Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 15, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,724,966,404 | ||
Entity Common Stock, Shares Outstanding | 205,345,003 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2021 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 | ||
Document Fiscal Year Focus | 2020 | ||
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 3,676.9 | $ 3,106 | $ 2,702.9 |
Cost of sales | 2,038.5 | 1,763.8 | 1,582.2 |
Gross profit | 1,638.4 | 1,342.2 | 1,120.7 |
Selling and marketing expenses | 740.2 | 666.3 | 587.8 |
General, administrative and other expenses | 382.5 | 345.1 | 294.2 |
Equity income in earnings of unconsolidated affiliates | (16.4) | (15.9) | (17.6) |
Operating (loss) income | 532.1 | 346.7 | 256.3 |
Other expense, net: | |||
Interest expense, net | 77 | 85.7 | 92.3 |
Loss on extinguishment of debt | 5.1 | 0 | 0 |
Other income, net | (2.4) | (4.5) | (1) |
Total other expense, net | 79.7 | 81.2 | 91.3 |
Income from continuing operations before income taxes | 452.4 | 265.5 | 165 |
Income tax provision | (102.6) | (74.7) | (49.6) |
Income from continuing operations | 349.8 | 190.8 | 115.4 |
Loss from discontinued operations, net of tax | 0 | (1.4) | (17.8) |
Net income before non-controlling interests | 349.8 | 189.4 | 97.6 |
Less: Net income (loss) attributable to non-controlling interests | 1 | (0.1) | (2.9) |
Net income attributable to Tempur Sealy International, Inc. | $ 348.8 | $ 189.5 | $ 100.5 |
Basic | |||
Earnings per share for continuing operations, basic (in dollars per share) | $ 1.68 | $ 0.87 | $ 0.54 |
Loss per share for discontinued operations, basic (in dollars per share) | 0 | 0 | (0.08) |
Basic (in dollars per share) | 1.68 | 0.87 | 0.46 |
Diluted | |||
Earnings per share for continuing operations, diluted (in dollars per share) | 1.64 | 0.86 | 0.54 |
Loss per share for discontinued operations, diluted (in dollars per share) | 0 | 0 | (0.08) |
Diluted (in dollars per share) | $ 1.64 | $ 0.86 | $ 0.46 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 207.9 | 218 | 217.6 |
Diluted (in shares) | 212.3 | 221.6 | 220.4 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income before non-controlling interests | $ 349.8 | $ 189.4 | $ 97.6 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 23.6 | 9.5 | (18.9) |
Net change in pension benefits, net of tax | (1.4) | (1.9) | (0.9) |
Other comprehensive income (loss), net of tax | 22.2 | 7.6 | (19.8) |
Comprehensive income | 372 | 197 | 77.8 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 1 | (0.1) | (2.9) |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ 371 | $ 197.1 | $ 80.7 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 65 | $ 64.9 |
Accounts receivable, net | 383.7 | 372 |
Inventories | 312.1 | 260.5 |
Prepaid expenses and other current assets | 207.6 | 202.8 |
Total Current Assets | 968.4 | 900.2 |
Property, plant and equipment, net | 507.9 | 435.8 |
Goodwill | 766.3 | 732.3 |
Other intangible assets, net | 630.1 | 641.4 |
Operating lease right-of-use assets | 304.3 | 245.4 |
Deferred income taxes | 13.5 | 14.1 |
Other non-current assets | 118.1 | 92.6 |
Total Assets | 3,308.6 | 3,061.8 |
Current Liabilities: | ||
Accounts payable | 324.1 | 251.7 |
Accrued expenses and other current liabilities | 585.1 | 473.2 |
Income taxes payable | 21.7 | 11 |
Current portion of long-term debt | 43.9 | 37.4 |
Total Current Liabilities | 974.8 | 773.3 |
Long-term debt, net | 1,323 | 1,502.6 |
Long-term operating lease obligations | 275.1 | 205.4 |
Deferred income taxes | 90.4 | 102.1 |
Other non-current liabilities | 131.8 | 118 |
Total Liabilities | 2,795.1 | 2,701.4 |
Redeemable non-controlling interest | 8.9 | 0 |
Stockholders' Equity: | ||
Common stock, $0.01 par value, 300.0 million shares authorized; 283.8 million shares issued as of December 31, 2020 and 2019 | 2.8 | 2.8 |
Additional paid in capital | 617.5 | 573.9 |
Retained earnings | 2,045.6 | 1,703.3 |
Accumulated other comprehensive loss | (65.5) | (87.7) |
Treasury stock at cost; 78.9 million and 75.1 million shares as of December 31, 2020 and 2019, respectively | (2,096.8) | (1,832.8) |
Total stockholders' equity, net of non-controlling interests in subsidiaries | 503.6 | 359.5 |
Non-controlling interests in subsidiaries | 1 | 0.9 |
Total Stockholders' Equity | 504.6 | 360.4 |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity | $ 3,308.6 | $ 3,061.8 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
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) | 283,800,000 | 283,800,000 |
Treasury stock, shares (in shares) | 78,900,000 | 75,100,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) IncomeCumulative Effect, Period of Adoption, Adjustment | Non-controlling Interests in Subsidiaries |
Balance at beginning of period at Dec. 31, 2017 | $ 2.2 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Net loss attributable to non-controlling interests | (2.7) | |||||||||
Acquisition of non-controlling interest | 0.5 | |||||||||
Balance at end of period at Dec. 31, 2018 | 0 | |||||||||
Balance at beginning of period (in shares) at Dec. 31, 2017 | 283,800,000 | 74,700,000 | ||||||||
Balance at beginning of period at Dec. 31, 2017 | 112.5 | $ (3.4) | $ 2.8 | $ (1,737.2) | $ 506.2 | $ 1,416.2 | $ (2.9) | $ (75.5) | $ (0.5) | $ 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 | 3.1 | 3.1 | ||||||||
Adjustment to pension liability, net of tax | (0.4) | (0.4) | ||||||||
Foreign currency translation adjustments | (18.9) | (18.9) | ||||||||
Exercise of stock options (in shares) | (200,000) | |||||||||
Exercise of stock options | 4.6 | $ 2.1 | 2.5 | |||||||
Issuances of PRSUs, RSUs and DSUs (shares) | (200,000) | |||||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | $ 2.7 | (2.7) | |||||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 100,000 | |||||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | $ (4.6) | $ (4.6) | ||||||||
Treasury stock repurchased (in shares) | 0 | |||||||||
Amortization of unearned stock-based compensation | $ 24.8 | 24.8 | ||||||||
Acquisition of non-controlling interest in subsidiary | (0.5) | (0.5) | ||||||||
Balance at end of period (in shares) at Dec. 31, 2018 | 283,800,000 | 74,400,000 | ||||||||
Balance at ending of period at Dec. 31, 2018 | 217.5 | $ 2.8 | $ (1,737) | 530.3 | 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) | ||||||||
Adjustment to pension liability, net of tax | (1.9) | (1.9) | ||||||||
Foreign currency translation adjustments | 9.5 | 9.5 | ||||||||
Exercise of stock options (in shares) | (300,000) | |||||||||
Exercise of stock options | 17.8 | $ 4.8 | 13 | |||||||
Issuances of PRSUs, RSUs and DSUs (shares) | (300,000) | |||||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | $ 3.7 | (3.7) | |||||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 100,000 | |||||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | $ (3.4) | $ (3.4) | ||||||||
Treasury stock repurchased (in shares) | 1,300,000 | 1,300,000 | ||||||||
Treasury stock repurchased | $ (102.3) | $ (102.3) | ||||||||
Amortization of unearned stock-based compensation | 26.8 | 26.8 | ||||||||
Acquisition of non-controlling interest in subsidiary | (1.9) | (1.9) | ||||||||
Charitable stock donation (in shares) | (100,000) | |||||||||
Charitable stock donation | 8.9 | $ 1.4 | 7.5 | |||||||
Balance at end of period (in shares) at Dec. 31, 2019 | 283,800,000 | 75,100,000 | ||||||||
Balance at ending of period at Dec. 31, 2019 | 360.4 | $ (6.5) | $ 2.8 | $ (1,832.8) | 573.9 | 1,703.3 | $ (6.5) | (87.7) | 0.9 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Net loss attributable to non-controlling interests | 0.9 | |||||||||
Acquisition of non-controlling interest | 8.4 | |||||||||
Dividend paid to non-controlling interest in subsidiary | (0.4) | |||||||||
Balance at end of period at Dec. 31, 2020 | 8.9 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 348.8 | 348.8 | ||||||||
Net loss attributable to non-controlling interests | 0.1 | 0.1 | ||||||||
Adjustment to pension liability, net of tax | (1.4) | (1.4) | ||||||||
Foreign currency translation adjustments | 23.6 | 23.6 | ||||||||
Exercise of stock options (in shares) | (500,000) | |||||||||
Exercise of stock options | 6.9 | $ 9.6 | (2.7) | |||||||
Issuances of PRSUs, RSUs and DSUs (shares) | (3,600,000) | |||||||||
Issuances of PRSUs, RSUs, and DSUs | 0 | $ 58.2 | (58.2) | |||||||
Treasury stock repurchased - PRSU/RSU/DSU releases (in shares) | 1,400,000 | |||||||||
Treasury stock repurchased - PRSU/RSU/DSU releases | $ (45.9) | $ (45.9) | ||||||||
Treasury stock repurchased (in shares) | 6,500,000 | 6,500,000 | ||||||||
Treasury stock repurchased | $ (285.9) | $ (285.9) | ||||||||
Amortization of unearned stock-based compensation | 104.5 | 104.5 | ||||||||
Balance at end of period (in shares) at Dec. 31, 2020 | 283,800,000 | 78,900,000 | ||||||||
Balance at ending of period at Dec. 31, 2020 | $ 504.6 | $ 2.8 | $ (2,096.8) | $ 617.5 | $ 2,045.6 | $ (65.5) | $ 1 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Adjustment to pension liability, tax | $ (0.4) | $ (0.7) | $ (0.1) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Net income before non-controlling interests | $ 349.8 | $ 189.4 | $ 97.6 |
Loss from discontinued operations, net of tax | 0 | 1.4 | 17.8 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 98 | 89.7 | 87.1 |
Amortization of stock-based compensation | 104.5 | 26.8 | 24.8 |
Amortization of deferred financing costs | 3.2 | 2.4 | 2.3 |
Bad debt expense | 35.8 | 29.3 | 31.3 |
Charitable stock donation | 0 | 8.9 | 0 |
Deferred income taxes | (8.6) | (7.1) | 6 |
Dividends received from unconsolidated affiliates | 19.3 | 13.4 | 14.8 |
Equity income in earnings of unconsolidated affiliates | (16.4) | (15.9) | (17.6) |
Loss on extinguishment of debt | 2.3 | 0 | 0 |
Loss on sale of assets | (1.7) | 1 | 3.3 |
Foreign currency adjustments and other | (0.5) | (5.2) | (2.1) |
Changes in operating assets and liabilities, net of effect of business acquisitions: | |||
Accounts receivable | (55.7) | (76) | (46.3) |
Inventories | (42.5) | (28.2) | (44.6) |
Prepaid expenses and other assets | (19.4) | 11.3 | (14.4) |
Operating leases, net | 21.9 | 8.6 | 0 |
Accounts payable | 63 | (4.8) | 28.7 |
Accrued expenses and other liabilities | 90.5 | 67.3 | 43.2 |
Income taxes, net | 11.2 | 2.5 | (24.4) |
Net cash provided by operating activities from continuing operations | 654.7 | 314.8 | 207.5 |
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Purchases of property, plant and equipment | (111.3) | (88.2) | (73.6) |
Acquisitions, net of cash acquired | (41.2) | (17.1) | 0 |
Other | 5.9 | 15.1 | 2.4 |
Net cash used in investing activities from continuing operations | (146.6) | (90.2) | (71.2) |
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS: | |||
Proceeds from borrowings under long-term debt obligations | 1,175.8 | 1,242.8 | 1,094.9 |
Repayments of borrowings under long-term debt obligations | (1,360.3) | (1,347.1) | (1,195.8) |
Proceeds from exercise of stock options | 6.9 | 17.8 | 4.6 |
Treasury stock repurchased | (331.8) | (105.7) | (4.6) |
Payment of deferred financing costs | (1.3) | (3.2) | 0 |
Repayments of finance lease obligations and other | (11.9) | (7.8) | (6.1) |
Net cash used in financing activities from continuing operations | (522.6) | (203.2) | (107) |
Net cash (used in) provided by continuing operations | (14.5) | 21.4 | 29.3 |
CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS | |||
Operating cash flows | 0.3 | (2) | (24.4) |
Investing cash flows | 0 | 0 | 2.1 |
Net cash provided by (used in) discontinued operations | 0.3 | (2) | (22.3) |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 14.3 | (0.3) | (3.1) |
Increase in cash and cash equivalents | 0.1 | 19.1 | 3.9 |
CASH AND CASH EQUIVALENTS, beginning of period | 64.9 | 45.8 | 41.9 |
CASH AND CASH EQUIVALENTS, end of period | 65 | 64.9 | 45.8 |
Cash paid during the period for: | |||
Interest | 79 | 89 | 91.8 |
Income taxes, net of refunds | $ 93.8 | $ 73.8 | $ 32.5 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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 designs, manufactures and distributes 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. On November 24, 2020, the Company effected a four-for-one stock split to shareholders of record on November 10, 2020. All share and per share information (including share and per share information related to share-based compensation) has been retroactively adjusted to reflect the stock split, except for certain shares held as treasury stock that were not subject to the split. (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 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. Additionally, in October 2020, the Company entered into a 50.0% ownership joint venture to reacquire the rights and acquire the assets to manufacture, market and distribute Sealy® and Stearns & Foster® branded products in the United Kingdom. (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. 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 6, "Leases" of the Consolidated Financial Statements Goodwill. Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2017-04, "Intangibles - Goodwill and Other (Topic 350)." The ASU simplifies the test for goodwill impairment, by eliminating Step 2 of the impairment test. Under ASU 2017-04, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill for the reporting unit. Adoption of this guidance did not have an impact on the Company's financial statements. Credit Losses. Effective January 1, 2020, the Company adopted 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. The Company adopted the new credit losses standard using the modified retrospective approach. The cumulative effect of adoption at January 1, 2020 was $6.5 million, net of tax. The Company's primary financial assets are its trade accounts receivable, which are short-term financings under industry standard credit and trade terms. (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, 2020 and 2019 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) 2020 2019 Finished goods $ 170.2 $ 157.4 Work-in-process 12.6 10.8 Raw materials and supplies 129.3 92.3 $ 312.1 $ 260.5 (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 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) 2020 2019 Machinery and equipment $ 419.6 $ 350.7 Land and buildings 359.7 317.8 Computer equipment and software 182.0 155.2 Furniture and fixtures 57.6 52.5 Construction in progress 72.0 65.0 Total property, plant and equipment 1,090.9 941.2 Accumulated depreciation (583.0) (505.4) Total property, plant and equipment, net $ 507.9 $ 435.8 Depreciation expense, which includes depreciation expense for finance and capital lease assets, for the Company was $80.5 million, $73.8 million and $71.8 million for the years ended December 31, 2020, 2019 and 2018, 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, 2020, 2019 and 2018. (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, the goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. Using the quantitative approach, the Company makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. Discounted cash flow models are reliant on various assumptions, including projected business results, long-term growth factors and weighted-average cost of capital. Management judgement is involved in estimating these variables, and they include inherent uncertainties as they are forecasting future events. The Company performs sensitivity analyses by using a range of inputs to confirm the reasonableness of the long-term growth rate and weighted average cost of capital. Additionally, the Company compares the indicated equity value to its market capitalization and evaluates the resulting implied control premium/discount to determine if the estimated enterprise value is reasonable compared to external market indicators. 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 2020, 2019 and 2018, none of which resulted in the recognition of impairment charges. The most recent annual impairment tests performed as of October 1, 2020, indicated that the fair values of each of the Company's reporting units and indefinite-lived intangible assets were substantially in excess of their carrying values. For further information on goodwill and other intangible assets, refer to Note 4, "Goodwill and Other Intangible Assets." (l) Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. The Company considers the impact of recoverable salvage value on sales returns by product in determining its estimate of future sales returns. 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, 2018 to December 31, 2020: (in millions) 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 Amounts accrued 111.9 Returns charged to accrual (106.3) Balance as of December 31, 2020 $ 44.9 As of December 31, 2020 and 2019, $31.6 million and $26.2 million of accrued sales returns is included as a component of accrued expenses and other current liabilities and $13.3 million and $13.1 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, 2018 to December 31, 2020: (in millions) 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 Amounts accrued 24.3 Warranties charged to accrual (21.7) Balance as of December 31, 2020 $ 44.2 As of December 31, 2020 and 2019, $20.3 million and $19.4 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $23.9 million and $22.2 million of accrued warranty expense is included in other non-current liabilities on the Company’s accompanying Consolidated Balance Sheets, respectively. (n) Allowance for Credit Losses. The allowance for credit losses is the Company's best estimate of the amount of estimated lifetime credit losses in the Company's accounts receivable. The Company regularly reviews the adequacy of its allowance for credit losses. The Company estimates losses over the contractual life using assumptions to capture the risk of loss, even if remote, based principally on how long a receivable has been outstanding. Account balances are charged off against the allowance for credit losses after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2020, the Company's accounts receivable were substantially current, and there were no significant changes to the aging of receivables as a result of the impact of the global pandemic. Other factors considered include historical write-off experience, current economic conditions and also factors such as customer credit, past transaction history with the customer and changes in customer payment terms. The allowance for credit losses is included in accounts receivable, net in the accompanying Consolidated Balance Sheets. The Company had the following activity for its allowance for credit losses from December 31, 2018 to December 31, 2020. (in millions) Balance as of December 31, 2018 $ 47.6 Amounts accrued 29.3 Write-offs charged against the allowance (5.0) Balance as of December 31, 2019 71.9 ASU 2016-13 adoption impact (before tax) 8.9 Balance as of January 1, 2020 80.8 Amounts accrued 35.8 Write-offs charged against the allowance (45.0) Balance as of December 31, 2020 $ 71.6 (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 $223.1 million, $192.2 million and $169.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. Additionally, cost of sales include royalties that the Company pays to other entities for the use of their names on products produced by the Company. For additional information, please refer to Note 2, "Net Sales." 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 $332.5 million, $280.5 million and $259.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Advertising costs include expenditures for shared advertising costs that the Company reimburses to customers under its integrated and cooperative advertising programs. Advertising costs deferred and included in prepaid expenses and other current assets in the accompanying Consolidated Balance Sheets were $4.7 million and $3.6 million as of December 31, 2020 and 2019, 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 $23.1 million, $23.0 million and $21.9 million for the years ended December 31, 2020, 2019 and 2018, 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 10, ":Stock-based Compensation." (u) Treasury Stock. Subject to Delaware law, and the limitations in the 2019 Credit Agreement (as defined in Note 5, "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. 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 8, "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 |
