon six months of continuous employment with the Company. The 401(k) Plan provides a 100.0% match of the first 3.0% and 50.0% of the next 2.0% of eligible employee contributions. The match for union employees is based on the applicable collective bargaining arrangement. All matching contributions vest immediately. The Company incurred $6.0 million , $5.8 million and $4.0 million of expenses associated with the 401(k) Plan for the years ended December 31, 2019 , 2018 and 2017 , respectively, which are included in the Consolidated Statements of Income. Defined Benefit Pension Plans The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at two of its active Sealy plants and ten previously closed Sealy U.S. facilities. Sealy Canada, Ltd. (a wholly-owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities (collectively, referred to as the "Plans"). The Plans provide retirement and survivorship benefits based on the employees’ credited years of service. The Company’s funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The Plans' assets consist of investments in various common/collective trusts with equity investment strategies diversified across multiple industry sectors and company market capitalization within specific geographical investment strategies, fixed income common/collective trusts, which invest primarily in investment-grade and high-yield corporate bonds and U.S. treasury securities, as well as money market mutual funds. The fixed income investments are diversified as to ratings, maturities, industries and other factors. The Plans' assets contain no significant concentrations of risk related to individual securities or industry sectors. The Plans have no direct investment in the Company's common stock. The long-term rate of return for the Plans is based on the weighted average of the Plans’ investment allocation and the historical returns for those asset categories. Because future compensation levels are not a factor in these Plans’ benefit formulas, the accumulated benefit obligation is equal to the projected benefit obligation as reported below. The discount rate is based on the returns on long-term bonds in the private sector and incorporates a long-term inflation rate. Summarized information for the Plans follows: Expenses and Status The Company recognizes the service cost component of net periodic pension cost within general, administrative and other expenses and all other components of net periodic pension cost are recognized within other income, net, in the accompanying Consolidated Statements of Income. Components of total net periodic pension cost for the years ended December 31 were as follows: (in millions) 2019 2018 2017 Service cost $ 0.9 $ 1.0 $ 0.9 Interest cost 1.2 1.1 1.2 Expected return on assets (1.3 ) (1.5 ) (1.5 ) Amortization of prior service cost 0.1 0.1 0.1 Amortization of net gain 0.1 — — Net periodic pension cost $ 1.0 $ 0.7 $ 0.7 The other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, for the years ended December 31 were: (in millions) 2019 2018 2017 Net loss $ 2.2 $ 0.6 $ 0.4 New prior service cost 0.6 0.1 0.5 Amortization of prior service cost (0.1 ) (0.1 ) (0.1 ) Amortization or settlement recognition of net loss (0.1 ) — — Total recognized in other comprehensive loss $ 2.6 $ 0.6 $ 0.8 The following assumptions, calculated on a weighted-average basis, were used to determine net periodic pension cost for the Company’s Plans for the years ended December 31: 2019 2018 2017 Discount rate (a) 4.10 % 3.58 % 4.07 % Expected long-term return on plan assets 6.16 % 6.25 % 6.64 % (a) The discount rates used in 2019 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.16% and 3.90% , respectively. The discount rates used in 2018 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 3.54% and 3.70% , respectively. The discount rates used in 2017 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.06% and 4.10% Obligations and Funded Status The measurement date for the Company's Plans is December 31. The funded status of the Plans as of December 31 was as follows: (in millions) 2019 2018 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 30.0 $ 32.1 Service cost 0.9 1.0 Interest cost 1.2 1.1 Plan amendments 0.5 0.1 Actuarial (gain) loss 5.5 (3.0 ) Benefits paid (1.3 ) (0.9 ) Expenses paid (0.1 ) (0.1 ) Foreign currency exchange rate changes 0.2 (0.3 ) Projected benefit obligation at end of year $ 36.9 $ 30.0 Change in Plan Assets: Fair value of plan assets at beginning of year $ 22.2 $ 25.3 Actual return on plan assets 4.6 (2.1 ) Employer contribution 1.4 0.3 Benefits paid (1.3 ) (0.9 ) Expenses paid (0.1 ) (0.1 ) Foreign currency exchange rate changes 0.2 (0.3 ) Fair value of plan assets at end of year $ 27.0 $ 22.2 Funded status $ (9.9 ) $ (7.8 ) The Company’s defined benefit pension plan for U.S. Sealy employees is underfunded. As of December 31, 2019 , the projected benefit obligation and fair value of plan assets were $32.6 million and $22.6 million , respectively. As of December 31, 2018 , the projected benefit obligation and fair value of plan assets were $26.5 million and $18.4 million , respectively. As of December 31, 2019 , the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $4.3 million and $4.4 million , respectively. As of December 31, 2018 , the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $3.5 million and $3.8 million , respectively. The accumulated benefit obligation for all pension plans was $36.9 million at December 31, 2019 and $30.0 million at December 31, 2018 . The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2019 2018 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 10.0 $ 8.1 Non-current benefit asset 0.1 0.3 The following assumption, calculated on a weighted-average basis, was used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: 2019 2018 Discount rate (a) 3.16 % 4.13 % (a) The discount rates used in 2019 to determine the benefit obligations for the U.S. retirement plan and Canadian retirement plan were 3.15% and 3.20% , respectively. The discount rates used in 2018 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 4.16% and 3.90% , respectively. No material amounts are expected to be reclassified from AOCL to be recognized as components of net income during 2020 . Plan Contributions and Expected Benefit Payments During 2020 , the Company expects to contribute $1.2 million to the Company's Plans from available cash and cash equivalents. The following table presents estimated future benefit payments: (in millions) Fiscal 2020 $ 1.1 Fiscal 2021 1.1 Fiscal 2022 1.2 Fiscal 2023 1.2 Fiscal 2024 1.3 Fiscal 2025 ‑ Fiscal 2028 8.0 Pension Plan Asset Information Investment Objective and Strategies The Company's investment objectives are to minimize the volatility of the value of the Company's pension assets relative to pension liabilities and to ensure assets are sufficient to pay plan benefits. Target and actual asset allocations are as follows: 2019 Target 2019 Common/collective trust consisting primarily of: Equity securities 60.0 % 55.7 % Debt securities 40.0 % 44.0 % Other — % 0.3 % Total plan assets 100.0 % 100.0 % Investment strategies and policies reflect a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to liabilities is addressed primarily through asset diversification. Assets are broadly diversified across many asset classes to achieve risk-adjusted returns that, in total, lower asset volatility relative to liabilities. The Company's policy to rebalance the Company's investment regularly ensures that actual allocations are in line with target allocations as appropriate. Strategies to address the goal of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes that provide return, diversification and liquidity. The plan investment fiduciaries are responsible for setting asset allocation targets, and monitoring asset allocation and investment performance. The Company’s pension investment manager has discretion to manage assets to ensure compliance with the asset allocations approved by the plan fiduciaries. Significant Concentrations of Risk Significant concentrations of risk in the Company's plan assets relate to equity, interest rate, and operating risk. In order to ensure assets are sufficient to pay benefits, a portion of plan assets is allocated to equity investments that are expected, over time, to earn higher returns with more volatility than fixed income investments which more closely match pension liabilities. Within the common/collective trusts, the plan assets contain no significant concentrations of risk related to individual securities or industry sectors. In order to minimize asset volatility relative to the liabilities, a portion of the plan assets are allocated to fixed income investments that are exposed to interest rate risk. Rate increases will generally result in a decline in fixed income assets while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Operating risks primarily include the risks of inadequate diversification and insufficient oversight. To mitigate this risk, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing oversight, plan and asset class investment guidelines, and periodic reviews against these guidelines to ensure adherence. Expected Long-Term Return on Plan Assets The expected long-term return assumption at December 31, 2019 was 6.50% for the defined benefit pension plan for U.S. Sealy employees and 5.00% for the defined benefit pension plan for Sealy Canada, Ltd. The expected long-term return assumption is based on historical and projected rates of return for current and planned asset classes in the plan’s investment portfolio. The assumption considers various sources, primarily inputs from advisors for long-term capital market returns, inflation, bond yields, and other variables, adjusted for specific aspects of the Company's investment strategy by plan. The investments in plan assets primarily consist of common collective trusts and money market funds. Investments in common collective trusts and money market funds are valued at the net asset value ("NAV") per share or unit multiplied by the number of shares or units held as of the measurement date. The determination of NAV for the common/collective trusts includes market pricing of the underlying assets as well as broker quotes and other valuation techniques that represent fair value as determined by the respective administrator of the common/collective trust. Management has determined that the NAV is an appropriate estimate of the fair value of the common collective trusts at December 31, 2019 and 2018 , based on the fact that the common/collective trusts are audited and accounted for at fair value by the administrators of the respective common/collective trusts. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair value. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the Consolidated Balance Sheet dates. The fair value of the Company’s plan assets, all valued at NAV, at December 31 by asset category was as follows: (in millions) 2019 2018 Asset Category Common/collective trust U.S. equity $ 5.5 $ 14.1 International equity 9.5 3.6 Total equity based funds 15.0 17.7 Common/collective trust - fixed income 11.9 4.4 Money market funds 0.1 0.1 Total $ 27.0 $ 22.2 Multi‑Employer Benefit Plans Approximately 25.0% of the Company’s domestic employees are represented by various labor unions with separate collective bargaining agreements. Hourly employees working at six of the Company’s domestic manufacturing facilities are covered by union sponsored retirement plans. Further, employees working at three of the Company’s domestic manufacturing facilities are covered by union sponsored health and welfare plans. These plans cover both active employees and retirees. Through the health and welfare plans, employees receive medical, dental, vision, prescription and disability coverage. The Company’s cost associated with these plans consists of periodic contributions to these plans based upon employee participation. The expense recognized by the Company for such contributions for the years ended December 31 was follows: (in millions) 2019 2018 2017 Multi‑employer retirement plan expense $ 4.3 $ 3.9 $ 4.3 Multi‑employer health and welfare plan expense 3.8 3.6 3.5 The risks of participating in multi‑employer pension plans are different from the risks of sponsoring single‑employer pension plans in the following respects: 1) contributions to the multi‑employer plan by one employer may be used to provide benefits to employees of other participating employers; 2) if a participating employer ceases its contributions to the plan, the unfunded obligations of the plan allocable to the withdrawing employer may be borne by the remaining participating employers; and 3) if the Company withdraws from the multi‑employer pension plans in which it participates, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan. The following table presents information regarding the multi‑employer pension plans that are significant to the Company for the years ended December 31, 2019 and 2018 , respectively: Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2019 FIP/RP Status (2) Contributions of the Company in 2019 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions (in millions) United Furniture Workers Pension Fund A (4) 13-5511877-001 2/28/19 Red Implemented $ 1.1 No 2020 2017, 2018, 2019 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/18 Red Implemented $ 1.0 Yes, 10.0% 2022 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/18 Red Implemented $ 0.8 Yes, 10.0% 2021 N/A Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2018 FIP/RP Status (2) Contributions of the Company in 2018 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions (in millions) United Furniture Workers Pension Fund A (4) 13-5511877-001 2/28/18 Red Implemented $ 0.7 No 2020 2016, 2017, 2018 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/17 Red Implemented $ 0.7 Yes, 10.0% 2019 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/17 Red Implemented $ 0.8 Yes, 10.0% 2021 N/A (1) The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage of less than 65.0% . A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80.0% , or projects a credit balance deficit within seven years . A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80.0% and does not have a projected credit balance deficit within seven years . The zone status is based on the plan’s year end rather than the Company’s. The zone status listed for each plan is based on information that the Company received from that plan and is certified by that plan’s actuary for the most recent year available. (2) Funding Improvement Plan or Rehabilitation Plan as defined in the Employee Retirement Income Security Act of 1974 has been implemented or is pending. (3) Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge. (4) The Company represented more than 5.0% of the total contributions for the most recent plan year available. For year ended December 31, 2017 , the Company contributed $1.1 million to the plan. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity (a) Common and Preferred Stock. Tempur Sealy International has 300.0 million authorized shares of common stock with $0.01 per share par value and 10.0 million authorized shares of preferred stock with $0.01 per share par value. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared from time to time by the Board of Directors out of funds legally available for that purpose. In the event of liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders, to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as determined by the Board of Directors, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights and preemptive rights. (b) Treasury Stock. As of December 31, 2019 , the Company had approximately $124.6 million remaining under an existing share repurchase program initially authorized by the Board of Directors in 2016. In February 2020, the Board of Directors authorized an increase, of over $190.0 million , to its existing share repurchase authorization of Tempur Sealy International's common stock to $300.0 million . For the year ended December 31, 2019 , the Company repurchased 1.3 million shares for approximately $102.3 million under the program. The Company did not repurchase any shares under the program during the year ended December 31, 2018 . For the year ended December 31, 2017 , the Company repurchased 0.6 million shares for approximately $40.1 million under the program. In addition, the Company acquired 0.1 million , 0.1 million , and 0.1 million shares upon the vesting of certain restricted stock units ("RSUs"), which were withheld to satisfy tax withholding obligations during the years ended December 31, 2019 , 2018 and 2017 , respectively. The shares withheld were valued at the closing price of the stock on the New York Stock Exchange on the vesting date or first business day prior to vesting, resulting in approximately $3.4 million , $4.6 million , and 4.8 million in treasury stock acquired during the years ended December 31, 2019 , 2018 and 2017 , respectively. (c) Charitable Stock Donation. In the fourth quarter of 2019, the Company recorded an $8.9 million charge, recorded in General, administrative and other expenses, related to the donation of 100,000 shares of its common stock at fair market value to certain public charities. (d) AOCL. AOCL consisted of the following: Year Ended December 31, (in millions) 2019 2018 2017 Foreign Currency Translation Balance at beginning of period $ (91.7 ) $ (72.8 ) $ (101.9 ) Other comprehensive loss: Foreign currency translation adjustments (1) 9.5 (18.9 ) 29.1 Balance at end of period $ (82.2 ) $ (91.7 ) $ (72.8 ) Pension Benefits Balance at beginning of period $ (3.6 ) $ (2.7 ) $ (2.2 ) Other comprehensive loss: Net change from period revaluation (2.6 ) (0.4 ) (0.8 ) Tax benefit (2) 0.7 0.1 0.3 Total other comprehensive loss before reclassifications, net of tax (1.9 ) (0.3 ) (0.5 ) Net amount reclassified to earnings — — — U.S tax reform - reclassification to retained earnings upon adoption of ASU No. 2018-02 — (0.5 ) — Tax expense (2) — (0.1 ) — Total amount reclassified from accumulated other comprehensive loss, net of tax — (0.6 ) — Total other comprehensive loss (1.9 ) (0.9 ) (0.5 ) Balance at end of period $ (5.5 ) $ (3.6 ) $ (2.7 ) Foreign Exchange Forward Contracts Balance at beginning of period $ — $ — $ 0.6 Other comprehensive loss: Net change from period revaluation — — (0.6 ) Tax benefit (2) — — 0.1 Total other comprehensive loss before reclassifications, net of tax — — (0.5 ) Net amount reclassified to earnings (3) — — (0.1 ) Total amount reclassified from accumulated other comprehensive loss, net of tax — — (0.1 ) Total other comprehensive loss — — (0.6 ) Balance at end of period $ — $ — $ — (1) In 2019 , 2018 and 2017 , there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. (2) These amounts were included in the income tax provision in the accompanying Consolidated Statements of Income. (3) This amount was included in cost of sales, net in the accompanying Consolidated Statements of Income . |
Other Items
Other Items | 12 Months Ended |
Dec. 31, 2019 | |
Other Items [Abstract] | |
Other Items | Other Items Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following: December 31, December 31, (in millions) 2019 2018 Taxes $ 136.0 $ 136.8 Other 90.8 84.1 Wages and benefits 79.5 43.7 Advertising 56.9 46.1 Operating leases obligations 50.8 — Sales returns 26.2 22.0 Warranty 19.4 14.9 Rebates 13.6 11.6 $ 473.2 $ 359.2 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Tempur Sealy International has two stock-based compensation plans which provide for grants of non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock unit awards, performance shares, stock grants and performance based awards to employees, non-employee directors, consultants and Company advisors. The plan under which equity awards may be granted in the future is the Amended and Restated 2013 Equity Incentive Plan (the "2013 Plan"). It is the policy of the Company to issue stock out of treasury shares upon issuance or exercise of share-based awards. The Company believes that awards and purchases made under these plans better align the interests of the plan participants with those of its stockholders. On May 11, 2017, the Company's stockholders approved the amendment and restatement of the original 2013 Plan. The 2013 Plan provides for grants of stock options to purchase shares of common stock to employees and directors of the Company. The 2013 Plan may be administered by the Compensation Committee of the Board of Directors, by the Board of Directors directly, or, in certain cases, by an executive officer or officers of the Company designated by the Compensation Committee. The shares issued or to be issued under the 2013 Plan may be either authorized but unissued shares of the Company’s common stock or shares held by the Company in its treasury. Tempur Sealy International may issue a maximum of 8.7 million shares of common stock under the 2013 Plan, subject to certain adjustment provisions. The Amended and Restated 2003 Equity Incentive Plan, as amended (the “2003 Plan”), was administered by the Compensation Committee of the Board of Directors, which, together with the Board of Directors, had the exclusive authority to administer the 2003 Plan, including the power to determine eligibility to receive awards, the types and number of shares of stock subject to the awards, the price and timing of awards and the acceleration or waiver of any vesting and performance of forfeiture restrictions, in each case subject to the terms of the 2003 Plan. Any of the Company’s employees, non-employee directors, consultants and Company advisors, as determined by the Compensation Committee, were eligible to be selected to participate in the 2003 Plan. Tempur Sealy International allowed a maximum of 11.5 million shares of its common stock under the 2003 Plan to be issued. In May 2013, the Company's Board of Directors adopted a resolution that prohibited further grants under the 2003 Plan. In 2010, the Board of Directors approved the terms of a Long-Term Incentive Plan established under the 2003 Plan. In 2013, the Board of Directors approved the terms of another Long-Term Incentive Plan established under the 2013 Plan. Awards under both Long-Term Incentive Plans have typically consisted primarily of a mix of stock options, RSUs and PRSUs. Shares with respect to the PRSUs will be granted and vest following the end of the applicable performance period and achievement of applicable performance metrics as determined by the Compensation Committee of the Board of Directors. The Company’s stock-based compensation expense for the year ended December 31, 2019 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: Year Ended December 31, (in millions) 2019 2018 2017 PRSU expense (benefit) $ 1.4 $ 2.5 $ (6.5 ) Stock option expense 4.9 6.7 7.1 RSU/DSU expense 20.5 15.6 12.7 Total stock-based compensation expense $ 26.8 $ 24.8 $ 13.3 The Company granted PRSUs during the years ended December 31, 2019 , 2018 and 2017 . Actual payout under the PRSUs is dependent upon the achievement of certain financial goals. The Company recorded a benefit in the accompanying Consolidated Statements of Income of $9.3 million for the year ended December 31, 2017 , after the change in estimate to reduce accumulated performance stock-based compensation amortization to actual cost based on updated projected or final financial results. Performance Restricted Stock Units A summary of the Company’s PRSU activity and related information for the years ended December 31, 2019 and 2018 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2017 2.7 $ 64.13 Granted 0.2 51.72 Vested (0.1 ) 68.57 Forfeited (0.8 ) 68.07 Awards unvested at December 31, 2018 2.0 61.07 Granted 0.1 85.41 Vested — 59.21 Forfeited (1.3 ) 70.94 Awards unvested at December 31, 2019 0.8 $ 60.09 During 2017, the Company granted executive officers and certain members of management PRSUs if the Company achieves a certain level of adjusted earnings before interest, tax, depreciation and amortization ("Adjusted EBITDA") during four consecutive fiscal quarters as described below (the "2019 Aspirational Plan PRSUs"). Adjusted EBITDA is defined as the Company’s "Consolidated EBITDA" as such term is defined in the Company’s 2016 Credit Agreement. The 2019 Aspirational Plan PRSUs will vest based on the highest Adjusted EBITDA in any four consecutive fiscal quarter period ending between (and including) March 31, 2018 and December 31, 2019 (the “First Designated Period”). At the end of the First Designated Period, the Adjusted EBITDA targets were not met. As a result, one-half of the total 2019 Aspirational Plan PRSUs are no longer available for vesting based on performance and are included in forfeitures in the table above. The remaining one-half of the total 2019 Aspirational Plan PRSUs will vest based on the highest Adjusted EBITDA in any four consecutive fiscal quarter period ending between (and including) March 31, 2020 and December 31, 2020 (the “Second Designated Period”). If the highest Adjusted EBITDA in the Second Designated Period is $600.0 million then 66% of the remaining 2019 Aspirational Plan PRSUs will vest; if the Adjusted EBITDA is $650.0 million or more 100% will vest; if Adjusted EBITDA is between $600.0 million and $650.0 million then a pro rata portion will vest; and if Adjusted EBITDA is below $600.0 million then all of the remaining 2019 Aspirational Plan PRSUs will be forfeited. The Company did not record any stock-based compensation expense related to the 2019 Aspirational Plan PRSUs during the years ended December 31, 2019 , 2018 and 2017, as it was not probable that the Company would achieve the specified performance target for either the First Designated Period or the Second Designated Period. 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 the Second Designated Period would range from $33.1 million to $49.7 million , which would be expensed over the remaining service period if achievement of the performance condition becomes probable. As of December 31, 2019 , the Company has 0.8 million of the 2019 Aspirational PRSUs outstanding that will fully vest if the Company achieves $650.0 million or more of Adjusted EBITDA for 2020. All remaining 2019 Aspirational Plan PRSUs will be forfeited if the performance metric is not met in 2020. In March 2019, the Compensation Committee of the Board of Directors formally determined that the Company did not have more than $650.0 million of Adjusted EBITDA for payout under the PRSUs granted in 2017 ("the 2017 Aspirational Plan PRSUs"). As a result, the remaining one-third of the 2017 Aspirational Plan PRSUs previously granted with a performance period for 2018 were forfeited as of this date. Stock Options The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options granted. During the year ended December 31, 2019, no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2019 , 2018 and 2017 are set forth in the following table. Expected volatility is based on the unbiased standard deviation of Tempur Sealy International’s common stock over the option term. