Delaware
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33-1022198
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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New York Stock Exchange
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Page
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•
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Bedding
- Our bedding product category includes mattresses, foundations and adjustable foundations and represented
92.5%
of our net sales in 2016.
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•
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Other -
Our other product category includes pillows, mattress covers, sheets, cushions and various other comfort products and represented
7.5%
of our net sales in 2016.
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•
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Tempur-Pedic
- Founded in 1991, the Tempur brand is our specialty innovation category leader designed to provide life changing sleep for our wellness seeking consumers. Our proprietary Tempur material precisely adapts to the shape, weight and temperature of the consumer and creates fewer pressure points, reduces motion transfer and provides personalized comfort and support.
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•
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Stearns & Foster
- The Stearns & Foster brand offers our consumers high quality mattresses built by certified craftsmen who have been specially trained. Founded in 1846, the brand is designed and built with precise engineering and relentless attention to detail and fuses new innovative technologies with time-honored techniques, creating supremely comfortable beds.
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•
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Sealy
- The Sealy brand originated in 1881 in Sealy, Texas, and for over a century has focused on offering trusted comfort, durability and excellent value while maintaining contemporary styles and great support. In 2017, we are uniting all of our Sealy products under one masterbrand, which will include the Posturepedic Technology™ as described below.
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•
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Sealy Posturepedic
- The Sealy Posturepedic brand, introduced in 1950, is engineered to provide all-over support and body alignment to allow full relaxation and deliver a comfortable night's sleep. In 2017, Sealy Posturepedic will no longer represent its own separate brand, but will be featured as Posturepedic Technology™ in the Sealy Performance™ and Sealy Premium™ collections.
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•
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Cocoon by Sealy -
The Cocoon by Sealy brand, introduced in 2016, is our new offering in the below $1,000 e-commerce space, made with the high quality materials that consumers expect from Sealy, sold online
at www.cocoonbysealy.com and delivered in a box directly to consumers' doorsteps.
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•
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our ability to continuously improve our products to offer new and enhanced consumer benefits and better quality;
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•
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the ability of our future product launches to increase net sales;
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•
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the effectiveness of our advertising campaigns and other marketing programs in building product and brand awareness, driving traffic to our distribution channels and increasing sales;
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•
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our ability to expand into new distribution channels and grow our existing channels, including our current roll-out of Sealy mattress products in various international markets;
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•
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our ability to continue to successfully execute our strategic initiatives;
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•
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the level of consumer acceptance of our products; and
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•
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general economic factors that negatively impact consumer confidence, disposable income or the availability of consumer financing.
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•
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increasing our vulnerability to adverse economic, industry or competitive developments;
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•
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requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and other business opportunities;
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•
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making it more difficult for us to satisfy our obligations with respect to our indebtedness;
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•
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restricting us from making strategic acquisitions or investments or causing us to make non-strategic divestitures;
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•
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limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes;
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•
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limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate, placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting;
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•
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exposing us to variability in interest rates, as a substantial portion of our indebtedness is and will be at variable rates; and
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•
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limiting our ability to return capital to our stockholders, including through share repurchases.
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•
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general economic conditions in the markets in which we sell our products and the impact on consumers and retailers;
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•
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the level of competition in the mattress and pillow industry;
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•
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our ability to successfully identify and respond to emerging trends in the mattress and pillow industry;
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•
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our ability to successfully launch new products;
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•
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our ability to effectively sell our products through our distribution channels in volumes sufficient to drive growth and leverage our cost structure and advertising spending;
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•
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our ability to reduce costs, including our ability to align our cost structure with sales in the existing economic environment;
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•
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our ability to successfully manage our relationships with our major customers;
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•
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our ability to absorb fluctuations in commodity costs;
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•
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our ability to maintain efficient, timely and cost-effective production and utilization of our manufacturing capacity; and
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•
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our ability to maintain efficient, timely and cost-effective delivery of our products, and our ability to maintain public recognition of our brands.
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•
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actual or anticipated variations in our quarterly and annual operating results, including those resulting from seasonal variations in our business;
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•
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general economic conditions, such as unemployment, changes in short-term and long-term interest rates and fluctuations in both debt and equity capital markets;
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•
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introductions or announcements of technological innovations or new products by us or our competitors;
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•
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disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to patent, or otherwise protect, our products and technologies;
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•
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changes in estimates by securities analysts of our financial performance or the financial performance of our competitors or major customers or statements by others in the investment community relating to such performance;
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•
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stock repurchase programs;
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•
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bankruptcies of any of our major customers;
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•
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loss of any of our major customers;
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•
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conditions or trends in the mattress industry generally;
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•
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additions or departures of key personnel;
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•
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announcements by us or our competitors or significant retailer customers of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
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•
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announcements by our competitors or our major customers of their quarterly operating results or announcements by our competitors or our major customers of their views on trends in the bedding industry;
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•
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regulatory developments in the U.S. and abroad;
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•
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economic and political factors;
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•
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public announcements or filings with the SEC indicating that significant stockholders, directors or officers are buying or selling shares of our common stock; and
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•
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the declaration or suspension of a cash dividend.