Net Sales
Net Sales | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales | Net Sales 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, 2020 (in millions) North America International Consolidated Channel Wholesale $ 2,806.7 $ 379.1 $ 3,185.8 Direct 352.5 138.6 491.1 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 North America International Consolidated Product Bedding $ 2,956.3 $ 397.5 $ 3,353.8 Other 202.9 120.2 323.1 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 North America International Consolidated Geographical region United States $ 2,886.6 $ — $ 2,886.6 All other 272.6 517.7 790.3 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 Twelve Months Ended December 31, 2019 (in millions) North America International Consolidated Channel Wholesale $ 2,343.5 $ 373.6 $ 2,717.1 Direct 260.0 128.9 388.9 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 North America International Consolidated Product Bedding $ 2,448.8 $ 388.2 $ 2,837.0 Other 154.7 114.3 269.0 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 North America International Consolidated Geographical region United States $ 2,312.1 $ — $ 2,312.1 All other 291.4 502.5 793.9 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 Twelve Months Ended December 31, 2018 (in millions) North America International Consolidated Channel Wholesale $ 2,059.5 $ 392.6 $ 2,452.1 Direct 147.5 103.3 250.8 Net sales $ 2,207.0 $ 495.9 $ 2,702.9 North America International Consolidated Product Bedding $ 2,069.5 $ 385.8 $ 2,455.3 Other 137.5 110.1 247.6 Net sales $ 2,207.0 $ 495.9 $ 2,702.9 North America International Consolidated Geographical region United States $ 1,928.8 $ — $ 1,928.8 All Other 278.2 495.9 774.1 Net sales $ 2,207.0 $ 495.9 $ 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 $21.9 million, $22.6 million and $20.9 million for the years ended December 31, 2020, 2019 and 2018, 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. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures 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 $39.1 million, which included $1.2 million of cash acquired. The Company accounted for this transaction as a business combination. The final allocation of the purchase price is based on the fair values of the assets acquired and liabilities assumed as of January 31, 2020, which included the following: (in millions) Working capital (accounts receivable and inventory, net of accounts payable and accrued liabilities) $ 5.8 Property and equipment 10.1 Goodwill 26.7 Customer relationships intangible assets 3.7 Operating lease right-of-use assets 19.9 Operating lease liabilities (19.9) Non-controlling interest (8.4) Purchase price, net of cash acquired $ 37.9 Goodwill is calculated as the excess of the purchase price over the net assets acquired and primarily represents the private label product growth opportunities and expected synergistic manufacturing benefits to be realized from the acquisition. The goodwill is deductible for income tax purposes and is included within the North American reporting unit for goodwill impairment assessments. 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 $24.0 million, including assumed liabilities of approximately $11.0 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, which included $5.1 million of cash acquired. 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 included 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) Purchase price, net of cash acquired $ 8.1 Goodwill is calculated as the excess of the purchase price over the net assets acquired and primarily represents the growth opportunities and expected retail synergistic benefits to be realized from the acquisition. The goodwill is deductible for income tax purposes and is 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. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
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, 2018 $ 576.7 $ 146.3 $ 723.0 Goodwill resulting from acquisitions 2.4 5.4 7.8 Foreign currency translation adjustments and other 2.8 (1.3) 1.5 Balance as of December 31, 2019 $ 581.9 $ 150.4 $ 732.3 Goodwill resulting from acquisition 26.7 — 26.7 Foreign currency translation adjustments and other 1.7 5.6 7.3 Balance as of December 31, 2020 $ 610.3 $ 156.0 $ 766.3 The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2020 December 31, 2019 Useful Gross Accumulated Net Gross Accumulated Net Unamortized indefinite life intangible assets: Trade names $ 560.7 $ 560.7 $ 559.5 $ 559.5 Amortized intangible assets: Contractual distributor relationships 15 85.7 44.5 41.2 85.5 38.7 46.8 Technology and other 4-10 91.3 75.9 15.4 91.1 68.7 22.4 Patents, other trademarks and other trade names 5-20 28.7 21.3 7.4 27.9 18.6 9.3 Customer databases, relationships and reacquired rights 2-5 35.1 29.7 5.4 30.9 27.5 3.4 Total $ 801.5 $ 171.4 $ 630.1 $ 794.9 $ 153.5 $ 641.4 Amortization expense relating to intangible assets for the Company was $17.5 million, $15.9 million and $15.3 million for the years ended December 31, 2020, 2019 and 2018, 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) 2021 $ 20.0 2022 14.2 2023 8.2 2024 6.6 2025 6.5 Thereafter 13.9 Total $ 69.4 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt for the Company consists of the following: (in millions) December 31, 2020 December 31, 2019 Debt: Amount Rate Amount Rate Maturity Date 2019 Credit Agreement: Term A Facility $ 409.1 (1) $ 425.0 (2) October 16, 2024 Revolver — (1) — (2) October 16, 2024 2026 Senior Notes 600.0 5.500% 600.0 5.500% June 15, 2026 2023 Senior Notes 250.0 5.625% 450.0 5.625% October 15, 2023 Securitized debt 33.9 (3) — (3) April 6, 2021 Finance lease obligations (4) 71.4 64.1 Various Other 5.9 7.9 Various Total debt 1,370.3 1,547.0 Less: Deferred financing costs 3.4 7.0 Total debt, net 1,366.9 1,540.0 Less: Current portion 43.9 37.4 Total long-term debt, net $ 1,323.0 $ 1,502.6 (1) Interest at LIBOR plus applicable margin of 1.250% as of December 31, 2020. (2) Interest at LIBOR plus applicable margin of 1.625% as of December 31, 2019. (3) Interest at one month LIBOR index plus 80 basis points. (4) Finance lease obligations are a non-cash financing activity. Refer to Note 6, "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 $424.9 million, after a $0.1 million reduction for outstanding letters of credit. Borrowings under the 2019 Credit Agreement will generally bear interest, at the election of Tempur Sealy International and the other subsidiary borrowers, at either Base Rate or 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, 2020, such applicable margins that are 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, 2020, netted cash was $63.6 million. As of December 31, 2020, the Company's consolidated total net leverage ratio was 1.68 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, 2020. The maturity date of the 2019 Credit Agreement is October 16, 2024. On February 2, 2021 the Company entered into an amendment to the 2019 Credit Agreement. The amendment provides for an increase to the revolving credit facility from $425.0 million to $725.0 million. 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. 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. On November 9, 2020, the Company redeemed the first $200.0 million of the issued and outstanding 2023 Notes at 101.406% of the principal amount, plus the accrued and unpaid interest. On January 13, 2021, the Company redeemed $125.0 million of the remaining $250.0 million issued and outstanding 2023 Senior Notes at 101.406% of the principal amount, plus the accrued and unpaid interest. On February 8, 2021 the Company redeemed the remaining $125.0 million of its 2023 Senior Notes at 101.406% of the principal amount, plus the accrued and unpaid interest. 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. 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. The Accounts Receivable Securitization matures April 6, 2021. The Company is in the process of refinancing this facility. Borrowings under this facility are classified as long-term debt within the Consolidated Balance Sheets at December 31, 2020, based on the Company's ability and intent to refinance on a long-term basis. 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. 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, 2020 December 31, 2019 2023 Senior Notes $ 255.1 $ 464.2 2026 Senior Notes 625.4 634.9 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. As a result of the redemption of $200.0 million of the 2023 Senior Notes, the Company expensed $2.3 million of deferred financing costs, which are included within loss on extinguishment of debt in the Consolidated Statement of Income for the twelve months ended December 31, 2020. Future Obligations As of December 31, 2020, 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) 2021 $ 66.4 2022 21.3 2023 281.9 2024 329.3 2025 — Thereafter 600.0 Total $ 1,298.9 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating and finance 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 2034. 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, 2020 and 2019: (in millions) December 31, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 304.3 $ 245.4 Finance lease assets Property, plant and equipment, net 61.2 54.4 Total leased assets $ 365.5 $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 61.0 $ 50.8 Finance lease obligations Current portion of long-term debt 11.4 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 275.1 205.4 Finance lease obligations Long-term debt, net 60.0 55.9 Total lease obligations $ 407.5 $ 320.3 The following table summarizes the classification of lease expense in the Company's Consolidated Statements of Income for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Operating lease expense: Operating lease expense $ 75.4 $ 63.8 Short-term lease expense 11.1 9.0 Variable lease expense 22.2 18.8 Finance lease expense: Amortization of right-of-use assets 9.3 8.5 Interest on lease obligations 4.7 4.7 Total lease expense $ 122.7 $ 104.8 The following table sets forth the scheduled maturities of lease obligations as of December 31, 2020: (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2021 $ 74.1 $ 15.3 $ 89.4 2022 67.9 13.4 81.3 2023 55.5 10.7 66.2 2024 46.0 8.6 54.6 2025 39.3 7.7 47.0 Thereafter 112.3 34.2 146.5 Total lease payments 395.1 89.9 485.0 Less: Interest (59.0) (18.5) (77.5) Present value of lease obligations $ 336.1 $ 71.4 $ 407.5 The following table provides lease term and discount rate information related to operating and finance leases as of December 31, 2020: December 31, 2020 Weighted average remaining lease term (years): Operating leases 6.66 Finance leases 7.91 Weighted average discount rate: Operating leases 4.90 % Finance leases 5.80 % The following table provides supplemental information related to the Company's Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases (a) $ 70.1 $ 62.7 Operating cash flows paid for finance leases $ 4.7 $ 3.7 Financing cash flows paid for finance leases $ 10.2 $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 109.4 $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 17.6 $ 4.1 (a) Operating cash flows paid for operating leases are included within the change in other assets and liabilities within the Consolidated Statement of Cash Flows offset by non-cash right-of-use asset amortization and lease liability accretion. |
Leases | Leases The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating and finance 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 2034. 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, 2020 and 2019: (in millions) December 31, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 304.3 $ 245.4 Finance lease assets Property, plant and equipment, net 61.2 54.4 Total leased assets $ 365.5 $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 61.0 $ 50.8 Finance lease obligations Current portion of long-term debt 11.4 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 275.1 205.4 Finance lease obligations Long-term debt, net 60.0 55.9 Total lease obligations $ 407.5 $ 320.3 The following table summarizes the classification of lease expense in the Company's Consolidated Statements of Income for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Operating lease expense: Operating lease expense $ 75.4 $ 63.8 Short-term lease expense 11.1 9.0 Variable lease expense 22.2 18.8 Finance lease expense: Amortization of right-of-use assets 9.3 8.5 Interest on lease obligations 4.7 4.7 Total lease expense $ 122.7 $ 104.8 The following table sets forth the scheduled maturities of lease obligations as of December 31, 2020: (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2021 $ 74.1 $ 15.3 $ 89.4 2022 67.9 13.4 81.3 2023 55.5 10.7 66.2 2024 46.0 8.6 54.6 2025 39.3 7.7 47.0 Thereafter 112.3 34.2 146.5 Total lease payments 395.1 89.9 485.0 Less: Interest (59.0) (18.5) (77.5) Present value of lease obligations $ 336.1 $ 71.4 $ 407.5 The following table provides lease term and discount rate information related to operating and finance leases as of December 31, 2020: December 31, 2020 Weighted average remaining lease term (years): Operating leases 6.66 Finance leases 7.91 Weighted average discount rate: Operating leases 4.90 % Finance leases 5.80 % The following table provides supplemental information related to the Company's Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases (a) $ 70.1 $ 62.7 Operating cash flows paid for finance leases $ 4.7 $ 3.7 Financing cash flows paid for finance leases $ 10.2 $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 109.4 $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 17.6 $ 4.1 (a) Operating cash flows paid for operating leases are included within the change in other assets and liabilities within the Consolidated Statement of Cash Flows offset by non-cash right-of-use asset amortization and lease liability accretion. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2020 | |