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. The dividend yield reflects an estimate of dividend payouts over the term of the award. The Company uses historical data to determine these assumptions. Year Ended December 31, 2019 2018 2017 Expected volatility range of stock N/A 39.8% - 40.1% 37.4% - 40.8% Expected life of option, range in years N/A 5 5 Risk-free interest range rate N/A 2.2% - 2.8% 1.8% - 1.9% Expected dividend yield on stock N/A —% —% A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2019 and 2018 is presented below: (in millions, except per share amounts and years) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at December 31, 2017 1.7 $ 58.93 Granted 0.3 61.84 Exercised (0.2 ) 28.20 Forfeited (0.2 ) 60.45 Options outstanding at December 31, 2018 1.6 $ 62.51 Granted — — Exercised (0.3 ) 52.49 Forfeited — 46.36 Options outstanding at December 31, 2019 1.3 $ 65.18 6.35 20.8 Options exercisable at December 31, 2019 0.8 $ 64.72 5.73 18.4 The aggregate intrinsic value of options exercised during the years ended December 31, 2019 , 2018 and 2017 was $5.9 million , $3.9 million and $5.4 million , respectively. Cash received from options exercised under all stock-based compensation plans, including cash received from options issued from treasury shares, for the years ended December 31, 2019 , 2018 and 2017 , was $17.8 million , $4.6 million , and $12.8 million , respectively. A summary of the Company’s unvested shares relating to stock options as of December 31, 2019 and 2018 , and changes during the years ended December 31, 2019 and 2018 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2017 0.7 $ 67.95 Granted 0.3 61.84 Vested (0.2 ) 66.72 Forfeited (0.2 ) 60.45 Options unvested at December 31, 2018 0.6 $ 66.20 Granted — — Vested (0.1 ) 66.66 Forfeited — 46.36 Options unvested at December 31, 2019 0.5 $ 65.99 Restricted/Deferred Stock Units A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2019 and 2018 is presented below: (in millions, except per share amounts) Shares Weighted Average Release Price Aggregate Intrinsic Value Awards outstanding at December 31, 2017 0.6 $ 64.94 Granted 0.3 61.29 Vested (0.1 ) 62.85 Terminated — 64.00 Awards outstanding at December 31, 2018 0.8 $ 63.82 $ 34.6 Granted 0.7 43.07 Vested (0.3 ) 62.54 Terminated — 58.07 Awards outstanding at December 31, 2019 1.2 $ 52.96 $ 110.5 The aggregate intrinsic value of RSUs and DSUs vested during the year ended December 31, 2019 was $14.7 million . Excluding any potential compensation expense related to the 2019 Aspirational Plan PRSUs discussed above, a summary of total unrecognized stock-based compensation expense based on current performance estimates related to stock options, DSUs, RSUs and PRSUs for the year ended December 31, 2019 is presented below: (in millions, except years) December 31, 2019 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 6.6 1.50 Unrecognized DSU/RSU expense 37.6 2.42 Unrecognized PRSU expense 2.0 1.73 Total unrecognized stock-based compensation expense $ 46.2 2.25 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in various legal and administrative proceedings incidental to the operations of its business. The Company believes that the outcome of all pending proceedings in the aggregate will not have a material adverse effect on its business, financial condition, liquidity, or operating results. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Pre-tax Income by Jurisdiction The following sets forth the amount of income before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, (in millions) 2019 2018 2017 Income before income taxes: United States $ 150.9 $ 59.2 $ 97.2 Rest of the world 114.6 105.8 118.2 $ 265.5 $ 165.0 $ 215.4 Reconciliation of Statutory Tax Rate to Effective Tax Rate The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following: Year Ended December 31, 2019 2018 2017 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 55.8 21.0 % $ 34.6 21.0 % $ 75.4 35.0 % State income taxes, net of federal benefit 8.7 3.3 % 1.8 1.1 % (0.6 ) (0.3 )% Foreign tax differential 2.1 0.8 % 2.5 1.5 % (11.9 ) (5.5 )% Change in valuation allowances (8.6 ) (3.2 )% (17.7 ) (10.7 )% 5.6 2.6 % Uncertain tax positions and interest 2.4 0.9 % 33.1 20.1 % (1.0 ) (0.5 )% Subpart F income 11.0 4.1 % 6.6 4.0 % 2.7 1.2 % Manufacturing deduction — — — — (1.9 ) (0.9 )% Remeasurement of deferred taxes — — — — (69.7 ) (32.3 )% Transition Tax — — (6.8 ) (4.1 )% 45.9 21.3 % Permanent and other 3.3 1.2 % (4.5 ) (2.8 )% (0.7 ) (0.3 )% Effective income tax provision $ 74.7 28.1 % $ 49.6 30.1 % $ 43.8 20.3 % For 2019 and 2018, Subpart F income consists primarily of Global Intangible Low-Taxed Income ("GILTI") which is taxable to Tempur Sealy International as if earned directly by Tempur Sealy International. The Company recognizes GILTI in the period in which such tax arises. For years prior to 2018, Subpart F income represents interest and royalties earned by a foreign subsidiary as well as sales made by certain foreign subsidiaries outside of their country of incorporation and is taxable to Tempur Sealy International as if earned directly by Tempur Sealy International. The Transition Tax, described below, represents taxes on certain foreign sourced earnings and profits that were previously tax deferred. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Act") was signed into law, making significant changes to U.S. tax law. Changes include, but are not limited to, a corporate income tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017 ("Transition Tax"). In accordance with the Act, the Company recorded an income tax benefit of $23.8 million in the fourth quarter of 2017, the period in which the legislation was enacted. The total benefit included a tax benefit of $69.7 million related to the remeasurement of certain deferred tax assets and liabilities net of $45.9 million in additional income tax expense related to the Transition Tax on foreign earnings. Pursuant to Staff Accounting Bulletin No. 118 ("SAB 118") the Company recorded an additional SAB 118 tax benefit of $6.8 million in 2018 related to the finalization of the Company’s Transition Tax obligation. Income Tax Provision The income tax provision consisted of the following: Year Ended December 31, (in millions) 2019 2018 2017 Current provision Federal $ 50.4 $ (14.6 ) $ 73.5 State 11.9 1.1 3.1 Foreign 19.5 57.1 28.3 Total current $ 81.8 $ 43.6 $ 104.9 Deferred provision Federal $ (10.8 ) $ 11.4 $ (67.7 ) State (8.0 ) (4.5 ) 7.6 Foreign 11.7 (0.9 ) (1.0 ) Total deferred (7.1 ) 6.0 (61.1 ) Total income tax provision $ 74.7 $ 49.6 $ 43.8 The income tax provision includes federal, state and foreign income taxes currently payable and those deferred or prepaid because of temporary differences between financial statement and tax bases of assets and liabilities. The Company records income taxes under the liability method. Under this method, deferred income taxes are recognized for the estimated future tax effects of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws. The amount provided for deferred income taxes reflects that impact of the revaluation of the Company's deferred income tax assets and liabilities required as the result of the change in the U.S. federal and state income tax rates, as discussed above. Deferred Income Tax Assets and Liabilities The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets, determined using the income tax rate applicable to each period in which those items will reverse, consist of the following: December 31, (in millions) 2019 2018 Deferred tax assets: Stock-based compensation $ 13.9 $ 12.8 Accrued expenses and other 129.7 49.1 Net operating losses, foreign tax credits and other tax attribute carryforwards 43.1 56.1 Inventories 8.2 6.0 Transaction costs 6.6 13.5 Property, plant and equipment 2.9 3.6 Total deferred tax assets 204.4 141.1 Valuation allowances (30.0 ) (43.1 ) Total net deferred tax assets $ 174.4 $ 98.0 Deferred tax liabilities: Intangible assets $ (156.4 ) $ (156.8 ) Property, plant and equipment (36.9 ) (30.3 ) Accrued expenses and other (69.1 ) (5.8 ) Total deferred tax liabilities (262.4 ) (192.9 ) Net deferred tax liabilities $ (88.0 ) $ (94.9 ) Tax Attributes Included in Deferred Tax Assets Included in the calculation of the Company’s deferred tax assets are the following gross income tax attributes available at December 31, 2019 and 2018 , respectively: (in millions) 2019 2018 State net operating losses (“SNOLs”) $ 165.7 $ 355.7 U.S. federal foreign tax credits (“FTCs”) 12.2 12.2 U.S. state income tax credits ("SITCs") 5.3 8.0 Foreign net operating losses (“FNOLs”) 36.9 57.0 Charitable contribution carryover ("CCCs") 32.9 39.6 Interest limitation carryover ("ILC") — 10.6 The SNOLs, FTCs, SITCs, FNOLs and CCCs generally expire in 2021, 2023, 2023, 2023 and 2020, respectively. Management believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of certain of the SNOLs, FTCs, SITCs, FNOLs, CCCs, the ILC and certain other deferred tax assets related to certain foreign operations (together, the “Tax Attributes”). In assessing the realizability of deferred tax assets (including the Tax Attributes), management considers whether it is more likely than not that some portion of all of such deferred tax assets will not be realized. Accordingly, the Company has established a valuation allowance for certain Tax Attributes. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible or creditable. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded valuation allowances against $89.5 million of the SNOLs, $12.2 million of the FTCs and $1.4 million of SITCs. With respect to all other Tax Attributes above, based upon the level of historical taxable income and projections for future taxable income, management believes it is more likely than not the Company will realize the benefits of the underlying deferred tax assets. However, there can be no assurance that such assets will be realized if circumstances change. Deferred Tax Liability for Undistributed Foreign Earnings No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the Transition Tax, or any additional outside basis differences inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. At December 31, 2019, the Company’s tax basis in its top tier foreign subsidiary exceeded the Company’s book basis in this subsidiary in the hands of the top tier foreign subsidiary's U.S. shareholder. The Company has not recorded a deferred tax asset on such excess tax basis as it is not apparent that the excess tax basis will reverse in the foreseeable future. As it relates to the book to tax basis difference with respect to the stock of each of the Company’s lower tier foreign subsidiaries, as a general matter, the book basis exceeds the tax basis in the hands of such foreign subsidiaries' shareholders. By operation of the tax laws of the various countries in which these subsidiaries are domiciled, earnings of lower tier foreign subsidiaries are not subject to tax, in all material respects, when distributed to a foreign shareholder. It is the Company’s intent that the earnings of each lower tier foreign subsidiary, with the exception of its Danish subsidiary and one of its Canadian subsidiaries, will be permanently reinvested in each such foreign subsidiaries' own operations. As it relates to the Danish subsidiary, its earnings may be distributed without any income tax impact. Thus, no tax is provided for with respect to the book to tax basis difference of its stock. With respect to the Canadian subsidiary, Canadian income tax withholding applies to any distribution it makes to its foreign parent company. The Company concluded that at December 31, 2019 the Canadian subsidiary has accumulated earnings in excess of its operating needs and as such Canadian withholding tax has been accrued on such excess. The amount accrued is not material. Uncertain Income Tax Positions GAAP prescribes a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires the Company to recognize in the financial statements each tax position that meets the more likely than not criteria, measured at the largest amount of benefit that has a greater than 50.0% likelihood of being realized. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in millions) Balance as of December 31, 2017 $ 84.5 Additions based on tax positions related to 2018 2.5 Additions for tax positions of prior years 21.2 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities (4.4 ) Balance as of December 31, 2018 $ 103.8 Additions based on tax positions related to 2019 — Additions for tax positions of prior years 0.7 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities — Balance as of December 31, 2019 $ 104.5 The amount of unrecognized tax benefits that would impact the effective tax rate if recognized at December 31, 2019 , 2018 and 2017 would be $96.8 million , $91.4 million and $31.7 million , respectively. During the years ended December 31, 2019 , 2018 and 2017 , the Company recognized $1.3 million , $6.4 million and $0.4 million in interest and penalties, respectively, in income tax expense. The Company had $67.9 million , $66.3 million and $59.9 million of accrued interest and penalties at December 31, 2019 , 2018 and 2017 , respectively. The Company anticipates it is reasonably possible an increase or decrease in the amount of unrecognized tax benefits could be made in the next twelve months as a result of the statute of limitations expiring and/or the examinations being concluded on these returns. However, the Company does not presently anticipate that any increase or decrease in unrecognized tax benefits will be material to the Consolidated Financial Statements, other than the Danish Tax Matter discussed below which the Company believes will be settled commensurate with the amount previously accrued. With few exceptions, the Company is no longer subject to tax examinations by the U.S., state and local municipalities for periods prior to 2011, and in non-U.S. jurisdictions for periods prior to 2001. The Company is currently under examination by various tax authorities around the world. The Company's liability for the Danish Tax Matter uncertain tax position is derived using a cumulative probability analysis with possible outcomes based on an evaluation of facts and circumstances and applying the technical requirements applicable to U.S., Danish, and international transfer pricing standard, taking into account the U.S. and Danish income tax implications of such outcomes. The Company’s remaining uncertain tax liability is derived using the cumulative probability analysis with possible outcomes for each relevant matter based on the Company's updated evaluation of the facts and circumstances regarding each such matter and applying the technical requirements applicable to each tax position taken as it relates to each applicable taxing jurisdiction. The uncertain tax liability reflects the Company’s best judgment of the facts, circumstances and information available related to each matter through the balance sheet date. The Danish Tax Matter The Company has been involved in a dispute with the Danish Tax Authority ("SKAT") regarding the royalty paid by a U.S. subsidiary of Tempur Sealy International to a Danish subsidiary (the "Danish Tax Matter") for tax years 2001 through current. 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. During 2018, the Company reached agreements with both SKAT and the U.S. Internal Revenue Service ("IRS") (the "Settlement") with respect to the adjusted amount of royalties for tax years 2001 through 2011. The Company and SKAT are currently discussing the appropriate administrative process required to implement the Settlement as it relates to both tax and interest. During this process, the Company continues to maintain a liability on its balance sheet for tax and interest under the terms of the Settlement. At December 31, 2019 and December 31, 2018, the Danish liability related to the Settlement is DKK 847.3 million (approximately $127.2 million and $130.0 million using the applicable exchange rates at December 31, 2019 and December 31, 2018, respectively) and is included in accrued expenses and other current liabilities within the Company’s Consolidated Balance Sheet. At December 31, 2019 and December 31, 2018, respectively the Company had on deposit with SKAT DKK 970.1 million (approximately $145.6 million using the applicable exchange rate at December 31, 2019) and DKK 962.3 million (approximately $147.7 million using the applicable exchange rate at December 31, 2018) for the satisfaction of the anticipated liability for both tax and interest once the administrative process is concluded. The deposit held by SKAT is included in "Prepaid expenses and other current assets" within the Company's Consolidated Balance Sheet. SKAT has issued income tax assessments for the years 2012 through 2017 asserting an increase in the royalty earned by the Danish subsidiary. The Company expects to continue to receive income tax assessments from SKAT for the tax years 2018 and forward, asserting the royalties paid by the U.S. to the Danish subsidiary were too low, which the Company disputes. The Company entered into the Advance Pricing Agreement Program (the "APA Program") for the tax years 2012 through 2022 (the "Post-2011 Years") in which the IRS, on the Company’s behalf, will negotiate directly with SKAT for a mutually agreeable royalty due from the U.S. subsidiary to the Danish Subsidiary (the "APA"). That APA is in the early stages of negotiations. Such negotiations are not expected to be concluded in the near term. The Company anticipates such negotiations will result in an increase in the amount of royalties due from the U.S subsidiary to the Danish subsidiary (the "Post-2011 Years Adjustment") for the years 2012 - 2019 (the "2012 to Current Period"). It is expected that the Post-2011 Years Adjustment will result in additional income tax in Denmark and a reduction of tax in the United States for the 2012 to Current Period. Consequently, the Company maintains an uncertain income tax liability for its estimate of the potential Danish income tax liability and a deferred tax asset for the associated United States tax benefit for the Post-2011 Years Adjustment. As of December 31, 2019 and December 31, 2018, the Company had accrued Danish tax and interest for Post-2011 Years of approximately DKK 263.3 million and DKK 230.3 million ( $39.5 million and $35.3 million using the applicable exchange rates at December 31, 2019 and December 31, 2018, respectively) as an uncertain income tax liability, which is included in other non-current liabilities on the Company's Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively. The deferred tax asset for the U.S. correlative benefit associated with the accrual of Danish tax for the Post-2011 Years as of December 31, 2019 and 2018, respectively, is approximately $7.2 million and $4.2 million . Both the uncertain income tax liability and the deferred tax asset reflect the Company’s best judgment of the facts, circumstances and information available through December 31, 2019. If the Company is not successful in resolving the Danish Tax Matter for the Post-2011 Years or there is a change in facts and circumstances, the Company may be required to further increase its uncertain income tax position associated with this matter, or decrease its deferred tax asset, also related to this matter, which could have a material impact on the Company's reported earnings. The Company continues to discuss certain matters with SKAT relating to the Danish Tax Matter. For instance, the Company’s calculation of interest for the Settlement Years differs from the amount asserted by SKAT by approximately DKK 125.0 million (approximately $18.8 million using the December 31, 2019 exchange rate). The Company believes its calculations properly reflect the mechanics of the calculation of interest as provided in Danish tax law and as such has not recorded a liability for the incremental interest proposed by SKAT. Further, if the IRS and SKAT are unable to reach a mutually acceptable agreement with respect to the years included in the APA Program, the Company could be required to make a significant payment to SKAT for Danish tax related to such years, which could have a material adverse effect on the Company’s results of operations and liquidity. From June 2012 through December 31, 2018, SKAT withheld Value Added Tax refunds otherwise owed to the Company, pending resolution of the Danish Tax Matter. Total withheld refunds at both December 31, 2019 and 2018 is approximately DKK 347.1 million (approximately $52.1 million and $53.3 million at the December 31, 2019 and 2018 exchange rates, respectively). In July 2016, the Company paid a deposit to SKAT in the amount of approximately DKK 615.2 million (approximately $92.3 million and $94.4 million using the applicable exchange rates at December 31, 2019 and 2018, respectively) (the “Tax Deposit”) and applied approximately DKK 232.1 million (approximately $34.8 million and $35.6 million using the applicable exchange rates at December 31, 2019 and 2018, respectively) of its Value Added Tax refund (the “VAT Refund Applied”) to the aforementioned potential Danish income tax liability, consistent with the Company’s reserve position for this royalty matter. The deposit was made to mitigate additional interest and foreign exchange exposure. The Tax Deposit and the VAT Refund Applied are included within prepaid and other current assets and other non-current assets on the Consolidated Balance Sheets as of December 31, 2019 and 2018, respectively. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share The following table sets forth the components of the numerator and denominator for the computation of basic and diluted earnings per share for net income attributable to Tempur Sealy International. Year Ended December 31, (in millions, except per common share amounts) 2019 2018 2017 Numerator: Net income from continuing operations, net of loss attributable to non-controlling interests $ 190.9 $ 118.3 $ 182.3 Denominator: Denominator for basic earnings per common share—weighted average shares 54.5 54.4 54.0 Effect of dilutive securities: Employee stock-based compensation 0.9 0.7 0.7 Denominator for diluted earnings per common share—adjusted weighted average shares 55.4 55.1 54.7 Basic earnings per common share for continuing operations $ 3.50 $ 2.17 $ 3.37 Diluted earnings per common share for continuing operations $ 3.45 $ 2.15 $ 3.33 The Company excluded 1.1 million , 1.5 million and 1.3 million shares issuable upon exercise of outstanding stock options for the years ended December 31, 2019 , 2018 and 2017 , respectively, from the diluted earnings per common share computation because their exercise price was greater than the average market price of Tempur Sealy International’s common stock or they were otherwise anti-dilutive. Holders of non-vested stock-based compensation awards do not have voting rights or rights to receive any dividends thereon. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
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. There were no customers that contributed more than 10% of the Company's sales in 2019 or 2018 . The Company’s North America and International segment assets include investments in subsidiaries that are appropriately eliminated in the Company’s accompanying Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable and payable. The following table summarizes total assets by segment: December 31, December 31, (in millions) 2019 2018 North America $ 3,142.9 $ 2,788.1 International 615.3 604.8 Corporate 477.1 569.0 Inter-segment eliminations (1,173.5 ) (1,246.5 ) Total assets $ 3,061.8 $ 2,715.4 The following table summarizes property, plant and equipment, net, by segment: December 31, December 31, (in millions) 2019 2018 North America $ 328.9 $ 317.5 International 51.8 51.1 Corporate 55.1 52.2 Total property, plant and equipment, net $ 435.8 $ 420.8 The following table summarizes operating lease right-of-use assets by segment: December 31, December 31, (in millions) 2019 2018 North America $ 202.0 $ — International 42.2 — Corporate 1.2 — Total operating lease right-of-use assets $ 245.4 $ — The following table summarizes segment information for the year ended December 31, 2019 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,379.6 $ 455.7 $ — $ — $ 2,835.3 Other sales 153.7 117.0 — — 270.7 Net sales $ 2,533.3 $ 572.7 $ — $ — $ 3,106.0 Inter-segment sales $ 3.4 $ 0.7 $ — $ (4.1 ) $ — Inter-segment royalty expense (income) 4.5 (4.5 ) — — — Gross profit 1,035.2 307.0 — — 1,342.2 Operating income (loss) 344.8 115.4 (113.5 ) — 346.7 Income (loss) from continuing operations before income taxes 337.0 109.7 (181.2 ) — 265.5 Depreciation and amortization (1) $ 64.4 $ 13.7 $ 38.4 $ — $ 116.5 Capital expenditures 62.1 11.6 14.5 — 88.2 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2018 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,002.1 $ 453.2 $ — $ — $ 2,455.3 Other sales 134.1 113.5 — — 247.6 Net sales $ 2,136.2 $ 566.7 $ — $ — $ 2,702.9 Inter-segment sales $ 3.4 $ 0.5 $ — $ (3.9 ) $ — Inter-segment royalty expense (income) 3.1 (3.1 ) — — — Gross profit 823.4 297.3 — — 1,120.7 Operating income (loss) 250.0 107.5 (101.2 ) — 256.3 Income (loss) from continuing operations before income taxes 241.1 101.0 (177.1 ) — 165.0 Depreciation and amortization (1) $ 59.0 $ 13.5 $ 39.4 $ — $ 111.9 Capital expenditures 52.7 14.0 6.9 — 73.6 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2017 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,051.8 $ 421.6 $ — $ — $ 2,473.4 Other sales 122.0 105.2 — — 227.2 Net sales $ 2,173.8 $ 526.8 $ — $ — $ 2,700.6 Inter-segment sales $ 3.8 $ 1.0 $ — $ (4.8 ) $ — Inter-segment royalty expense (income) 5.5 (5.5 ) — — — Gross profit 844.7 276.3 — — 1,121.0 Operating income (loss) 273.2 112.0 (89.7 ) — 295.5 Income (loss) from continuing operations before income taxes 276.0 104.5 (165.1 ) — 215.4 Depreciation and amortization (1) $ 51.4 $ 14.1 $ 28.5 $ — $ 94.0 Capital expenditures 39.9 9.0 17.7 — 66.6 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes property, plant and equipment, net, by geographic region: December 31, December 31, (in millions) 2019 2018 United States $ 366.4 $ 350.7 Canada 17.5 19.1 Other International 51.9 51.0 Total property, plant and equipment, net $ 435.8 $ 420.8 Total International $ 69.4 $ 70.1 The following table summarizes operating lease right-of-use assets by geographic region: December 31, December 31, (in millions) 2019 2018 United States $ 198.3 $ — Canada 4.9 — Other International 42.2 — Total operating lease right-of-use assets $ 245.4 $ — Total International $ 47.1 $ — The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2019 2018 2017 United States $ 2,312.3 $ 1,928.9 $ 1,954.2 Canada 221.0 207.3 219.6 Other International 572.7 566.7 526.8 Total net sales $ 3,106.0 $ 2,702.9 $ 2,700.6 Total International $ 793.7 $ 774.0 $ 746.4 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) Quarterly results of operations for the years ended December 31, 2019 and 2018 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2019 Net sales $ 690.9 $ 722.8 $ 821.0 $ 871.3 Gross profit 281.8 313.4 360.6 386.4 Operating income 60.5 81.0 120.6 84.6 Income from continuing operations 29.0 42.7 72.4 46.7 Net income attributable to Tempur Sealy International, Inc. 28.4 41.6 73.3 46.2 Basic earnings per common share for continuing operations $ 0.53 $ 0.78 $ 1.33 $ 0.87 Diluted earnings per common share for continuing operations $ 0.52 $ 0.76 $ 1.30 $ 0.85 2018 Net sales $ 637.4 $ 659.9 $ 729.5 $ 676.1 Gross profit 264.7 272.8 300.0 283.2 Operating income 55.7 58.0 84.7 57.9 Income from continuing operations 25.6 26.6 44.1 19.1 Net income attributable to Tempur Sealy International, Inc. 23.1 22.8 42.3 12.3 Basic earnings per common share for continuing operations $ 0.48 $ 0.52 $ 0.83 $ 0.35 Diluted earnings per common share for continuing operations $ 0.47 $ 0.52 $ 0.82 $ 0.35 The sum of the quarterly earnings per common share amounts may not equal the annual amount reported because per share amounts are computed independently for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares. The Company’s quarterly operating results fluctuate as a result of seasonal variations in the Company’s business. In the fourth quarter of 2019, the Company recorded $29.8 million of customer-related charges in connection with the bankruptcy of Mattress PAL Holding, LLC ("Mattress PAL") and resulting significant liquidity issues of Mattress PAL's affiliates to fully reserve trade receivables and other assets associated with this account. Additionally, in the fourth quarter of 2019, the Company recorded an $8.9 million charge related to the donation of common stock at fair market value to certain public charities. In the fourth quarter of 2018, prior to the Sleep Outfitters Acquisition, the Company recorded $21.2 million of customer-related charges in connection with the bankruptcy of iMS to fully reserve trade receivables and other assets associated with this account. Additionally, in the fourth quarter of 2018, the Company recorded $9.1 million of restructuring costs. These costs included $4.7 million of charges in the International business segment associated with International simplification efforts, including headcount reduction, professional fees, store closures and other costs, $2.9 million of Corporate professional fees related to restructuring activities and $1.5 million of charges associated with the operational alignment of a previous joint venture that became wholly acquired in the North America business segment. |