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•
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our ability to issue preferred stock with rights senior to those of the common stock without any further vote or action by the holders of our common stock;
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•
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the requirements that our stockholders provide advance notice when nominating our directors; and
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•
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the inability of our stockholders to convene a stockholders’ meeting without the chairperson of the Board of Directors, the president, or a majority of the Board of Directors first calling the meeting.
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Name
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Location
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Approximate Square Footage
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Title
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Type of Facility
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North America
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Tempur Production USA, LLC
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Albuquerque, New Mexico
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800,000
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Leased
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Hagerstown, Maryland
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615,600
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Leased
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Plainfield, Indiana
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614,000
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Leased
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Manufacturing
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Tempur Production USA, LLC
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Duffield, Virginia
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581,000
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Owned
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Conyers, Georgia
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300,000
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Owned
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Green Island, New York
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257,000
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Leased
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Richmond, California
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241,000
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Owned
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Orlando, Florida
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225,050
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Leased
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Brenham, Texas
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220,500
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Owned
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Batavia, Illinois
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210,000
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Leased
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Manufacturing
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Tempur Production USA, LLC
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Mountain Top, Pennsylvania
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210,000
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Leased
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Trinity, North Carolina
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180,000
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Owned
(a)
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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South Gate, California
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172,000
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Leased
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Manufacturing
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Sealy Canada, Ltd
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Alberta, Canada
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144,500
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Owned
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Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Medina, Ohio
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140,000
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Owned
(a)
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|
Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Williamsport, Maryland
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134,500
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Leased
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|
Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Lacey, Washington
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134,000
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|
Leased
|
|
Manufacturing
|
Sealy Mattress Manufacturing Co., LLC
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Kansas City, Kansas
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122,000
|
|
Leased
|
|
Manufacturing
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Sealy Mattress Manufacturing Co., LLC
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Phoenix, Arizona
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|
120,000
|
|
Leased
|
|
Manufacturing
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Sealy Canada, Ltd
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|
Toronto, Canada
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120,000
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Leased
|
|
Manufacturing
|
Sealy, Inc.
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Trinity, North Carolina
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105,500
|
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Owned
(a)
|
|
Office
|
Sealy Mattress Manufacturing Co., LLC
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St. Paul, Minnesota
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93,600
|
|
Owned
(a)
|
|
Manufacturing
|
Sealy Canada, Ltd
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|
Quebec, Canada
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|
88,000
|
|
Owned
|
|
Manufacturing
|
Sealy Mattress Manufacturing Co., LLC
|
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Denver, Colorado
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|
82,000
|
|
Owned
(a)
|
|
Manufacturing
|
Tempur-Pedic Management, LLC
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Lexington, Kentucky
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|
77,400
|
|
Owned
(a)
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|
Office
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Sealy Mattress Company of Puerto Rico
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Carolina, Puerto Rico
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44,000
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Owned
|
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Manufacturing
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|
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|
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International
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|
|
|
|
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Dan-Foam ApS
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Aarup, Denmark
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523,000
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|
Owned
|
|
Manufacturing
|
Sealy Argentina SRL
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Buenos Aires, Argentina
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|
144,000
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Owned
|
|
Manufacturing
|
Tempur Deutschland GmbH
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Steinhagen, Germany
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|
143,500
|
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Owned
|
|
Warehouse
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Sealy Mattress Company Mexico, S. de R.L. de C.V.
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Toluca, Mexico
|
|
130,500
|
|
Owned
|
|
Manufacturing
|
Tempur UK Ltd
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Middlesex, United Kingdom
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|
61,000
|
|
Leased
|
|
Warehouse
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Tempur France
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Ile de France, France
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|
53,800
|
|
Leased
|
|
Warehouse
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(a)
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|
We have granted a mortgage or otherwise encumbered our interest in this facility as collateral for secured indebtedness.
|
Brunswick Corp.
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Harman International Industries, Inc.
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Polaris Industries Inc.
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Carter's, Inc.
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Hasbro, Inc.