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 $5.8 million, $6.0 million and $5.8 million of expenses associated with the 401(k) Plan for the years ended December 31, 2020, 2019 and 2018, 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) 2020 2019 2018 Service cost $ 1.1 $ 0.9 $ 1.0 Interest cost 1.1 1.2 1.1 Expected return on assets (1.5) (1.3) (1.5) Amortization of prior service cost 0.1 0.1 0.1 Amortization of net gain 0.1 0.1 — Net periodic pension cost $ 0.9 $ 1.0 $ 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) 2020 2019 2018 Net loss $ 1.9 $ 2.2 $ 0.6 New prior service cost 0.1 0.6 0.1 Amortization of prior service cost (0.1) (0.1) (0.1) Amortization or settlement recognition of net loss (0.1) (0.1) — Total recognized in other comprehensive loss $ 1.8 $ 2.6 $ 0.6 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: 2020 2019 2018 Discount rate (a) 3.16 % 4.10 % 3.58 % Expected long-term return on plan assets (b) 5.37 % 6.16 % 6.25 % (a) The discount rates used in 2020 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 3.15% and 3.20%, respectively. 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%. (b) The expected long-term return on plan assets in 2020 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 5.75% and 4.30%, respectively. The discount rates used in 2019 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 6.50% and 5.00%, respectively. The discount rates used in 2018 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 6.50% and 5.50%, respectively. Obligations and Funded Status The measurement date for the Company's Plans is December 31. The funded status of the Plans as of December 31 was as follows: (in millions) 2020 2019 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 36.9 $ 30.0 Service cost 1.1 0.9 Interest cost 1.1 1.2 Plan amendments 0.1 0.5 Actuarial loss 4.6 5.5 Benefits paid (1.3) (1.3) Expenses paid (0.1) (0.1) Foreign currency exchange rate changes 0.1 0.2 Projected benefit obligation at end of year $ 42.5 $ 36.9 Change in Plan Assets: Fair value of plan assets at beginning of year $ 27.0 $ 22.2 Actual return on plan assets 4.2 4.6 Employer contribution 1.4 1.4 Benefits paid (1.3) (1.3) Expenses paid (0.1) (0.1) Foreign currency exchange rate changes 0.1 0.2 Fair value of plan assets at end of year $ 31.3 $ 27.0 Funded status $ (11.2) $ (9.9) The Company’s defined benefit pension plan for U.S. Sealy employees is underfunded. As of December 31, 2020, the projected benefit obligation and fair value of plan assets were $37.7 million and $26.5 million, respectively. 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, 2020, the projected benefit obligation and fair value of plan assets for the Sealy Canada Ltd. pension plan were $4.8 million and $4.8 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. The accumulated benefit obligation for all pension plans was $42.5 million at December 31, 2020 and $36.9 million at December 31, 2019. The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2020 2019 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 11.2 $ 10.0 Non-current benefit asset — 0.1 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: 2020 2019 Discount rate (a) 2.47 % 3.16 % (a) The discount rates used in 2020 to determine the benefit obligations for the U.S. retirement plan and Canadian retirement plan were 2.43% and 2.80%, respectively. The discount rates used in 2019 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 3.15% and 3.20%, respectively. No material amounts are expected to be reclassified from AOCL to be recognized as components of net income during 2021. Plan Contributions and Expected Benefit Payments During 2021, the Company expects to contribute $1.1 million to the Company's Plans from available cash and cash equivalents. The following table presents estimated future benefit payments: (in millions) Fiscal 2021 $ 1.0 Fiscal 2022 1.1 Fiscal 2023 1.2 Fiscal 2024 1.2 Fiscal 2025 1.3 Fiscal 2026 ‑ Fiscal 2029 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: 2020 Target 2020 Actual Common/collective trust consisting primarily of: Equity securities 60.0 % 56.6 % Debt securities 40.0 % 43.1 % 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, 2020 was 5.75% for the defined benefit pension plan for U.S. Sealy employees and 4.30% 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, 2020 and 2019, 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) 2020 2019 Asset Category Common/collective trust U.S. equity $ 6.5 $ 5.5 International equity 11.2 9.5 Total equity based funds 17.7 15.0 Common/collective trust - fixed income 13.5 11.9 Money market funds 0.1 0.1 Total $ 31.3 $ 27.0 Multi‑Employer Benefit Plans Approximately 22.6% 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) 2020 2019 2018 Multi‑employer retirement plan expense $ 4.6 $ 4.3 $ 3.9 Multi‑employer health and welfare plan expense 3.4 3.8 3.6 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, 2020 and 2019, respectively: Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2020 FIP/RP Status (2) Contributions of the Company in 2020 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 2/28/20 Red Implemented $ 1.5 No 2023 2018, 2019, 2020 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/19 Red Implemented $ 1.1 Yes, 10.0% 2022 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/19 Red Implemented $ 1.0 Yes, 10.0% 2021 N/A 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 (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, 2018, the Company contributed $0.7 million to the plan. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, the Company had approximately $201.6 million remaining under an existing share repurchase program initially authorized by the Board of Directors in 2016. The Company repurchased 6.5 million shares and 1.3 million shares, under the program, for approximately $285.9 million and $102.3 million during the years ended December 31, 2020 and 2019, respectively. In February 2021, the Board of Directors authorized an increase to our share repurchase authorization to bring the total authorization to $400.0 million. The Company did not repurchase any shares under the program during the year ended December 31, 2018. In addition, the Company acquired shares upon the vesting of certain restricted stock units ("RSUs") and performance restricted stock units ("PRSUs"), which were withheld to satisfy tax withholding obligations during the years ended December 31, 2020, 2019 and 2018, 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 $45.9 million, $3.4 million and $4.6 million in treasury stock acquired during the years ended December 31, 2020, 2019 and 2018, 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) 2020 2019 2018 Foreign Currency Translation Balance at beginning of period $ (82.2) $ (91.7) $ (72.8) Other comprehensive loss: Foreign currency translation adjustments (1) 23.6 9.5 (18.9) Balance at end of period $ (58.6) $ (82.2) $ (91.7) Pension Benefits Balance at beginning of period $ (5.5) $ (3.6) $ (2.7) Other comprehensive loss: Net change from period revaluation (1.8) (2.6) (0.4) Tax benefit (2) 0.4 0.7 0.1 Total other comprehensive loss before reclassifications, net of tax (1.4) (1.9) (0.3) 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 (1.4) (1.9) (0.9) Balance at end of period $ (6.9) $ (5.5) $ (3.6) (1) In 2020, 2019 and 2018, 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. |
Other Items
Other Items | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 Taxes $ 150.4 $ 136.0 Wages and benefits 102.5 79.5 Advertising 74.4 56.9 Operating leases obligations 61.0 50.8 Other 196.8 150.0 $ 585.1 $ 473.2 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
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 34.8 million shares of common stock under the 2013 Plan, subject to certain adjustment provisions. The maximum number of shares of common stock has been adjusted to include 26.1 million additional shares as a result of the four-for-one stock-split that occurred on November 24, 2020. 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 46.0 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. The maximum allowed shares of common stock under the 2003 Plan has been adjusted to include 34.5 million additional shares as a result of the four-for-one stock-split that occurred on November 24, 2020. 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, 2020 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) 2020 2019 2018 PRSU expense $ 77.4 $ 1.4 $ 2.5 Stock option expense 4.9 4.9 6.7 RSU/DSU expense 22.2 20.5 15.6 Total stock-based compensation expense $ 104.5 $ 26.8 $ 24.8 Performance Restricted Stock Units A summary of the Company's PRSU activity and related information for the years ended December 31, 2020 and 2019 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2018 8.0 $ 15.27 Granted 0.3 21.35 Vested — — Forfeited (4.8) 17.74 Awards unvested at December 31, 2019 3.5 15.02 Granted 3.5 21.39 Vested (3.4) 15.03 Forfeited — — Awards unvested at December 31, 2020 3.6 $ 21.18 The Company grants PRSUs to executive officers and certain members of management. The Company granted PRSUs during the years ended December 31, 2020, 2019 and 2018. Actual payout under the PRSUs is dependent upon the achievement of certain financial goals. During the first quarter of 2020, the Company granted 0.6 million PRSUs at target at a weighted average grant date fair value of $21.39 per share with a performance January 1, 2020 through December 31, 2020 as a component of the long-term incentive plan ("2020 PRSUs"). For the year ended December 31, 2020, the Company recognized stock-based compensation expense related to the 2020 PRSUs, as the Company achieved the maximum specified performance target for the performance period. 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 were forfeited in 2019. Vesting for the remaining one-half of the total 2019 Aspirational Plan PRSUs was based on the highest Adjusted EBITDA per credit facility in any four consecutive fiscal quarter period ending between (and including) March 31, 2020 and December 31, 2020 (the "Second Designated Period"). On November 16, 2020, the Compensation Committee of the Board of Directors determined that the maximum performance condition was achieved during the Second Designated Period. The 2019 Aspirational Plan PRSUs vested on December 15, 2020. The Company recorded $45.2 million of stock-based compensation expense related to the 2019 Aspirational Plan PRSUs during the third quarter of 2020, as it became probable the Company would achieve the highest specified performance target. The amount recognized in the third quarter represents the cumulative catch-up adjustment. The Company recognized an additional $4.2 million of stock-based compensation expense in the fourth quarter of 2020 commensurate with the remaining requisite service period. 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, 2020 and 2019, no stock options were granted. The assumptions used in the Black-Scholes option-pricing model for the years ended December 31, 2020, 2019 and 2018 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, 2020 2019 2018 Expected volatility range of stock N/A N/A 39.8% - 40.1% Expected life of option, range in years N/A N/A 5 Risk-free interest range rate N/A N/A 2.2% - 2.8% Expected dividend yield on stock N/A N/A —% A summary of the Company's stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2020 and 2019 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, 2018 6.4 $ 15.63 Granted — — Exercised (1.2) 13.12 Forfeited — — Options outstanding at December 31, 2019 5.2 $ 16.30 Granted — — Exercised (0.5) 13.03 Forfeited — — Options outstanding at December 31, 2020 4.7 $ 16.69 5.59 47.7 Options exercisable at December 31, 2020 3.6 $ 16.78 5.32 36.3 The aggregate intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $6.0 million, $5.9 million and $3.9 million, respectively. A summary of the Company's unvested shares relating to stock options as of December 31, 2020 and 2019, and changes during the years ended December 31, 2020 and 2019, are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2018 2.4 $ 16.55 Granted — — Vested (0.4) 16.67 Forfeited — — Options unvested at December 31, 2019 2.0 $ 16.50 Granted — — Vested (0.9) 16.67 Forfeited — — Options unvested at December 31, 2020 1.1 $ 16.38 Restricted/Deferred Stock Units A summary of the Company's RSU and DSU activity and related information for the years ended December 31, 2020 and 2019 is presented below: (in millions, except per share amounts) Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Awards outstanding at December 31, 2018 3.3 $ 15.96 Granted 2.7 10.77 Vested (0.9) 15.64 Terminated — — Awards outstanding at December 31, 2019 5.1 $ 13.24 $ 110.3 Granted 0.8 20.81 Vested (1.6) 13.43 Terminated (0.1) 13.99 Awards outstanding at December 31, 2020 4.2 $ 14.57 $ 113.6 The aggregate intrinsic value of RSUs and DSUs vested during the year ended December 31, 2020 was $33.0 million. 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, 2020 is presented below: (in millions, except years) December 31, 2020 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 1.6 1 Unrecognized DSU/RSU expense 30.4 2.19 Unrecognized PRSU expense 47.1 2.12 Total unrecognized stock-based compensation expense $ 79.1 2.12 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 | |
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, 2020, 2019 and 2018: Year Ended December 31, (in millions) 2020 2019 2018 Income before income taxes: United States $ 319.5 $ 150.9 $ 59.2 Rest of the world 132.9 114.6 105.8 $ 452.4 $ 265.5 $ 165.0 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, 2020 2019 2018 (dollars in millions) Amount Percentage of Income Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 95.0 21.0 % $ 55.8 21.0 % $ 34.6 21.0 % State income taxes, net of federal benefit 9.9 2.2 % 8.7 3.3 % 1.8 1.1 % Foreign tax differential 2.8 0.6 % 2.1 0.8 % 2.5 1.5 % Change in valuation allowances 5.5 1.2 % (8.6) (3.2) % (17.7) (10.7) % Uncertain tax positions and interest 0.5 0.1 % 2.4 0.9 % 33.1 20.1 % Subpart F income 3.3 0.7 % 1.8 0.7 % (0.8) (0.5) % Global Intangible Low-Taxed Income (“GILTI”) — — 9.2 3.4 % 7.4 4.5 % GILTI High-Taxed Exception (8.6) (1.9) % — — — — Stock compensation (10.9) (2.4) % 0.9 0.3 % 0.8 0.5 % Transition Tax — — — — (6.8) (4.1) % Permanent and other 5.1 1.2 % 2.4 0.9 % (5.3) (3.3) % Effective income tax provision $ 102.6 22.7 % $ 74.7 28.1 % $ 49.6 30.1 % In July 2020 the U.S. Treasury finalized income tax regulations applicable to the global intangible low-taxed income ("GILTI") provisions of the Internal Revenue Code (the "High Taxed Regulations"). The Company recognizes income tax expense on GILTI in the period in which such tax arises. The High Taxed Regulations provide for full or partial relief from U.S. taxation of current period earnings of foreign subsidiaries otherwise taxable under the GILTI regime. The relief from U.S. taxation may be achieved pursuant to an exception to GILTI for earnings of any individual foreign subsidiary subject to a high rate of local country income tax (the exception is referred to as the "high-taxed exception" or "HTE"). Each foreign subsidiary's facts and circumstances must be individually analyzed to determine whether the current earnings of such subsidiary qualify for the HTE and thus are excepted from GILTI. The benefit of the HTE is retroactive to the Company's tax years starting with the tax year ended December 31, 2018 and was recognized in 2020. Income Tax Provision The income tax provision consisted of the following: Year Ended December 31, (in millions) 2020 2019 2018 Current provision Federal $ 55.1 $ 50.4 $ (14.6) State 17.3 11.9 1.1 Foreign 38.8 19.5 57.1 Total current $ 111.2 $ 81.8 $ 43.6 Deferred provision Federal $ (3.4) $ (10.8) $ 11.4 State (3.4) (8.0) (4.5) Foreign (1.8) 11.7 (0.9) Total deferred (8.6) (7.1) 6.0 Total income tax provision $ 102.6 $ 74.7 $ 49.6 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) 2020 2019 Deferred tax assets: Stock-based compensation $ 21.6 $ 13.9 Operating lease obligations 92.9 67.2 Accrued expenses and other 55.1 62.5 Net operating losses, foreign tax credits and other tax attribute carryforwards 50.6 43.1 Inventories 11.1 8.2 Transaction costs 6.0 6.6 Property, plant and equipment 2.5 2.9 Total deferred tax assets 239.8 204.4 Valuation allowances (33.5) (30.0) Total net deferred tax assets $ 206.3 $ 174.4 Deferred tax liabilities: Intangible assets $ (150.7) $ (156.4) Operating lease right-of-use assets (82.3) (63.9) Property, plant and equipment (34.3) (36.9) Accrued expenses and other (15.9) (5.2) Total deferred tax liabilities (283.2) (262.4) Net deferred tax liabilities $ (76.9) $ (88.0) 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, 2020 and 2019, respectively: (in millions) 2020 2019 State net operating losses (“SNOLs”) $ 157.0 $ 165.7 U.S. federal foreign tax credits (“FTCs”) 12.2 12.2 U.S. state income tax credits ("SITCs") 4.9 5.3 Foreign net operating losses (“FNOLs”) 54.1 36.9 Charitable contribution carryover ("CCCs") 23.6 32.9 The SNOLs, FTCs, SITCs, FNOLs and CCCs generally expire in 2021, 2023, 2023, 2023 and 2021, 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, the CCCs and certain other deferred tax assets related to certain foreign operations (together, the "Tax Attributes"). The Company has established a valuation allowance for certain deferred tax assets (including the Tax Attributes) where it is more-likely-than-not such deferred tax assets will not be realized. 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 its assessment regarding the recoverability of its deferred tax assets. The Company has recorded valuation allowances against $88.1 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 undistributed foreign earnings not otherwise subject to 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, 2020, 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 its two 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. With respect to the Canadian subsidiaries, Canadian income tax withholding applies to any distribution each subsidiary makes to its foreign parent company. The Company concluded that at December 31, 2020 each 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. Uncertain income tax liabilities reflect the Company's best judgement of the facts, circumstances and information available through December 31, 2020. Uncertain income tax liabilities are derived using the cumulative probability approach and applying the tax technical requirements applicable to U.S. and other international tax and transfer pricing requirements. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in millions) 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 Additions based on tax positions related to 2020 — Additions for tax positions of prior years 14.1 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities — Balance as of December 31, 2020 $ 118.6 The amount of unrecognized tax benefits that would impact the effective tax rate if recognized at December 31, 2020, 2019 and 2018 would be $106.0 million, $96.8 million and $91.4 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company recognized $1.0 million, $1.3 million and $6.4 million in interest and penalties, respectively, in income tax expense. The Company had $74.9 million, $67.9 million and $66.3 million of accrued interest and penalties at December 31, 2020, 2019 and 2018, respectively. There were no significant changes in any uncertain tax positions during the three or twelve month periods ended December 31, 2020. 