Guarantor_Non-Guarantor Financi
Guarantor/Non-Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Guarantor/Non-Guarantor Financial Information | |
Guarantor/Non-Guarantor Financial Information | Guarantor/Non-Guarantor Financial Information The $450.0 million and $600.0 million aggregate principal amount of 2023 Senior Notes and 2026 Senior Notes (collectively the "Senior Notes"), respectively, are general unsecured senior obligations of Tempur Sealy International and are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by the Combined Guarantor Subsidiaries. The $375.0 million aggregate principal amount of 2020 Senior Notes were general unsecured senior obligations at December 31, 2015 but were redeemed in full in 2016. The foreign subsidiaries (the "Combined Non-Guarantor Subsidiaries") represent the foreign operations of the Company and do not guarantee the Senior Notes. A subsidiary guarantor will be released from its obligations under the applicable indenture governing the Senior Notes when: (a) the subsidiary guarantor is sold or sells all or substantially all of its assets; (b) the subsidiary is declared "unrestricted" under the applicable indenture governing the Senior Notes; (c) the subsidiary’s guarantee of indebtedness under the 2019 Credit Agreement (as it may be amended, refinanced or replaced) is released (other than a discharge through repayment); or (d) the requirements for legal or covenant defeasance or discharge of the applicable indenture have been satisfied. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, including transactions with the Company’s wholly-owned subsidiary guarantors and non-guarantor subsidiaries. The Company has accounted for its investments in its subsidiaries under the equity method. The following financial information presents Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018 , and the related Consolidated Statements of Income and Comprehensive Income and Cash Flows for the years ended December 31, 2019 , 2018 and 2017 for Tempur Sealy International, Combined Guarantor Subsidiaries and Combined Non-Guarantor Subsidiaries. TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 2,387.1 $ 793.5 $ (74.6 ) $ 3,106.0 Cost of sales — 1,390.6 447.8 (74.6 ) 1,763.8 Gross profit — 996.5 345.7 — 1,342.2 Selling and marketing expenses 11.2 466.0 189.2 (0.1 ) 666.3 General, administrative and other expenses 17.4 242.8 57.7 (2.6 ) 315.3 Customer-related charges — 29.8 — — 29.8 Equity income in earnings of unconsolidated affiliates — — (15.9 ) — (15.9 ) Operating (loss) income (28.6 ) 257.9 114.7 2.7 346.7 Other expense, net: Third party interest expense, net 56.3 26.7 2.7 — 85.7 Intercompany interest (income) expense, net (9.8 ) 13.2 (3.4 ) — — Interest expense (income), net 46.5 39.9 (0.7 ) — 85.7 Other (income) expense, net — (7.6 ) 1.6 1.5 (4.5 ) Total other expense, net 46.5 32.3 0.9 1.5 81.2 Income from equity investees 250.7 84.3 — (335.0 ) — Income from continuing operations before income taxes 175.6 309.9 113.8 (333.8 ) 265.5 Income tax benefit (provision) 13.8 (59.2 ) (29.5 ) 0.2 (74.7 ) Income from continuing operations 189.4 250.7 84.3 (333.6 ) 190.8 Loss from discontinued operations, net of tax — — — (1.4 ) (1.4 ) Net income before non-controlling interests 189.4 250.7 84.3 (335.0 ) 189.4 Less: Net loss attributable to non-controlling interest (0.1 ) — (0.1 ) 0.1 (0.1 ) Net income attributable to Tempur Sealy International, Inc. $ 189.5 $ 250.7 $ 84.4 $ (335.1 ) $ 189.5 Comprehensive income attributable to Tempur Sealy International, Inc. $ 197.1 $ 251.9 $ 90.8 $ (342.7 ) $ 197.1 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 2,000.9 $ 800.5 $ (98.5 ) $ 2,702.9 Cost of sales — 1,208.3 464.3 (90.4 ) 1,582.2 Gross profit — 792.6 336.2 (8.1 ) 1,120.7 Selling and marketing expenses 8.4 392.0 199.8 (12.4 ) 587.8 General, administrative and other expenses 17.8 204.6 57.4 (6.8 ) 273.0 Customer-related charges — 21.2 — — 21.2 Equity income in earnings of unconsolidated affiliates — — (17.6 ) — (17.6 ) Operating (loss) income (26.2 ) 174.8 96.6 11.1 256.3 Other expense, net: Third party interest expense, net 59.2 30.2 4.6 (1.7 ) 92.3 Intercompany interest (income) expense, net (6.9 ) 10.8 (3.9 ) — — Interest expense, net 52.3 41.0 0.7 (1.7 ) 92.3 Other (income) expense, net — (9.9 ) 13.9 (5.0 ) (1.0 ) Total other expense, net 52.3 31.1 14.6 (6.7 ) 91.3 Income from equity investees 162.0 26.6 — (188.6 ) — Income from continuing operations before income taxes 83.5 170.3 82.0 (170.8 ) 165.0 Income tax benefit (provision) 14.1 (8.3 ) (55.4 ) — (49.6 ) Income from continuing operations 97.6 162.0 26.6 (170.8 ) 115.4 Loss from discontinued operations, net of tax — — — (17.8 ) (17.8 ) Net income before non-controlling interests 97.6 162.0 26.6 (188.6 ) 97.6 Less: Net loss attributable to non-controlling interests (2.9 ) (2.6 ) (0.3 ) 2.9 (2.9 ) Net income attributable to Tempur Sealy International, Inc. $ 100.5 $ 164.6 $ 26.9 $ (191.5 ) $ 100.5 Comprehensive income attributable to Tempur Sealy International, Inc. $ 80.7 $ 164.2 $ 7.5 $ (171.7 ) $ 80.7 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 1,961.2 $ 862.5 $ (123.1 ) $ 2,700.6 Cost of sales — 1,185.4 497.6 (103.4 ) 1,579.6 Gross profit — 775.8 364.9 (19.7 ) 1,121.0 Selling and marketing expenses 5.6 406.8 188.9 (15.2 ) 586.1 General, administrative and other expenses 17.5 176.6 78.9 (11.6 ) 261.4 Customer-related charges (8.4 ) 21.7 1.1 — 14.4 Equity income in earnings of unconsolidated affiliates — — (15.6 ) — (15.6 ) Royalty income, net of royalty expense — (20.8 ) — — (20.8 ) Operating (loss) income (14.7 ) 191.5 111.6 7.1 295.5 Other expense, net: Third party interest expense, net 59.6 26.0 22.4 (20.7 ) 87.3 Intercompany interest (income) expense, net (4.7 ) 8.3 (3.6 ) — — Interest expense, net 54.9 34.3 18.8 (20.7 ) 87.3 Other (income) expense, net — (17.2 ) 9.2 0.8 (7.2 ) Total other expense, net 54.9 17.1 28.0 (19.9 ) 80.1 Income from equity investees 193.1 51.3 — (244.4 ) — Income from continuing operations before income taxes 123.5 225.7 83.6 (217.4 ) 215.4 Income tax benefit (provision) 17.2 (32.6 ) (32.3 ) 3.9 (43.8 ) Income from continuing operations 140.7 193.1 51.3 (213.5 ) 171.6 Loss from discontinued operations — — — (30.9 ) (30.9 ) Net income before non-controlling interests 140.7 193.1 51.3 (244.4 ) 140.7 Less: Net loss attributable to non-controlling interests (10.7 ) (5.2 ) (5.5 ) 10.7 (10.7 ) Net income attributable to Tempur Sealy International, Inc. $ 151.4 $ 198.3 $ 56.8 $ (255.1 ) $ 151.4 Comprehensive income attributable to Tempur Sealy International, Inc. $ 179.4 $ 193.0 $ 89.9 $ (282.9 ) $ 179.4 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 0.2 $ 20.0 $ 44.7 $ — $ 64.9 Accounts receivable, net 0.2 21.9 352.5 (2.6 ) 372.0 Inventories — 199.9 60.6 — 260.5 Prepaid expenses and other current assets 12.9 59.5 140.2 (9.8 ) 202.8 Total Current Assets 13.3 301.3 598.0 (12.4 ) 900.2 Property, plant and equipment, net — 366.5 69.3 — 435.8 Goodwill — 511.2 221.1 — 732.3 Other intangible assets, net — 564.3 77.1 — 641.4 Operating lease right-of-use assets — 198.2 47.2 — 245.4 Deferred income taxes 13.0 — 14.1 (13.0 ) 14.1 Other non-current assets 0.4 46.6 45.6 — 92.6 Net investment in subsidiaries 1,143.3 369.0 — (1,512.3 ) — Due from affiliates 341.6 125.4 19.6 (486.6 ) — Total Assets $ 1,511.6 $ 2,482.5 $ 1,092.0 $ (2,024.3 ) $ 3,061.8 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 198.4 $ 55.9 $ (2.6 ) $ 251.7 Accrued expenses and other current liabilities 6.8 245.7 220.7 — 473.2 Income taxes payable — 10.0 10.8 (9.8 ) 11.0 Current portion of long-term debt — 29.5 7.9 — 37.4 Total Current Liabilities 6.8 483.6 295.3 (12.4 ) 773.3 Long-term debt, net 1,044.3 458.1 0.2 — 1,502.6 Long-term operating lease obligations — 172.4 33.0 — 205.4 Deferred income taxes — 98.5 16.6 (13.0 ) 102.1 Other non-current liabilities 0.2 59.4 58.4 — 118.0 Due to affiliates 99.9 67.2 319.5 (486.6 ) — Total Liabilities 1,151.2 1,339.2 723.0 (512.0 ) 2,701.4 Total Stockholders' Equity 360.4 1,143.3 369.0 (1,512.3 ) 360.4 Total Liabilities and Stockholders’ Equity $ 1,511.6 $ 2,482.5 $ 1,092.0 $ (2,024.3 ) $ 3,061.8 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 0.1 $ 6.2 $ 39.5 $ — $ 45.8 Accounts receivable, net — 15.2 303.3 3.0 321.5 Inventories — 159.4 62.9 — 222.3 Prepaid expenses and other current assets 276.9 65.4 148.1 (274.6 ) 215.8 Total Current Assets 277.0 246.2 553.8 (271.6 ) 805.4 Property, plant and equipment, net — 350.7 70.1 — 420.8 Goodwill — 508.8 214.2 — 723.0 Other intangible assets, net — 572.7 76.6 — 649.3 Deferred income taxes 15.0 — 22.6 (15.0 ) 22.6 Other non-current assets — 49.2 45.1 — 94.3 Net investment in subsidiaries 661.7 210.0 — (871.7 ) — Due from affiliates 422.1 153.8 15.4 (591.3 ) — Total Assets $ 1,375.8 $ 2,091.4 $ 997.8 $ (1,749.6 ) $ 2,715.4 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 186.7 $ 63.3 $ 3.0 $ 253.0 Accrued expenses and other current liabilities 6.7 143.9 208.6 — 359.2 Income taxes payable — 274.7 9.6 (274.6 ) 9.7 Current portion of long-term debt — 44.0 3.1 — 47.1 Total Current Liabilities 6.7 649.3 284.6 (271.6 ) 669.0 Long-term debt, net 1,043.0 547.1 9.0 — 1,599.1 Deferred income taxes — 118.0 14.5 (15.0 ) 117.5 Other non-current liabilities 1.9 58.2 52.2 — 112.3 Due to affiliates 106.7 57.1 427.5 (591.3 ) — Total Liabilities 1,158.3 1,429.7 787.8 (877.9 ) 2,497.9 Total Stockholders’ Equity 217.5 661.7 210.0 (871.7 ) 217.5 Total Liabilities and Stockholders’ Equity $ 1,375.8 $ 2,091.4 $ 997.8 $ (1,749.6 ) $ 2,715.4 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (47.6 ) $ 295.2 $ 65.2 $ 2.0 $ 314.8 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (68.4 ) 68.4 — — Purchases of property, plant and equipment — (76.2 ) (12.0 ) — (88.2 ) Acquisitions, net of cash acquired — (8.1 ) (9.0 ) — (17.1 ) Other — 4.9 10.2 — 15.1 Net cash (used in) provided by investing activities from continuing operations — (147.8 ) 57.6 — (90.2 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 607.8 635.0 — 1,242.8 Repayments of borrowings under long-term debt obligations — (707.6 ) (639.5 ) — (1,347.1 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 135.6 (22.8 ) (112.8 ) — — Proceeds from exercise of stock options 17.8 — — — 17.8 Treasury stock repurchased (105.7 ) — — — (105.7 ) Repayments of deferred financing costs — (3.2 ) — — (3.2 ) Repayments of finance lease obligations and other — (7.8 ) — — (7.8 ) Net cash provided by (used in) financing activities from continuing operations 47.7 (133.6 ) (117.3 ) — (203.2 ) Net cash provided by continuing operations 0.1 13.8 5.5 2.0 21.4 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (2.0 ) (2.0 ) Investing cash flows, net — — — — — Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (2.0 ) (2.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (0.3 ) — (0.3 ) Increase in cash and cash equivalents 0.1 13.8 5.2 — 19.1 CASH AND CASH EQUIVALENTS, beginning of period 0.1 6.2 39.5 — 45.8 CASH AND CASH EQUIVALENTS, end of period $ 0.2 $ 20.0 $ 44.7 $ — $ 64.9 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (55.8 ) $ 166.6 $ 72.3 $ 24.4 $ 207.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (75.8 ) 75.8 — — Purchases of property, plant and equipment — (58.8 ) (15.3 ) 0.5 (73.6 ) Other — 0.1 4.9 (2.6 ) 2.4 Net cash (used in) provided by investing activities from continuing operations — (134.5 ) 65.4 (2.1 ) (71.2 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 414.0 680.9 — 1,094.9 Repayments of borrowings under long-term debt obligations — (444.0 ) (751.8 ) — (1,195.8 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 55.8 (3.0 ) (52.8 ) — — Proceeds from exercise of stock options 4.6 — — — 4.6 Treasury stock repurchased (4.6 ) — — — (4.6 ) Repayments of finance lease obligations and other — (5.2 ) (0.9 ) — (6.1 ) Net cash provided by (used in) financing activities from continuing operations 55.8 (38.2 ) (124.6 ) — (107.0 ) Net cash (used in) provided by continuing operations — (6.1 ) 13.1 22.3 29.3 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (24.4 ) (24.4 ) Investing cash flow, net — — — 2.1 2.1 Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (22.3 ) (22.3 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (3.1 ) — (3.1 ) (Decrease) increase in cash and cash equivalents — (6.1 ) 10.0 — 3.9 CASH AND CASH EQUIVALENTS, beginning of period 0.1 12.3 29.5 — 41.9 CASH AND CASH EQUIVALENTS, end of period $ 0.1 $ 6.2 $ 39.5 $ — $ 45.8 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (55.3 ) $ 376.9 $ (98.7 ) $ 33.6 $ 256.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (129.7 ) 129.7 — — Purchases of property, plant and equipment — (55.8 ) (11.2 ) 0.4 (66.6 ) Other — 0.8 4.1 (4.0 ) 0.9 Net cash (used in) provided by investing activities from continuing operations — (184.7 ) 122.6 (3.6 ) (65.7 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 603.9 729.0 — 1,332.9 Repayments of borrowings under long-term debt obligations — (790.8 ) (680.7 ) — (1,471.5 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 87.5 0.5 (88.0 ) — — Proceeds from exercise of stock options 12.8 — — — 12.8 Treasury stock repurchased (44.9 ) — — — (44.9 ) Payment of deferred financing costs — — (0.5 ) — (0.5 ) Other — (1.4 ) (2.6 ) — (4.0 ) Net cash provided by (used in) financing activities from continuing operations 55.4 (187.8 ) (42.8 ) — (175.2 ) Net cash provided by (used in) continuing operations 0.1 4.4 (18.9 ) 30.0 15.6 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (33.6 ) (33.6 ) Investing cash flow, net — — — 3.6 3.6 Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (30.0 ) (30.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (9.4 ) — (9.4 ) Increase (decrease) in cash and cash equivalents 0.1 4.4 (28.3 ) — (23.8 ) CASH AND CASH EQUIVALENTS, beginning of period — 7.9 57.8 — 65.7 CASH AND CASH EQUIVALENTS, end of period 0.1 12.3 29.5 — 41.9 LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS — — 0.8 — 0.8 CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS $ 0.1 $ 12.3 $ 28.7 $ — $ 41.1 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2019 , 2018 AND 2017 SCHEDULE II (in millions) Additions Description Balance at Beginning of Period Charges to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Allowance for doubtful accounts: Year Ended December 31, 2017 $ 20.9 9.8 — (6.0 ) $ 24.7 Year Ended December 31, 2018 $ 24.7 31.3 — (8.4 ) $ 47.6 Year Ended December 31, 2019 $ 47.6 29.3 — (5.0 ) $ 71.9 Additions Description Balance at Beginning of Period Charges to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Valuation allowance for deferred tax assets: Year Ended December 31, 2017 $ 45.2 9.9 — — $ 55.1 Year Ended December 31, 2018 $ 55.1 9.5 — (21.5 ) $ 43.1 Year Ended December 31, 2019 $ 43.1 0.8 — (13.9 ) $ 30.0 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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. |
Basis of Consolidation | Basis of Consolidation. The accompanying financial statements include the accounts of Tempur Sealy International and its controlled subsidiaries. Intercompany balances and transactions have been eliminated. The Company's Consolidated Financial Statements include the results of Comfort Revolution, LLC ("Comfort Revolution"). Prior to July 11, 2018, Comfort Revolution constituted a variable interest entity for which the Company was 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. On July 11, 2018, the Company acquired the remaining 55% equity interest in Comfort Revolution, which did not result in a material impact to the Company's Consolidated Financial Statements. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards. Revenue Recognition. On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" using the modified retrospective method. Under the modified retrospective method, the Company recognized the cumulative effect of initially applying the new revenue standard as a decrease to the opening balance of retained earnings. Topic 606 required additional qualitative and quantitative disclosures. Other presentation and disclosure changes include the classification of royalty income to net sales and changes in the balance sheet classification and measurement for accrued sales returns. For additional information, see Note 4 , " Revenue Recognition " of the Consolidated Financial Statements. Pensions. In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost", which is accounting guidance that changed how employers who sponsor defined benefit pension and/or postretirement benefit plans present the net periodic benefit cost in the 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 Consolidated Statements of Income as other employee compensation costs from services rendered during the period. All other components of the net periodic benefit cost are presented separately outside of the operating income caption. The Company adopted ASU No. 2017-07 as of January 1, 2018 and applied the accounting guidance retrospectively. Adoption of this guidance resulted in a reclassification of pension and other postretirement plan non-service income and remeasurement adjustments, net, from within operating income to non-operating income. The adoption of this guidance was not material to the Consolidated Statement of Income for any periods presented. Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" , which allows entities to reclassify tax effects stranded in accumulated other comprehensive loss ("AOCL") as a result of the Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform Act") to retained earnings. The Company early adopted ASU No. 2018-02 on March 31, 2018. The impact of adoption was not material to the Company's Consolidated Financial Statements. Derivatives and Hedging. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", which simplifies hedge accounting by better aligning a company's financial reporting for hedging relationships with its risk management activities. This guidance expands an entity’s ability to hedge non-financial and financial risk components and reduces complexity in fair value hedges of interest rate risk; eliminates the requirement to separately measure and report hedge ineffectiveness and present the entire change in the fair value of a hedging instrument in the same income statement line as the hedged item; eases certain documentation and assessment requirements; and modifies the accounting for components excluded from the assessment of hedge effectiveness. The Company early adopted this ASU in the third quarter of 2018. There were no adjustments to the Company's Consolidated Financial Statements as a result of the adoption. Leases. Effective January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases ("ASC 842"). ASC 842 consists of a comprehensive lease accounting standard requiring most leases to be recognized on the Consolidated Balance Sheet and significant new disclosures. The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed it to carry forward the historical lease classification. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded within the Consolidated Balance Sheet and are expensed on a straight-line basis over the lease term within the Consolidated Statement of Income. The lease term is determined by assuming the exercise of renewal options that are reasonably certain. As most leases do not provide an implicit interest rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. The adoption of ASC 842 resulted in the recognition of right-of-use assets, net of prepaid lease payments and lease incentives, of $197.2 million and operating lease liabilities of $203.3 million Recently Issued Accounting Pronouncements Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which requires entities to estimate expected lifetime credit losses on financial assets and provide expanded disclosures. The ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. |
Foreign Currency | Foreign Currency. Assets and liabilities of non-U.S. subsidiaries, whose functional currency is the local currency, are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the period. The adjustments resulting from translating the financial statements of foreign subsidiaries are included in accumulated other comprehensive loss (“AOCL”), a component of stockholders’ equity, and included in net earnings only upon sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in net earnings based on differences between foreign exchange rates on the transaction date and on the settlement date. These amounts are not considered material to the Consolidated Financial Statements. |
Derivative Financial Instruments | Derivative Financial Instruments. Derivative financial instruments are used in the normal course of business to manage interest rate and foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the Consolidated Balance Sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows or a hedge of a net investment in a foreign operation. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders’ equity section of the Consolidated Balance Sheets as a component of AOCL and subsequently recognized in the Consolidated Statements of Comprehensive Income when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge is recognized in income immediately. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of AOCL in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. 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. 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 forward exchange contract assets and liabilities as of December 31, 2019 and 2018 were not material in any period presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents consist of all highly liquid investments with initial maturities of three months or less. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of those instruments. |
Inventories | Inventories. Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method |
Property, Plant and Equipment | Property, Plant and Equipment. Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Estimated Useful Lives (in years) Buildings 25-30 Computer equipment and software 3-7 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 The Company records depreciation and amortization in cost of sales for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or seven years . Assets under finance leases are included within property, plant and equipment and represent non-cash investing activities. |
Long-Lived Assets | Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset or group of assets. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value. Fair value generally is determined from estimated discounted future net cash flows (for assets held for use) or net realizable value (for assets held for sale). |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate impairment may have occurred. The Company performs an annual impairment test on goodwill and indefinite-lived intangible assets on October 1 of each year and whenever events or circumstances make it more likely than not that impairment may have occurred. In conducting the impairment test for the North America and International reporting units, the fair value of each of the Company's reporting units is compared to its respective carrying amount including goodwill. If the fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the fair value, further analysis is performed to assess impairment. The Company’s determination of fair value of the reporting units is based on a discounted cash flow approach, with an appropriate risk-adjusted discount rate, and a market approach. Any identified impairment would result in an adjustment to the Company’s results of operations. The Company also tests its indefinite-lived intangible assets, principally the Tempur and Sealy trade names. The Company tested both trade names for impairment using a “relief-from-royalty” method. Significant assumptions inherent in the methodologies are employed and include such estimates as royalty and discount rates. The Company performed its annual impairment test of goodwill and indefinite-lived intangible assets in 2019 , 2018 and 2017 , none of which resulted in the recognition of impairment charges. The most recent annual impairment tests performed as of October 1, 2019 |
Accrued Sales Returns | Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. The Company considers the impact of recoverable salvage value on sales returns by segment in determining its estimate of future sales returns. Effective January 1, 2018 with the Company's adoption of Topic 606, the Company recognizes a return asset for the right to recover the goods returned by the customer. The right of return asset is recognized on a gross basis outside of the accrued sales returns and is not material to the Company's 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-Pedic 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-Pedic 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-Pedic pillows have a warranty term of 3 years, non-prorated. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company regularly reviews the adequacy of its allowance for doubtful accounts. The Company determines the allowance for doubtful accounts based on historical write-off experience and current economic conditions and also considers factors such as customer credit, past transaction history with the customer and changes in customer payment terms when determining whether the collection of a customer receivable is reasonably assured. Account balances are charged off against the allowance after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. |