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 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") with respect to the adjusted amount of royalties (the "Settlement") for tax years 2001 through 2011 (the "Settlement Years"). The Company and SKAT are currently discussing the appropriate administrative process required to implement the Settlement as it relates to the computation of interest. During this process, the Company continues to maintain an uncertain income tax liability on its balance sheet for tax and interest under the terms of the Settlement. The tax years 2012 through 2020 (the "2012 to Current Period") are currently the subject of the Advance Pricing Agreement procedure ("APA") request filed by the Company with SKAT and the IRS in the third quarter of 2018. As part of the APA, the IRS is negotiating on the Company’s behalf directly with SKAT for a mutually agreeable royalty due from the U.S. subsidiary to the Danish Subsidiary. The APA negotiation is ongoing and is not expected to conclude in the near term. The Company anticipates such negotiations will result in additional income tax in Denmark and a reduction of income tax in the U.S. Consequently, the Company maintains both an uncertain income tax liability for its estimate of the potential Danish income tax and a deferred tax asset for the associated United States tax benefit for the 2012 to Current Period. The uncertain income tax liabilities for the Danish Tax Matter Settlement Years and for the 2012 to Current Period are reflected in the Company Consolidated Balance Sheet as per below: December 31, 2020 December 31, 2019 Period Balance Sheet Presentation DKK USD DKK USD Settlement Years Accrued expenses and other current liabilities 847.3 $ 139.1 847.3 $ 127.2 2012 to Current Period Other non-current liabilities 295.0 48.4 263.3 39.5 Total 1,142.3 $ 187.5 1,110.6 $ 166.7 The deferred tax asset for the U.S. correlative benefit associated with the accrual of Danish tax for the 2012 to Current Period at December 31, 2020 and 2019 is approximately $12.0 million and $7.2 million, respectively. SKAT has issued income tax assessments for the years 2012 through 2014 and has proposed assessments for the years 2015 through 2017, in each case 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. 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. In July 2016, the Company paid a deposit to SKAT in the amount of approximately DKK 615.2 million related to the Settlement. In addition, during the three months ended September 30, 2020, the Company made a tax deposit with SKAT of DKK 76.8 million applicable to a tax assessment by SKAT for the year 2014. Also, during the three months ended March 31, 2020 the Company made a tax deposit with SKAT of DKK 134.0 million applicable to a tax assessment by SKAT for the years 2012 and 2013. The Company is contesting all three assessments. The above Value Added Tax refunds withheld and the tax deposits made are reflected in the Company's Consolidated Balance Sheet (translated at the exchange rates on December 31, 2020 and December 31, 2019), as per below: December 31, 2020 December 31, 2019 DKK USD DKK USD Prepaid expenses and other current assets 847.3 $ 139.1 847.3 $ 127.2 Other non-current assets 333.6 54.8 122.8 18.4 Total 1,180.9 $ 193.9 970.1 $ 145.6 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 $20.5 million and $18.8 million using the applicable exchange rates at December 31, 2020 and December 31, 2019). 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. If the Company is not successful in resolving the Danish Tax Matter for the 2012 to Current Period 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. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 2018 Numerator: Net income from continuing operations, net of loss attributable to non-controlling interests $ 348.8 $ 190.9 $ 118.3 Denominator: Denominator for basic earnings per common share—weighted average shares 207.9 218.0 217.6 Effect of dilutive securities: Employee stock-based compensation 4.4 3.6 2.8 Denominator for diluted earnings per common share—adjusted weighted average shares 212.3 221.6 220.4 Basic earnings per common share for continuing operations $ 1.68 $ 0.87 $ 0.54 Diluted earnings per common share for continuing operations $ 1.64 $ 0.86 $ 0.54 The Company excluded an insignificant number of shares for the year ended December 31, 2020, 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. The Company excluded 4.4 million and 6.0 million shares issuable upon exercise of outstanding stock options for the years ended, December 31, 2019 and 2018, 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. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The Company operates in two segments: North America and International. In the fourth quarter of 2020, the Company realigned its business segment reporting to include Mexico within the North America segment, which was previously included in the International segment. The change in segment reporting aligned with changes in how our global operations are managed. 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., Canada and Mexico. The International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico). This segment change was retrospectively applied to all prior periods presented. Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results. The Company evaluates segment performance based on net sales, gross profit and operating income. The Company sells its products in over 100 countries to over 10,000 wholesale customers. The Company’s Direct channel represents 13.4% of the Company’s consolidated net sales. One customer contributed between 10% and 15% of the Company’s net sales in 2020. No customer contributed more than 10% of the Company's net sales in 2019. 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) 2020 2019 North America $ 3,740.3 $ 3,187.7 International 639.8 569.0 Corporate 490.3 477.1 Inter-segment eliminations (1,561.8) (1,172.0) Total assets $ 3,308.6 $ 3,061.8 The following table summarizes property, plant and equipment, net, by segment: December 31, December 31, (in millions) 2020 2019 North America $ 415.3 $ 334.8 International 49.8 45.9 Corporate 42.8 55.1 Total property, plant and equipment, net $ 507.9 $ 435.8 The following table summarizes operating lease right-of-use assets by segment: December 31, December 31, (in millions) 2020 2019 North America $ 256.6 $ 202.0 International 45.7 42.2 Corporate 2.0 1.2 Total operating lease right-of-use assets $ 304.3 $ 245.4 The following table summarizes segment information for the year ended December 31, 2020: (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,956.3 $ 397.5 $ — $ — $ 3,353.8 Other sales 202.9 120.2 — — 323.1 Net sales $ 3,159.2 $ 517.7 $ — $ — $ 3,676.9 Inter-segment sales $ 1.2 $ 0.7 $ — $ (1.9) $ — Inter-segment royalty expense (income) 9.4 (9.4) — — — Gross profit 1,332.0 306.4 — — 1,638.4 Operating income (loss) 591.4 127.6 (186.9) — 532.1 Income (loss) from continuing operations before income taxes 590.1 120.2 (257.9) — 452.4 Depreciation and amortization (1) $ 76.3 $ 13.6 $ 112.6 $ — $ 202.5 Capital expenditures 92.6 11.0 7.7 — 111.3 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2019: (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,448.8 $ 388.2 $ — $ — $ 2,837.0 Other sales 154.7 114.3 — — 269.0 Net sales $ 2,603.5 $ 502.5 $ — $ — $ 3,106.0 Inter-segment sales $ 1.2 $ 1.1 $ — $ (2.3) $ — Inter-segment royalty expense (income) 7.6 (7.6) — — — Gross profit 1,055.2 287.0 — — 1,342.2 Operating income (loss) 349.9 110.3 (113.5) — 346.7 Income (loss) from continuing operations before income taxes 342.9 103.8 (181.2) — 265.5 Depreciation and amortization (1) $ 65.1 $ 13.0 $ 38.4 $ — $ 116.5 Capital expenditures 63.0 10.7 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 2,069.5 $ 385.8 $ — $ — $ 2,455.3 Other sales 137.5 110.1 — — 247.6 Net sales $ 2,207.0 $ 495.9 $ — $ — $ 2,702.9 Inter-segment sales $ 1.3 $ 0.6 $ — $ (1.9) $ — Inter-segment royalty expense (income) 6.2 (6.2) — — — Gross profit 843.4 277.3 — — 1,120.7 Operating income (loss) 256.5 101.0 (101.2) — 256.3 Income (loss) from continuing operations before income taxes 248.4 93.7 (177.1) — 165.0 Depreciation and amortization (1) $ 59.5 $ 13.0 $ 39.4 $ — $ 111.9 Capital expenditures 53.6 13.1 6.9 — 73.6 (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) 2020 2019 United States $ 436.2 $ 366.4 All other 71.7 69.4 Total property, plant and equipment, net $ 507.9 $ 435.8 The following table summarizes operating lease right-of-use assets by geographic region: December 31, December 31, (in millions) 2020 2019 United States $ 255.0 $ 198.3 All Other 49.3 47.1 Total operating lease right-of-use assets $ 304.3 $ 245.4 The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2020 2019 2018 United States $ 2,886.6 $ 2,312.1 $ 1,928.8 All other 790.3 793.9 774.1 Total net sales $ 3,676.9 $ 3,106.0 $ 2,702.9 |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 AND 2018 SCHEDULE II (in millions) Additions Description Balance at Charges to Charged to Other Deductions Balance at Valuation allowance for deferred tax assets: 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 Year Ended December 31, 2020 $ 30.0 7.6 — (4.1) $ 33.5 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 designs, manufactures and distributes 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. On November 24, 2020, the Company effected a four-for-one stock split to shareholders of record on November 10, 2020. All share and per share information (including share and per share information related to share-based compensation) has been retroactively adjusted to reflect the stock split, except for certain shares held as treasury stock that were not subject to the split. |
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 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. |
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. 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 6, "Leases" of the Consolidated Financial Statements Goodwill. Effective January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2017-04, "Intangibles - Goodwill and Other (Topic 350)." The ASU simplifies the test for goodwill impairment, by eliminating Step 2 of the impairment test. Under ASU 2017-04, the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill for the reporting unit. Adoption of this guidance did not have an impact on the Company's financial statements. |
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. |
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 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, the goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. Using the quantitative approach, the Company makes various estimates and assumptions in determining the estimated fair value of each reporting unit using a combination of discounted cash flow models and valuations based on earnings multiples for guideline public companies in each reporting unit’s industry peer group, when externally quoted market prices are not readily available. Discounted cash flow models are reliant on various assumptions, including projected business results, long-term growth factors and weighted-average cost of capital. Management judgement is involved in estimating these variables, and they include inherent uncertainties as they are forecasting future events. The Company performs sensitivity analyses by using a range of inputs to confirm the reasonableness of the long-term growth rate and weighted average cost of capital. Additionally, the Company compares the indicated equity value to its market capitalization and evaluates the resulting implied control premium/discount to determine if the estimated enterprise value is reasonable compared to external market indicators. 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. |
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 product in determining its estimate of future sales returns. 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 Credit Losses | Allowance for Credit Losses. The allowance for credit losses is the Company's best estimate of the amount of estimated lifetime credit losses in the Company's accounts receivable. The Company regularly reviews the adequacy of its allowance for credit losses. The Company estimates losses over the contractual life using assumptions to capture the risk of loss, even if remote, based principally on how long a receivable has been outstanding. Account balances are charged off against the allowance for credit losses after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2020, the Company's accounts receivable were substantially current, and there were no significant changes to the aging of receivables as a result of the impact of the global pandemic. Other factors considered include historical write-off experience, current economic conditions and also factors such as customer credit, past transaction history with the customer and changes in customer payment terms. The allowance for credit losses is included in accounts receivable, net in the accompanying Consolidated Balance Sheets. |
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. Costs associated with net sales are recorded in cost of sales. Cost of sales includes the costs of receiving, producing, inspecting, warehousing, insuring, and shipping goods during the period, as well as depreciation and amortization of long-lived assets used in these processes. Cost of sales also includes shipping and handling costs associated with the delivery of goods to customers and costs associated with internal transfers between plant locations. |
Cooperative Advertising, Rebate and Other Promotional Programs | Cooperative Advertising, Rebate and Other Promotional Programs. The Company enters into programs with customers to provide funds for advertising and promotions. The Company also enters into volume and other rebate programs with customers. When sales are made to these customers, the Company records liabilities pursuant to these programs. The Company periodically assesses these liabilities based on actual sales and claims to determine whether all of the cooperative advertising earned will be used by the customer or whether the customer will meet the requirements to receive rebate funds. The Company generally negotiates these programs on a customer-by-customer basis. Some of these agreements extend over several years. Significant estimates are required at any point in time with regard to the ultimate reimbursement to be claimed by the customers. Subsequent revisions to the estimates are recorded and charged to earnings in the period in which they are identified. Rebates and cooperative advertising are classified as a reduction of revenue and presented within net sales in the accompanying Consolidated Statements of Income. Certain cooperative advertising expenses are reported as components of selling and marketing expenses in the accompanying Consolidated Statements of Income because the Company receives an identifiable benefit and the fair value of the advertising benefit can be reasonably estimated. |
Advertising Costs | Advertising Costs. The Company expenses advertising costs as incurred except for production costs and advance payments, which are deferred and expensed when advertisements run for the first time. Direct response advance payments are deferred and amortized over the life of the program. Advertising costs are included in selling and marketing expenses in the accompanying Consolidated Statements of Income. Advertising costs charged to expense were $332.5 million, $280.5 million and $259.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. Advertising costs include expenditures for shared advertising costs that the Company reimburses to customers under its integrated and cooperative advertising programs. |
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 5, "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. 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. |
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 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 Finished goods $ 170.2 $ 157.4 Work-in-process 12.6 10.8 Raw materials and supplies 129.3 92.3 $ 312.1 $ 260.5 |
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 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) 2020 2019 Machinery and equipment $ 419.6 $ 350.7 Land and buildings 359.7 317.8 Computer equipment and software 182.0 155.2 Furniture and fixtures 57.6 52.5 Construction in progress 72.0 65.0 Total property, plant and equipment 1,090.9 941.2 Accumulated depreciation (583.0) (505.4) Total property, plant and equipment, net $ 507.9 $ 435.8 |
Changes in Accrued Sales Returns | The Company had the following activity for accrued sales returns from December 31, 2018 to December 31, 2020: (in millions) 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 Amounts accrued 111.9 Returns charged to accrual (106.3) Balance as of December 31, 2020 $ 44.9 |
Warranty Activity | The Company had the following activity for its accrued warranty expense from December 31, 2018 to December 31, 2020: (in millions) 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 Amounts accrued 24.3 Warranties charged to accrual (21.7) Balance as of December 31, 2020 $ 44.2 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The Company had the following activity for its allowance for credit losses from December 31, 2018 to December 31, 2020. (in millions) Balance as of December 31, 2018 $ 47.6 Amounts accrued 29.3 Write-offs charged against the allowance (5.0) Balance as of December 31, 2019 71.9 ASU 2016-13 adoption impact (before tax) 8.9 Balance as of January 1, 2020 80.8 Amounts accrued 35.8 Write-offs charged against the allowance (45.0) Balance as of December 31, 2020 $ 71.6 |
Net Sales (Tables)
Net Sales (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 (in millions) North America International Consolidated Channel Wholesale $ 2,806.7 $ 379.1 $ 3,185.8 Direct 352.5 138.6 491.1 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 North America International Consolidated Product Bedding $ 2,956.3 $ 397.5 $ 3,353.8 Other 202.9 120.2 323.1 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 North America International Consolidated Geographical region United States $ 2,886.6 $ — $ 2,886.6 All other 272.6 517.7 790.3 Net sales $ 3,159.2 $ 517.7 $ 3,676.9 Twelve Months Ended December 31, 2019 (in millions) North America International Consolidated Channel Wholesale $ 2,343.5 $ 373.6 $ 2,717.1 Direct 260.0 128.9 388.9 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 North America International Consolidated Product Bedding $ 2,448.8 $ 388.2 $ 2,837.0 Other 154.7 114.3 269.0 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 North America International Consolidated Geographical region United States $ 2,312.1 $ — $ 2,312.1 All other 291.4 502.5 793.9 Net sales $ 2,603.5 $ 502.5 $ 3,106.0 Twelve Months Ended December 31, 2018 (in millions) North America International Consolidated Channel Wholesale $ 2,059.5 $ 392.6 $ 2,452.1 Direct 147.5 103.3 250.8 Net sales $ 2,207.0 $ 495.9 $ 2,702.9 North America International Consolidated Product Bedding $ 2,069.5 $ 385.8 $ 2,455.3 Other 137.5 110.1 247.6 Net sales $ 2,207.0 $ 495.9 $ 2,702.9 North America International Consolidated Geographical region United States $ 1,928.8 $ — $ 1,928.8 All Other 278.2 495.9 774.1 Net sales $ 2,207.0 $ 495.9 $ 2,702.9 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 included 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) Purchase price, net of cash acquired $ 8.1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2018 $ 576.7 $ 146.3 $ 723.0 Goodwill resulting from acquisitions 2.4 5.4 7.8 Foreign currency translation adjustments and other 2.8 (1.3) 1.5 Balance as of December 31, 2019 $ 581.9 $ 150.4 $ 732.3 Goodwill resulting from acquisition 26.7 — 26.7 Foreign currency translation adjustments and other 1.7 5.6 7.3 Balance as of December 31, 2020 $ 610.3 $ 156.0 $ 766.3 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2020 December 31, 2019 Useful Gross Accumulated Net Gross Accumulated Net Unamortized indefinite life intangible assets: Trade names $ 560.7 $ 560.7 $ 559.5 $ 559.5 Amortized intangible assets: Contractual distributor relationships 15 85.7 44.5 41.2 85.5 38.7 46.8 Technology and other 4-10 91.3 75.9 15.4 91.1 68.7 22.4 Patents, other trademarks and other trade names 5-20 28.7 21.3 7.4 27.9 18.6 9.3 Customer databases, relationships and reacquired rights 2-5 35.1 29.7 5.4 30.9 27.5 3.4 Total $ 801.5 $ 171.4 $ 630.1 $ 794.9 $ 153.5 $ 641.4 |
Schedule of Indefinite-Lived Intangible Assets | The following table summarizes information relating to the Company’s other intangible assets, net: ($ in millions) December 31, 2020 December 31, 2019 Useful Gross Accumulated Net Gross Accumulated Net Unamortized indefinite life intangible assets: Trade names $ 560.7 $ 560.7 $ 559.5 $ 559.5 Amortized intangible assets: Contractual distributor relationships 15 85.7 44.5 41.2 85.5 38.7 46.8 Technology and other 4-10 91.3 75.9 15.4 91.1 68.7 22.4 Patents, other trademarks and other trade names 5-20 28.7 21.3 7.4 27.9 18.6 9.3 Customer databases, relationships and reacquired rights 2-5 35.1 29.7 5.4 30.9 27.5 3.4 Total $ 801.5 $ 171.4 $ 630.1 $ 794.9 $ 153.5 $ 641.4 |
Expected Future Amortization Expense | Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31: (in millions) 2021 $ 20.0 2022 14.2 2023 8.2 2024 6.6 2025 6.5 Thereafter 13.9 Total $ 69.4 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Borrowings Outstanding | Debt for the Company consists of the following: (in millions) December 31, 2020 December 31, 2019 Debt: Amount Rate Amount Rate Maturity Date 2019 Credit Agreement: Term A Facility $ 409.1 (1) $ 425.0 (2) October 16, 2024 Revolver — (1) — (2) October 16, 2024 2026 Senior Notes 600.0 5.500% 600.0 5.500% June 15, 2026 2023 Senior Notes 250.0 5.625% 450.0 5.625% October 15, 2023 Securitized debt 33.9 (3) — (3) April 6, 2021 Finance lease obligations (4) 71.4 64.1 Various Other 5.9 7.9 Various Total debt 1,370.3 1,547.0 Less: Deferred financing costs 3.4 7.0 Total debt, net 1,366.9 1,540.0 Less: Current portion 43.9 37.4 Total long-term debt, net $ 1,323.0 $ 1,502.6 (1) Interest at LIBOR plus applicable margin of 1.250% as of December 31, 2020. (2) Interest at LIBOR plus applicable margin of 1.625% as of December 31, 2019. (3) Interest at one month LIBOR index plus 80 basis points. (4) Finance lease obligations are a non-cash financing activity. Refer to Note 6, "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, 2020 December 31, 2019 2023 Senior Notes $ 255.1 $ 464.2 2026 Senior Notes 625.4 634.9 |
Schedule of Maturities of Long-term Debt | As of December 31, 2020, 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) 2021 $ 66.4 2022 21.3 2023 281.9 2024 329.3 2025 — Thereafter 600.0 Total $ 1,298.9 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Summary of Operating and Finance Lease Assets and Obligations | 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, 2020 and 2019: (in millions) December 31, 2020 December 31, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 304.3 $ 245.4 Finance lease assets Property, plant and equipment, net 61.2 54.4 Total leased assets $ 365.5 $ 299.8 Liabilities Short-term: Operating lease obligations Accrued expenses and other current liabilities $ 61.0 $ 50.8 Finance lease obligations Current portion of long-term debt 11.4 8.2 Long-term: Operating lease obligations Long-term operating lease obligations 275.1 205.4 Finance lease obligations Long-term debt, net 60.0 55.9 Total lease obligations $ 407.5 $ 320.3 |
Summary of Lease Expense | The following table summarizes the classification of lease expense in the Company's Consolidated Statements of Income for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Operating lease expense: Operating lease expense $ 75.4 $ 63.8 Short-term lease expense 11.1 9.0 Variable lease expense 22.2 18.8 Finance lease expense: Amortization of right-of-use assets 9.3 8.5 Interest on lease obligations 4.7 4.7 Total lease expense $ 122.7 $ 104.8 The following table provides supplemental information related to the Company's Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019: Twelve Months Ended (in millions) December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease obligations: Operating cash flows paid for operating leases (a) $ 70.1 $ 62.7 Operating cash flows paid for finance leases $ 4.7 $ 3.7 Financing cash flows paid for finance leases $ 10.2 $ 7.7 Right-of-use assets obtained in exchange for new operating lease obligations $ 109.4 $ 60.9 Right-of-use assets obtained in exchange for new finance lease obligations $ 17.6 $ 4.1 (a) Operating cash flows paid for operating leases are included within the change in other assets and liabilities within the Consolidated Statement of Cash Flows offset by non-cash right-of-use asset amortization and lease liability accretion. |
Schedule of Operating Lease Maturities | The following table sets forth the scheduled maturities of lease obligations as of December 31, 2020: (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2021 $ 74.1 $ 15.3 $ 89.4 2022 67.9 13.4 81.3 2023 55.5 10.7 66.2 2024 46.0 8.6 54.6 2025 39.3 7.7 47.0 Thereafter 112.3 34.2 146.5 Total lease payments 395.1 89.9 485.0 Less: Interest (59.0) (18.5) (77.5) Present value of lease obligations $ 336.1 $ 71.4 $ 407.5 |
Schedule of Finance Lease Maturity | The following table sets forth the scheduled maturities of lease obligations as of December 31, 2020: (in millions) Operating Leases Finance Leases Total Year Ended December 31, 2021 $ 74.1 $ 15.3 $ 89.4 2022 67.9 13.4 81.3 2023 55.5 10.7 66.2 2024 46.0 8.6 54.6 2025 39.3 7.7 47.0 Thereafter 112.3 34.2 146.5 Total lease payments 395.1 89.9 485.0 Less: Interest (59.0) (18.5) (77.5) Present value of lease obligations $ 336.1 $ 71.4 $ 407.5 |
Summary of 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, 2020: December 31, 2020 Weighted average remaining lease term (years): Operating leases 6.66 Finance leases 7.91 Weighted average discount rate: Operating leases 4.90 % Finance leases 5.80 % |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 2018 Service cost $ 1.1 $ 0.9 $ 1.0 Interest cost 1.1 1.2 1.1 Expected return on assets (1.5) (1.3) (1.5) Amortization of prior service cost 0.1 0.1 0.1 Amortization of net gain 0.1 0.1 — Net periodic pension cost $ 0.9 $ 1.0 $ 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) 2020 2019 2018 Net loss $ 1.9 $ 2.2 $ 0.6 New prior service cost 0.1 0.6 0.1 Amortization of prior service cost (0.1) (0.1) (0.1) Amortization or settlement recognition of net loss (0.1) (0.1) — Total recognized in other comprehensive loss $ 1.8 $ 2.6 $ 0.6 |
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: 2020 2019 2018 Discount rate (a) 3.16 % 4.10 % 3.58 % Expected long-term return on plan assets (b) 5.37 % 6.16 % 6.25 % (a) The discount rates used in 2020 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were 3.15% and 3.20%, respectively. 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) 2020 2019 Change in Benefit Obligation: Projected benefit obligation at beginning of year $ 36.9 $ 30.0 Service cost 1.1 0.9 Interest cost 1.1 1.2 Plan amendments 0.1 0.5 Actuarial loss 4.6 5.5 Benefits paid (1.3) (1.3) Expenses paid (0.1) (0.1) Foreign currency exchange rate changes 0.1 0.2 Projected benefit obligation at end of year $ 42.5 $ 36.9 Change in Plan Assets: Fair value of plan assets at beginning of year $ 27.0 $ 22.2 Actual return on plan assets 4.2 4.6 Employer contribution 1.4 1.4 Benefits paid (1.3) (1.3) Expenses paid (0.1) (0.1) Foreign currency exchange rate changes 0.1 0.2 Fair value of plan assets at end of year $ 31.3 $ 27.0 Funded status $ (11.2) $ (9.9) |
Schedule of Amounts Recognized in the Consolidated Balance Sheet and the Accumulated Benefit Obligation and Fair Value of Assets | The following table represents amounts recorded in the Consolidated Balance Sheets: December 31, (in millions) 2020 2019 Amounts recognized in the Consolidated Balance Sheets: Non-current benefit liability $ 11.2 $ 10.0 Non-current benefit asset — 0.1 |
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: 2020 2019 Discount rate (a) 2.47 % 3.16 % (a) The discount rates used in 2020 to determine the benefit obligations for the U.S. retirement plan and Canadian retirement plan were 2.43% and 2.80%, respectively. The discount rates used in 2019 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were 3.15% and 3.20%, respectively. |
Schedule of Estimated Future Benefit Payments | The following table presents estimated future benefit payments: (in millions) Fiscal 2021 $ 1.0 Fiscal 2022 1.1 Fiscal 2023 1.2 Fiscal 2024 1.2 Fiscal 2025 1.3 Fiscal 2026 ‑ Fiscal 2029 8.0 |
Schedule of Target and Actual Asset Allocations | Target and actual asset allocations are as follows: 2020 Target 2020 Actual Common/collective trust consisting primarily of: Equity securities 60.0 % 56.6 % Debt securities 40.0 % 43.1 % 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) 2020 2019 Asset Category Common/collective trust U.S. equity $ 6.5 $ 5.5 International equity 11.2 9.5 Total equity based funds 17.7 15.0 Common/collective trust - fixed income 13.5 11.9 Money market funds 0.1 0.1 Total $ 31.3 $ 27.0 |
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) 2020 2019 2018 Multi‑employer retirement plan expense $ 4.6 $ 4.3 $ 3.9 Multi‑employer health and welfare plan expense 3.4 3.8 3.6 |
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, 2020 and 2019, respectively: Pension Fund EIN/Pension Plan Number Date of Plan Year-End Pension Protection Act (1) 2020 FIP/RP Status (2) Contributions of the Company in 2020 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 2/28/20 Red Implemented $ 1.5 No 2023 2018, 2019, 2020 Pension Plan of the National Retirement Fund 13-6130178-001 12/31/19 Red Implemented $ 1.1 Yes, 10.0% 2022 N/A Central States, Southeast & Southwest Areas Pension Plan 36-6044243-001 12/31/19 Red Implemented $ 1.0 Yes, 10.0% 2021 N/A 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 (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, 2018, the Company contributed $0.7 million to the plan. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Changes in Accumulated Other Comprehensive Income | AOCL consisted of the following: Year Ended December 31, (in millions) 2020 2019 2018 Foreign Currency Translation Balance at beginning of period $ (82.2) $ (91.7) $ (72.8) Other comprehensive loss: Foreign currency translation adjustments (1) 23.6 9.5 (18.9) Balance at end of period $ (58.6) $ (82.2) $ (91.7) Pension Benefits Balance at beginning of period $ (5.5) $ (3.6) $ (2.7) Other comprehensive loss: Net change from period revaluation (1.8) (2.6) (0.4) Tax benefit (2) 0.4 0.7 0.1 Total other comprehensive loss before reclassifications, net of tax (1.4) (1.9) (0.3) 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 (1.4) (1.9) (0.9) Balance at end of period $ (6.9) $ (5.5) $ (3.6) (1) In 2020, 2019 and 2018, 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. |
Other Items (Tables)
Other Items (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Items [Abstract] | |
Summary of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: December 31, December 31, (in millions) 2020 2019 Taxes $ 150.4 $ 136.0 Wages and benefits 102.5 79.5 Advertising 74.4 56.9 Operating leases obligations 61.0 50.8 Other 196.8 150.0 $ 585.1 $ 473.2 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | The Company's stock-based compensation expense for the year ended December 31, 2020 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) 2020 2019 2018 PRSU expense $ 77.4 $ 1.4 $ 2.5 Stock option expense 4.9 4.9 6.7 RSU/DSU expense 22.2 20.5 15.6 Total stock-based compensation expense $ 104.5 $ 26.8 $ 24.8 |
Summary of PRSU Activity and Related Information | A summary of the Company's PRSU activity and related information for the years ended December 31, 2020 and 2019 is presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Awards unvested at December 31, 2018 8.0 $ 15.27 Granted 0.3 21.35 Vested — — Forfeited (4.8) 17.74 Awards unvested at December 31, 2019 3.5 15.02 Granted 3.5 21.39 Vested (3.4) 15.03 Forfeited — — Awards unvested at December 31, 2020 3.6 $ 21.18 |
Schedule of Stock Options Valuation Assumptions | Year Ended December 31, 2020 2019 2018 Expected volatility range of stock N/A N/A 39.8% - 40.1% Expected life of option, range in years N/A N/A 5 Risk-free interest range rate N/A N/A 2.2% - 2.8% Expected dividend yield on stock N/A N/A —% |
Schedule of Stock Option Activity | A summary of the Company's stock option activity under the 2003 Plan and 2013 Plan for the years ended December 31, 2020 and 2019 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, 2018 6.4 $ 15.63 Granted — — Exercised (1.2) 13.12 Forfeited — — Options outstanding at December 31, 2019 5.2 $ 16.30 Granted — — Exercised (0.5) 13.03 Forfeited — — Options outstanding at December 31, 2020 4.7 $ 16.69 5.59 47.7 Options exercisable at December 31, 2020 3.6 $ 16.78 5.32 36.3 A summary of the Company's unvested shares relating to stock options as of December 31, 2020 and 2019, and changes during the years ended December 31, 2020 and 2019, are presented below: (shares in millions) Shares Weighted Average Grant Date Fair Value Options unvested at December 31, 2018 2.4 $ 16.55 Granted — — Vested (0.4) 16.67 Forfeited — — Options unvested at December 31, 2019 2.0 $ 16.50 Granted — — Vested (0.9) 16.67 Forfeited — — Options unvested at December 31, 2020 1.1 $ 16.38 |
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, 2020 and 2019 is presented below: (in millions, except per share amounts) Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Awards outstanding at December 31, 2018 3.3 $ 15.96 Granted 2.7 10.77 Vested (0.9) 15.64 Terminated — — Awards outstanding at December 31, 2019 5.1 $ 13.24 $ 110.3 Granted 0.8 20.81 Vested (1.6) 13.43 Terminated (0.1) 13.99 Awards outstanding at December 31, 2020 4.2 $ 14.57 $ 113.6 |
Schedule of Unrecognized Compensation Expense | 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, 2020 is presented below: (in millions, except years) December 31, 2020 Weighted Average Remaining Vesting Period (Years) Unrecognized stock option expense $ 1.6 1 Unrecognized DSU/RSU expense 30.4 2.19 Unrecognized PRSU expense 47.1 2.12 Total unrecognized stock-based compensation expense $ 79.1 2.12 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018: Year Ended December 31, (in millions) 2020 2019 2018 Income before income taxes: United States $ 319.5 $ 150.9 $ 59.2 Rest of the world 132.9 114.6 105.8 $ 452.4 $ 265.5 $ 165.0 |
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, 2020 2019 2018 (dollars in millions) Amount Percentage of Income Amount Percentage of Income Amount Percentage of Income Statutory U.S. federal income tax $ 95.0 21.0 % $ 55.8 21.0 % $ 34.6 21.0 % State income taxes, net of federal benefit 9.9 2.2 % 8.7 3.3 % 1.8 1.1 % Foreign tax differential 2.8 0.6 % 2.1 0.8 % 2.5 1.5 % Change in valuation allowances 5.5 1.2 % (8.6) (3.2) % (17.7) (10.7) % Uncertain tax positions and interest 0.5 0.1 % 2.4 0.9 % 33.1 20.1 % Subpart F income 3.3 0.7 % 1.8 0.7 % (0.8) (0.5) % Global Intangible Low-Taxed Income (“GILTI”) — — 9.2 3.4 % 7.4 4.5 % GILTI High-Taxed Exception (8.6) (1.9) % — — — — Stock compensation (10.9) (2.4) % 0.9 0.3 % 0.8 0.5 % Transition Tax — — — — (6.8) (4.1) % Permanent and other 5.1 1.2 % 2.4 0.9 % (5.3) (3.3) % Effective income tax provision $ 102.6 22.7 % $ 74.7 28.1 % $ 49.6 30.1 % |
Summary of Tax Provision | The income tax provision consisted of the following: Year Ended December 31, (in millions) 2020 2019 2018 Current provision Federal $ 55.1 $ 50.4 $ (14.6) State 17.3 11.9 1.1 Foreign 38.8 19.5 57.1 Total current $ 111.2 $ 81.8 $ 43.6 Deferred provision Federal $ (3.4) $ (10.8) $ 11.4 State (3.4) (8.0) (4.5) Foreign (1.8) 11.7 (0.9) Total deferred (8.6) (7.1) 6.0 Total income tax provision $ 102.6 $ 74.7 $ 49.6 |
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) 2020 2019 Deferred tax assets: Stock-based compensation $ 21.6 $ 13.9 Operating lease obligations 92.9 67.2 Accrued expenses and other 55.1 62.5 Net operating losses, foreign tax credits and other tax attribute carryforwards 50.6 43.1 Inventories 11.1 8.2 Transaction costs 6.0 6.6 Property, plant and equipment 2.5 2.9 Total deferred tax assets 239.8 204.4 Valuation allowances (33.5) (30.0) Total net deferred tax assets $ 206.3 $ 174.4 Deferred tax liabilities: Intangible assets $ (150.7) $ (156.4) Operating lease right-of-use assets (82.3) (63.9) Property, plant and equipment (34.3) (36.9) Accrued expenses and other (15.9) (5.2) Total deferred tax liabilities (283.2) (262.4) Net deferred tax liabilities $ (76.9) $ (88.0) |
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, 2020 and 2019, respectively: (in millions) 2020 2019 State net operating losses (“SNOLs”) $ 157.0 $ 165.7 U.S. federal foreign tax credits (“FTCs”) 12.2 12.2 U.S. state income tax credits ("SITCs") 4.9 5.3 Foreign net operating losses (“FNOLs”) 54.1 36.9 Charitable contribution carryover ("CCCs") 23.6 32.9 |
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, 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 Additions based on tax positions related to 2020 — Additions for tax positions of prior years 14.1 Expiration of statutes of limitations — Settlements of uncertain tax positions with tax authorities — Balance as of December 31, 2020 $ 118.6 |