Income Taxes | Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carry forwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain foreign and domestic tax positions utilizing a proscribed recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. |
Cost of Sales | Cost of Sales |
Cooperative Advertising, Rebate and Other Promotional Programs | Cooperative Advertising, Rebate and Other Promotional Programs. The Company enters into programs with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these programs. The Company periodically assesses these liabilities based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer or whether the customer will meet the requirements to receive rebate funds. The Company generally negotiates these programs on a customer-by-customer basis. Some of these agreements extend over several years. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to the estimates are recorded and charged to earnings in the period in which they are identified. Rebates and cooperative advertising are classified as a reduction of revenue and presented within net sales in the accompanying Consolidated Statements of Income. Certain cooperative advertising expenses are reported as components of selling and marketing expenses in the accompanying Consolidated Statements of Income because the Company receives an identifiable benefit and the fair value of the advertising benefit can be reasonably estimated. |
Advertising Costs | Advertising Costs. The Company expenses advertising costs as incurred except for production costs and advance payments, which are deferred and expensed when advertisements run for the first time. Direct response advance payments are deferred and amortized over the life of the program. Advertising costs are included in selling and marketing expenses in the accompanying Consolidated Statements of Income. Advertising costs charged to expense were $280.5 million , $259.3 million and $283.5 million for the years ended December 31, 2019 , 2018 and 2017 |
Research and Development Expenses | Research and Development Expenses. Research and development expenses for new products are expensed as they are incurred and are included in general, administrative and other expenses in the accompanying Consolidated Statements of Income. |
Stock-Based Compensation | Stock-based Compensation. The Company accounts for stock-based payment transactions in which the Company receives employee services in exchange for equity instruments of the Company. Stock-based compensation cost for restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”) and deferred stock units (“DSUs”) is measured based on the closing fair market value of the Company’s common stock on the date of grant. Stock-based compensation cost for stock options is estimated at the grant date based on each option’s fair value as calculated by the Black-Scholes option-pricing model. The Company recognizes stock-based compensation cost as expense for awards other than its PRSUs ratably on a straight-line basis over the requisite service period. The Company recognizes stock-based compensation cost associated with its PRSUs over the requisite service period if it is probable that the performance conditions will be satisfied. |
Treasury Stock | Treasury Stock. Subject to Delaware law, and the limitations in the 2019 Credit Agreement (as defined in Note 8 |
Pension Obligations | Pension Obligations. The Company has a noncontributory, defined benefit pension plan covering current and former hourly employees at two of its active Sealy plants and ten previously-closed Sealy U.S. facilities. Sealy Canada, Ltd. (a 100.0% owned subsidiary of the Company) also sponsors a noncontributory, defined benefit pension plan covering hourly employees at one of its facilities. Both plans provide retirement and survivorship benefits based on the employees' credited years of service. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at December 31, the measurement date. The benefit obligation is the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Inventory, Current | Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method and consist of the following: December 31, (in millions) 2019 2018 Finished goods $ 157.4 $ 148.9 Work-in-process 10.8 11.8 Raw materials and supplies 92.3 61.6 $ 260.5 $ 222.3 |
Schedule of Property, Plant and Equipment | Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Estimated Useful Lives (in years) Buildings 25-30 Computer equipment and software 3-7 Leasehold improvements 4-7 Machinery and equipment 3-7 Office furniture and fixtures 5-7 The Company records depreciation and amortization in cost of sales for long-lived assets used in the manufacturing process, and within each line item of operating expenses for all other long-lived assets. Leasehold improvements are amortized over the shorter of the life of the lease or seven years . Assets under finance leases are included within property, plant and equipment and represent non-cash investing activities. Property, plant and equipment, net consisted of the following: December 31, (in millions) 2019 2018 Machinery and equipment $ 350.7 $ 319.3 Land and buildings 317.8 328.5 Computer equipment and software 155.2 142.2 Furniture and fixtures 52.5 50.4 Construction in progress 65.0 52.4 Total property, plant, and equipment 941.2 892.8 Accumulated depreciation (505.4 ) (472.0 ) Total property, plant and equipment, net $ 435.8 $ 420.8 |
Changes in Accrued Sales Returns | The Company had the following activity for accrued sales returns from December 31, 2017 to December 31, 2019 : (in millions) Balance as of December 31, 2017 $ 30.0 Reclassification and remeasurement of sales return asset under Topic 606 1.7 Balance as of January 1, 2018 31.7 Amounts accrued 83.8 Returns charged to accrual (81.2 ) Balance as of December 31, 2018 34.3 Amounts accrued 112.4 Returns charged to accrual (107.4 ) Balance as of December 31, 2019 $ 39.3 |
Warranty Activity | The Company had the following activity for its accrued warranty expense from December 31, 2017 to December 31, 2019 : (in millions) Balance as of December 31, 2017 $ 36.7 Remeasurement of obligations under Topic 606 2.8 Balance as of January 1, 2018 39.5 Amounts accrued 21.9 Warranties charged to accrual (25.0 ) Balance as of December 31, 2018 36.4 Amounts accrued 29.4 Warranties charged to accrual (24.2 ) Balance as of December 31, 2019 $ 41.6 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | Components of amounts reflected in the Consolidated Statements of Income related to discontinued operations are presented in the following table for the years ended December 31. Twelve Months Ended December 31, 2019 2018 2017 Net sales $ — $ 31.1 $ 53.8 Cost of sales — 23.0 34.1 Gross profit — 8.1 19.7 Selling and marketing expenses 0.1 12.4 15.2 General, administrative and other expenses 2.6 6.8 11.6 Operating loss (2.7 ) (11.1 ) (7.1 ) Interest (income) expense, net and other (1.5 ) 7.7 19.9 Loss from discontinued operations before income taxes (1.2 ) (18.8 ) (27.0 ) Income tax provision (0.2 ) — (3.9 ) Loss generated from discontinued operations, net of tax (1.4 ) (18.8 ) (30.9 ) Gain on disposal of business — 1.0 — Loss from discontinued operations, net of tax $ (1.4 ) $ (17.8 ) $ (30.9 ) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's disaggregated revenue by channel, product and geographical region, including a reconciliation of disaggregated revenue by segment, for the years ended December 31. Twelve Months Ended December 31, 2019 Twelve Months Ended December 31, 2018 (in millions) North America International Consolidated North America International Consolidated Channel Wholesale $ 2,273.5 $ 443.6 $ 2,717.1 $ 1,989.1 $ 463.0 $ 2,452.1 Direct 259.8 129.1 388.9 147.1 103.7 250.8 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 North America International Consolidated North America International Consolidated Product Bedding $ 2,379.6 $ 455.7 $ 2,835.3 $ 2,002.1 $ 453.2 $ 2,455.3 Other 153.7 117.0 270.7 134.1 113.5 247.6 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 North America International Consolidated North America International Consolidated Geographical region United States $ 2,312.3 $ — $ 2,312.3 $ 1,928.9 $ — $ 1,928.9 Canada 221.0 — 221.0 207.3 — 207.3 International — 572.7 572.7 — 566.7 566.7 Net sales $ 2,533.3 $ 572.7 $ 3,106.0 $ 2,136.2 $ 566.7 $ 2,702.9 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Fair Value of Assets Acquired and Liabilities Assumed | The final allocation of the purchase price is based on the fair values of the assets acquired and liabilities assumed as of April 1, 2019, which includes the following: (in millions) Working capital (accounts receivable and inventory, net of accounts payable and accrued liabilities) $ (1.4 ) Property and equipment 5.0 Goodwill 2.4 Other intangible assets 2.1 Operating lease right-of-use assets 28.5 Long-term operating lease liabilities (28.5 ) Net purchase price $ 8.1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Reportable Business Segment | The following summarizes the Company's goodwill by reportable segment: (in millions) North America International Consolidated Balance as of December 31, 2017 $ 576.6 $ 156.1 $ 732.7 Foreign currency translation adjustments and other (5.5 ) (4.2 ) (9.7 ) Balance as of December 31, 2018 $ 571.1 $ 151.9 $ 723.0 Goodwill resulting from acquisitions 2.4 5.4 7.8 Foreign currency translation adjustments and other 3.1 (1.6 ) 1.5 Balance as of December 31, 2019 $ 576.6 $ 155.7 $ 732.3 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2019 December 31, 2018 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 559.5 $ — $ 559.5 $ 556.5 $ — $ 556.5 Amortized intangible assets: Contractual distributor relationships 15 85.5 38.7 46.8 84.7 32.7 52.0 Technology and other 4-10 91.1 68.7 22.4 90.2 61.1 29.1 Patents, other trademarks and other trade names 5-20 27.9 18.6 9.3 32.0 21.0 11.0 Customer databases, relationships and reacquired rights 2-5 30.9 27.5 3.4 21.3 20.6 0.7 Total $ 794.9 $ 153.5 $ 641.4 $ 784.7 $ 135.4 $ 649.3 |
Schedule of Indefinite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2019 December 31, 2018 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Unamortized indefinite life intangible assets: Trade names $ 559.5 $ — $ 559.5 $ 556.5 $ — $ 556.5 Amortized intangible assets: Contractual distributor relationships 15 85.5 38.7 46.8 84.7 32.7 52.0 Technology and other 4-10 91.1 68.7 22.4 90.2 61.1 29.1 Patents, other trademarks and other trade names 5-20 27.9 18.6 9.3 32.0 21.0 11.0 Customer databases, relationships and reacquired rights 2-5 30.9 27.5 3.4 21.3 20.6 0.7 Total $ 794.9 $ 153.5 $ 641.4 $ 784.7 $ 135.4 $ 649.3 |
Expected Future Amortization Expense | Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31: (in millions) 2020 $ 17.1 2021 15.9 2022 15.1 2023 8.3 2024 6.4 Thereafter 19.1 Total $ 81.9 |
Unconsolidated Affiliate Comp_2
Unconsolidated Affiliate Companies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Financial Information for Joint Ventures | The tables below present summarized financial information for joint ventures as of and for the years ended December 31: (in millions) 2019 2018 Current assets $ 81.0 $ 81.8 Non-current assets 15.3 18.6 Total liabilities 55.4 59.0 Equity 40.9 41.4 (in millions) 2019 2018 2017 Net sales $ 212.6 $ 220.5 $ 195.1 Gross profit 147.2 147.8 129.9 Income from operations 44.6 46.6 43.3 Net income 32.4 33.5 31.7 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | Debt for the Company consists of the following: (in millions) December 31, 2019 December 31, 2018 Debt: Amount Rate Amount Rate Maturity Date 2019 Credit Agreement: Term A Facility $ 425.0 (1) $ — N/A October 16, 2024 Revolver — (1) — N/A October 16, 2024 2016 Credit Agreement: Term A Facility — N/A 525.0 (2) Revolver — N/A — (2) 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 Securitized debt — (3) 9.1 (3) April 6, 2021 Finance lease obligations (4) 64.1 66.7 Various Other 7.9 3.0 Various Total debt 1,547.0 1,653.8 Less: Deferred financing costs 7.0 7.6 Total debt, net 1,540.0 1,646.2 Less: Current portion 37.4 47.1 Total long-term debt, net $ 1,502.6 $ 1,599.1 (1) Interest at LIBOR plus applicable margin of 1.625% as of December 31, 2019. (2) Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2018. (3) Interest at one month LIBOR index plus 80 basis points. (4) Finance lease obligations are a non-cash financing activity. Refer to Note 9, "Leases." |
Schedule of Estimated Fair Values of Debt Instruments | The fair values of these material financial instruments are as follows: Fair Value (in millions) December 31, 2019 December 31, 2018 2023 Senior Notes $ 464.2 $ 435.6 2026 Senior Notes 634.9 549.3 |
Schedule of Maturities of Long-term Debt | As of December 31, 2019 , the scheduled maturities of long-term debt outstanding, excluding finance lease obligations, for each of the next five years and thereafter are as follows: (in millions) 2020 $ 29.2 2021 21.3 2022 21.3 2023 481.8 2024 329.3 Thereafter 600.0 Total $ 1,482.9 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Consolidated Balance Sheet as of December 31, 2019 : (in millions) December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 245.4 Finance lease assets Property, plant and equipment, net 54.4 Total leased assets $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 50.8 Finance lease obligations Current portion of long-term debt 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 205.4 Finance lease obligations Long-term debt, net 55.9 Total lease obligations $ 320.3 |
Lease, Expense | The following table summarizes the classification of lease expense in the Company's Consolidated Statement of Income for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Operating lease expense: Operating lease expense $ 63.8 Short-term lease expense 9.0 Variable lease expense 18.8 Finance lease expense: Amortization of right-of-use assets 8.5 Interest on lease obligations 4.7 Total lease expense $ 104.8 The following table provides supplemental information related to the Company's Consolidated Statement of Cash Flows for the year ended December 31, 2019 : Twelve months ended (in millions) December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases $ 62.7 Operating cash flows paid for finance leases $ 3.7 Financing cash flows paid for finance leases $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 4.1 |
Lessee, Operating Lease, Liability, Maturity | The following table sets forth the scheduled maturities of lease obligations as of December 31, 2019 : (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2020 $ 62.1 $ 12.3 $ 74.4 2021 54.5 12.0 66.5 2022 46.6 9.8 56.4 2023 36.2 7.8 44.0 2024 29.0 6.2 35.2 Thereafter 74.5 36.3 110.8 Total lease payments 302.9 84.4 387.3 Less: Interest (46.7 ) (20.3 ) (67.0 ) Present value of lease obligations $ 256.2 $ 64.1 $ 320.3 |
Finance Lease, Liability, Maturity | The following table sets forth the scheduled maturities of lease obligations as of December 31, 2019 : (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2020 $ 62.1 $ 12.3 $ 74.4 2021 54.5 12.0 66.5 2022 46.6 9.8 56.4 2023 36.2 7.8 44.0 2024 29.0 6.2 35.2 Thereafter 74.5 36.3 110.8 Total lease payments 302.9 84.4 387.3 Less: Interest (46.7 ) (20.3 ) (67.0 ) Present value of lease obligations $ 256.2 $ 64.1 $ 320.3 |
Lease, Lease Term and Discount Rate | The following table provides lease term and discount rate information related to operating and finance leases as of December 31, 2019 : December 31, 2019 Weighted average remaining lease term (years): Operating leases 6.43 Finance leases 9.03 Weighted average discount rate: Operating leases 5.42 % Finance leases 6.27 % |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Cost for Employees | Components of total net periodic pension cost for the years ended December 31 were as follows: (in millions) 2019 2018 2017 Service cost $ 0.9 $ 1.0 $ 0.9 Interest cost 1.2 1.1 1.2 Expected return on assets (1.3 ) (1.5 ) (1.5 ) Amortization of prior service cost 0.1 0.1 0.1 Amortization of net gain 0.1 — — Net periodic pension cost $ 1.0 $ 0.7 $ 0.7 |
Schedule of Other Changes in Plan Assets and Benefit Obligations Recognized in Accumulated Other Comprehensive Income | The other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, for the years ended December 31 were: (in millions) 2019 2018 2017 Net loss $ 2.2 $ 0.6 $ 0.4 New prior service cost 0.6 0.1 0.5 Amortization of prior service cost (0.1 ) (0.1 ) (0.1 ) Amortization or settlement recognition of net loss (0.1 ) — — Total recognized in other comprehensive loss $ 2.6 $ 0.6 $ 0.8 |
Schedule of Weighted-Average Assumptions Used in Calculating Net Periodic Benefit Costs | The following assumptions, calculated on a weighted-average basis, were used to determine net periodic pension cost for the Company’s Plans for the years ended December 31: 2019 2018 2017 Discount rate (a) 4.10 % 3.58 % 4.07 % Expected long-term return on plan assets 6.16 % 6.25 % 6.64 % (a) The discount rates used in 2019 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 4.16% and 3.90% , respectively. The discount rates used in 2018 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 3.54% and 3.70% |
Schedule of Funded Status of the Pension Plans | The measurement date for the Company's Plans is December 31. The funded status of the Plans as of December 31 was as follows: (in millions) 2019 2018 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 30.0 $ 32.1 Service cost 0.9 1.0 Interest cost 1.2 1.1 Plan amendments 0.5 0.1 Actuarial (gain) loss 5.5 (3.0 ) Benefits paid (1.3 ) (0.9 ) Expenses paid (0.1 ) (0.1 ) Foreign currency exchange rate changes 0.2 (0.3 ) Projected benefit obligation at end of year $ 36.9 $ 30.0 Change in Plan Assets: Fair value of plan assets at beginning of year $ 22.2 $ 25.3 Actual return on plan assets 4.6 (2.1 ) Employer contribution 1.4 0.3 Benefits paid (1.3 ) (0.9 ) Expenses paid (0.1 ) (0.1 ) Foreign currency exchange rate changes 0.2 (0.3 ) Fair value of plan assets at end of year $ 27.0 $ 22.2 Funded status $ (9.9 ) $ (7.8 ) |
Schedule of Amounts Recognized in the Consolidated Balance Sheet and the Accumulated Benefit Obligation and Fair Value of Assets | The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2019 2018 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 10.0 $ 8.1 Non-current benefit asset 0.1 0.3 |
Schedule of Weighted-Average Assumptions Used in Calculating Benefit Obligations | The following assumption, calculated on a weighted-average basis, was used to determine benefit obligations for the Company’s defined benefit pension plans as of December 31: 2019 2018 Discount rate (a) 3.16 % 4.13 % (a) The discount rates used in 2019 to determine the benefit obligations for the U.S. retirement plan and Canadian retirement plan were 3.15% and 3.20% , respectively. The discount rates used in 2018 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 4.16% and 3.90% , respectively. |
Schedule of Estimated Future Benefit Payments | The following table presents estimated future benefit payments: (in millions) Fiscal 2020 $ 1.1 Fiscal 2021 1.1 Fiscal 2022 1.2 Fiscal 2023 1.2 Fiscal 2024 1.3 Fiscal 2025 ‑ Fiscal 2028 8.0 |
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations are as follows: 2019 Target 2019 Common/collective trust consisting primarily of: Equity securities 60.0 % 55.7 % Debt securities 40.0 % 44.0 % Other — % 0.3 % Total plan assets 100.0 % 100.0 % |
Schedule of Fair Value of Pension Plan Assets by Asset Category | The fair value of the Company’s plan assets, all valued at NAV, at December 31 by asset category was as follows: (in millions) 2019 2018 Asset Category Common/collective trust U.S. equity $ 5.5 $ 14.1 International equity 9.5 3.6 Total equity based funds 15.0 17.7 Common/collective trust - fixed income 11.9 4.4 Money market funds 0.1 0.1 Total $ 27.0 $ 22.2 |
Schedule of Expenses Related to the Multi-employer Benefit Plans | The expense recognized by the Company for such contributions for the years ended December 31 was follows: (in millions) 2019 2018 2017 Multi‑employer retirement plan expense $ 4.3 $ 3.9 $ 4.3 Multi‑employer health and welfare plan expense 3.8 3.6 3.5 |
Schedule of Information Regarding Multi-employer Pension Plans | The following table presents information regarding the multi‑employer pension plans that are significant to the Company for the years ended December 31, 2019 and 2018 , respectively: Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2019 FIP/RP Status (2) Contributions of the Company in 2019 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions (in millions) United Furniture Workers Pension Fund A (4) 13-5511877-001 2/28/19 Red Implemented $ 1.1 No 2020 2017, 2018, 2019 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/18 Red Implemented $ 1.0 Yes, 10.0% 2022 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/18 Red Implemented $ 0.8 Yes, 10.0% 2021 N/A Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2018 FIP/RP Status (2) Contributions of the Company in 2018 Surcharge Imposed (3) Expiration Date Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions (in millions) United Furniture Workers Pension Fund A (4) 13-5511877-001 2/28/18 Red Implemented $ 0.7 No 2020 2016, 2017, 2018 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/17 Red Implemented $ 0.7 Yes, 10.0% 2019 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/17 Red Implemented $ 0.8 Yes, 10.0% 2021 N/A (1) The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage of less than 65.0% . A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than 80.0% , or projects a credit balance deficit within seven years . A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than 80.0% and does not have a projected credit balance deficit within seven years . The zone status is based on the plan’s year end rather than the Company’s. The zone status listed for each plan is based on information that the Company received from that plan and is certified by that plan’s actuary for the most recent year available. (2) Funding Improvement Plan or Rehabilitation Plan as defined in the Employee Retirement Income Security Act of 1974 has been implemented or is pending. (3) Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge. (4) The Company represented more than 5.0% of the total contributions for the most recent plan year available. For year ended December 31, 2017 , the Company contributed $1.1 million to the plan. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Changes in accumulated other comprehensive income | AOCL consisted of the following: Year Ended December 31, (in millions) 2019 2018 2017 Foreign Currency Translation Balance at beginning of period $ (91.7 ) $ (72.8 ) $ (101.9 ) Other comprehensive loss: Foreign currency translation adjustments (1) 9.5 (18.9 ) 29.1 Balance at end of period $ (82.2 ) $ (91.7 ) $ (72.8 ) Pension Benefits Balance at beginning of period $ (3.6 ) $ (2.7 ) $ (2.2 ) Other comprehensive loss: Net change from period revaluation (2.6 ) (0.4 ) (0.8 ) Tax benefit (2) 0.7 0.1 0.3 Total other comprehensive loss before reclassifications, net of tax (1.9 ) (0.3 ) (0.5 ) Net amount reclassified to earnings — — — U.S tax reform - reclassification to retained earnings upon adoption of ASU No. 2018-02 — (0.5 ) — Tax expense (2) — (0.1 ) — Total amount reclassified from accumulated other comprehensive loss, net of tax — (0.6 ) — Total other comprehensive loss (1.9 ) (0.9 ) (0.5 ) Balance at end of period $ (5.5 ) $ (3.6 ) $ (2.7 ) Foreign Exchange Forward Contracts Balance at beginning of period $ — $ — $ 0.6 Other comprehensive loss: Net change from period revaluation — — (0.6 ) Tax benefit (2) — — 0.1 Total other comprehensive loss before reclassifications, net of tax — — (0.5 ) Net amount reclassified to earnings (3) — — (0.1 ) Total amount reclassified from accumulated other comprehensive loss, net of tax — — (0.1 ) Total other comprehensive loss — — (0.6 ) Balance at end of period $ — $ — $ — (1) In 2019 , 2018 and 2017 , there were no tax impacts related to foreign currency translation adjustments and no amounts were reclassified to earnings. (2) These amounts were included in the income tax provision in the accompanying Consolidated Statements of Income. (3) This amount was included in cost of sales, net in the accompanying Consolidated Statements of Income . |
Other Items (Tables)
Other Items (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Items [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: December 31, December 31, (in millions) 2019 2018 Taxes $ 136.0 $ 136.8 Other 90.8 84.1 Wages and benefits 79.5 43.7 Advertising 56.9 46.1 Operating leases obligations 50.8 — Sales returns 26.2 22.0 Warranty 19.4 14.9 Rebates 13.6 11.6 $ 473.2 $ 359.2 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The Company’s stock-based compensation expense for the year ended December 31, 2019 included PRSUs, stock options, RSUs and DSUs. A summary of the Company’s stock-based compensation expense is presented below: Year Ended December 31, (in millions) 2019 2018 2017 PRSU expense (benefit) $ 1.4 $ 2.5 $ (6.5 ) Stock option expense 4.9 6.7 7.1 RSU/DSU expense 20.5 15.6 12.7 Total stock-based compensation expense $ 26.8 $ 24.8 $ 13.3 |
Summary of PRSU Activity and Related Information | A summary of the Company’s PRSU activity and related information for the years ended December 31, 2019 and 2018 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2017 2.7 $ 64.13 Granted 0.2 51.72 Vested (0.1 ) 68.57 Forfeited (0.8 ) 68.07 Awards unvested at December 31, 2018 2.0 61.07 Granted 0.1 85.41 Vested — 59.21 Forfeited (1.3 ) 70.94 Awards unvested at December 31, 2019 0.8 $ 60.09 |
Schedule of Stock Options Valuation Assumptions | The Company uses the Black-Scholes option-pricing model to calculate the fair value of stock options granted. During the year ended December 31, 2019, no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2019 , 2018 and 2017 are set forth in the following table. Expected volatility is based on the unbiased standard deviation of Tempur Sealy International’s common stock over the option term. The expected life of the options represents the period of time that the Company expects the options granted to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option for the expected term of the instrument. The dividend yield reflects an estimate of dividend payouts over the term of the award. The Company uses historical data to determine these assumptions. Year Ended December 31, 2019 2018 2017 Expected volatility range of stock N/A 39.8% - 40.1% 37.4% - 40.8% Expected life of option, range in years N/A 5 5 Risk-free interest range rate N/A 2.2% - 2.8% 1.8% - 1.9% Expected dividend yield on stock N/A —% —% |
Schedule of Stock Option Activity | A summary of the Company’s unvested shares relating to stock options as of December 31, 2019 and 2018 , and changes during the years ended December 31, 2019 and 2018 , are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2017 0.7 $ 67.95 Granted 0.3 61.84 Vested (0.2 ) 66.72 Forfeited (0.2 ) 60.45 Options unvested at December 31, 2018 0.6 $ 66.20 Granted — — Vested (0.1 ) 66.66 Forfeited — 46.36 Options unvested at December 31, 2019 0.5 $ 65.99 A summary of the Company’s stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2019 and 2018 is presented below: (in millions, except per share amounts and years) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at December 31, 2017 1.7 $ 58.93 Granted 0.3 61.84 Exercised (0.2 ) 28.20 Forfeited (0.2 ) 60.45 Options outstanding at December 31, 2018 1.6 $ 62.51 Granted — — Exercised (0.3 ) 52.49 Forfeited — 46.36 Options outstanding at December 31, 2019 1.3 $ 65.18 6.35 20.8 Options exercisable at December 31, 2019 0.8 $ 64.72 5.73 18.4 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2019 and 2018 is presented below: (in millions, except per share amounts) Shares Weighted Average Release Price Aggregate Intrinsic Value Awards outstanding at December 31, 2017 0.6 $ 64.94 Granted 0.3 61.29 Vested (0.1 ) 62.85 Terminated — 64.00 Awards outstanding at December 31, 2018 0.8 $ 63.82 $ 34.6 Granted 0.7 43.07 Vested (0.3 ) 62.54 Terminated — 58.07 Awards outstanding at December 31, 2019 1.2 $ 52.96 $ 110.5 |
Schedule of Unrecognized Compensation Expense | Excluding any potential compensation expense related to the 2019 Aspirational Plan PRSUs discussed above, a summary of total unrecognized stock-based compensation expense based on current performance estimates related to stock options, DSUs, RSUs and PRSUs for the year ended December 31, 2019 is presented below: (in millions, except years) December 31, 2019 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 6.6 1.50 Unrecognized DSU/RSU expense 37.6 2.42 Unrecognized PRSU expense 2.0 1.73 Total unrecognized stock-based compensation expense $ 46.2 2.25 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Pre-tax Income Attributable to Operating Segments | The following sets forth the amount of income before income taxes attributable to each of the Company’s geographies for the years ended December 31, 2019 , 2018 and 2017 : Year Ended December 31, (in millions) 2019 2018 2017 Income before income taxes: United States $ 150.9 $ 59.2 $ 97.2 Rest of the world 114.6 105.8 118.2 $ 265.5 $ 165.0 $ 215.4 |
Reconciliation of Statutory Tax Rate to Effective Tax Rate | The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following: Year Ended December 31, 2019 2018 2017 (dollars in millions) Amount Percentage of Income Before Income Taxes Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 55.8 21.0 % $ 34.6 21.0 % $ 75.4 35.0 % State income taxes, net of federal benefit 8.7 3.3 % 1.8 1.1 % (0.6 ) (0.3 )% Foreign tax differential 2.1 0.8 % 2.5 1.5 % (11.9 ) (5.5 )% Change in valuation allowances (8.6 ) (3.2 )% (17.7 ) (10.7 )% 5.6 2.6 % Uncertain tax positions and interest 2.4 0.9 % 33.1 20.1 % (1.0 ) (0.5 )% Subpart F income 11.0 4.1 % 6.6 4.0 % 2.7 1.2 % Manufacturing deduction — — — — (1.9 ) (0.9 )% Remeasurement of deferred taxes — — — — (69.7 ) (32.3 )% Transition Tax — — (6.8 ) (4.1 )% 45.9 21.3 % Permanent and other 3.3 1.2 % (4.5 ) (2.8 )% (0.7 ) (0.3 )% Effective income tax provision $ 74.7 28.1 % $ 49.6 30.1 % $ 43.8 20.3 % |
Tax Provision Summary | The income tax provision consisted of the following: Year Ended December 31, (in millions) 2019 2018 2017 Current provision Federal $ 50.4 $ (14.6 ) $ 73.5 State 11.9 1.1 3.1 Foreign 19.5 57.1 28.3 Total current $ 81.8 $ 43.6 $ 104.9 Deferred provision Federal $ (10.8 ) $ 11.4 $ (67.7 ) State (8.0 ) (4.5 ) 7.6 Foreign 11.7 (0.9 ) (1.0 ) Total deferred (7.1 ) 6.0 (61.1 ) Total income tax provision $ 74.7 $ 49.6 $ 43.8 |
Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets | The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets, determined using the income tax rate applicable to each period in which those items will reverse, consist of the following: December 31, (in millions) 2019 2018 Deferred tax assets: Stock-based compensation $ 13.9 $ 12.8 Accrued expenses and other 129.7 49.1 Net operating losses, foreign tax credits and other tax attribute carryforwards 43.1 56.1 Inventories 8.2 6.0 Transaction costs 6.6 13.5 Property, plant and equipment 2.9 3.6 Total deferred tax assets 204.4 141.1 Valuation allowances (30.0 ) (43.1 ) Total net deferred tax assets $ 174.4 $ 98.0 Deferred tax liabilities: Intangible assets $ (156.4 ) $ (156.8 ) Property, plant and equipment (36.9 ) (30.3 ) Accrued expenses and other (69.1 ) (5.8 ) Total deferred tax liabilities (262.4 ) (192.9 ) Net deferred tax liabilities $ (88.0 ) $ (94.9 ) |
Summary of Operating Loss and Tax Credit Carryforwards | Included in the calculation of the Company’s deferred tax assets are the following gross income tax attributes available at December 31, 2019 and 2018 , respectively: (in millions) 2019 2018 State net operating losses (“SNOLs”) $ 165.7 $ 355.7 U.S. federal foreign tax credits (“FTCs”) 12.2 12.2 U.S. state income tax credits ("SITCs") 5.3 8.0 Foreign net operating losses (“FNOLs”) 36.9 57.0 Charitable contribution carryover ("CCCs") 32.9 39.6 Interest limitation carryover ("ILC") — 10.6 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in millions) Balance as of December 31, 2017 $ 84.5 Additions based on tax positions related to 2018 2.5 Additions for tax positions of prior years 21.2 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities (4.4 ) Balance as of December 31, 2018 $ 103.8 Additions based on tax positions related to 2019 — Additions for tax positions of prior years 0.7 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities — Balance as of December 31, 2019 $ 104.5 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | The following table sets forth the components of the numerator and denominator for the computation of basic and diluted earnings per share for net income attributable to Tempur Sealy International. Year Ended December 31, (in millions, except per common share amounts) 2019 2018 2017 Numerator: Net income from continuing operations, net of loss attributable to non-controlling interests $ 190.9 $ 118.3 $ 182.3 Denominator: Denominator for basic earnings per common share—weighted average shares 54.5 54.4 54.0 Effect of dilutive securities: Employee stock-based compensation 0.9 0.7 0.7 Denominator for diluted earnings per common share—adjusted weighted average shares 55.4 55.1 54.7 Basic earnings per common share for continuing operations $ 3.50 $ 2.17 $ 3.37 Diluted earnings per common share for continuing operations $ 3.45 $ 2.15 $ 3.33 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Total Assets and Long-lived Assets by Segment | The following table summarizes total assets by segment: December 31, December 31, (in millions) 2019 2018 North America $ 3,142.9 $ 2,788.1 International 615.3 604.8 Corporate 477.1 569.0 Inter-segment eliminations (1,173.5 ) (1,246.5 ) Total assets $ 3,061.8 $ 2,715.4 The following table summarizes property, plant and equipment, net, by segment: December 31, December 31, (in millions) 2019 2018 North America $ 328.9 $ 317.5 International 51.8 51.1 Corporate 55.1 52.2 Total property, plant and equipment, net $ 435.8 $ 420.8 The following table summarizes operating lease right-of-use assets by segment: December 31, December 31, (in millions) 2019 2018 North America $ 202.0 $ — International 42.2 — Corporate 1.2 — Total operating lease right-of-use assets $ 245.4 $ — |
Segment Financial Information | The following table summarizes segment information for the year ended December 31, 2019 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,379.6 $ 455.7 $ — $ — $ 2,835.3 Other sales 153.7 117.0 — — 270.7 Net sales $ 2,533.3 $ 572.7 $ — $ — $ 3,106.0 Inter-segment sales $ 3.4 $ 0.7 $ — $ (4.1 ) $ — Inter-segment royalty expense (income) 4.5 (4.5 ) — — — Gross profit 1,035.2 307.0 — — 1,342.2 Operating income (loss) 344.8 115.4 (113.5 ) — 346.7 Income (loss) from continuing operations before income taxes 337.0 109.7 (181.2 ) — 265.5 Depreciation and amortization (1) $ 64.4 $ 13.7 $ 38.4 $ — $ 116.5 Capital expenditures 62.1 11.6 14.5 — 88.2 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2018 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,002.1 $ 453.2 $ — $ — $ 2,455.3 Other sales 134.1 113.5 — — 247.6 Net sales $ 2,136.2 $ 566.7 $ — $ — $ 2,702.9 Inter-segment sales $ 3.4 $ 0.5 $ — $ (3.9 ) $ — Inter-segment royalty expense (income) 3.1 (3.1 ) — — — Gross profit 823.4 297.3 — — 1,120.7 Operating income (loss) 250.0 107.5 (101.2 ) — 256.3 Income (loss) from continuing operations before income taxes 241.1 101.0 (177.1 ) — 165.0 Depreciation and amortization (1) $ 59.0 $ 13.5 $ 39.4 $ — $ 111.9 Capital expenditures 52.7 14.0 6.9 — 73.6 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2017 : (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,051.8 $ 421.6 $ — $ — $ 2,473.4 Other sales 122.0 105.2 — — 227.2 Net sales $ 2,173.8 $ 526.8 $ — $ — $ 2,700.6 Inter-segment sales $ 3.8 $ 1.0 $ — $ (4.8 ) $ — Inter-segment royalty expense (income) 5.5 (5.5 ) — — — Gross profit 844.7 276.3 — — 1,121.0 Operating income (loss) 273.2 112.0 (89.7 ) — 295.5 Income (loss) from continuing operations before income taxes 276.0 104.5 (165.1 ) — 215.4 Depreciation and amortization (1) $ 51.4 $ 14.1 $ 28.5 $ — $ 94.0 Capital expenditures 39.9 9.0 17.7 — 66.6 (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: December 31, December 31, (in millions) 2019 2018 United States $ 366.4 $ 350.7 Canada 17.5 19.1 Other International 51.9 51.0 Total property, plant and equipment, net $ 435.8 $ 420.8 Total International $ 69.4 $ 70.1 The following table summarizes operating lease right-of-use assets by geographic region: December 31, December 31, (in millions) 2019 2018 United States $ 198.3 $ — Canada 4.9 — Other International 42.2 — Total operating lease right-of-use assets $ 245.4 $ — Total International $ 47.1 $ — |
Net sales by geographic region | The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2019 2018 2017 United States $ 2,312.3 $ 1,928.9 $ 1,954.2 Canada 221.0 207.3 219.6 Other International 572.7 566.7 526.8 Total net sales $ 3,106.0 $ 2,702.9 $ 2,700.6 Total International $ 793.7 $ 774.0 $ 746.4 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | Quarterly results of operations for the years ended December 31, 2019 and 2018 are summarized below: (in millions, except per share amounts) First Quarter Second Quarter Third Quarter Fourth Quarter 2019 Net sales $ 690.9 $ 722.8 $ 821.0 $ 871.3 Gross profit 281.8 313.4 360.6 386.4 Operating income 60.5 81.0 120.6 84.6 Income from continuing operations 29.0 42.7 72.4 46.7 Net income attributable to Tempur Sealy International, Inc. 28.4 41.6 73.3 46.2 Basic earnings per common share for continuing operations $ 0.53 $ 0.78 $ 1.33 $ 0.87 Diluted earnings per common share for continuing operations $ 0.52 $ 0.76 $ 1.30 $ 0.85 2018 Net sales $ 637.4 $ 659.9 $ 729.5 $ 676.1 Gross profit 264.7 272.8 300.0 283.2 Operating income 55.7 58.0 84.7 57.9 Income from continuing operations 25.6 26.6 44.1 19.1 Net income attributable to Tempur Sealy International, Inc. 23.1 22.8 42.3 12.3 Basic earnings per common share for continuing operations $ 0.48 $ 0.52 $ 0.83 $ 0.35 Diluted earnings per common share for continuing operations $ 0.47 $ 0.52 $ 0.82 $ 0.35 |
Guarantor_Non-Guarantor Finan_2
Guarantor/Non-Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Guarantor/Non-Guarantor Financial Information | |
Schedule of Supplemental Condensed Consolidating Statements of Operations | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 2,387.1 $ 793.5 $ (74.6 ) $ 3,106.0 Cost of sales — 1,390.6 447.8 (74.6 ) 1,763.8 Gross profit — 996.5 345.7 — 1,342.2 Selling and marketing expenses 11.2 466.0 189.2 (0.1 ) 666.3 General, administrative and other expenses 17.4 242.8 57.7 (2.6 ) 315.3 Customer-related charges — 29.8 — — 29.8 Equity income in earnings of unconsolidated affiliates — — (15.9 ) — (15.9 ) Operating (loss) income (28.6 ) 257.9 114.7 2.7 346.7 Other expense, net: Third party interest expense, net 56.3 26.7 2.7 — 85.7 Intercompany interest (income) expense, net (9.8 ) 13.2 (3.4 ) — — Interest expense (income), net 46.5 39.9 (0.7 ) — 85.7 Other (income) expense, net — (7.6 ) 1.6 1.5 (4.5 ) Total other expense, net 46.5 32.3 0.9 1.5 81.2 Income from equity investees 250.7 84.3 — (335.0 ) — Income from continuing operations before income taxes 175.6 309.9 113.8 (333.8 ) 265.5 Income tax benefit (provision) 13.8 (59.2 ) (29.5 ) 0.2 (74.7 ) Income from continuing operations 189.4 250.7 84.3 (333.6 ) 190.8 Loss from discontinued operations, net of tax — — — (1.4 ) (1.4 ) Net income before non-controlling interests 189.4 250.7 84.3 (335.0 ) 189.4 Less: Net loss attributable to non-controlling interest (0.1 ) — (0.1 ) 0.1 (0.1 ) Net income attributable to Tempur Sealy International, Inc. $ 189.5 $ 250.7 $ 84.4 $ (335.1 ) $ 189.5 Comprehensive income attributable to Tempur Sealy International, Inc. $ 197.1 $ 251.9 $ 90.8 $ (342.7 ) $ 197.1 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 2,000.9 $ 800.5 $ (98.5 ) $ 2,702.9 Cost of sales — 1,208.3 464.3 (90.4 ) 1,582.2 Gross profit — 792.6 336.2 (8.1 ) 1,120.7 Selling and marketing expenses 8.4 392.0 199.8 (12.4 ) 587.8 General, administrative and other expenses 17.8 204.6 57.4 (6.8 ) 273.0 Customer-related charges — 21.2 — — 21.2 Equity income in earnings of unconsolidated affiliates — — (17.6 ) — (17.6 ) Operating (loss) income (26.2 ) 174.8 96.6 11.1 256.3 Other expense, net: Third party interest expense, net 59.2 30.2 4.6 (1.7 ) 92.3 Intercompany interest (income) expense, net (6.9 ) 10.8 (3.9 ) — — Interest expense, net 52.3 41.0 0.7 (1.7 ) 92.3 Other (income) expense, net — (9.9 ) 13.9 (5.0 ) (1.0 ) Total other expense, net 52.3 31.1 14.6 (6.7 ) 91.3 Income from equity investees 162.0 26.6 — (188.6 ) — Income from continuing operations before income taxes 83.5 170.3 82.0 (170.8 ) 165.0 Income tax benefit (provision) 14.1 (8.3 ) (55.4 ) — (49.6 ) Income from continuing operations 97.6 162.0 26.6 (170.8 ) 115.4 Loss from discontinued operations, net of tax — — — (17.8 ) (17.8 ) Net income before non-controlling interests 97.6 162.0 26.6 (188.6 ) 97.6 Less: Net loss attributable to non-controlling interests (2.9 ) (2.6 ) (0.3 ) 2.9 (2.9 ) Net income attributable to Tempur Sealy International, Inc. $ 100.5 $ 164.6 $ 26.9 $ (191.5 ) $ 100.5 Comprehensive income attributable to Tempur Sealy International, Inc. $ 80.7 $ 164.2 $ 7.5 $ (171.7 ) $ 80.7 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net sales $ — $ 1,961.2 $ 862.5 $ (123.1 ) $ 2,700.6 Cost of sales — 1,185.4 497.6 (103.4 ) 1,579.6 Gross profit — 775.8 364.9 (19.7 ) 1,121.0 Selling and marketing expenses 5.6 406.8 188.9 (15.2 ) 586.1 General, administrative and other expenses 17.5 176.6 78.9 (11.6 ) 261.4 Customer-related charges (8.4 ) 21.7 1.1 — 14.4 Equity income in earnings of unconsolidated affiliates — — (15.6 ) — (15.6 ) Royalty income, net of royalty expense — (20.8 ) — — (20.8 ) Operating (loss) income (14.7 ) 191.5 111.6 7.1 295.5 Other expense, net: Third party interest expense, net 59.6 26.0 22.4 (20.7 ) 87.3 Intercompany interest (income) expense, net (4.7 ) 8.3 (3.6 ) — — Interest expense, net 54.9 34.3 18.8 (20.7 ) 87.3 Other (income) expense, net — (17.2 ) 9.2 0.8 (7.2 ) Total other expense, net 54.9 17.1 28.0 (19.9 ) 80.1 Income from equity investees 193.1 51.3 — (244.4 ) — Income from continuing operations before income taxes 123.5 225.7 83.6 (217.4 ) 215.4 Income tax benefit (provision) 17.2 (32.6 ) (32.3 ) 3.9 (43.8 ) Income from continuing operations 140.7 193.1 51.3 (213.5 ) 171.6 Loss from discontinued operations — — — (30.9 ) (30.9 ) Net income before non-controlling interests 140.7 193.1 51.3 (244.4 ) 140.7 Less: Net loss attributable to non-controlling interests (10.7 ) (5.2 ) (5.5 ) 10.7 (10.7 ) Net income attributable to Tempur Sealy International, Inc. $ 151.4 $ 198.3 $ 56.8 $ (255.1 ) $ 151.4 Comprehensive income attributable to Tempur Sealy International, Inc. $ 179.4 $ 193.0 $ 89.9 $ (282.9 ) $ 179.4 |
Schedule of Supplemental Condensed Consolidating Balance Sheets | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 0.2 $ 20.0 $ 44.7 $ — $ 64.9 Accounts receivable, net 0.2 21.9 352.5 (2.6 ) 372.0 Inventories — 199.9 60.6 — 260.5 Prepaid expenses and other current assets 12.9 59.5 140.2 (9.8 ) 202.8 Total Current Assets 13.3 301.3 598.0 (12.4 ) 900.2 Property, plant and equipment, net — 366.5 69.3 — 435.8 Goodwill — 511.2 221.1 — 732.3 Other intangible assets, net — 564.3 77.1 — 641.4 Operating lease right-of-use assets — 198.2 47.2 — 245.4 Deferred income taxes 13.0 — 14.1 (13.0 ) 14.1 Other non-current assets 0.4 46.6 45.6 — 92.6 Net investment in subsidiaries 1,143.3 369.0 — (1,512.3 ) — Due from affiliates 341.6 125.4 19.6 (486.6 ) — Total Assets $ 1,511.6 $ 2,482.5 $ 1,092.0 $ (2,024.3 ) $ 3,061.8 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 198.4 $ 55.9 $ (2.6 ) $ 251.7 Accrued expenses and other current liabilities 6.8 245.7 220.7 — 473.2 Income taxes payable — 10.0 10.8 (9.8 ) 11.0 Current portion of long-term debt — 29.5 7.9 — 37.4 Total Current Liabilities 6.8 483.6 295.3 (12.4 ) 773.3 Long-term debt, net 1,044.3 458.1 0.2 — 1,502.6 Long-term operating lease obligations — 172.4 33.0 — 205.4 Deferred income taxes — 98.5 16.6 (13.0 ) 102.1 Other non-current liabilities 0.2 59.4 58.4 — 118.0 Due to affiliates 99.9 67.2 319.5 (486.6 ) — Total Liabilities 1,151.2 1,339.2 723.0 (512.0 ) 2,701.4 Total Stockholders' Equity 360.4 1,143.3 369.0 (1,512.3 ) 360.4 Total Liabilities and Stockholders’ Equity $ 1,511.6 $ 2,482.5 $ 1,092.0 $ (2,024.3 ) $ 3,061.8 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Balance Sheets December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 0.1 $ 6.2 $ 39.5 $ — $ 45.8 Accounts receivable, net — 15.2 303.3 3.0 321.5 Inventories — 159.4 62.9 — 222.3 Prepaid expenses and other current assets 276.9 65.4 148.1 (274.6 ) 215.8 Total Current Assets 277.0 246.2 553.8 (271.6 ) 805.4 Property, plant and equipment, net — 350.7 70.1 — 420.8 Goodwill — 508.8 214.2 — 723.0 Other intangible assets, net — 572.7 76.6 — 649.3 Deferred income taxes 15.0 — 22.6 (15.0 ) 22.6 Other non-current assets — 49.2 45.1 — 94.3 Net investment in subsidiaries 661.7 210.0 — (871.7 ) — Due from affiliates 422.1 153.8 15.4 (591.3 ) — Total Assets $ 1,375.8 $ 2,091.4 $ 997.8 $ (1,749.6 ) $ 2,715.4 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ — $ 186.7 $ 63.3 $ 3.0 $ 253.0 Accrued expenses and other current liabilities 6.7 143.9 208.6 — 359.2 Income taxes payable — 274.7 9.6 (274.6 ) 9.7 Current portion of long-term debt — 44.0 3.1 — 47.1 Total Current Liabilities 6.7 649.3 284.6 (271.6 ) 669.0 Long-term debt, net 1,043.0 547.1 9.0 — 1,599.1 Deferred income taxes — 118.0 14.5 (15.0 ) 117.5 Other non-current liabilities 1.9 58.2 52.2 — 112.3 Due to affiliates 106.7 57.1 427.5 (591.3 ) — Total Liabilities 1,158.3 1,429.7 787.8 (877.9 ) 2,497.9 Total Stockholders’ Equity 217.5 661.7 210.0 (871.7 ) 217.5 Total Liabilities and Stockholders’ Equity $ 1,375.8 $ 2,091.4 $ 997.8 $ (1,749.6 ) $ 2,715.4 |
Schedule of Supplemental Condensed Consolidating Statements of Cash Flows | TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2019 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (47.6 ) $ 295.2 $ 65.2 $ 2.0 $ 314.8 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (68.4 ) 68.4 — — Purchases of property, plant and equipment — (76.2 ) (12.0 ) — (88.2 ) Acquisitions, net of cash acquired — (8.1 ) (9.0 ) — (17.1 ) Other — 4.9 10.2 — 15.1 Net cash (used in) provided by investing activities from continuing operations — (147.8 ) 57.6 — (90.2 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 607.8 635.0 — 1,242.8 Repayments of borrowings under long-term debt obligations — (707.6 ) (639.5 ) — (1,347.1 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 135.6 (22.8 ) (112.8 ) — — Proceeds from exercise of stock options 17.8 — — — 17.8 Treasury stock repurchased (105.7 ) — — — (105.7 ) Repayments of deferred financing costs — (3.2 ) — — (3.2 ) Repayments of finance lease obligations and other — (7.8 ) — — (7.8 ) Net cash provided by (used in) financing activities from continuing operations 47.7 (133.6 ) (117.3 ) — (203.2 ) Net cash provided by continuing operations 0.1 13.8 5.5 2.0 21.4 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (2.0 ) (2.0 ) Investing cash flows, net — — — — — Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (2.0 ) (2.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (0.3 ) — (0.3 ) Increase in cash and cash equivalents 0.1 13.8 5.2 — 19.1 CASH AND CASH EQUIVALENTS, beginning of period 0.1 6.2 39.5 — 45.8 CASH AND CASH EQUIVALENTS, end of period $ 0.2 $ 20.0 $ 44.7 $ — $ 64.9 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2018 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (55.8 ) $ 166.6 $ 72.3 $ 24.4 $ 207.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (75.8 ) 75.8 — — Purchases of property, plant and equipment — (58.8 ) (15.3 ) 0.5 (73.6 ) Other — 0.1 4.9 (2.6 ) 2.4 Net cash (used in) provided by investing activities from continuing operations — (134.5 ) 65.4 (2.1 ) (71.2 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 414.0 680.9 — 1,094.9 Repayments of borrowings under long-term debt obligations — (444.0 ) (751.8 ) — (1,195.8 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 55.8 (3.0 ) (52.8 ) — — Proceeds from exercise of stock options 4.6 — — — 4.6 Treasury stock repurchased (4.6 ) — — — (4.6 ) Repayments of finance lease obligations and other — (5.2 ) (0.9 ) — (6.1 ) Net cash provided by (used in) financing activities from continuing operations 55.8 (38.2 ) (124.6 ) — (107.0 ) Net cash (used in) provided by continuing operations — (6.1 ) 13.1 22.3 29.3 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (24.4 ) (24.4 ) Investing cash flow, net — — — 2.1 2.1 Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (22.3 ) (22.3 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (3.1 ) — (3.1 ) (Decrease) increase in cash and cash equivalents — (6.1 ) 10.0 — 3.9 CASH AND CASH EQUIVALENTS, beginning of period 0.1 12.3 29.5 — 41.9 CASH AND CASH EQUIVALENTS, end of period $ 0.1 $ 6.2 $ 39.5 $ — $ 45.8 TEMPUR SEALY INTERNATIONAL, INC. Supplemental Consolidated Statements of Cash Flows Year Ended December 31, 2017 (in millions) Tempur Sealy International, Inc. (Ultimate Parent) Combined Guarantor Subsidiaries Combined Non-Guarantor Subsidiaries Reclassifications and Eliminations Consolidated Net cash (used in) provided by operating activities from continuing operations $ (55.3 ) $ 376.9 $ (98.7 ) $ 33.6 $ 256.5 CASH FLOWS FROM INVESTING ACTIVITIES: Contributions (paid to) received from subsidiaries and affiliates — (129.7 ) 129.7 — — Purchases of property, plant and equipment — (55.8 ) (11.2 ) 0.4 (66.6 ) Other — 0.8 4.1 (4.0 ) 0.9 Net cash (used in) provided by investing activities from continuing operations — (184.7 ) 122.6 (3.6 ) (65.7 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings under long-term debt obligations — 603.9 729.0 — 1,332.9 Repayments of borrowings under long-term debt obligations — (790.8 ) (680.7 ) — (1,471.5 ) Net activity in investment in and advances from (to) subsidiaries and affiliates 87.5 0.5 (88.0 ) — — Proceeds from exercise of stock options 12.8 — — — 12.8 Treasury stock repurchased (44.9 ) — — — (44.9 ) Payment of deferred financing costs — — (0.5 ) — (0.5 ) Other — (1.4 ) (2.6 ) — (4.0 ) Net cash provided by (used in) financing activities from continuing operations 55.4 (187.8 ) (42.8 ) — (175.2 ) Net cash provided by (used in) continuing operations 0.1 4.4 (18.9 ) 30.0 15.6 CASH USED IN DISCONTINUED OPERATIONS Operating cash flows, net — — — (33.6 ) (33.6 ) Investing cash flow, net — — — 3.6 3.6 Financing cash flows, net — — — — — Net cash used in discontinued operations — — — (30.0 ) (30.0 ) NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS — — (9.4 ) — (9.4 ) Increase (decrease) in cash and cash equivalents 0.1 4.4 (28.3 ) — (23.8 ) CASH AND CASH EQUIVALENTS, beginning of period — 7.9 57.8 — 65.7 CASH AND CASH EQUIVALENTS, end of period 0.1 12.3 29.5 — 41.9 LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS — — 0.8 — 0.8 CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS $ 0.1 $ 12.3 $ 28.7 $ — $ 41.1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019USD ($)channelfacility | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | Jul. 11, 2018 | Jan. 01, 2018USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of products sales channels | channel | 2 | |||||
Operating lease right-of-use assets | $ 245.4 | $ 0 | ||||
Operating lease, liability | 256.2 | |||||
Depreciation expense | 73.8 | 71.8 | $ 64.8 | |||
Sales returns accrual | 39.3 | 34.3 | 30 | $ 31.7 | ||
Allowance for doubtful accounts included in accounts receivable, net | 71.9 | 47.6 | ||||
Shipping and handling included in cost of sales | 192.5 | 169.1 | 155.9 | |||
Advertising costs charged to expense | 280.5 | 259.3 | 283.5 | |||
Advertising costs deferred and included in prepaid expenses and other current assets | 3.6 | 8.5 | ||||
Research and development costs charged to expense | $ 23 | 21.9 | $ 21.7 | |||
Number of active plants | facility | 2 | |||||
Number of previously closed US facilities | facility | 10 | |||||
Bedding | Non-prorated | International | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 5 years | |||||
Bedding | Prorated | International | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 10 years | |||||
Pillows Two | Non-prorated | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 3 years | |||||
Accrued liabilities and other current liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Sales returns accrual | $ 26.2 | 22 | ||||
Other non-current liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Sales returns accrual | 13.1 | 12.3 | ||||
Standard product warranty accrual | 22.2 | 21.5 | ||||
Accounts payable and accrued liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Standard product warranty accrual | $ 19.4 | $ 14.9 | ||||
Maximum | Bedding | North America | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 25 years | |||||
Maximum | Bedding | International | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 15 years | |||||
Maximum | Bedding | Non-prorated | North America | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 15 years | |||||
Minimum | Bedding | North America | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 10 years | |||||
Minimum | Bedding | International | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 5 years | |||||
Minimum | Bedding | Non-prorated | North America | ||||||
Business Acquisition [Line Items] | ||||||
Warranty term (in years) | 10 years | |||||
Leasehold improvements | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Property, plant and equipment, useful life | 7 years | |||||
Leasehold improvements | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Property, plant and equipment, useful life | 4 years | |||||
Variable Interest Entity, Primary Beneficiary | ||||||
Business Acquisition [Line Items] | ||||||
Equity method investment, acquired remaining interest, percentage | 55.00% | |||||
Sealy Canada | ||||||
Business Acquisition [Line Items] | ||||||
Ownership percentage by parent | 100.00% | |||||
Accounting Standards Update 2016-02 | ||||||
Business Acquisition [Line Items] | ||||||
Operating lease right-of-use assets | $ 197.2 | |||||