Schedule of Balance Sheet Location | The uncertain income tax liabilities for the Danish Tax Matter Settlement Years and for the 2012 to Current Period are reflected in the Company Consolidated Balance Sheet as per below: December 31, 2020 December 31, 2019 Period Balance Sheet Presentation DKK USD DKK USD Settlement Years Accrued expenses and other current liabilities 847.3 $ 139.1 847.3 $ 127.2 2012 to Current Period Other non-current liabilities 295.0 48.4 263.3 39.5 Total 1,142.3 $ 187.5 1,110.6 $ 166.7 The above Value Added Tax refunds withheld and the tax deposits made are reflected in the Company's Consolidated Balance Sheet (translated at the exchange rates on December 31, 2020 and December 31, 2019), as per below: December 31, 2020 December 31, 2019 DKK USD DKK USD Prepaid expenses and other current assets 847.3 $ 139.1 847.3 $ 127.2 Other non-current assets 333.6 54.8 122.8 18.4 Total 1,180.9 $ 193.9 970.1 $ 145.6 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of 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) 2020 2019 2018 Numerator: Net income from continuing operations, net of loss attributable to non-controlling interests $ 348.8 $ 190.9 $ 118.3 Denominator: Denominator for basic earnings per common share—weighted average shares 207.9 218.0 217.6 Effect of dilutive securities: Employee stock-based compensation 4.4 3.6 2.8 Denominator for diluted earnings per common share—adjusted weighted average shares 212.3 221.6 220.4 Basic earnings per common share for continuing operations $ 1.68 $ 0.87 $ 0.54 Diluted earnings per common share for continuing operations $ 1.64 $ 0.86 $ 0.54 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 North America $ 3,740.3 $ 3,187.7 International 639.8 569.0 Corporate 490.3 477.1 Inter-segment eliminations (1,561.8) (1,172.0) Total assets $ 3,308.6 $ 3,061.8 The following table summarizes property, plant and equipment, net, by segment: December 31, December 31, (in millions) 2020 2019 North America $ 415.3 $ 334.8 International 49.8 45.9 Corporate 42.8 55.1 Total property, plant and equipment, net $ 507.9 $ 435.8 The following table summarizes operating lease right-of-use assets by segment: December 31, December 31, (in millions) 2020 2019 North America $ 256.6 $ 202.0 International 45.7 42.2 Corporate 2.0 1.2 Total operating lease right-of-use assets $ 304.3 $ 245.4 |
Segment Financial Information | The following table summarizes segment information for the year ended December 31, 2020: (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,956.3 $ 397.5 $ — $ — $ 3,353.8 Other sales 202.9 120.2 — — 323.1 Net sales $ 3,159.2 $ 517.7 $ — $ — $ 3,676.9 Inter-segment sales $ 1.2 $ 0.7 $ — $ (1.9) $ — Inter-segment royalty expense (income) 9.4 (9.4) — — — Gross profit 1,332.0 306.4 — — 1,638.4 Operating income (loss) 591.4 127.6 (186.9) — 532.1 Income (loss) from continuing operations before income taxes 590.1 120.2 (257.9) — 452.4 Depreciation and amortization (1) $ 76.3 $ 13.6 $ 112.6 $ — $ 202.5 Capital expenditures 92.6 11.0 7.7 — 111.3 (1) Depreciation and amortization includes stock-based compensation amortization expense. The following table summarizes segment information for the year ended December 31, 2019: (in millions) North America International Corporate Eliminations Consolidated Bedding sales $ 2,448.8 $ 388.2 $ — $ — $ 2,837.0 Other sales 154.7 114.3 — — 269.0 Net sales $ 2,603.5 $ 502.5 $ — $ — $ 3,106.0 Inter-segment sales $ 1.2 $ 1.1 $ — $ (2.3) $ — Inter-segment royalty expense (income) 7.6 (7.6) — — — Gross profit 1,055.2 287.0 — — 1,342.2 Operating income (loss) 349.9 110.3 (113.5) — 346.7 Income (loss) from continuing operations before income taxes 342.9 103.8 (181.2) — 265.5 Depreciation and amortization (1) $ 65.1 $ 13.0 $ 38.4 $ — $ 116.5 Capital expenditures 63.0 10.7 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 2,069.5 $ 385.8 $ — $ — $ 2,455.3 Other sales 137.5 110.1 — — 247.6 Net sales $ 2,207.0 $ 495.9 $ — $ — $ 2,702.9 Inter-segment sales $ 1.3 $ 0.6 $ — $ (1.9) $ — Inter-segment royalty expense (income) 6.2 (6.2) — — — Gross profit 843.4 277.3 — — 1,120.7 Operating income (loss) 256.5 101.0 (101.2) — 256.3 Income (loss) from continuing operations before income taxes 248.4 93.7 (177.1) — 165.0 Depreciation and amortization (1) $ 59.5 $ 13.0 $ 39.4 $ — $ 111.9 Capital expenditures 53.6 13.1 6.9 — 73.6 (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) 2020 2019 United States $ 436.2 $ 366.4 All other 71.7 69.4 Total property, plant and equipment, net $ 507.9 $ 435.8 The following table summarizes operating lease right-of-use assets by geographic region: December 31, December 31, (in millions) 2020 2019 United States $ 255.0 $ 198.3 All Other 49.3 47.1 Total operating lease right-of-use assets $ 304.3 $ 245.4 |
Net Sales by Geographic Region | The following table summarizes net sales by geographic region: Year Ended December 31, (in millions) 2020 2019 2018 United States $ 2,886.6 $ 2,312.1 $ 1,928.8 All other 790.3 793.9 774.1 Total net sales $ 3,676.9 $ 3,106.0 $ 2,702.9 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | Nov. 24, 2020 | Dec. 31, 2020USD ($)channelfacility | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 31, 2020 | Jan. 01, 2020USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||||
Number of products sales channels | channel | 2 | |||||||
Stock split ratio | 4 | |||||||
Operating lease right-of-use assets | $ 304.3 | $ 245.4 | ||||||
Operating lease, liability | 336.1 | |||||||
Total stockholders' deficit | (504.6) | (360.4) | $ (217.5) | $ (112.5) | ||||
Depreciation expense | 80.5 | 73.8 | 71.8 | |||||
Sales returns accrual | 44.9 | 39.3 | 34.3 | |||||
Shipping and handling included in cost of sales | 223.1 | 192.2 | 169.1 | |||||
Advertising costs charged to expense | 332.5 | 280.5 | 259.3 | |||||
Advertising costs deferred and included in prepaid expenses and other current assets | 4.7 | 3.6 | ||||||
Research and development costs charged to expense | $ 23.1 | 23 | 21.9 | |||||
Number of active plants | facility | 2 | |||||||
Number of previously closed US facilities | facility | 10 | |||||||
Retained Earnings | ||||||||
Business Acquisition [Line Items] | ||||||||
Total stockholders' deficit | $ (2,045.6) | (1,703.3) | $ (1,513.8) | (1,416.2) | ||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Business Acquisition [Line Items] | ||||||||
Operating lease right-of-use assets | $ 197.2 | |||||||
Operating lease, liability | $ 203.3 | |||||||
Total stockholders' deficit | 6.5 | 3.4 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||||
Business Acquisition [Line Items] | ||||||||
Total stockholders' deficit | 6.5 | $ 6.5 | $ 2.9 | |||||
Sealy And Stems & Foster | ||||||||
Business Acquisition [Line Items] | ||||||||
Ownership percentage | 50.00% | |||||||
Bedding | Non-prorated | International Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 5 years | |||||||
Bedding | Prorated | International Segment | ||||||||
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 | $ 31.6 | 26.2 | ||||||
Other non-current liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Sales returns accrual | 13.3 | 13.1 | ||||||
Standard product warranty accrual | 23.9 | 22.2 | ||||||
Accounts payable and accrued liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Standard product warranty accrual | $ 20.3 | $ 19.4 | ||||||
Maximum | Bedding | North America Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 25 years | |||||||
Maximum | Bedding | International Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 15 years | |||||||
Maximum | Bedding | Non-prorated | North America Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 15 years | |||||||
Minimum | Bedding | North America Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 10 years | |||||||
Minimum | Bedding | International Segment | ||||||||
Business Acquisition [Line Items] | ||||||||
Warranty term (in years) | 5 years | |||||||
Minimum | Bedding | Non-prorated | North America Segment | ||||||||
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 | |||||||
Sealy Canada | ||||||||
Business Acquisition [Line Items] | ||||||||
Ownership percentage by parent | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Inventory, Current (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Finished goods | $ 170.2 | $ 157.4 |
Work-in-process | 12.6 | 10.8 |
Raw materials and supplies | 129.3 | 92.3 |
Total | $ 312.1 | $ 260.5 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 1,090.9 | $ 941.2 |
Accumulated depreciation | (583) | (505.4) |
Total property, plant and equipment, net | 507.9 | 435.8 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 419.6 | 350.7 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 359.7 | 317.8 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 182 | 155.2 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 57.6 | 52.5 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 72 | $ 65 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Changes in Accrued Sales Returns (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in Accrued Sales Returns [Roll Forward] | ||
Beginning balance | $ 39.3 | $ 34.3 |
Amounts accrued | 111.9 | 112.4 |
Returns charged to accrual | (106.3) | (107.4) |
Ending balance | $ 44.9 | $ 39.3 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Warranty Activity (Details) - Warranty Reserves - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Extended Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 41.6 | $ 36.4 |
Amounts accrued | 24.3 | 29.4 |
Warranties charged to accrual | (21.7) | (24.2) |
Balance at end of period | $ 44.2 | $ 41.6 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 71.9 | $ 47.6 | |
Amounts accrued | 35.8 | 29.3 | $ 31.3 |
Write-offs charged against the allowance | (45) | (5) | |
Ending balance | 71.6 | 71.9 | $ 47.6 |
Cumulative Effect, Period of Adoption, Adjustment | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | 8.9 | ||
Ending balance | 8.9 | ||
Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 80.8 | ||
Ending balance | $ 80.8 |
Net Sales - Disaggregation of R
Net Sales - Disaggregation of Revenue (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)channelproduct_category | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 3,676.9 | $ 3,106 | $ 2,702.9 |
Number of products sales channels | channel | 2 | ||
Number of product categories | product_category | 2 | ||
Shipping and handling included in net sales | $ 14.4 | 19.3 | 13.6 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,928.8 | ||
All Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 790.3 | 793.9 | 774.1 |
Bedding | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,455.3 | ||
Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 247.6 | ||
Operating Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,676.9 | 3,106 | 2,702.9 |
Operating Segments | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,185.8 | 2,717.1 | 2,452.1 |
Operating Segments | Direct | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 491.1 | 388.9 | 250.8 |
Operating Segments | United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,886.6 | 2,312.1 | 1,928.8 |
Operating Segments | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 790.3 | 793.9 | |
Operating Segments | All Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 774.1 | ||
Operating Segments | Bedding | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,353.8 | 2,837 | 2,455.3 |
Operating Segments | Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 323.1 | 269 | 247.6 |
Operating Segments | North America Segment | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 3,159.2 | 2,603.5 | 2,207 |
Operating Segments | North America Segment | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,806.7 | 2,343.5 | 2,059.5 |
Operating Segments | North America Segment | Direct | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 352.5 | 260 | 147.5 |
Operating Segments | North America Segment | United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,886.6 | 2,312.1 | 1,928.8 |
Operating Segments | North America Segment | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 272.6 | 291.4 | |
Operating Segments | North America Segment | All Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 278.2 | ||
Operating Segments | North America Segment | Bedding | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 2,956.3 | 2,448.8 | 2,069.5 |
Operating Segments | North America Segment | Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 202.9 | 154.7 | 137.5 |
Operating Segments | International Segment | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 517.7 | 502.5 | 495.9 |
Operating Segments | International Segment | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 379.1 | 373.6 | 392.6 |
Operating Segments | International Segment | Direct | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 138.6 | 128.9 | 103.3 |
Operating Segments | International Segment | United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 0 | 0 | 0 |
Operating Segments | International Segment | International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 517.7 | 502.5 | |
Operating Segments | International Segment | All Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 495.9 | ||
Operating Segments | International Segment | Bedding | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 397.5 | 388.2 | 385.8 |
Operating Segments | International Segment | Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 120.2 | 114.3 | 110.1 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Disaggregation of Revenue [Line Items] | |||
Royalty income, net of royalty expense | $ 21.9 | $ 22.6 | $ 20.9 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Details) - USD ($) $ in Millions | Jan. 31, 2020 | Apr. 01, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ 41.2 | $ 17.1 | $ 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 | ||||
Sherwood Bedding | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 39.1 | ||||
Voting interest acquired | 80.00% | ||||
Cash acquired | $ 1.2 | ||||
Trade Name and Customer Database | Innovative Mattress Solutions, LLC (IMS) | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 2.1 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Sherwood Bedding Price Purchase Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 766.3 | $ 732.3 | $ 723 | |
Sherwood Bedding | ||||
Business Acquisition [Line Items] | ||||
Working capital (accounts receivable and inventory, net of accounts payable and accrued liabilities) | $ 5.8 | |||
Property and equipment | 10.1 | |||
Goodwill | 26.7 | |||
Operating lease right-of-use assets | 19.9 | |||
Operating lease liabilities | (19.9) | |||
Non-controlling interest | (8.4) | |||
Purchase price, net of cash acquired | 37.9 | |||
Sherwood Bedding | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Customer relationships intangible assets | $ 3.7 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - iMS Price Purchase Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 01, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 766.3 | $ 732.3 | $ 723 | |
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 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) | |||
Purchase price, net of cash acquired | $ 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, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 732.3 | $ 723 |
Goodwill resulting from acquisition | 26.7 | 7.8 |
Foreign currency translation adjustments and other | 7.3 | 1.5 |
Ending balance | 766.3 | 732.3 |
North America Segment | ||
Goodwill [Roll Forward] | ||
Beginning balance | 581.9 | 576.7 |
Goodwill resulting from acquisition | 26.7 | 2.4 |
Foreign currency translation adjustments and other | 1.7 | 2.8 |
Ending balance | 610.3 | 581.9 |
International Segment | ||
Goodwill [Roll Forward] | ||
Beginning balance | 150.4 | 146.3 |
Goodwill resulting from acquisition | 0 | 5.4 |
Foreign currency translation adjustments and other | 5.6 | (1.3) |
Ending balance | $ 156 | $ 150.4 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount, total | $ 801.5 | $ 794.9 | |
Accumulated Amortization | 171.4 | 153.5 | |
Net Carrying Amount | 630.1 | 641.4 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization expense relating to intangible assets | 17.5 | 15.9 | $ 15.3 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |||
2021 | 20 | ||
2022 | 14.2 | ||
2023 | 8.2 | ||
2024 | 6.6 | ||
2025 | 6.5 | ||
Thereafter | 13.9 | ||
Total | 69.4 | ||
Trade names | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - indefinite life intangible assets | 560.7 | 559.5 | |
Net Carrying Amount | $ 560.7 | 559.5 | |
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 | $ 85.7 | 85.5 | |
Accumulated Amortization | 44.5 | 38.7 | |
Net Carrying Amount | 41.2 | 46.8 | |
Technology and other | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | 91.3 | 91.1 | |
Accumulated Amortization | 75.9 | 68.7 | |
Net Carrying Amount | $ 15.4 | 22.4 | |
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 | $ 28.7 | 27.9 | |
Accumulated Amortization | 21.3 | 18.6 | |
Net Carrying Amount | $ 7.4 | 9.3 | |
Patents, other trademarks and other trade names | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years | ||
Patents, other trademarks and other trade names | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 20 years | ||
Customer databases, relationships and reacquired rights | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Gross carrying amount - finite life intangible assets | $ 35.1 | 30.9 | |
Accumulated Amortization | 29.7 | 27.5 | |
Net Carrying Amount | $ 5.4 | $ 3.4 | |
Customer databases, relationships and reacquired rights | Minimum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 2 years | ||
Customer databases, relationships and reacquired rights | Maximum | |||
Intangible Assets, Combined Indefinite lived and Finite lived Intangible Assets by Major Class [Line Items] | |||
Useful Lives (Years) | 5 years |
Debt - Schedule of Borrowings O
Debt - Schedule of Borrowings Outstanding (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | May 24, 2016 | Sep. 24, 2015 | |
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Capital lease obligations | $ 71.4 | $ 64.1 | ||
Total debt | 1,370.3 | 1,547 | ||
Less: Deferred financing costs | 3.4 | 7 | ||
Total debt, net | 1,366.9 | 1,540 | ||
Current portion of long-term debt | 43.9 | 37.4 | ||
Total long-term debt, net | 1,323 | 1,502.6 | ||
2026 Senior Notes | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 600 | $ 600 | ||