Operating lease, liability | $ 203.3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Finished goods | $ 157.4 | $ 148.9 |
Work-in-process | 10.8 | 11.8 |
Raw materials and supplies | 92.3 | 61.6 |
Total | $ 260.5 | $ 222.3 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 30 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 4 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Office furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 5 years |
Office furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 7 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property, Plant and Equipment Summary (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 892.8 | |
Total property, plant, and equipment | $ 941.2 | |
Accumulated depreciation | (472) | |
Accumulated depreciation | (505.4) | |
Total property, plant and equipment, net | 435.8 | |
Total property, plant and equipment, net | 435.8 | 420.8 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 350.7 | 319.3 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 317.8 | 328.5 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 155.2 | 142.2 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 52.5 | 50.4 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 65 | $ 52.4 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Changes in Accrued Sales Returns (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Changes in Accrued Sales Returns [Roll Forward] | |||
Beginning balance | $ 30 | $ 34.3 | $ 30 |
Amounts accrued | 112.4 | 83.8 | |
Returns charged to accrual | (107.4) | (81.2) | |
Reclassification and remeasurement of sales return asset under Topic 606 | 1.7 | ||
Ending balance | $ 31.7 | $ 39.3 | $ 34.3 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Warranty Activity (Details) - Warranty Reserves - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |
Movement in Extended Product Warranty Accrual [Roll Forward] | |||
Balance at beginning of period | $ 36.4 | $ 36.7 | |
Amounts accrued | 29.4 | 21.9 | |
Warranties charged to accrual | (24.2) | (25) | |
Remeasurement of obligations under Topic 606 | $ 2.8 | ||
Balance at end of period | 41.6 | 36.4 | |
Correction | |||
Movement in Extended Product Warranty Accrual [Roll Forward] | |||
Balance at beginning of period | $ 39.5 | ||
Balance at end of period | $ 39.5 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net sales | $ 0 | $ 31.1 | $ 53.8 |
Cost of sales | 0 | 23 | 34.1 |
Gross profit | 0 | 8.1 | 19.7 |
Selling and marketing expenses | 0.1 | 12.4 | 15.2 |
General, administrative and other expenses | 2.6 | 6.8 | 11.6 |
Operating loss | (2.7) | (11.1) | (7.1) |
Interest (income) expense, net and other | (1.5) | 7.7 | 19.9 |
Loss from discontinued operations before income taxes | (1.2) | (18.8) | (27) |
Income tax provision | (0.2) | 0 | (3.9) |
Loss generated from discontinued operations, net of tax | (1.4) | (18.8) | (30.9) |
Loss generated from discontinued operations, net of tax | 0 | 1 | 0 |
Loss generated from discontinued operations, net of tax | $ (1.4) | $ (17.8) | $ (30.9) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)channel | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)product_category | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 871.3 | $ 821 | $ 722.8 | $ 690.9 | $ 676.1 | $ 729.5 | $ 659.9 | $ 637.4 | $ 3,106 | $ 2,702.9 | $ 2,700.6 |
Number of products sales channels | channel | 2 | ||||||||||
Number of product categories | product_category | 2 | ||||||||||
Royalty income, net of royalty expense | $ 0 | 0 | $ 20.8 | ||||||||
Shipping and handling included in net sales | 19.3 | 13.6 | 11.3 | ||||||||
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 1,954.2 | ||||||||||
Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 219.6 | ||||||||||
Bedding | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,455.3 | 2,473.4 | |||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 247.6 | 227.2 | |||||||||
Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 3,106 | 2,702.9 | |||||||||
Operating Segments | Wholesale | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,717.1 | 2,452.1 | |||||||||
Operating Segments | Direct | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 388.9 | 250.8 | |||||||||
Operating Segments | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,312.3 | 1,928.9 | |||||||||
Operating Segments | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 221 | 207.3 | |||||||||
Operating Segments | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 572.7 | 566.7 | |||||||||
Operating Segments | Bedding | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,835.3 | 2,455.3 | |||||||||
Operating Segments | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 270.7 | 247.6 | |||||||||
Operating Segments | North America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,533.3 | 2,136.2 | 2,173.8 | ||||||||
Operating Segments | North America | Wholesale | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,273.5 | 1,989.1 | |||||||||
Operating Segments | North America | Direct | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 259.8 | 147.1 | |||||||||
Operating Segments | North America | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,312.3 | 1,928.9 | |||||||||
Operating Segments | North America | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 221 | 207.3 | |||||||||
Operating Segments | North America | Bedding | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,379.6 | 2,002.1 | 2,051.8 | ||||||||
Operating Segments | North America | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 153.7 | 134.1 | 122 | ||||||||
Operating Segments | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 572.7 | 566.7 | 526.8 | ||||||||
Operating Segments | International | Wholesale | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 443.6 | 463 | |||||||||
Operating Segments | International | Direct | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 129.1 | 103.7 | |||||||||
Operating Segments | International | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 572.7 | 566.7 | |||||||||
Operating Segments | International | Bedding | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 455.7 | 453.2 | 421.6 | ||||||||
Operating Segments | International | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 117 | 113.5 | 105.2 | ||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Royalty income, net of royalty expense | $ 22.6 | $ 20.9 | $ 20.8 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) - USD ($) $ in Millions | Jan. 31, 2020 | Apr. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 |
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 17.1 | $ 0 | $ 0 | |||
Innovative Mattress Solutions, LLC (IMS) | ||||||
Business Acquisition [Line Items] | ||||||
Transaction value | $ 24 | |||||
Liabilities assumed | $ 11 | |||||
Consideration transferred | 13.2 | |||||
Cash and equivalents | 5.1 | |||||
Payments to acquire business | 8.1 | |||||
Trade Name and Customer Database | Innovative Mattress Solutions, LLC (IMS) | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 2.1 | |||||
Subsequent Event | Sherwood Acquisition Holdings, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 40 | |||||
Voting interest acquired | 80.00% |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Price Purchase Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Apr. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 732.3 | $ 723 | $ 732.7 | |
Innovative Mattress Solutions, LLC (IMS) | ||||
Business Acquisition [Line Items] | ||||
Working capital (accounts receivable and inventory, net of accounts payable and accrued liabilities) | $ (1.4) | |||
Property, plant and equipment | 5 | |||
Goodwill | 2.4 | |||
Other intangible assets | 2.1 | |||
Operating lease right-of-use assets | 28.5 | |||
Long-term operating lease liabilities | (28.5) | |||
Net purchase price | $ 8.1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill by Reportable Business Segment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | $ 723 | $ 732.7 |
Goodwill resulting from acquisitions | 7.8 | |
Foreign currency translation adjustments | 1.5 | (9.7) |
Goodwill, Ending balance | 732.3 | 723 |
North America | Tempur Sealy U.S. | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 571.1 | 576.6 |
Goodwill resulting from acquisitions | 2.4 | |
Foreign currency translation adjustments | 3.1 | (5.5) |
Goodwill, Ending balance | 576.6 | 571.1 |
International | Sealy Canada | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 151.9 | 156.1 |
Goodwill resulting from acquisitions | 5.4 | |
Foreign currency translation adjustments | (1.6) | (4.2) |
Goodwill, Ending balance | $ 155.7 | $ 151.9 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets and Expected Future Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount, total | $ 794.9 | $ 784.7 | |
Accumulated Amortization | 153.5 | 135.4 | |
Net Carrying Amount | 641.4 | 649.3 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense relating to intangible assets | 15.9 | 15.3 | $ 16 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2020 | 17.1 | ||
2021 | 15.9 | ||
2022 | 15.1 | ||
2023 | 8.3 | ||
2024 | 6.4 | ||
Thereafter | 19.1 | ||
Total | 81.9 | ||
Trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - indefinite life intangible assets | 559.5 | 556.5 | |
Net Carrying Amount | $ 559.5 | 556.5 | |
Contractual distributor relationships | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 15 years | ||
Gross carrying amount - finite life intangible assets | $ 85.5 | 84.7 | |
Accumulated Amortization | 38.7 | 32.7 | |
Net Carrying Amount | 46.8 | 52 | |
Technology and other | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | 91.1 | 90.2 | |
Accumulated Amortization | 68.7 | 61.1 | |
Net Carrying Amount | $ 22.4 | 29.1 | |
Technology and other | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 4 years | ||
Technology and other | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 10 years | ||
Patents, other trademarks and other trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | $ 27.9 | 32 | |
Accumulated Amortization | 18.6 | 21 | |
Net Carrying Amount | $ 9.3 | 11 | |
Patents, other trademarks and other trade names | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years | ||
Patents, other trademarks and other trade names | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 20 years | ||
Customer databases, relationships and reacquired rights | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | $ 30.9 | 21.3 | |
Accumulated Amortization | 27.5 | 20.6 | |
Net Carrying Amount | $ 3.4 | $ 0.7 | |
Customer databases, relationships and reacquired rights | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 2 years | ||
Customer databases, relationships and reacquired rights | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years |
Unconsolidated Affiliate Comp_3
Unconsolidated Affiliate Companies (Details) - Joint Ventures - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unconsolidated Affiliate Companies | |||
Ownership percentage | 50.00% | ||
Net investment | $ 22.5 | $ 22.5 | |
Current assets | 81 | 81.8 | |
Non-current assets | 15.3 | 18.6 | |
Total liabilities | 55.4 | 59 | |
Equity | 40.9 | 41.4 | |
Net sales | 212.6 | 220.5 | $ 195.1 |
Gross profit | 147.2 | 147.8 | 129.9 |
Income from operations | 44.6 | 46.6 | 43.3 |
Net income | $ 32.4 | $ 33.5 | $ 31.7 |
Debt - Schedule of Borrowings O
Debt - Schedule of Borrowings Outstanding (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | May 24, 2016 | Sep. 24, 2015 | |
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Capital lease obligations | $ 64,100,000 | $ 66,700,000 | ||
Other | 7,900,000 | 3,000,000 | ||
Total debt | 1,547,000,000 | 1,653,800,000 | ||
Less: Deferred financing costs | 7,000,000 | 7,600,000 | ||
Total debt, net | 1,540,000,000 | 1,646,200,000 | ||
Less: Current portion | 37,400,000 | 47,100,000 | ||
Total long-term debt, net | 1,502,600,000 | $ 1,599,100,000 | ||
LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 0.08% | |||
2026 Senior Notes | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Senior notes, noncurrent | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | |
Line of Credit Facility [Abstract] | ||||
Stated percentage | 5.50% | 5.50% | 5.50% | |
2023 Senior Notes | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Senior notes, noncurrent | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | |
Line of Credit Facility [Abstract] | ||||
Stated percentage | 5.625% | 5.625% | 5.625% | |
Securitized debt | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | ||
Securitized debt | 0 | 9,100,000 | ||
2019 Credit Agreement | Term A Facility | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Line of credit | $ 425,000,000 | 0 | ||
2019 Credit Agreement | Term A Facility | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 1.625% | |||
2019 Credit Agreement | Revolver | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Line of credit | $ 0 | 0 | ||
2019 Credit Agreement | Revolver | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 1.625% | |||
Credit Facility 2016 | Term A Facility | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Line of credit | $ 0 | $ 525,000,000 | ||
Credit Facility 2016 | Term A Facility | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 2.00% | |||
Credit Facility 2016 | Revolver | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Line of credit | $ 0 | $ 0 | ||
Credit Facility 2016 | Revolver | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 2000000.00% |
Debt - Credit Facilities and Ca
Debt - Credit Facilities and Capital Leases (Details) | Oct. 16, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018 | Apr. 12, 2017USD ($) | Apr. 06, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||||
Total net leverage ratio | 2.92 | 2.92 | ||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 120,000,000 | |||||
Credit Facility 2016 | Term A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Prepayment of debt | $ 75,000,000 | |||||
Credit Facility 2016 | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 500,000,000 | |||||
Equity interest of subsidiary guarantor (percentage) | 100.00% | |||||
Equity voting rights of subsidiary (percentage) | 65.00% | |||||
Credit Facility 2016 | Line of Credit | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Total net leverage ratio | 5 | 5 | ||||
Credit Facility 2016 | Line of Credit | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 500,000,000 | |||||
Credit Facility 2016 | Line of Credit | Delayed Draw Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 100,000,000 | |||||
2019 Credit Agreement | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Leverage ratio, letters of credit outstanding | $ 40,000,000 | |||||
Domestic and foreign qualified cash, maximum | $ 200,000,000 | |||||
Netted cash amount | $ 63,400,000 | |||||
Line of credit facility, commitment fee percentage | 0.25% | |||||
Allowed netted cash amount percentage | 100.00% | |||||
Base Rate | 2019 Credit Agreement | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 0.625% | |||||
LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 0.08% | |||||
LIBOR | Credit Facility 2016 | Term A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 2.00% | |||||
LIBOR | Credit Facility 2016 | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 2000000.00% | |||||
LIBOR | 2019 Credit Agreement | Term A Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 1.625% | |||||
LIBOR | 2019 Credit Agreement | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 1.625% | |||||
LIBOR | 2019 Credit Agreement | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Index rate or LIBOR plus (percentage) | 1.625% | |||||
Line of Credit | 2019 Credit Agreement | Incremental Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 550,000,000 | |||||
Line of Credit | 2019 Credit Agreement | Letter of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | 60,000,000 | |||||
Line of Credit | 2019 Credit Agreement | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | 425,000,000 | |||||
Principal borrowing capacity, remaining | $ 402,800,000 | $ 402,800,000 | ||||
Letters of credit outstanding | $ 22,200,000 | $ 22,200,000 | ||||
Line of Credit | 2019 Credit Agreement | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal borrowing capacity, maximum | $ 425,000,000 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2019 | Dec. 31, 2018 | Apr. 12, 2017 | Oct. 18, 2016 | May 24, 2016 | Apr. 04, 2016 | Sep. 24, 2015 | |
2026 Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes, noncurrent | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | ||||
Stated percentage | 5.50% | 5.50% | 5.50% | ||||
Percentage of principal amount that may be redeemed | 105.50% | ||||||
Minimum percentage of notes not eligible for early redemption | 65.00% | ||||||
Senior notes, percent exchanged | 100.00% | ||||||
2026 Senior Notes | Any time on or after June 15, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 102.75% | ||||||
2026 Senior Notes | Beginning on June 15, 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 100.00% | ||||||
2026 Senior Notes | Any time prior to June 15, 2021 with a 'make-whole' premium and accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of redemption on notes | 100.00% | ||||||
2026 Senior Notes | Any time prior to June 15, 2019 with the net cash proceeds from certain equity offerings plus accrued and unpaid interest, if any | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of redemption on notes | 35.00% | ||||||
Securitized debt | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | |||||
2023 Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Senior notes, noncurrent | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | ||||
Stated percentage | 5.625% | 5.625% | 5.625% | ||||
Senior notes, percent exchanged | 100.00% | ||||||
2023 Senior Notes | Any time on or after October 15, 2018 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 104.219% | ||||||
2023 Senior Notes | Beginning on October 15, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price, percentage | 100.00% | ||||||
Revolver | |||||||
Debt Instrument [Line Items] | |||||||
Principal borrowing capacity, maximum | $ 120,000,000 | ||||||
Significant Other Observable Inputs (Level 2) | 2026 Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Notes, fair value | $ 634,900,000 | $ 549,300,000 | |||||
Significant Other Observable Inputs (Level 2) | 2023 Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Notes, fair value | $ 464,200,000 | $ 435,600,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 29.2 |
2021 | 21.3 |
2022 | 21.3 |
2023 | 481.8 |
2024 | 329.3 |
Thereafter | 600 |
Total | $ 1,482.9 |
Leases - Balance Sheet Effect (
Leases - Balance Sheet Effect (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 245.4 | $ 0 |
Finance lease assets | 54.4 | |
Total leased assets | 299.8 | |
Operating leases obligations | 50.8 | $ 0 |
Finance lease obligations | 8.2 | |
Long-term operating lease obligations | 205.4 | |
Finance lease obligations | 55.9 | |
Present value of lease obligations | $ 320.3 |
Leases - Expense (Details)
Leases - Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 63.8 |
Short-term lease expense | 9 |
Variable lease expense | 18.8 |
Finance lease expense: | |
Amortization of right-of-use assets | 8.5 |
Interest on lease obligations | 4.7 |
Total lease expense | $ 104.8 |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2020 | $ 62.1 | |
2021 | 54.5 | |
2022 | 46.6 | |
2023 | 36.2 | |
2024 | 29 | |
Thereafter | 74.5 | |
Future minimum lease payments | 302.9 | |
Less: Interest | (46.7) | |
Present value of lease obligations | 256.2 | |
Finance Leases | ||
2020 | 12.3 | |
2021 | 12 | |
2022 | 9.8 | |
2023 | 7.8 | |
2024 | 6.2 | |
Thereafter | 36.3 | |
Total lease payments | 84.4 | |
Less: Interest | (20.3) | |
Present value of lease obligations | 64.1 | $ 66.7 |
2020 | 74.4 | |
2021 | 66.5 | |
2022 | 56.4 | |
2023 | 44 | |
2024 | 35.2 | |
Thereafter | 110.8 | |
Total lease payments | 387.3 | |
Less: Interest | (67) | |
Present value of lease obligations | $ 320.3 |
Leases - Long Term and Discount
Leases - Long Term and Discount Rate (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Document Period End Date | Dec. 31, 2019 |
Weighted average remaining lease term (years): | |
Operating leases | 6 years 5 months 4 days |
Finance leases | 9 years 10 days |
Weighted average discount rate: | |
Operating leases | 5.42% |
Finance leases | 6.27% |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease obligations: | |
Operating cash flows paid for operating leases | $ 62.7 |
Operating cash flows paid for finance leases | 3.7 |
Financing cash flows paid for finance leases | 7.7 |
Right-of-use assets obtained in exchange for new operating lease obligations | 60.9 |
Right-of-use asset obtained in exchange for finance lease liability | $ 4.1 |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Eligible employee contribution maximum (percentage) | 85.00% | ||
Defined contribution plan, employment eligibility to receive matching contributions, minimum (in years) | 6 months | ||
Defined contribution plan, percentage of eligible employee contribution match, first tier | 100.00% | ||
Defined contribution plan, percentage of eligible employee contributions matched fully, first tier | 3.00% | ||
Defined contribution plan, eligible employee contribution match, second tier | 50.00% | ||
Defined contribution plan, eligible employee contribution matched by the company, second tier | 2.00% | ||
Defined contribution plan, cost recognized | $ 6 | $ 5.8 | $ 4 |
Retirement Plans - Defined Bene
Retirement Plans - Defined Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)facility | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Retirement plans | |||
Number of active plants at which a defined benefit pension plan for current and former hourly employees is provided | facility | 2 | ||
Number of previously closed U.S. facilities at which a defined benefit pension plan for current and former hourly employees was provided | facility | 10 | ||
Components of net periodic pension cost for employees | |||
Service cost | $ 0.9 | $ 1 | $ 0.9 |
Interest cost | 1.2 | 1.1 | 1.2 |
Expected return on assets | (1.3) | (1.5) | (1.5) |
Amortization of prior service cost | 0.1 | 0.1 | 0.1 |
Amortization of net gain | 0.1 | 0 | 0 |
Net periodic pension cost | 1 | 0.7 | 0.7 |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income | |||
Net loss | 2.2 | 0.6 | 0.4 |
New prior service cost | 0.6 | 0.1 | 0.5 |
Amortization of prior service cost | (0.1) | (0.1) | (0.1) |
Amortization or settlement recognition of net loss | (0.1) | 0 | 0 |
Total recognized in other comprehensive loss | $ 2.6 | $ 0.6 | $ 0.8 |
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 4.10% | 3.58% | 4.07% |
Expected long term return on plan assets (as a percent) | 6.16% | 6.25% | 6.64% |
Change in Benefit Obligation: | |||
Projected benefit obligation at beginning of year | $ 30 | $ 32.1 | |
Service cost | 0.9 | 1 | $ 0.9 |
Interest cost | 1.2 | 1.1 | 1.2 |
Plan amendments | 0.5 | 0.1 | |
Actuarial (gain) loss | 5.5 | (3) | |
Benefits paid | (1.3) | (0.9) | |
Expenses paid | (0.1) | (0.1) | |
Foreign currency exchange rate changes | 0.2 | (0.3) | |
Projected benefit obligation at end of year | 36.9 | 30 | 32.1 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 22.2 | 25.3 | |
Actual return on plan assets | 4.6 | (2.1) | |
Employer contribution | 1.4 | 0.3 | |
Benefits paid | (1.3) | (0.9) | |
Expenses paid | (0.1) | (0.1) | |
Foreign currency exchange rate changes | 0.2 | (0.3) | |
Fair value of plan assets at end of year | 27 | 22.2 | $ 25.3 |
Funded status | (9.9) | (7.8) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Non-current benefit liability | 10 | 8.1 | |
Non-current benefit asset | $ 0.1 | $ 0.3 | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 3.16% | 4.13% | |
United States Retirement Plan | |||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 4.16% | 3.54% | 4.06% |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 3.15% | 4.16% | |
Canadian Retirement Plan | |||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 3.90% | 3.70% | 4.10% |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 3.20% | 3.90% | |
Sealy | |||
Retirement plans | |||
Number of facilities where employees are covered by defined benefit pension plan | facility | 1 | ||
Sealy | United States Retirement Plan | |||
Change in Benefit Obligation: | |||
Projected benefit obligation at beginning of year | $ 26.5 | ||
Projected benefit obligation at end of year | 32.6 | $ 26.5 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 18.4 | ||
Fair value of plan assets at end of year | 22.6 | 18.4 | |
Sealy | Canadian Retirement Plan | |||
Change in Benefit Obligation: | |||
Projected benefit obligation at beginning of year | 3.5 | ||
Projected benefit obligation at end of year | 4.3 | 3.5 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 3.8 | ||
Fair value of plan assets at end of year | $ 4.4 | $ 3.8 |
Retirement Plans - Plan Assets
Retirement Plans - Plan Assets and Estimated Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement plans | |||
Expected contribution in next fiscal year | $ 1.2 | ||
Estimated future benefit payments | |||
Fiscal 2020 | 1.1 | ||
Fiscal 2021 | 1.1 | ||
Fiscal 2022 | 1.2 | ||
Fiscal 2023 | 1.2 | ||
Fiscal 2024 | 1.3 | ||
Fiscal 2025 ‑ Fiscal 2028 | $ 8 | ||
Target and actual asset allocations | |||
Total target plan assets | 100.00% | ||
Total actual plan assets | 100.00% | ||
Total assets | $ 27 | $ 22.2 | $ 25.3 |
United States Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 6.50% | ||
Canadian Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 5.00% | ||
Total equity based funds | |||
Target and actual asset allocations | |||
Total target plan assets | 60.00% | ||
Total actual plan assets | 55.70% | ||
Total assets | $ 15 | 17.7 | |
Debt securities | |||
Target and actual asset allocations | |||
Total target plan assets | 40.00% | ||
Total actual plan assets | 44.00% | ||
Other | |||
Target and actual asset allocations | |||
Total target plan assets | 0.00% | ||
Total actual plan assets | 0.30% | ||
U.S. equity | |||
Target and actual asset allocations | |||
Total assets | $ 5.5 | 14.1 | |
International equity | |||
Target and actual asset allocations | |||
Total assets | 9.5 | 3.6 | |
Common/collective trust - fixed income | |||
Target and actual asset allocations | |||
Total assets | 11.9 | 4.4 | |
Money market funds | |||
Target and actual asset allocations | |||
Total assets | $ 0.1 | $ 0.1 |
Retirement Plans - Multi-employ
Retirement Plans - Multi-employer Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)facility | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Multi-Employer Benefit Plans | |||
Domestic employees represented by various labor unions with separate collective bargaining agreements (percentage) | 25.00% | ||
Expenses recognized for contributions | $ 1.1 | ||
Total contributions for most recent plan year available (percentage) | 5.00% | ||
Red Zone | |||
Multi-Employer Benefit Plans | |||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 65.00% | 65.00% | |
Yellow Zone | |||
Multi-Employer Benefit Plans | |||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 80.00% | 80.00% | |