Line of Credit Facility [Abstract] | ||||
Stated percentage | 5.50% | 5.50% | 5.50% | |
2023 Senior Notes | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 250 | $ 450 | ||
Line of Credit Facility [Abstract] | ||||
Stated percentage | 5.625% | 5.625% | 5.625% | |
Securitized debt | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 33.9 | $ 0 | ||
Securitized debt | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 0.80% | 0.80% | ||
Other | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 5.9 | $ 7.9 | ||
2019 Credit Agreement | Term A Facility | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 409.1 | $ 425 | ||
2019 Credit Agreement | Term A Facility | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 1.25% | 1.625% | ||
2019 Credit Agreement | Revolving Credit Facility | ||||
Long-term Debt, Current and Noncurrent [Abstract] | ||||
Long term debt, gross | $ 0 | $ 0 | ||
2019 Credit Agreement | Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Abstract] | ||||
Index rate or LIBOR plus (percentage) | 1.25% | 1.625% |
Debt - Credit Facilities and Ca
Debt - Credit Facilities and Capital Leases (Details) | Oct. 16, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 02, 2021USD ($) | Apr. 12, 2017USD ($) |
Line of Credit Facility [Line Items] | |||||
Total net leverage ratio | 1.68 | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Principal borrowing capacity, maximum | $ 120,000,000 | ||||
2019 Credit Agreement | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Equity interest of subsidiary guarantor (percentage) | 100.00% | ||||
Equity voting rights of subsidiary (percentage) | 65.00% | ||||
Leverage ratio, letters of credit outstanding | $ 40,000,000 | ||||
Allowed netted cash amount percentage | 100.00% | ||||
Domestic and foreign qualified cash, maximum | $ 200,000,000 | ||||
Netted cash amount | $ 63,600,000 | ||||
2019 Credit Agreement | Line of Credit | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Total net leverage ratio | 5 | ||||
Base Rate | 2019 Credit Agreement | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Index rate or LIBOR plus (percentage) | 0.625% | ||||
LIBOR | 2019 Credit Agreement | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Index rate or LIBOR plus (percentage) | 1.25% | 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 | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Principal borrowing capacity, maximum | $ 425,000,000 | ||||
Principal borrowing capacity, remaining | $ 424,900,000 | ||||
Increase (decrease) to line of credit | $ (100,000) | ||||
Line of Credit | 2019 Credit Agreement | Revolving Credit Facility | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Principal borrowing capacity, maximum | $ 725,000,000 | ||||
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 | 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 ($) | Feb. 08, 2021 | Jan. 13, 2021 | Dec. 14, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 12, 2017 | Oct. 18, 2016 | May 24, 2016 | Sep. 24, 2015 |
Debt Instrument [Line Items] | ||||||||||
Deferred financing costs expense | $ 2,300,000 | $ 0 | $ 0 | |||||||
2026 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior notes, noncurrent | $ 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 | |||||||||
2023 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior notes, noncurrent | $ 450,000,000 | |||||||||
Stated percentage | 5.625% | 5.625% | 5.625% | |||||||
Repayments of senior notes | $ 200,000,000 | $ 200,000,000 | ||||||||
Deferred financing costs expense | $ 2,300,000 | |||||||||
2023 Senior Notes | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Senior notes, noncurrent | $ 250,000,000 | |||||||||
Repayments of senior notes | $ 125,000,000 | $ 125,000,000 | ||||||||
2023 Senior Notes | Any time on or after October 15, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101.406% | 104.219% | ||||||||
2023 Senior Notes | Any time on or after October 15, 2018 | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101.406% | 101.406% | ||||||||
2023 Senior Notes | Beginning on October 15, 2021 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal borrowing capacity, maximum | $ 120,000,000 |
Debt - Schedule of Notes Estima
Debt - Schedule of Notes Estimated Fair Value (Details) - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
2023 Senior Notes | ||
Debt Instrument [Line Items] | ||
Notes, fair value | $ 255.1 | $ 464.2 |
2026 Senior Notes | ||
Debt Instrument [Line Items] | ||
Notes, fair value | $ 625.4 | $ 634.9 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 66.4 |
2022 | 21.3 |
2023 | 281.9 |
2024 | 329.3 |
2025 | 0 |
Thereafter | 600 |
Total debt, net | $ 1,298.9 |
Leases - Balance Sheet Effect (
Leases - Balance Sheet Effect (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 304.3 | $ 245.4 |
Finance lease assets | 61.2 | 54.4 |
Total leased assets | 365.5 | 299.8 |
Operating leases obligations | 61 | 50.8 |
Finance lease obligations | 11.4 | 8.2 |
Long-term operating lease obligations | 275.1 | 205.4 |
Finance lease obligations | 60 | 55.9 |
Present value of lease obligations | $ 407.5 | $ 320.3 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | us-gaap:PropertyPlantAndEquipmentNet |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtNoncurrent | us-gaap:LongTermDebtNoncurrent |
Leases - Expense (Details)
Leases - Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 75.4 | $ 63.8 |
Short-term lease expense | 11.1 | 9 |
Variable lease expense | 22.2 | 18.8 |
Finance lease expense: | ||
Amortization of right-of-use assets | 9.3 | 8.5 |
Interest on lease obligations | 4.7 | 4.7 |
Total lease expense | $ 122.7 | $ 104.8 |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2021 | $ 74.1 | |
2022 | 67.9 | |
2023 | 55.5 | |
2024 | 46 | |
2025 | 39.3 | |
Thereafter | 112.3 | |
Future minimum lease payments | 395.1 | |
Less: Interest | (59) | |
Present value of lease obligations | 336.1 | |
Finance Leases | ||
2021 | 15.3 | |
2022 | 13.4 | |
2023 | 10.7 | |
2024 | 8.6 | |
2025 | 7.7 | |
Thereafter | 34.2 | |
Total lease payments | 89.9 | |
Less: Interest | (18.5) | |
Present value of lease obligations | 71.4 | $ 64.1 |
2021 | 89.4 | |
2022 | 81.3 | |
2023 | 66.2 | |
2024 | 54.6 | |
2025 | 47 | |
Thereafter | 146.5 | |
Total lease payments | 485 | |
Less: Interest | (77.5) | |
Present value of lease obligations | $ 407.5 | $ 320.3 |
Leases - Long Term and Discount
Leases - Long Term and Discount Rate (Details) | Dec. 31, 2020 |
Weighted average remaining lease term (years): | |
Operating leases | 6 years 7 months 28 days |
Finance leases | 7 years 10 months 28 days |
Weighted average discount rate: | |
Operating leases | 4.90% |
Finance leases | 5.80% |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease obligations: | ||
Operating cash flows paid for operating leases (a) | $ 70.1 | $ 62.7 |
Operating cash flows paid for finance leases | 4.7 | 3.7 |
Financing cash flows paid for finance leases | 10.2 | 7.7 |
Right-of-use assets obtained in exchange for new operating lease obligations | 109.4 | 60.9 |
Right-of-use asset obtained in exchange for finance lease liability | $ 17.6 | $ 4.1 |
Retirement Plans - Defined Cont
Retirement Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 (percentage) | 100.00% | ||
Defined contribution plan, percentage of eligible employee contributions matched fully, first tier (percentage) | 3.00% | ||
Defined contribution plan, eligible employee contribution match, second tier (percentage) | 50.00% | ||
Defined contribution plan, eligible employee contribution matched by the company, second tier (percentage) | 2.00% | ||
Defined contribution plan, cost recognized | $ 5.8 | $ 6 | $ 5.8 |
Retirement Plans - Defined Bene
Retirement Plans - Defined Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)facility | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
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 | $ 1.1 | $ 0.9 | $ 1 |
Interest cost | 1.1 | 1.2 | 1.1 |
Expected return on assets | (1.5) | (1.3) | (1.5) |
Amortization of prior service cost | 0.1 | 0.1 | 0.1 |
Amortization of net gain | 0.1 | 0.1 | 0 |
Net periodic pension cost | 0.9 | 1 | 0.7 |
Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive income | |||
Net loss | 1.9 | 2.2 | 0.6 |
New prior service cost | 0.1 | 0.6 | 0.1 |
Amortization of prior service cost | (0.1) | (0.1) | (0.1) |
Amortization or settlement recognition of net loss | (0.1) | (0.1) | 0 |
Total recognized in other comprehensive loss | $ 1.8 | $ 2.6 | $ 0.6 |
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 3.16% | 4.10% | 3.58% |
Expected long term return on plan assets (as a percent) | 5.37% | 6.16% | 6.25% |
Change in Benefit Obligation: | |||
Projected benefit obligation at beginning of year | $ 36.9 | $ 30 | |
Service cost | 1.1 | 0.9 | $ 1 |
Interest cost | 1.1 | 1.2 | 1.1 |
Plan amendments | 0.1 | 0.5 | |
Actuarial loss | 4.6 | 5.5 | |
Benefits paid | (1.3) | (1.3) | |
Expenses paid | (0.1) | (0.1) | |
Foreign currency exchange rate changes | 0.1 | 0.2 | |
Projected benefit obligation at end of year | 42.5 | 36.9 | 30 |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 27 | 22.2 | |
Actual return on plan assets | 4.2 | 4.6 | |
Employer contribution | 1.4 | 1.4 | |
Benefits paid | (1.3) | (1.3) | |
Expenses paid | (0.1) | (0.1) | |
Foreign currency exchange rate changes | 0.1 | 0.2 | |
Fair value of plan assets at end of year | 31.3 | 27 | $ 22.2 |
Funded status | (11.2) | (9.9) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Non-current benefit liability | 11.2 | 10 | |
Non-current benefit asset | $ 0 | $ 0.1 | |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 2.47% | 3.16% | |
United States Retirement Plan | |||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 3.15% | 4.16% | 3.54% |
Expected long term return on plan assets (as a percent) | 5.75% | 6.50% | 6.50% |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 2.43% | 3.15% | |
Canadian Retirement Plan | |||
Assumptions, calculated on a weighted-average basis, were used to determine pension costs | |||
Discount rate (as a percent) | 3.20% | 3.90% | 3.70% |
Expected long term return on plan assets (as a percent) | 4.30% | 5.00% | 5.50% |
Assumptions, calculated on a weighted-average basis, were used to determine benefit obligations | |||
Discount rate (percentage) | 2.80% | 3.20% | |
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 | $ 32.6 | ||
Projected benefit obligation at end of year | 37.7 | $ 32.6 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 22.6 | ||
Fair value of plan assets at end of year | 26.5 | 22.6 | |
Sealy | Canadian Retirement Plan | |||
Change in Benefit Obligation: | |||
Projected benefit obligation at beginning of year | 4.3 | ||
Projected benefit obligation at end of year | 4.8 | 4.3 | |
Change in Plan Assets: | |||
Fair value of plan assets at beginning of year | 4.4 | ||
Fair value of plan assets at end of year | $ 4.8 | $ 4.4 |
Retirement Plans - Plan Assets
Retirement Plans - Plan Assets and Estimated Future Benefit Payments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement plans | |||
Expected contribution in next fiscal year | $ 1.1 | ||
Estimated future benefit payments | |||
Fiscal 2021 | 1 | ||
Fiscal 2022 | 1.1 | ||
Fiscal 2023 | 1.2 | ||
Fiscal 2024 | 1.2 | ||
Fiscal 2025 | 1.3 | ||
Fiscal 2026 ‑ Fiscal 2029 | $ 8 | ||
Target and actual asset allocations | |||
Total target plan assets | 100.00% | ||
Total actual plan assets | 100.00% | ||
Total assets | $ 31.3 | $ 27 | $ 22.2 |
United States Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 5.75% | ||
Canadian Retirement Plan | |||
Target and actual asset allocations | |||
Expected long-term return assumption (percentage) | 4.30% | ||
Total equity based funds | |||
Target and actual asset allocations | |||
Total target plan assets | 60.00% | ||
Total actual plan assets | 56.60% | ||
Total assets | $ 17.7 | 15 | |
U.S. equity | |||
Target and actual asset allocations | |||
Total assets | 6.5 | 5.5 | |
International equity | |||
Target and actual asset allocations | |||
Total assets | $ 11.2 | 9.5 | |
Debt securities | |||
Target and actual asset allocations | |||
Total target plan assets | 40.00% | ||
Total actual plan assets | 43.10% | ||
Other | |||
Target and actual asset allocations | |||
Total target plan assets | 0.00% | ||
Total actual plan assets | 0.30% | ||
Common/collective trust - fixed income | |||
Target and actual asset allocations | |||
Total assets | $ 13.5 | 11.9 | |
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, 2020USD ($)facility | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Multi-Employer Benefit Plans | |||
Domestic employees represented by various labor unions with separate collective bargaining agreements (percentage) | 22.60% | ||
Expenses recognized for contributions | $ 0.7 | ||
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 | $ 4.6 | $ 4.3 | 3.9 |
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 | $ 3.4 | 3.8 | $ 3.6 |
United Furniture Workers Pension Fund A | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 1.5 | $ 1.1 | |
Pension Plan of the National Retirement Fund | |||
Multi-Employer Benefit Plans | |||
Surcharge imposed | 10.00% | 10.00% | |
Pension Plan of the National Retirement Fund | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 1.1 | $ 1 | |
Central States, Southeast & Southwest Areas Pension Plan | |||
Multi-Employer Benefit Plans | |||
Surcharge imposed | 10.00% | 10.00% | |
Central States, Southeast & Southwest Areas Pension Plan | Multi-employer Retirement Plan | |||
Multi-Employer Benefit Plans | |||
Expenses recognized for contributions | $ 1 | $ 0.8 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)vote$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Feb. 19, 2021USD ($) | |
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 | ||||
Preferred stock par or stated value (in dollars per share) | $ / shares | $ 0.01 | ||||
Common stock, voting rights per share held | vote | 1 | ||||
Remaining authorized repurchase amount | $ 201,600,000 | ||||
Treasury stock repurchased (in shares) | shares | 6,500,000 | 1,300,000 | 0 | ||
Treasury stock repurchased | $ 285,900,000 | $ 102,300,000 | |||
Charitable stock donation | $ 8,900,000 | 0 | 8,900,000 | $ 0 | |
Charitable stock donation (in shares) | shares | (100,000) | ||||
Subsequent Event | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Authorized amount of stock to be repurchased | $ 400,000,000 | ||||
Performance-based Restricted Stock Units | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Treasury stock repurchased | $ 45,900,000 | $ 3,400,000 | $ 4,600,000 |
Stockholders' Equity - AOCI (De
Stockholders' Equity - AOCI (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 360,400,000 | $ 217,500,000 | $ 112,500,000 |
Other comprehensive loss: | |||
Other comprehensive income (loss), net of tax | 22,200,000 | 7,600,000 | (19,800,000) |
Balance at ending of period | 504,600,000 | 360,400,000 | 217,500,000 |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (82,200,000) | (91,700,000) | (72,800,000) |
Other comprehensive loss: | |||
Net amount reclassified to earnings | 0 | 0 | 0 |
Tax expense | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | 23,600,000 | 9,500,000 | (18,900,000) |
Balance at ending of period | (58,600,000) | (82,200,000) | (91,700,000) |
Pension Benefits | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (5,500,000) | (3,600,000) | (2,700,000) |
Other comprehensive loss: | |||
Net change from period revaluation | (1,800,000) | (2,600,000) | (400,000) |
Tax benefit | 400,000 | 700,000 | 100,000 |
Total other comprehensive loss before reclassifications, net of tax | (1,400,000) | (1,900,000) | (300,000) |
Net amount reclassified to earnings | 0 | 0 | 0 |
U.S tax reform - reclassification to retained earnings upon adoption of ASU No. 2018-02 | 0 | 0 | (500,000) |
Tax expense | 0 | 0 | (100,000) |
Total amount reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | (600,000) |
Other comprehensive income (loss), net of tax | (1,400,000) | (1,900,000) | (900,000) |
Balance at ending of period | $ (6,900,000) | $ (5,500,000) | $ (3,600,000) |
Other Items - Accrued Expenses
Other Items - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other Items [Abstract] | ||
Taxes | $ 150.4 | $ 136 |
Wages and benefits | 102.5 | 79.5 |
Operating leases obligations | 61 | 50.8 |
Advertising | 74.4 | 56.9 |
Other | 196.8 | 150 |
Total accrued expenses and other current liabilities | $ 585.1 | $ 473.2 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Nov. 24, 2020shares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020$ / sharesshares | Dec. 31, 2020USD ($)plan$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | May 11, 2017shares | Dec. 31, 2003shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of compensation plans | plan | 2 | ||||||||
Stock split ratio | 4 | ||||||||
Total stock-based compensation expense | $ | $ 104.5 | $ 26.8 | $ 24.8 | ||||||
Stock options granted (in shares) | shares | 0 | ||||||||
Total intrinsic value of options exercised | $ | $ 6 | $ 5.9 | 3.9 | ||||||
Performance-based Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | shares | 600,000 | 3,500,000 | 300,000 | ||||||
Granted (in dollars per share) | $ / shares | $ 21.39 | $ 21.39 | $ 21.35 | ||||||
Total stock-based compensation expense | $ | $ 77.4 | $ 1.4 | 2.5 | ||||||
Restricted Stock Units and Deferred Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | shares | 800,000 | 2,700,000 | |||||||
Granted (in dollars per share) | $ / shares | $ 20.81 | $ 10.77 | |||||||
Total stock-based compensation expense | $ | $ 22.2 | $ 20.5 | 15.6 | ||||||
Aggregate intrinsic value of RSUs and DSUs vested during the period | $ | 33 | ||||||||
Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total stock-based compensation expense | $ | $ 4.9 | $ 4.9 | $ 6.7 | ||||||
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 | 34,800,000 | ||||||||
Additional shares due to stock split (in shares) | shares | 26,100,000 | ||||||||
Amended And Restated 2003 Equity Incentive Plan | Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Maximum number of common stock shares to be issued (in shares) | shares | 46,000,000 | ||||||||
Additional shares due to stock split (in shares) | shares | 34,500,000 | ||||||||
Aspirational Plan 2019 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total stock-based compensation expense | $ | $ 4.2 | $ 45.2 | |||||||
Aspirational Plan 2019 | Performance-based Restricted Stock Units | Tranche one | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of target shares forfeited | 50.00% | ||||||||
Award vesting rights, percentage | 50.00% |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 104.5 | $ 26.8 | $ 24.8 |
Performance-based Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 77.4 | 1.4 | 2.5 |
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 4.9 | 4.9 | 6.7 |
Restricted Stock Units and Deferred Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 22.2 | $ 20.5 | $ 15.6 |
Stock-based Compensation - PRSU
Stock-based Compensation - PRSU And RSU Activity And Related Information (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Performance-based Restricted Stock Units | |||
Shares | |||
Beginning balance (in shares) | 3.5 | 3.5 | 8 |
Granted (in shares) | 0.6 | 3.5 | 0.3 |
Vested (in shares) | (3.4) | 0 | |
Forfeited/Terminated (in shares) | 0 | (4.8) | |
Ending balance (in shares) | 3.6 | 3.5 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 15.02 | $ 15.02 | $ 15.27 |
Granted (in dollars per share) | $ 21.39 | 21.39 | 21.35 |
Vested (in dollars per share) | 15.03 | 0 | |
Forfeited/Terminated (in dollars per share) | 0 | 17.74 | |
Ending balance (in dollars per share) | $ 21.18 | $ 15.02 | |
Restricted Stock Units and Deferred Stock Units | |||
Shares | |||
Beginning balance (in shares) | 5.1 | 5.1 | 3.3 |
Granted (in shares) | 0.8 | 2.7 | |
Vested (in shares) | (1.6) | (0.9) | |
Forfeited/Terminated (in shares) | (0.1) | 0 | |
Ending balance (in shares) | 4.2 | 5.1 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 13.24 | $ 13.24 | $ 15.96 |
Granted (in dollars per share) | 20.81 | 10.77 | |
Vested (in dollars per share) | 13.43 | 15.64 | |
Forfeited/Terminated (in dollars per share) | 13.99 | 0 | |
Ending balance (in dollars per share) | $ 14.57 | $ 13.24 | |
Intrinsic value | $ 113.6 | $ 110.3 |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value Assumptions And Methodology (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Fair value assumptions and methodology [Abstract] | |
Expected volatility range of stock, minimum (in hundredths) | 39.80% |
Expected volatility range of stock, maximum (in hundredths) | 40.10% |
Expected life of option, range in years | 5 years |
Risk-free interest rate range, minimum (in hundredths) | 2.20% |
Risk-free interest rate range, maximum (in hundredths) | 2.80% |
Expected dividend yield on stock (in hundredths) | 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, 2020 | Dec. 31, 2019 | |
Weighted Average Exercise Price | ||
Forfeited weighted average exercise price (dollars per share) | $ 0 | $ 0 |
Stock Option Plans 2003 and 2013 | ||
Shares | ||
Beginning balance (in shares) | 5.2 | 6.4 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | (0.5) | (1.2) |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 4.7 | 5.2 |
Options exercisable (in shares) | 3.6 | |
Weighted Average Exercise Price | ||
Beginning balance weighted average exercise price (dollars per share) | $ 16.30 | $ 15.63 |
Granted weighted average exercise price (dollars per share) | 0 | 0 |
Exercised weighted average exercise price (in dollars per share) | 13.03 | 13.12 |
Ending balance weighted average exercise price (dollars per share) | 16.69 | $ 16.30 |
Options exercisable weighted average exercise price (dollars per share) | $ 16.78 | |
Options outstanding weighted average remaining contractual term (in years) | 5 years 7 months 2 days | |
Options outstanding weighted average intrinsic value | $ 47.7 | |
Options exercisable weighted average remaining contractual term (in years) | 5 years 3 months 25 days | |
Options exercisable weighted average intrinsic value | $ 36.3 |
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, 2020 | Dec. 31, 2019 | |
Shares | ||
Beginning balance (in shares) | 2 | 2.4 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | (0.9) | (0.4) |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 1.1 | 2 |
Weighted Average Grant Date Fair Value | ||
Beginning of period weighted average grant date fair value (dollars per share) | $ 16.50 | $ 16.55 |
Granted weighted average grant date fair value (dollars per share) | 0 | 0 |
Vested weighted average grant date fair value (dollars per share) | 16.67 | 16.67 |
Forfeited weighted average grant date fair value (dollars per share) | 0 | 0 |
Ending of period weighted average grant date fair value (dollars per share) | $ 16.38 | $ 16.50 |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 79.1 |
Weighted average remaining vesting period (in years) | 2 years 1 month 13 days |
Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 1.6 |
Weighted average remaining vesting period (in years) | 1 year |
Restricted Stock Units and Deferred Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 30.4 |
Weighted average remaining vesting period (in years) | 2 years 2 months 8 days |
Performance-based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation expense | $ 47.1 |
Weighted average remaining vesting period (in years) | 2 years 1 month 13 days |
Income Taxes - Pre-tax Income A
Income Taxes - Pre-tax Income Attributable to Operating Segments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income before income taxes: | |||
United States | $ 319.5 | $ 150.9 | $ 59.2 |
Rest of the world | 132.9 | 114.6 | 105.8 |
Income from continuing operations before income taxes | $ 452.4 | $ 265.5 | $ 165 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amount | |||
Statutory U.S. federal income tax | $ 95 | $ 55.8 | $ 34.6 |
State income taxes, net of federal benefit | 9.9 | 8.7 | 1.8 |
Foreign tax differential | 2.8 | 2.1 | 2.5 |
Change in valuation allowances | 5.5 | (8.6) | (17.7) |
Uncertain tax positions and interest | 0.5 | 2.4 | 33.1 |
Subpart F income | 3.3 | 1.8 | (0.8) |
Global Intangible Low-Taxed Income (“GILTI”) | 0 | 9.2 | 7.4 |
GILTI High-Taxed Exception | (8.6) | 0 | 0 |
Stock compensation | (10.9) | 0.9 | 0.8 |
Transition Tax | 0 | 0 | (6.8) |
Permanent and other | 5.1 | 2.4 | (5.3) |
Effective income tax provision | $ 102.6 | $ 74.7 | $ 49.6 |
Percentage of Income Before Income Taxes | |||
Statutory U.S. federal income tax (percentage) | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal benefit (percentage) | 2.20% | 3.30% | 1.10% |
Foreign tax differential (percentage) | 0.60% | 0.80% | 1.50% |
Change in valuation allowance (percentage) | 1.20% | (3.20%) | (10.70%) |
Uncertain tax positions (percentage) | 0.10% | 0.90% | 20.10% |
Subpart F income (percentage) | 0.70% | 0.70% | (0.50%) |
Global Intangible Low-Taxed Income (percentage) | 0.00% | 3.40% | 4.50% |
Retro-active High Taxed Exception - GILTI (percentage) | (1.90%) | 0.00% | 0.00% |
Stock compensation (percentage) | (2.40%) | 0.30% | 0.50% |
Transition Tax (percentage) | 0 | 0 | (0.041) |
Permanent and other (percentage) | 1.20% | 0.90% | (3.30%) |
Effective income tax provision (percentage) | 22.70% | 28.10% | 30.10% |
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, 2016DKK (kr) | Sep. 30, 2020DKK (kr) | Mar. 31, 2020DKK (kr) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020DKK (kr) | |
Income Tax Examination [Line Items] | |||||||
Unrecognized tax benefits | $ 106 | $ 96.8 | $ 91.4 | ||||
Income tax penalties and interest expense | 1 | 1.3 | 6.4 | ||||
Accrued interest and penalties | 74.9 | 67.9 | $ 66.3 | ||||
US State | |||||||
Income Tax Examination [Line Items] | |||||||
Operating loss carryforwards, valuation allowance | 88.1 | ||||||
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 | kr | kr 615.2 | ||||||
Danish Tax Authority (SKAT) | Tax Years After 2011 | Danish Tax Authority | |||||||
Income Tax Examination [Line Items] | |||||||
Deferred tax assets, net | 12 | 7.2 | |||||
Danish Tax Authority (SKAT) | Tax Year 2014 | Danish Tax Authority | |||||||
Income Tax Examination [Line Items] | |||||||
Tax deposit paid | kr | kr 76.8 | ||||||
Danish Tax Authority (SKAT) | Tax Years 2012 - 2013 | Danish Tax Authority | |||||||
Income Tax Examination [Line Items] | |||||||
Tax deposit paid | kr | kr 134 | ||||||
Danish Tax Authority (SKAT) | Tax Years 2001-2011 | Danish Tax Authority | |||||||
Income Tax Examination [Line Items] | |||||||
Uncertain tax liability, difference | $ 20.5 | $ 18.8 | kr 125 |
Income Taxes - Tax Provision Su
Income Taxes - Tax Provision Summary (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current provision | |||
Federal | $ 55.1 | $ 50.4 | $ (14.6) |
State | 17.3 | 11.9 | 1.1 |
Foreign | 38.8 | 19.5 | 57.1 |
Total current | 111.2 | 81.8 | 43.6 |
Deferred provision | |||
Federal | (3.4) | (10.8) | 11.4 |
State | (3.4) | (8) | (4.5) |
Foreign | (1.8) | 11.7 | (0.9) |
Total deferred | (8.6) | (7.1) | 6 |
Effective income tax provision | $ 102.6 | $ 74.7 | $ 49.6 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities Recognized in the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Stock-based compensation | $ 21.6 | $ 13.9 |
Operating lease obligations | 92.9 | 67.2 |
Accrued expenses and other | 55.1 | 62.5 |
Net operating losses, foreign tax credits and other tax attribute carryforwards | 50.6 | 43.1 |
Inventories | 11.1 | 8.2 |
Transaction costs | 6 | 6.6 |
Property, plant and equipment | 2.5 | 2.9 |
Total deferred tax assets | 239.8 | 204.4 |
Valuation allowances | (33.5) | (30) |
Total net deferred tax assets | 206.3 | 174.4 |
Deferred tax liabilities: | ||
Intangible assets | (150.7) | (156.4) |
Operating lease right-of-use assets | (82.3) | (63.9) |
Property, plant and equipment | (34.3) | (36.9) |
Accrued expenses and other | (15.9) | (5.2) |
Total deferred tax liabilities | (283.2) | (262.4) |
Net deferred tax liabilities | $ (76.9) | $ (88) |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Tax Credit Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Loss Carryforwards [Line Items] | ||
Charitable contribution carryover (CCCs) | $ 23.6 | $ 32.9 |
US State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 157 | 165.7 |
Tax credit carryforwards | 4.9 | 5.3 |
US Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforwards | 12.2 | 12.2 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 54.1 | $ 36.9 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unrecognized tax benefits [Roll Forward] | ||
Balance as of beginning of period | $ 104.5 | $ 103.8 |
Additions based on tax positions related to current period | 0 | 0 |
Additions for tax positions of prior years | 14.1 | 0.7 |
Expiration of statutes of limitations | 0 | 0 |
Settlements of uncertain tax positions with tax authorities | 0 | 0 |
Balance as of end of period | $ 118.6 | $ 104.5 |
Income Taxes - Balance Sheet Lo
Income Taxes - Balance Sheet Location (Details) kr in Millions, $ in Millions | Dec. 31, 2020DKK (kr) | Dec. 31, 2020USD ($) | Dec. 31, 2019DKK (kr) | Dec. 31, 2019USD ($) |
Income Tax Examination [Line Items] | ||||
Tax liability | kr 1,142.3 | $ 187.5 | kr 1,110.6 | $ 166.7 |
Tax deposit | 1,180.9 | 193.9 | 970.1 | 145.6 |
Accrued expenses and other current liabilities | ||||
Income Tax Examination [Line Items] | ||||
Tax liability | 847.3 | 139.1 | 847.3 | 127.2 |
Tax deposit | 847.3 | 139.1 | 847.3 | 127.2 |
Other non-current liabilities | ||||
Income Tax Examination [Line Items] | ||||
Tax liability | 295 | 48.4 | 263.3 | 39.5 |
Other non-current assets | ||||
Income Tax Examination [Line Items] | ||||
Tax deposit | kr 333.6 | $ 54.8 | kr 122.8 | $ 18.4 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Net income from continuing operations, net of loss attributable to non-controlling interests | $ 348.8 | $ 190.9 | $ 118.3 |
Denominator: | |||
Denominator for basic earnings per common share—weighted average shares (in shares) | 207.9 | 218 | 217.6 |
Effect of dilutive securities: | |||
Employee stock based compensation (in shares) | 4.4 | 3.6 | 2.8 |
Denominator for diluted earnings per common share—adjusted weighted average shares (in shares) | 212.3 | 221.6 | 220.4 |
Basic earnings per share for continuing operations (in dollars per share) | $ 1.68 | $ 0.87 | $ 0.54 |
Diluted earnings per share for continuing operations (in dollars per share) | $ 1.64 | $ 0.86 | $ 0.54 |
Shares excluded from diluted earnings per common share computation as anti-dilutive (in shares) | 4.4 | 6 |
Business Segment Information (D
Business Segment Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)countrysegmentcustomer | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of business segments | segment | 2 | ||
Number of countries product is sold in | country | 100 | ||
Number of wholesale customers products are sold to | customer | 10,000 | ||
Segment information [Abstract] | |||
Total assets | $ 3,308.6 | $ 3,061.8 | |
Total property, plant and equipment, net | 507.9 | 435.8 | |
Operating lease right-of-use assets | 304.3 | 245.4 | |
Net sales | 3,676.9 | 3,106 | $ 2,702.9 |
Inter-segment royalty expense (income) | 0 | 0 | 0 |
Gross profit | 1,638.4 | 1,342.2 | 1,120.7 |
Operating income (loss) | 532.1 | 346.7 | 256.3 |
Income (loss) from continuing operations before income taxes | 452.4 | 265.5 | 165 |
Depreciation and amortization | 202.5 | 116.5 | 111.9 |
Capital expenditures | $ 111.3 | 88.2 | 73.6 |
Revenue | Sales Channel Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 13.40% | ||
Revenue | Customer Concentration Risk | Minimum | Customer A | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Revenue | Customer Concentration Risk | Maximum | Customer A | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 15.00% | ||
Bedding sales | |||
Segment information [Abstract] | |||
Net sales | 2,455.3 | ||
Other sales | |||
Segment information [Abstract] | |||
Net sales | 247.6 | ||
United States | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | $ 436.2 | 366.4 | |
Operating lease right-of-use assets | 255 | 198.3 | |
Net sales | 1,928.8 | ||
All other | |||
Segment information [Abstract] | |||
Total property, plant and equipment, net | 71.7 | 69.4 | |
Operating lease right-of-use assets | 49.3 | 47.1 | |
Net sales | 790.3 | 793.9 | 774.1 |
Operating Segments | |||
Segment information [Abstract] | |||
Net sales | 3,676.9 | 3,106 | 2,702.9 |
Operating Segments | Bedding sales | |||
Segment information [Abstract] | |||
Net sales | 3,353.8 | 2,837 | 2,455.3 |
Operating Segments | Other sales | |||
Segment information [Abstract] | |||
Net sales | 323.1 | 269 | 247.6 |
Operating Segments | United States | |||
Segment information [Abstract] | |||
Net sales | 2,886.6 | 2,312.1 | 1,928.8 |
Operating Segments | All other | |||
Segment information [Abstract] | |||
Net sales | 774.1 | ||
Operating Segments | North America Segment | |||
Segment information [Abstract] | |||
Total assets | 3,740.3 | 3,187.7 | |
Total property, plant and equipment, net | 415.3 | 334.8 | |
Operating lease right-of-use assets | 256.6 | 202 | |
Net sales | 3,159.2 | 2,603.5 | 2,207 |
Inter-segment royalty expense (income) | 9.4 | 7.6 | 6.2 |
Gross profit | 1,332 | 1,055.2 | 843.4 |
Operating income (loss) | 591.4 | 349.9 | 256.5 |
Income (loss) from continuing operations before income taxes | 590.1 | 342.9 | 248.4 |
Depreciation and amortization | 76.3 | 65.1 | 59.5 |
Capital expenditures | 92.6 | 63 | 53.6 |
Operating Segments | North America Segment | Bedding sales | |||
Segment information [Abstract] | |||
Net sales | 2,956.3 | 2,448.8 | 2,069.5 |
Operating Segments | North America Segment | Other sales | |||
Segment information [Abstract] | |||
Net sales | 202.9 | 154.7 | 137.5 |
Operating Segments | North America Segment | United States | |||
Segment information [Abstract] | |||
Net sales | 2,886.6 | 2,312.1 | 1,928.8 |
Operating Segments | North America Segment | All other | |||
Segment information [Abstract] | |||
Net sales | 278.2 | ||
Operating Segments | International Segment | |||
Segment information [Abstract] | |||
Total assets | 639.8 | 569 | |
Total property, plant and equipment, net | 49.8 | 45.9 | |
Operating lease right-of-use assets | 45.7 | 42.2 | |
Net sales | 517.7 | 502.5 | 495.9 |
Inter-segment royalty expense (income) | (9.4) | (7.6) | (6.2) |
Gross profit | 306.4 | 287 | 277.3 |
Operating income (loss) | 127.6 | 110.3 | 101 |
Income (loss) from continuing operations before income taxes | 120.2 | 103.8 | 93.7 |
Depreciation and amortization | 13.6 | 13 | 13 |
Capital expenditures | 11 | 10.7 | 13.1 |
Operating Segments | International Segment | Bedding sales | |||
Segment information [Abstract] | |||
Net sales | 397.5 | 388.2 | 385.8 |
Operating Segments | International Segment | Other sales | |||
Segment information [Abstract] | |||
Net sales | 120.2 | 114.3 | 110.1 |
Operating Segments | International Segment | United States | |||
Segment information [Abstract] | |||
Net sales | 0 | 0 | 0 |
Operating Segments | International Segment | All other | |||
Segment information [Abstract] | |||
Net sales | 495.9 | ||
Corporate | |||
Segment information [Abstract] | |||
Total assets | 490.3 | 477.1 | |
Total property, plant and equipment, net | 42.8 | 55.1 | |
Operating lease right-of-use assets | 2 | 1.2 | |
Net sales | 0 | 0 | 0 |
Inter-segment royalty expense (income) | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 |
Operating income (loss) | (186.9) | (113.5) | (101.2) |
Income (loss) from continuing operations before income taxes | (257.9) | (181.2) | (177.1) |
Depreciation and amortization | 112.6 | 38.4 | 39.4 |
Capital expenditures | 7.7 | 14.5 | 6.9 |
Corporate | Bedding sales | |||
Segment information [Abstract] | |||
Net sales | 0 | 0 | 0 |
Corporate | Other sales | |||
Segment information [Abstract] | |||
Net sales | 0 | 0 | 0 |
Inter-segment eliminations | |||
Segment information [Abstract] | |||
Total assets | (1,561.8) | (1,172) | |
Net sales | (1.9) | (2.3) | (1.9) |
Inter-segment eliminations | North America Segment | |||
Segment information [Abstract] | |||
Net sales | 1.2 | 1.2 | 1.3 |
Inter-segment eliminations | International Segment | |||
Segment information [Abstract] | |||
Net sales | $ 0.7 | $ 1.1 | $ 0.6 |
VALUATION AND QUALIFYING ACCO_2
VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 30 | $ 43.1 | $ 55.1 |
Additions - Charges to Costs and Expenses | 7.6 | 0.8 | 9.5 |
Additions - Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (4.1) | (13.9) | (21.5) |
Balance at End of Period | $ 33.5 | $ 30 | $ 43.1 |