Number of years in which a multi-employer plan is projected to be a credit balance | 7 years | ||
Green Zone | |||
Multi-Employer Benefit Plans | |||
Multi-employer plans funded status (percentage) (less than for Red and Yellow Zone, greater than for Green Zone) | 80.00% | 80.00% | |
Number of years in which a multi-employer plan is projected not to be a credit balance | 7 years | ||
Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | facility | 6 | ||
Expenses recognized for contributions | $ 4.3 | $ 3.9 | 4.3 |
Multi-employer Health and Welfare Plan | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Number of domestic manufacturing facilities where employees are covered by union sponsored multiemployer plans | facility | 3 | ||
Expenses recognized for contributions | $ 3.8 | 3.6 | $ 3.5 |
United Furniture Workers Pension Fund A | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 1.1 | $ 0.7 | |
Pension Plan of the National Retirement Fund | |||
Multi-Employer Benefit Plans | |||
Surcharge (percentage) | 10.00% | 10.00% | |
Pension Plan of the National Retirement Fund | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 1 | $ 0.7 | |
Central States, Southeast & Southwest Areas Pension Plan | |||
Multi-Employer Benefit Plans | |||
Surcharge (percentage) | 10.00% | 10.00% | |
Central States, Southeast & Southwest Areas Pension Plan | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 0.8 | $ 0.8 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Feb. 21, 2020USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | 300,000,000 | ||
Common stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Preferred stock authorized shares (in shares) | shares | 10,000,000 | 10,000,000 | |||
Preferred stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, voting rights per share held | vote | 1 | ||||
Remaining authorized repurchase amount | $ 124,600,000 | $ 124,600,000 | |||
Treasury stock repurchased (in shares) | shares | 1,300,000 | 600,000 | |||
Treasury stock repurchased | $ 102,300,000 | $ 40,100,000 | |||
Charitable stock donation | $ 8,900,000 | 8,900,000 | $ 0 | 0 | |
Charitable stock donation (in shares) | shares | (100,000) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at beginning of period | 217,500,000 | 112,500,000 | (41,900,000) | ||
Other comprehensive loss: | |||||
Total other comprehensive income | 7,600,000 | (19,800,000) | 28,000,000 | ||
Balance at ending of period | $ 360,400,000 | 360,400,000 | 217,500,000 | 112,500,000 | |
Foreign Currency Translation | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at beginning of period | (91,700,000) | (72,800,000) | (101,900,000) | ||
Other comprehensive loss: | |||||
Tax expense | 0 | 0 | 0 | ||
Net amount reclassified to earnings | 0 | 0 | 0 | ||
Total other comprehensive income | 9,500,000 | (18,900,000) | 29,100,000 | ||
Balance at ending of period | (82,200,000) | (82,200,000) | (91,700,000) | (72,800,000) | |
Pension Benefits | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at beginning of period | (3,600,000) | (2,700,000) | (2,200,000) | ||
Other comprehensive loss: | |||||
Net change from period revaluation | (2,600,000) | (400,000) | (800,000) | ||
Tax expense | 700,000 | 100,000 | 300,000 | ||
Total other comprehensive loss before reclassifications, net of tax | (1,900,000) | (300,000) | (500,000) | ||
Net amount reclassified to earnings | 0 | 0 | 0 | ||
U.S tax reform - reclassification to retained earnings upon adoption of ASU No. 2018-02 | 0 | (500,000) | 0 | ||
Tax benefit | 0 | (100,000) | 0 | ||
Total amount reclassified from accumulated other comprehensive loss, net of tax | 0 | (600,000) | 0 | ||
Total other comprehensive income | (1,900,000) | (900,000) | (500,000) | ||
Balance at ending of period | (5,500,000) | (5,500,000) | (3,600,000) | (2,700,000) | |
Foreign Exchange Forward | Derivative Contracts | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance at beginning of period | 0 | 0 | 600,000 | ||
Other comprehensive loss: | |||||
Net change from period revaluation | 0 | 0 | (600,000) | ||
Tax expense | 0 | 0 | 100,000 | ||
Total other comprehensive loss before reclassifications, net of tax | 0 | 0 | (500,000) | ||
Net amount reclassified to earnings | 0 | 0 | (100,000) | ||
Total amount reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | (100,000) | ||
Total other comprehensive income | 0 | 0 | (600,000) | ||
Balance at ending of period | $ 0 | 0 | 0 | 0 | |
Performance-based Restricted Stock Units | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Treasury stock repurchased | $ 3,400,000 | $ 4,600,000 | $ 4,800,000 | ||
Shares paid for tax withholding for share based compensation | shares | 100,000 | 100,000 | 100,000 | ||
Subsequent Event | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Increase in authorized amount | $ 190,000,000 | ||||
Authorized amount of stock to be repurchased | $ 300,000,000 |
Other Items - Accrued Expenses
Other Items - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Other Items [Abstract] | ||
Taxes | $ 136 | $ 136.8 |
Other | 90.8 | 84.1 |
Wages and benefits | 79.5 | 43.7 |
Operating leases obligations | 50.8 | 0 |
Advertising | 56.9 | 46.1 |
Sales returns | 26.2 | 22 |
Warranty | 19.4 | 14.9 |
Rebates | 13.6 | 11.6 |
Total accrued expenses and other current liabilities | $ 473.2 | $ 359.2 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019USD ($)planshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Mar. 31, 2019USD ($) | May 11, 2017shares | Dec. 31, 2003shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of compensation plans | plan | 2 | |||||
Total stock-based compensation expense | $ 26.8 | $ 24.8 | $ 13.3 | |||
Stock options granted | shares | 0 | |||||
Total intrinsic value of options exercised | 5.9 | 3.9 | $ 5.4 | |||
Cash received from exercise of stock options | 17.8 | 4.6 | 12.8 | |||
Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 4.9 | 6.7 | 7.1 | |||
Performance-based Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | $ 1.4 | $ 2.5 | (6.5) | |||
Revaluation benefit from PRSU Granted | $ 9.3 | |||||
Nonvested outstanding | shares | 800,000 | 2,000,000 | 2,700,000 | |||
Restricted Stock Units and Deferred Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | $ 20.5 | $ 15.6 | $ 12.7 | |||
Nonvested outstanding | shares | 1,200,000 | 800,000 | 600,000 | |||
Aggregate intrinsic value of RSUs and DSUs vested during the period | $ 14.7 | |||||
Long Term Incentive Plan 2013 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of common stock shares to be issued (in shares) | shares | 8,700,000 | |||||
Amended And Restated 2003 Equity Incentive Plan | Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum number of common stock shares to be issued (in shares) | shares | 11,500,000 | |||||
Aspirational Plan 2019 | Performance-based Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Outstanding (in shares) | shares | 800,000 | |||||
Aspirational Plan 2017 | Performance-based Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | $ 650 | |||||
Percentage of target shares forfeited | 66.66% | 33.33% | ||||
Vesting Scenario One | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | $ 600 | |||||
Award vesting rights, percentage | 66.00% | |||||
Vesting Scenario Two | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | $ 650 | |||||
Award vesting rights, percentage | 100.00% | |||||
Vesting Scenario Four | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | $ 600 | |||||
Minimum | Aspirational Plan | Performance-based Restricted Stock Units | Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | 33.1 | |||||
Minimum | Vesting Scenario Three | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | 600 | |||||
Maximum | Aspirational Plan | Performance-based Restricted Stock Units | Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | 49.7 | |||||
Maximum | Vesting Scenario Three | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche one | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | 650 | |||||
Maximum | Vesting Scenario Three | Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum adjusted EBITDA | $ 650 |
Stock-based Compensation - PRSU
Stock-based Compensation - PRSU And RSU Activity And Related Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Performance-based Restricted Stock Units | ||
Shares | ||
Beginning balance (in shares) | 2 | 2.7 |
Granted (in shares) | 0.1 | 0.2 |
Vested (in shares) | 0 | (0.1) |
Forfeited/Terminated (in shares) | (1.3) | (0.8) |
Ending balance (in shares) | 0.8 | 2 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 61.07 | $ 64.13 |
Granted (in dollars per share) | 85.41 | 51.72 |
Vested (in dollars per share) | 59.21 | 68.57 |
Forfeited/Terminated (in dollars per share) | 70.94 | 68.07 |
Ending balance (in dollars per share) | $ 60.09 | $ 61.07 |
Restricted Stock Units and Deferred Stock Units | ||
Shares | ||
Beginning balance (in shares) | 0.8 | 0.6 |
Granted (in shares) | 0.7 | 0.3 |
Vested (in shares) | (0.3) | (0.1) |
Forfeited/Terminated (in shares) | 0 | 0 |
Ending balance (in shares) | 1.2 | 0.8 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 63.82 | $ 64.94 |
Granted (in dollars per share) | 43.07 | 61.29 |
Vested (in dollars per share) | 62.54 | 62.85 |
Forfeited/Terminated (in dollars per share) | 58.07 | 64 |
Ending balance (in dollars per share) | $ 52.96 | $ 63.82 |
Intrinsic value | $ 110.5 | $ 34.6 |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value Assumptions And Methodology (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value assumptions and methodology [Abstract] | ||
Expected volatility range of stock, minimum (in hundredths) | 39.80% | 37.40% |
Expected volatility range of stock, maximum (in hundredths) | 40.10% | 40.80% |
Expected life of option, range in years | 5 years | 5 years |
Risk-free interest rate range, minimum (in hundredths) | 2.20% | 1.80% |
Risk-free interest rate range, maximum (in hundredths) | 2.80% | 1.90% |
Expected dividend yield on stock, minimum (in hundredths) | 0.00% | 0.00% |
Expected dividend yield on stock, maximum (in hundredths) | 0.00% | 0.00% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Option Plans 2003 and 2013 | ||
Shares | ||
Beginning balance (in shares) | 1.6 | 1.7 |
Granted (in shares) | 0 | 0.3 |
Exercised (in shares) | (0.3) | (0.2) |
Forfeited (in shares) | 0 | (0.2) |
Ending balance (in shares) | 1.3 | 1.6 |
Options exercisable (in shares) | 0.8 | |
Weighted Average Exercise Price | ||
Beginning balance weighted average exercise price (dollars per share) | $ 62.51 | $ 58.93 |
Granted weighted average exercise price (dollars per share) | 0 | 61.84 |
Exercised weighted average exercise price (in dollars per share) | 52.49 | 28.20 |
Forfeited weighted average exercise price (dollars per share) | 46.36 | 60.45 |
Ending balance weighted average exercise price (dollars per share) | 65.18 | $ 62.51 |
Options exercisable weighted average exercise price (dollars per share) | $ 64.72 | |
Options outstanding weighted average remaining contractual term (in years) | 6 years 4 months 6 days | |
Options outstanding weighted average intrinsic value | $ 20.8 | |
Options exercisable weighted average remaining contractual term (in years) | 5 years 8 months 23 days | |
Options exercisable weighted average intrinsic value | $ 18.4 | |
Unvested Stock Options | ||
Shares | ||
Beginning balance (in shares) | 0.6 | 0.7 |
Granted (in shares) | 0 | 0.3 |
Forfeited (in shares) | 0 | (0.2) |
Ending balance (in shares) | 0.5 | 0.6 |
Stock-based Compensation - Unve
Stock-based Compensation - Unvested Shares Relating To Stock Options (Details) - Unvested Stock Options - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Beginning balance (in shares) | 0.6 | 0.7 |
Granted (in shares) | 0 | 0.3 |
Vested (in shares) | (0.1) | (0.2) |
Forfeited (in shares) | 0 | (0.2) |
Ending balance (in shares) | 0.5 | 0.6 |
Weighted Average Grant Date Fair Value | ||
Beginning of period weighted average grant date fair value (dollars per share) | $ 66.20 | $ 67.95 |
Granted weighted average grant date fair value (dollars per share) | 0 | 61.84 |
Vested weighted average grant date fair value (dollars per share) | 66.66 | 66.72 |
Forfeited weighted average grant date fair value (dollars per share) | 46.36 | 60.45 |
Ending of period weighted average grant date fair value (dollars per share) | $ 65.99 | $ 66.20 |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 46.2 |
Weighted average remaining vesting period (in years) | 2 years 3 months |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 6.6 |
Weighted average remaining vesting period (in years) | 1 year 6 months |
Restricted Stock Units and Deferred Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 37.6 |
Weighted average remaining vesting period (in years) | 2 years 5 months 1 day |
Performance-based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 2 |
Weighted average remaining vesting period (in years) | 1 year 8 months 23 days |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) kr in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jul. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019DKK (kr) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019DKK (kr) | Dec. 31, 2018DKK (kr) | |
Income Tax Examination [Line Items] | ||||||||
Income tax expense (benefit) | $ (23.8) | |||||||
Remeasurement of deferred taxes | $ 0 | $ 0 | $ (69.7) | |||||
Transition Tax | 0 | 6.8 | (45.9) | |||||
Unrecognized tax benefits | 31.7 | 96.8 | 91.4 | 31.7 | ||||
Income tax penalties and interest expense | 1.3 | 6.4 | 0.4 | |||||
Accrued interest and penalties | 59.9 | 67.9 | 66.3 | 59.9 | ||||
Uncertain tax liability | $ 84.5 | 104.5 | 103.8 | $ 84.5 | ||||
Valuation allowance | 30 | 43.1 | ||||||
US State | ||||||||
Income Tax Examination [Line Items] | ||||||||
Operating loss carryforwards, valuation allowance | 89.5 | |||||||
Tax credit carryforward, valuation allowance | 1.4 | |||||||
US Federal | ||||||||
Income Tax Examination [Line Items] | ||||||||
Tax credit carryforward, valuation allowance | 12.2 | |||||||
Danish Tax Authority (SKAT) | Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Tax deposit paid | $ 615.2 | 92.3 | 94.4 | |||||
VAT refund applied to income tax liability | $ 232.1 | 34.8 | 35.6 | |||||
Danish Tax Authority (SKAT) | Tax Years 2001-2011 | Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Tax and interest expense | 127.2 | kr 847.3 | 130 | |||||
Income Tax Examination, Accrued Tax and Interest | 145.6 | 147.7 | kr 970.1 | kr 962.3 | ||||
Uncertain tax liability, difference | 18.8 | 125 | ||||||
Danish Tax Authority (SKAT) | Tax Years 2012 - 2018 | Danish Tax Authority | ||||||||
Income Tax Examination [Line Items] | ||||||||
Uncertain tax liability | 39.5 | 35.3 | 263.3 | kr 230.3 | ||||
Deferred tax assets, net | 7.2 | 4.2 | ||||||
VAT taxes withheld by tax authority | $ 52.1 | $ 53.3 | kr 347.1 |
Income Taxes - Pre-tax Income A
Income Taxes - Pre-tax Income Attributable to Operating Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income before income taxes: | |||
United States | $ 150.9 | $ 59.2 | $ 97.2 |
Rest of the world | 114.6 | 105.8 | 118.2 |
Income from continuing operations before income taxes | $ 265.5 | $ 165 | $ 215.4 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation in dollars [Abstract] | |||
Statutory U.S. federal income tax | $ 55.8 | $ 34.6 | $ 75.4 |
State income taxes, net of federal benefit | 8.7 | 1.8 | (0.6) |
Foreign tax differential | 2.1 | 2.5 | (11.9) |
Change in valuation allowances | (8.6) | (17.7) | 5.6 |
Uncertain tax positions and interest | 2.4 | 33.1 | (1) |
Subpart F income | 11 | 6.6 | 2.7 |
Manufacturing deduction | 0 | 0 | (1.9) |
Remeasurement of deferred taxes | 0 | 0 | (69.7) |
Transition Tax | 0 | (6.8) | 45.9 |
Permanent and other | 3.3 | (4.5) | (0.7) |
Effective income tax provision | $ 74.7 | $ 49.6 | $ 43.8 |
Reconciliation in percentages [Abstract] | |||
Statutory U.S. federal income tax (percentage) | 21.00% | 21.00% | 35.00% |
State income taxes, net of federal benefit (percentage) | 3.30% | 1.10% | (0.30%) |
Foreign tax differential (percentage) | 0.80% | 1.50% | (5.50%) |
Change in valuation allowance (percentage) | (3.20%) | (10.70%) | 2.60% |
Uncertain tax positions (percentage) | 0.90% | 20.10% | (0.50%) |
Subpart F income (percentage) | 4.10% | 4.00% | 1.20% |
Manufacturing deduction (percentage) | 0.00% | 0.00% | (0.90%) |
Tax reform tax rate change (percentage) | 0.00% | 0.00% | (32.30%) |
Transition Tax (percentage) | 0 | (0.041) | 0.213 |
Permanent and other (percentage) | 1.20% | (2.80%) | (0.30%) |
Effective income tax provision (percentage) | 28.10% | 30.10% | 20.30% |
Income Taxes - Tax Provision Su
Income Taxes - Tax Provision Summary (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current provision | |||
Federal | $ 50.4 | $ (14.6) | $ 73.5 |
State | 11.9 | 1.1 | 3.1 |
Foreign | 19.5 | 57.1 | 28.3 |
Total current | 81.8 | 43.6 | 104.9 |
Deferred provision | |||
Federal | (10.8) | 11.4 | (67.7) |
State | (8) | (4.5) | 7.6 |
Foreign | 11.7 | (0.9) | (1) |
Total deferred | (7.1) | 6 | (61.1) |
Effective income tax provision | $ 74.7 | $ 49.6 | $ 43.8 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Stock-based compensation | $ 13.9 | $ 12.8 |
Accrued expenses and other | 129.7 | 49.1 |
Net operating losses, foreign tax credits and charitable contribution carryforward | 43.1 | 56.1 |
Inventories | 8.2 | 6 |
Transaction costs | 6.6 | 13.5 |
Property, plant and equipment | 2.9 | 3.6 |
Total deferred tax assets | 204.4 | 141.1 |
Valuation allowances | (30) | (43.1) |
Total net deferred tax assets | 174.4 | 98 |
Deferred tax liabilities: | ||
Intangible assets | (156.4) | (156.8) |
Property, plant and equipment | (36.9) | (30.3) |
Accrued expenses and other | (69.1) | (5.8) |
Total deferred tax liabilities | (262.4) | (192.9) |
Net deferred tax liabilities | $ (88) | $ (94.9) |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Tax Credit Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Charitable contribution carryover (CCCs) | $ 32.9 | $ 39.6 |
Interest limitation carryover (ILC) | 0 | 10.6 |
US State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 165.7 | 355.7 |
Tax credit carryforwards | 5.3 | 8 |
US Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforwards | 12.2 | 12.2 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 36.9 | $ 57 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unrecognized tax benefits [Roll Forward] | ||
Balance as of beginning of period | $ 103.8 | $ 84.5 |
Additions based on tax positions related to current period | 0 | 2.5 |
Additions for tax positions of prior years | 0.7 | 21.2 |
Expiration of statutes of limitations | 0 | 0 |
Settlements of uncertain tax positions with tax authorities | 0 | (4.4) |
Balance as of end of period | $ 104.5 | $ 103.8 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net income from continuing operations, net of loss attributable to non-controlling interests | $ 46.7 | $ 72.4 | $ 42.7 | $ 29 | $ 19.1 | $ 44.1 | $ 26.6 | $ 25.6 | $ 190.9 | $ 118.3 | $ 182.3 |
Denominator: | |||||||||||
Denominator for basic earnings per common share—weighted average shares | 54.5 | 54.4 | 54 | ||||||||
Effect of dilutive securities: | |||||||||||
Employee stock based compensation (in shares) | 0.9 | 0.7 | 0.7 | ||||||||
Denominator for diluted earnings per common share—adjusted weighted average shares (in shares) | 55.4 | 55.1 | 54.7 | ||||||||
Earnings per share for continuing operations, basic (in dollars per share) | $ 0.87 | $ 1.33 | $ 0.78 | $ 0.53 | $ 0.35 | $ 0.83 | $ 0.52 | $ 0.48 | $ 3.50 | $ 2.17 | $ 3.37 |
Earnings per share for continuing operations, diluted (in dollars per share) | $ 0.85 | $ 1.30 | $ 0.76 | $ 0.52 | $ 0.35 | $ 0.82 | $ 0.52 | $ 0.47 | $ 3.45 | $ 2.15 | $ 3.33 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 1.1 | 1.5 | 1.3 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of business segments | segment | 2 | ||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $ 3,061.8 | $ 2,715.4 | $ 3,061.8 | $ 2,715.4 | |||||||
Total property, plant and equipment, net | 435.8 | 420.8 | 435.8 | 420.8 | |||||||
Operating lease right-of-use assets | 245.4 | 0 | 245.4 | 0 | |||||||
Net sales | 871.3 | $ 821 | $ 722.8 | $ 690.9 | 676.1 | $ 729.5 | $ 659.9 | $ 637.4 | 3,106 | 2,702.9 | $ 2,700.6 |
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Gross profit | 386.4 | 360.6 | 313.4 | 281.8 | 283.2 | 300 | 272.8 | 264.7 | 1,342.2 | 1,120.7 | 1,121 |
Operating income (loss) | 84.6 | $ 120.6 | $ 81 | $ 60.5 | 57.9 | $ 84.7 | $ 58 | $ 55.7 | 346.7 | 256.3 | 295.5 |
Income (loss) from continuing operations before income taxes | 265.5 | 165 | 215.4 | ||||||||
Depreciation and amortization | 116.5 | 111.9 | 94 | ||||||||
Capital expenditures | 88.2 | 73.6 | 66.6 | ||||||||
Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,455.3 | 2,473.4 | |||||||||
Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 247.6 | 227.2 | |||||||||
United States | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 366.4 | 350.7 | 366.4 | 350.7 | |||||||
Operating lease right-of-use assets | 198.3 | 0 | 198.3 | 0 | |||||||
Net sales | 1,954.2 | ||||||||||
Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 17.5 | 19.1 | 17.5 | 19.1 | |||||||
Operating lease right-of-use assets | 4.9 | 0 | 4.9 | 0 | |||||||
Net sales | 219.6 | ||||||||||
Other International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 51.9 | 51 | 51.9 | 51 | |||||||
Operating lease right-of-use assets | 42.2 | 0 | 42.2 | 0 | |||||||
Net sales | 526.8 | ||||||||||
Total International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 69.4 | 70.1 | 69.4 | 70.1 | |||||||
Operating lease right-of-use assets | 47.1 | 0 | 47.1 | 0 | |||||||
Net sales | 793.7 | 774 | 746.4 | ||||||||
Operating Segments | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 3,106 | 2,702.9 | |||||||||
Operating Segments | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,835.3 | 2,455.3 | |||||||||
Operating Segments | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 270.7 | 247.6 | |||||||||
Operating Segments | United States | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,312.3 | 1,928.9 | |||||||||
Operating Segments | Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 221 | 207.3 | |||||||||
Operating Segments | Other International | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 566.7 | ||||||||||
Operating Segments | North America | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 328.9 | 317.5 | 328.9 | 317.5 | |||||||
Operating lease right-of-use assets | 202 | 0 | 202 | 0 | |||||||
Net sales | 2,533.3 | 2,136.2 | 2,173.8 | ||||||||
Inter-segment royalty expense (income) | 4.5 | 3.1 | 5.5 | ||||||||
Gross profit | 1,035.2 | 823.4 | 844.7 | ||||||||
Operating income (loss) | 344.8 | 250 | 273.2 | ||||||||
Income (loss) from continuing operations before income taxes | 337 | 241.1 | 276 | ||||||||
Depreciation and amortization | 64.4 | 59 | 51.4 | ||||||||
Capital expenditures | 62.1 | 52.7 | 39.9 | ||||||||
Operating Segments | North America | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,379.6 | 2,002.1 | 2,051.8 | ||||||||
Operating Segments | North America | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 153.7 | 134.1 | 122 | ||||||||
Operating Segments | North America | United States | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 2,312.3 | 1,928.9 | |||||||||
Operating Segments | North America | Canada | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 221 | 207.3 | |||||||||
Operating Segments | International | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 51.8 | 51.1 | 51.8 | 51.1 | |||||||
Operating lease right-of-use assets | 42.2 | 0 | 42.2 | 0 | |||||||
Net sales | 572.7 | 566.7 | 526.8 | ||||||||
Inter-segment royalty expense (income) | (4.5) | (3.1) | (5.5) | ||||||||
Gross profit | 307 | 297.3 | 276.3 | ||||||||
Operating income (loss) | 115.4 | 107.5 | 112 | ||||||||
Income (loss) from continuing operations before income taxes | 109.7 | 101 | 104.5 | ||||||||
Depreciation and amortization | 13.7 | 13.5 | 14.1 | ||||||||
Capital expenditures | 11.6 | 14 | 9 | ||||||||
Operating Segments | International | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 455.7 | 453.2 | 421.6 | ||||||||
Operating Segments | International | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 117 | 113.5 | 105.2 | ||||||||
Corporate | |||||||||||
Segment information [Abstract] | |||||||||||
Total property, plant and equipment, net | 55.1 | 52.2 | 55.1 | 52.2 | |||||||
Operating lease right-of-use assets | 1.2 | 0 | 1.2 | 0 | |||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment royalty expense (income) | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating income (loss) | (113.5) | (101.2) | (89.7) | ||||||||
Income (loss) from continuing operations before income taxes | (181.2) | (177.1) | (165.1) | ||||||||
Depreciation and amortization | 38.4 | 39.4 | 28.5 | ||||||||
Capital expenditures | 14.5 | 6.9 | 17.7 | ||||||||
Corporate | Bedding sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Corporate | Other sales | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Inter-segment eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | (4.1) | (3.9) | (4.8) | ||||||||
Inter-segment eliminations | North America | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 3.4 | 3.4 | 3.8 | ||||||||
Inter-segment eliminations | International | |||||||||||
Segment information [Abstract] | |||||||||||
Net sales | 0.7 | 0.5 | $ 1 | ||||||||
Continuing Operations | Operating Segments | North America | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 3,142.9 | 2,788.1 | 3,142.9 | 2,788.1 | |||||||
Continuing Operations | Operating Segments | International | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 615.3 | 604.8 | 615.3 | 604.8 | |||||||
Continuing Operations | Corporate | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | 477.1 | 569 | 477.1 | 569 | |||||||
Continuing Operations | Inter-segment eliminations | |||||||||||
Segment information [Abstract] | |||||||||||
Total assets | $ (1,173.5) | $ (1,246.5) | $ (1,173.5) | $ (1,246.5) |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 871.3 | $ 821 | $ 722.8 | $ 690.9 | $ 676.1 | $ 729.5 | $ 659.9 | $ 637.4 | $ 3,106 | $ 2,702.9 | $ 2,700.6 |
Gross profit | 386.4 | 360.6 | 313.4 | 281.8 | 283.2 | 300 | 272.8 | 264.7 | 1,342.2 | 1,120.7 | 1,121 |
Operating income | 84.6 | 120.6 | 81 | 60.5 | 57.9 | 84.7 | 58 | 55.7 | 346.7 | 256.3 | 295.5 |
Income from continuing operations | 46.7 | 72.4 | 42.7 | 29 | 19.1 | 44.1 | 26.6 | 25.6 | 190.9 | 118.3 | 182.3 |
Net income attributable to Tempur Sealy International, Inc. | $ 46.2 | $ 73.3 | $ 41.6 | $ 28.4 | $ 12.3 | $ 42.3 | $ 22.8 | $ 23.1 | $ 189.5 | $ 100.5 | $ 151.4 |
Earnings per share for continuing operations, basic (in dollars per share) | $ 0.87 | $ 1.33 | $ 0.78 | $ 0.53 | $ 0.35 | $ 0.83 | $ 0.52 | $ 0.48 | $ 3.50 | $ 2.17 | $ 3.37 |
Earnings per share for continuing operations, diluted (in dollars per share) | $ 0.85 | $ 1.30 | $ 0.76 | $ 0.52 | $ 0.35 | $ 0.82 | $ 0.52 | $ 0.47 | $ 3.45 | $ 2.15 | $ 3.33 |
Quarterly Financial Data (una_4
Quarterly Financial Data (unaudited) Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of Fourth Quarter Events [Line Items] | |||||
Customer-related charges | $ 29.8 | $ 21.2 | $ 14.4 | ||
Donation of common stock | $ 8.9 | $ 8.9 | $ 0 | $ 0 | |
Restructuring costs | $ 9.1 | ||||
Mattress PAL | |||||
Effect of Fourth Quarter Events [Line Items] | |||||
Customer-related charges | $ 29.8 | ||||
Innovative Mattress Solutions, LLC (IMS) | |||||
Effect of Fourth Quarter Events [Line Items] | |||||
Customer-related charges | 21.2 | ||||
Other Restructuring | |||||
Effect of Fourth Quarter Events [Line Items] | |||||
Restructuring charges | 4.7 | ||||
Professional Fees | |||||
Effect of Fourth Quarter Events [Line Items] | |||||
Restructuring charges | 2.9 | ||||
Acquisition-related Costs | |||||
Effect of Fourth Quarter Events [Line Items] | |||||
Restructuring charges | $ 1.5 |
Guarantor_Non-Guarantor Finan_3
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Income and Comprehensive Income (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 24, 2016 | Sep. 24, 2015 | |
Statement of Income | |||||||||||||
Net sales | $ 871,300,000 | $ 821,000,000 | $ 722,800,000 | $ 690,900,000 | $ 676,100,000 | $ 729,500,000 | $ 659,900,000 | $ 637,400,000 | $ 3,106,000,000 | $ 2,702,900,000 | $ 2,700,600,000 | ||
Cost of sales | 1,763,800,000 | 1,582,200,000 | 1,579,600,000 | ||||||||||
Gross profit | 386,400,000 | 360,600,000 | 313,400,000 | 281,800,000 | 283,200,000 | 300,000,000 | 272,800,000 | 264,700,000 | 1,342,200,000 | 1,120,700,000 | 1,121,000,000 | ||
Selling and marketing expenses | 666,300,000 | 587,800,000 | 586,100,000 | ||||||||||
General, administrative and other expenses | 315,300,000 | 273,000,000 | 261,400,000 | ||||||||||
Customer-related charges | 29,800,000 | 21,200,000 | 14,400,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | (15,900,000) | (17,600,000) | (15,600,000) | ||||||||||
Royalty income, net of royalty expense | 0 | 0 | (20,800,000) | ||||||||||
Operating (loss) income | 84,600,000 | 120,600,000 | 81,000,000 | 60,500,000 | 57,900,000 | 84,700,000 | 58,000,000 | 55,700,000 | 346,700,000 | 256,300,000 | 295,500,000 | ||
Other expense, net: | |||||||||||||
Third party interest expense, net | 85,700,000 | 92,300,000 | 87,300,000 | ||||||||||
Intercompany interest (income) expense, net | 0 | 0 | 0 | ||||||||||
Interest expense (income), net | 85,700,000 | 92,300,000 | 87,300,000 | ||||||||||
Other (income) expense, net | (4,500,000) | (1,000,000) | (7,200,000) | ||||||||||
Total other expense, net | 81,200,000 | 91,300,000 | 80,100,000 | ||||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||||
Income from continuing operations before income taxes | 265,500,000 | 165,000,000 | 215,400,000 | ||||||||||
Income tax benefit (provision) | (74,700,000) | (49,600,000) | (43,800,000) | ||||||||||
Income from continuing operations | 190,800,000 | 115,400,000 | 171,600,000 | ||||||||||
Loss from discontinued operations, net of tax | (1,400,000) | (17,800,000) | (30,900,000) | ||||||||||
Net income before non-controlling interests | 189,400,000 | 97,600,000 | 140,700,000 | ||||||||||
Less: Net loss attributable to non-controlling interests | (100,000) | (2,900,000) | (10,700,000) | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 46,200,000 | $ 73,300,000 | $ 41,600,000 | $ 28,400,000 | 12,300,000 | $ 42,300,000 | $ 22,800,000 | $ 23,100,000 | 189,500,000 | 100,500,000 | 151,400,000 | ||
Comprehensive income attributable to Tempur Sealy International, Inc. | 197,100,000 | 80,700,000 | 179,400,000 | ||||||||||
2023 Senior Notes | |||||||||||||
Guarantor/non-guarantor financial information | |||||||||||||
Senior notes, noncurrent | 450,000,000 | 450,000,000 | 450,000,000 | 450,000,000 | $ 450,000,000 | ||||||||
2026 Senior Notes | |||||||||||||
Guarantor/non-guarantor financial information | |||||||||||||
Senior notes, noncurrent | 600,000,000 | 600,000,000 | 600,000,000 | 600,000,000 | $ 600,000,000 | ||||||||
Securitized debt | |||||||||||||
Guarantor/non-guarantor financial information | |||||||||||||
Senior notes, noncurrent | $ 375,000,000 | $ 375,000,000 | 375,000,000 | 375,000,000 | |||||||||
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | |||||||||||||
Statement of Income | |||||||||||||
Net sales | 0 | 0 | 0 | ||||||||||
Cost of sales | 0 | 0 | 0 | ||||||||||
Gross profit | 0 | 0 | 0 | ||||||||||
Selling and marketing expenses | 11,200,000 | 8,400,000 | 5,600,000 | ||||||||||
General, administrative and other expenses | 17,400,000 | 17,800,000 | 17,500,000 | ||||||||||
Customer-related charges | 0 | (8,400,000) | |||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||||
Royalty income, net of royalty expense | 0 | ||||||||||||
Operating (loss) income | (28,600,000) | (26,200,000) | (14,700,000) | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 56,300,000 | 59,200,000 | 59,600,000 | ||||||||||
Intercompany interest (income) expense, net | (9,800,000) | (6,900,000) | (4,700,000) | ||||||||||
Interest expense (income), net | 46,500,000 | 52,300,000 | 54,900,000 | ||||||||||
Other (income) expense, net | 0 | 0 | 0 | ||||||||||
Total other expense, net | 46,500,000 | 52,300,000 | 54,900,000 | ||||||||||
Income from equity investees | 250,700,000 | 162,000,000 | 193,100,000 | ||||||||||
Income from continuing operations before income taxes | 175,600,000 | 83,500,000 | 123,500,000 | ||||||||||
Income tax benefit (provision) | 13,800,000 | 14,100,000 | 17,200,000 | ||||||||||
Income from continuing operations | 189,400,000 | 97,600,000 | 140,700,000 | ||||||||||
Loss from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||
Net income before non-controlling interests | 189,400,000 | 97,600,000 | 140,700,000 | ||||||||||
Less: Net loss attributable to non-controlling interests | (100,000) | (2,900,000) | (10,700,000) | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 189,500,000 | 100,500,000 | 151,400,000 | ||||||||||
Comprehensive income attributable to Tempur Sealy International, Inc. | 197,100,000 | 80,700,000 | 179,400,000 | ||||||||||
Reportable Legal Entities | Combined Guarantor Subsidiaries | |||||||||||||
Statement of Income | |||||||||||||
Net sales | 2,387,100,000 | 2,000,900,000 | 1,961,200,000 | ||||||||||
Cost of sales | 1,390,600,000 | 1,208,300,000 | 1,185,400,000 | ||||||||||
Gross profit | 996,500,000 | 792,600,000 | 775,800,000 | ||||||||||
Selling and marketing expenses | 466,000,000 | 392,000,000 | 406,800,000 | ||||||||||
General, administrative and other expenses | 242,800,000 | 204,600,000 | 176,600,000 | ||||||||||
Customer-related charges | 29,800,000 | 21,200,000 | 21,700,000 | ||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||||
Royalty income, net of royalty expense | (20,800,000) | ||||||||||||
Operating (loss) income | 257,900,000 | 174,800,000 | 191,500,000 | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 26,700,000 | 30,200,000 | 26,000,000 | ||||||||||
Intercompany interest (income) expense, net | 13,200,000 | 10,800,000 | 8,300,000 | ||||||||||
Interest expense (income), net | 39,900,000 | 41,000,000 | 34,300,000 | ||||||||||
Other (income) expense, net | (7,600,000) | (9,900,000) | (17,200,000) | ||||||||||
Total other expense, net | 32,300,000 | 31,100,000 | 17,100,000 | ||||||||||
Income from equity investees | 84,300,000 | 26,600,000 | 51,300,000 | ||||||||||
Income from continuing operations before income taxes | 309,900,000 | 170,300,000 | 225,700,000 | ||||||||||
Income tax benefit (provision) | (59,200,000) | (8,300,000) | (32,600,000) | ||||||||||
Income from continuing operations | 250,700,000 | 162,000,000 | 193,100,000 | ||||||||||
Loss from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||
Net income before non-controlling interests | 250,700,000 | 162,000,000 | 193,100,000 | ||||||||||
Less: Net loss attributable to non-controlling interests | 0 | (2,600,000) | (5,200,000) | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 250,700,000 | 164,600,000 | 198,300,000 | ||||||||||
Comprehensive income attributable to Tempur Sealy International, Inc. | 251,900,000 | 164,200,000 | 193,000,000 | ||||||||||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | |||||||||||||
Statement of Income | |||||||||||||
Net sales | 793,500,000 | 800,500,000 | 862,500,000 | ||||||||||
Cost of sales | 447,800,000 | 464,300,000 | 497,600,000 | ||||||||||
Gross profit | 345,700,000 | 336,200,000 | 364,900,000 | ||||||||||
Selling and marketing expenses | 189,200,000 | 199,800,000 | 188,900,000 | ||||||||||
General, administrative and other expenses | 57,700,000 | 57,400,000 | 78,900,000 | ||||||||||
Customer-related charges | 0 | 1,100,000 | |||||||||||
Equity income in earnings of unconsolidated affiliates | (15,900,000) | (17,600,000) | (15,600,000) | ||||||||||
Royalty income, net of royalty expense | 0 | ||||||||||||
Operating (loss) income | 114,700,000 | 96,600,000 | 111,600,000 | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 2,700,000 | 4,600,000 | 22,400,000 | ||||||||||
Intercompany interest (income) expense, net | (3,400,000) | (3,900,000) | (3,600,000) | ||||||||||
Interest expense (income), net | (700,000) | 700,000 | 18,800,000 | ||||||||||
Other (income) expense, net | 1,600,000 | 13,900,000 | 9,200,000 | ||||||||||
Total other expense, net | 900,000 | 14,600,000 | 28,000,000 | ||||||||||
Income from equity investees | 0 | 0 | 0 | ||||||||||
Income from continuing operations before income taxes | 113,800,000 | 82,000,000 | 83,600,000 | ||||||||||
Income tax benefit (provision) | (29,500,000) | (55,400,000) | (32,300,000) | ||||||||||
Income from continuing operations | 84,300,000 | 26,600,000 | 51,300,000 | ||||||||||
Loss from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||
Net income before non-controlling interests | 84,300,000 | 26,600,000 | 51,300,000 | ||||||||||
Less: Net loss attributable to non-controlling interests | (100,000) | (300,000) | (5,500,000) | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | 84,400,000 | 26,900,000 | 56,800,000 | ||||||||||
Comprehensive income attributable to Tempur Sealy International, Inc. | 90,800,000 | 7,500,000 | 89,900,000 | ||||||||||
Reclassifications and Eliminations | |||||||||||||
Statement of Income | |||||||||||||
Net sales | (74,600,000) | (98,500,000) | (123,100,000) | ||||||||||
Cost of sales | (74,600,000) | (90,400,000) | (103,400,000) | ||||||||||
Gross profit | 0 | (8,100,000) | (19,700,000) | ||||||||||
Selling and marketing expenses | (100,000) | (12,400,000) | (15,200,000) | ||||||||||
General, administrative and other expenses | (2,600,000) | (6,800,000) | (11,600,000) | ||||||||||
Customer-related charges | 0 | 0 | |||||||||||
Equity income in earnings of unconsolidated affiliates | 0 | 0 | 0 | ||||||||||
Royalty income, net of royalty expense | 0 | ||||||||||||
Operating (loss) income | 2,700,000 | 11,100,000 | 7,100,000 | ||||||||||
Other expense, net: | |||||||||||||
Third party interest expense, net | 0 | (1,700,000) | (20,700,000) | ||||||||||
Intercompany interest (income) expense, net | 0 | 0 | 0 | ||||||||||
Interest expense (income), net | 0 | (1,700,000) | (20,700,000) | ||||||||||
Other (income) expense, net | 1,500,000 | (5,000,000) | 800,000 | ||||||||||
Total other expense, net | 1,500,000 | (6,700,000) | (19,900,000) | ||||||||||
Income from equity investees | (335,000,000) | (188,600,000) | (244,400,000) | ||||||||||
Income from continuing operations before income taxes | (333,800,000) | (170,800,000) | (217,400,000) | ||||||||||
Income tax benefit (provision) | 200,000 | 0 | 3,900,000 | ||||||||||
Income from continuing operations | (333,600,000) | (170,800,000) | (213,500,000) | ||||||||||
Loss from discontinued operations, net of tax | (1,400,000) | (17,800,000) | (30,900,000) | ||||||||||
Net income before non-controlling interests | (335,000,000) | (188,600,000) | (244,400,000) | ||||||||||
Less: Net loss attributable to non-controlling interests | 100,000 | 2,900,000 | 10,700,000 | ||||||||||
Net income attributable to Tempur Sealy International, Inc. | (335,100,000) | (191,500,000) | (255,100,000) | ||||||||||
Comprehensive income attributable to Tempur Sealy International, Inc. | $ (342,700,000) | $ (171,700,000) | $ (282,900,000) |
Guarantor_Non-Guarantor Finan_4
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||||
Cash and cash equivalents | $ 64.9 | $ 45.8 | ||
Accounts receivable, net | 372 | 321.5 | ||
Inventories | 260.5 | 222.3 | ||
Prepaid expenses and other current assets | 202.8 | 215.8 | ||
Total Current Assets | 900.2 | 805.4 | ||
Property, plant and equipment, net | 435.8 | 420.8 | ||
Goodwill | 732.3 | 723 | $ 732.7 | |
Other intangible assets, net | 641.4 | 649.3 | ||
Operating lease right-of-use assets | 245.4 | 0 | ||
Deferred income taxes | 14.1 | 22.6 | ||
Other non-current assets | 92.6 | 94.3 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 0 | 0 | ||
Total Assets | 3,061.8 | 2,715.4 | ||
Current Liabilities: | ||||
Accounts payable | 251.7 | 253 | ||
Accrued expenses and other current liabilities | 473.2 | 359.2 | ||
Income taxes payable | 11 | 9.7 | ||
Current portion of long-term debt | 37.4 | 47.1 | ||
Total Current Liabilities | 773.3 | 669 | ||
Long-term debt, net | 1,502.6 | 1,599.1 | ||
Long-term operating lease obligations | 205.4 | 0 | ||
Deferred income taxes | 102.1 | 117.5 | ||
Other non-current liabilities | 118 | 112.3 | ||
Due to affiliates | 0 | 0 | ||
Total Liabilities | 2,701.4 | 2,497.9 | ||
Total Stockholders' Equity | 360.4 | 217.5 | $ 112.5 | $ (41.9) |
Total Liabilities and Stockholders' Equity | 3,061.8 | 2,715.4 | ||
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | ||||
Current Assets: | ||||
Cash and cash equivalents | 0.2 | 0.1 | ||
Accounts receivable, net | 0.2 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 12.9 | 276.9 | ||
Total Current Assets | 13.3 | 277 | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | |||
Deferred income taxes | 13 | 15 | ||
Other non-current assets | 0.4 | 0 | ||
Net investment in subsidiaries | 1,143.3 | 661.7 | ||
Due from affiliates | 341.6 | 422.1 | ||
Total Assets | 1,511.6 | 1,375.8 | ||
Current Liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other current liabilities | 6.8 | 6.7 | ||
Income taxes payable | 0 | 0 | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | 6.8 | 6.7 | ||
Long-term debt, net | 1,044.3 | 1,043 | ||
Long-term operating lease obligations | 0 | |||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0.2 | 1.9 | ||
Due to affiliates | 99.9 | 106.7 | ||
Total Liabilities | 1,151.2 | 1,158.3 | ||
Total Stockholders' Equity | 360.4 | 217.5 | ||
Total Liabilities and Stockholders' Equity | 1,511.6 | 1,375.8 | ||
Reportable Legal Entities | Combined Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 20 | 6.2 | ||
Accounts receivable, net | 21.9 | 15.2 | ||
Inventories | 199.9 | 159.4 | ||
Prepaid expenses and other current assets | 59.5 | 65.4 | ||
Total Current Assets | 301.3 | 246.2 | ||
Property, plant and equipment, net | 366.5 | 350.7 | ||
Goodwill | 511.2 | 508.8 | ||
Other intangible assets, net | 564.3 | 572.7 | ||
Operating lease right-of-use assets | 198.2 | |||
Deferred income taxes | 0 | 0 | ||
Other non-current assets | 46.6 | 49.2 | ||
Net investment in subsidiaries | 369 | 210 | ||
Due from affiliates | 125.4 | 153.8 | ||
Total Assets | 2,482.5 | 2,091.4 | ||
Current Liabilities: | ||||
Accounts payable | 198.4 | 186.7 | ||
Accrued expenses and other current liabilities | 245.7 | 143.9 | ||
Income taxes payable | 10 | 274.7 | ||
Current portion of long-term debt | 29.5 | 44 | ||
Total Current Liabilities | 483.6 | 649.3 | ||
Long-term debt, net | 458.1 | 547.1 | ||
Long-term operating lease obligations | 172.4 | |||
Deferred income taxes | 98.5 | 118 | ||
Other non-current liabilities | 59.4 | 58.2 | ||
Due to affiliates | 67.2 | 57.1 | ||
Total Liabilities | 1,339.2 | 1,429.7 | ||
Total Stockholders' Equity | 1,143.3 | 661.7 | ||
Total Liabilities and Stockholders' Equity | 2,482.5 | 2,091.4 | ||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | ||||
Current Assets: | ||||
Cash and cash equivalents | 44.7 | 39.5 | ||
Accounts receivable, net | 352.5 | 303.3 | ||
Inventories | 60.6 | 62.9 | ||
Prepaid expenses and other current assets | 140.2 | 148.1 | ||
Total Current Assets | 598 | 553.8 | ||
Property, plant and equipment, net | 69.3 | 70.1 | ||
Goodwill | 221.1 | 214.2 | ||
Other intangible assets, net | 77.1 | 76.6 | ||
Operating lease right-of-use assets | 47.2 | |||
Deferred income taxes | 14.1 | 22.6 | ||
Other non-current assets | 45.6 | 45.1 | ||
Net investment in subsidiaries | 0 | 0 | ||
Due from affiliates | 19.6 | 15.4 | ||
Total Assets | 1,092 | 997.8 | ||
Current Liabilities: | ||||
Accounts payable | 55.9 | 63.3 | ||
Accrued expenses and other current liabilities | 220.7 | 208.6 | ||
Income taxes payable | 10.8 | 9.6 | ||
Current portion of long-term debt | 7.9 | 3.1 | ||
Total Current Liabilities | 295.3 | 284.6 | ||
Long-term debt, net | 0.2 | 9 | ||
Long-term operating lease obligations | 33 | |||
Deferred income taxes | 16.6 | 14.5 | ||
Other non-current liabilities | 58.4 | 52.2 | ||
Due to affiliates | 319.5 | 427.5 | ||
Total Liabilities | 723 | 787.8 | ||
Total Stockholders' Equity | 369 | 210 | ||
Total Liabilities and Stockholders' Equity | 1,092 | 997.8 | ||
Reclassifications and Eliminations | ||||
Current Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | (2.6) | 3 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | (9.8) | (274.6) | ||
Total Current Assets | (12.4) | (271.6) | ||
Property, plant and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | |||
Deferred income taxes | (13) | (15) | ||
Other non-current assets | 0 | 0 | ||
Net investment in subsidiaries | (1,512.3) | (871.7) | ||
Due from affiliates | (486.6) | (591.3) | ||
Total Assets | (2,024.3) | (1,749.6) | ||
Current Liabilities: | ||||
Accounts payable | (2.6) | 3 | ||
Accrued expenses and other current liabilities | 0 | 0 | ||
Income taxes payable | (9.8) | (274.6) | ||
Current portion of long-term debt | 0 | 0 | ||
Total Current Liabilities | (12.4) | (271.6) | ||
Long-term debt, net | 0 | 0 | ||
Long-term operating lease obligations | 0 | |||
Deferred income taxes | (13) | (15) | ||
Other non-current liabilities | 0 | 0 | ||
Due to affiliates | (486.6) | (591.3) | ||
Total Liabilities | (512) | (877.9) | ||
Total Stockholders' Equity | (1,512.3) | (871.7) | ||
Total Liabilities and Stockholders' Equity | $ (2,024.3) | $ (1,749.6) |
Guarantor_Non-Guarantor Finan_5
Guarantor/Non-Guarantor Financial Information - Schedule of Supplemental Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Guarantor/non-guarantor financial information | |||
Net cash (used in) provided by operating activities from continuing operations | $ 314.8 | $ 207.5 | $ 256.5 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | 0 | 0 |
Purchases of property, plant and equipment | (88.2) | (73.6) | (66.6) |
Acquisitions, net of cash acquired | (17.1) | 0 | 0 |
Other | 15.1 | 2.4 | 0.9 |
Net cash used in investing activities from continuing operations | (90.2) | (71.2) | (65.7) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 1,242.8 | 1,094.9 | 1,332.9 |
Repayments of borrowings under long-term debt obligations | (1,347.1) | (1,195.8) | (1,471.5) |
Net activity in investment in and advances from (to) subsidiaries and affiliates | 0 | 0 | 0 |
Proceeds from exercise of stock options | 17.8 | 4.6 | 12.8 |
Treasury stock repurchased | (105.7) | (4.6) | (44.9) |
Payment of deferred financing costs | (3.2) | 0 | (0.5) |
Repayments of finance lease obligations and other | (7.8) | (6.1) | (4) |
Net cash used in financing activities from continuing operations | (203.2) | (107) | (175.2) |
Net cash provided by continuing operations | 21.4 | 29.3 | 15.6 |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | (2) | (24.4) | (33.6) |
Investing cash flows | 0 | 2.1 | 3.6 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | (2) | (22.3) | (30) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.3) | (3.1) | (9.4) |
Increase (decrease) in cash and cash equivalents | 19.1 | 3.9 | (23.8) |
CASH AND CASH EQUIVALENTS, beginning of period | 45.8 | 41.9 | 65.7 |
CASH AND CASH EQUIVALENTS, end of period | 64.9 | 45.8 | 41.9 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0 | 0 | 0.8 |
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS | 64.9 | 45.8 | 41.1 |
Reportable Legal Entities | Tempur Sealy International, Inc. (Ultimate Parent) | |||
Guarantor/non-guarantor financial information | |||
Net cash (used in) provided by operating activities from continuing operations | (47.6) | (55.8) | (55.3) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | 0 | 0 |
Purchases of property, plant and equipment | 0 | 0 | 0 |
Acquisitions, net of cash acquired | 0 | ||
Other | 0 | 0 | 0 |
Net cash used in investing activities from continuing operations | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 0 | 0 | 0 |
Repayments of borrowings under long-term debt obligations | 0 | 0 | 0 |
Net activity in investment in and advances from (to) subsidiaries and affiliates | 135.6 | 55.8 | 87.5 |
Proceeds from exercise of stock options | 17.8 | 4.6 | 12.8 |
Treasury stock repurchased | (105.7) | (4.6) | (44.9) |
Payment of deferred financing costs | 0 | 0 | |
Repayments of finance lease obligations and other | 0 | 0 | 0 |
Net cash used in financing activities from continuing operations | 47.7 | 55.8 | 55.4 |
Net cash provided by continuing operations | 0.1 | 0 | 0.1 |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | 0 | 0 | 0 |
Investing cash flows | 0 | 0 | 0 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | 0 | 0 | 0 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0.1 | 0 | 0.1 |
CASH AND CASH EQUIVALENTS, beginning of period | 0.1 | 0.1 | 0 |
CASH AND CASH EQUIVALENTS, end of period | 0.2 | 0.1 | 0.1 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0 | ||
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS | 0.1 | ||
Reportable Legal Entities | Combined Guarantor Subsidiaries | |||
Guarantor/non-guarantor financial information | |||
Net cash (used in) provided by operating activities from continuing operations | 295.2 | 166.6 | 376.9 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | (68.4) | (75.8) | (129.7) |
Purchases of property, plant and equipment | (76.2) | (58.8) | (55.8) |
Acquisitions, net of cash acquired | (8.1) | ||
Other | 4.9 | 0.1 | 0.8 |
Net cash used in investing activities from continuing operations | (147.8) | (134.5) | (184.7) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 607.8 | 414 | 603.9 |
Repayments of borrowings under long-term debt obligations | (707.6) | (444) | (790.8) |
Net activity in investment in and advances from (to) subsidiaries and affiliates | (22.8) | (3) | 0.5 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | (3.2) | 0 | |
Repayments of finance lease obligations and other | (7.8) | (5.2) | (1.4) |
Net cash used in financing activities from continuing operations | (133.6) | (38.2) | (187.8) |
Net cash provided by continuing operations | 13.8 | (6.1) | 4.4 |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | 0 | 0 | 0 |
Investing cash flows | 0 | 0 | 0 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | 0 | 0 | 0 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 13.8 | (6.1) | 4.4 |
CASH AND CASH EQUIVALENTS, beginning of period | 6.2 | 12.3 | 7.9 |
CASH AND CASH EQUIVALENTS, end of period | 20 | 6.2 | 12.3 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0 | ||
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS | 12.3 | ||
Reportable Legal Entities | Combined Non-Guarantor Subsidiaries | |||
Guarantor/non-guarantor financial information | |||
Net cash (used in) provided by operating activities from continuing operations | 65.2 | 72.3 | (98.7) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 68.4 | 75.8 | 129.7 |
Purchases of property, plant and equipment | (12) | (15.3) | (11.2) |
Acquisitions, net of cash acquired | (9) | ||
Other | 10.2 | 4.9 | 4.1 |
Net cash used in investing activities from continuing operations | 57.6 | 65.4 | 122.6 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 635 | 680.9 | 729 |
Repayments of borrowings under long-term debt obligations | (639.5) | (751.8) | (680.7) |
Net activity in investment in and advances from (to) subsidiaries and affiliates | (112.8) | (52.8) | (88) |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | 0 | (0.5) | |
Repayments of finance lease obligations and other | 0 | (0.9) | (2.6) |
Net cash used in financing activities from continuing operations | (117.3) | (124.6) | (42.8) |
Net cash provided by continuing operations | 5.5 | 13.1 | (18.9) |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | 0 | 0 | 0 |
Investing cash flows | 0 | 0 | 0 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | 0 | 0 | 0 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (0.3) | (3.1) | (9.4) |
Increase (decrease) in cash and cash equivalents | 5.2 | 10 | (28.3) |
CASH AND CASH EQUIVALENTS, beginning of period | 39.5 | 29.5 | 57.8 |
CASH AND CASH EQUIVALENTS, end of period | 44.7 | 39.5 | 29.5 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0.8 | ||
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS | 28.7 | ||
Reclassifications and Eliminations | |||
Guarantor/non-guarantor financial information | |||
Net cash (used in) provided by operating activities from continuing operations | 2 | 24.4 | 33.6 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Contributions (paid to) received from subsidiaries and affiliates | 0 | 0 | 0 |
Purchases of property, plant and equipment | 0 | 0.5 | 0.4 |
Acquisitions, net of cash acquired | 0 | ||
Other | 0 | (2.6) | (4) |
Net cash used in investing activities from continuing operations | 0 | (2.1) | (3.6) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from borrowings under long-term debt obligations | 0 | 0 | 0 |
Repayments of borrowings under long-term debt obligations | 0 | 0 | 0 |
Net activity in investment in and advances from (to) subsidiaries and affiliates | 0 | 0 | 0 |
Proceeds from exercise of stock options | 0 | 0 | 0 |
Treasury stock repurchased | 0 | 0 | 0 |
Payment of deferred financing costs | 0 | 0 | |
Repayments of finance lease obligations and other | 0 | 0 | 0 |
Net cash used in financing activities from continuing operations | 0 | 0 | 0 |
Net cash provided by continuing operations | 2 | 22.3 | 30 |
CASH USED IN DISCONTINUED OPERATIONS | |||
Operating cash flows | (2) | (24.4) | (33.6) |
Investing cash flows | 0 | 2.1 | 3.6 |
Financing cash flows | 0 | 0 | 0 |
Net cash used in discontinued operations | (2) | (22.3) | (30) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, beginning of period | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, end of period | $ 0 | $ 0 | 0 |
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS | 0 | ||
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS | $ 0 |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 47.6 | $ 24.7 | $ 20.9 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (5) | (8.4) | (6) |
Balance at End of Period | 71.9 | 47.6 | 24.7 |
Valuation Allowance of Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 43.1 | 55.1 | 45.2 |
Additions - Charges to Costs and Expenses | 0.8 | 9.5 | 9.9 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (13.9) | (21.5) | 0 |
Balance at End of Period | $ 30 | $ 43.1 | $ 55.1 |
Uncategorized Items - tpx-20191
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (3,400,000) |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (500,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,900,000) |