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Select Comfort Corp.
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Columbia Sportswear Co.
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La-Z-Boy
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Steelcase Inc.
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Deckers Outdoor Corp.
|
Leggett & Platt, Inc.
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Tupperware Brands Corp.
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Dorel Industries Inc.
|
Lexmark International, Inc.
|
Under Armour, Inc.
|
Fossil Group, Inc.
|
Lululemon Athletica
|
Williams-Sonoma, Inc.
|
Gildan Activewear Inc.
|
Herman Miller, Inc.
|
Wolverine World Wide, Inc.
|
HanesBrands Inc.
|
Mohawk Industries, Inc.
|
|
Brunswick Corp.
|
Harman International Industries, Inc.
|
Newell Rubbermaid Inc.
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Carter's, Inc.
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Hasbro, Inc.
|
Polaris Industries Inc.
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Columbia Sportswear Co.
|
Jarden Corp.
|
Select Comfort Corp.
|
Deckers Outdoor Corp.
|
Leggett & Platt, Inc.
|
Steelcase Inc.
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Dorel Industries Inc.
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Lexmark International, Inc.
|
Tupperware Brands Corp.
|
Fossil Group, Inc.
|
Mattress Firm Holding Corp.
|
Under Armour, Inc.
|
Gildan Activewear Inc.
|
Herman Miller, Inc.
|
Williams-Sonoma, Inc.
|
HanesBrands Inc.
|
Mohawk Industries, Inc.
|
Wolverine World Wide, Inc.
|
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
||||||||||||
Tempur Sealy International, Inc.
|
|
$
|
100.00
|
|
|
$
|
59.95
|
|
|
$
|
102.72
|
|
|
$
|
104.53
|
|
|
$
|
134.13
|
|
|
$
|
129.98
|
|
S&P 500
|
|
100.00
|
|
|
116.00
|
|
|
153.58
|
|
|
174.60
|
|
|
177.01
|
|
|
198.18
|
|
||||||
2015 Peer Group
|
|
100.00
|
|
|
130.36
|
|
|
198.15
|
|
|
224.53
|
|
|
210.83
|
|
|
217.07
|
|
||||||
2016 Peer Group
|
|
100.00
|
|
|
132.43
|
|
|
190.64
|
|
|
211.58
|
|
|
193.81
|
|
|
202.99
|
|
(in millions, except per common share amounts)
|
|
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||||||||||
Statement of Income Data:
|
2016
|
|
2015
|
|
2014
|
|
2013
(1)
|
|
2012
|
||||||||||
Net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
$
|
2,989.8
|
|
|
$
|
2,464.3
|
|
|
$
|
1,402.9
|
|
Cost of sales
|
1,817.9
|
|
|
1,902.3
|
|
|
1,839.4
|
|
|
1,449.4
|
|
|
688.3
|
|
|||||
Gross profit
|
1,309.4
|
|
|
1,248.9
|
|
|
1,150.4
|
|
|
1,014.9
|
|
|
714.6
|
|
|||||
Operating expense, net
|
893.9
|
|
|
939.8
|
|
|
874.1
|
|
|
771.1
|
|
|
466.3
|
|
|||||
Operating income
|
415.5
|
|
|
309.1
|
|
|
276.3
|
|
|
243.8
|
|
|
248.3
|
|
|||||
Interest expense, net
|
85.2
|
|
|
96.1
|
|
|
91.9
|
|
|
110.8
|
|
|
18.8
|
|
|||||
Loss on extinguishment of debt
|
47.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on disposal, net
|
—
|
|
|
—
|
|
|
23.2
|
|
|
—
|
|
|
—
|
|
|||||
Other (income) expense, net
|
(0.2
|
)
|
|
12.9
|
|
|
(13.7
|
)
|
|
5.0
|
|
|
0.3
|
|
|||||
Income before income taxes
|
283.3
|
|
|
200.1
|
|
|
174.9
|
|
|
128.0
|
|
|
229.2
|
|
|||||
Income tax provision
(2)
|
(86.8
|
)
|
|
(125.4
|
)
|
|
(64.9
|
)
|
|
(49.1
|
)
|
|
(122.4
|
)
|
|||||
Net income before non-controlling interests
|
196.5
|
|
|
74.7
|
|
|
110.0
|
|
|
78.9
|
|
|
106.8
|
|
|||||
Less: net (loss) income attributable to non-controlling interests
|
(5.6
|
)
|
|
1.2
|
|
|
1.1
|
|
|
0.3
|
|
|
—
|
|
|||||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
202.1
|
|
|
$
|
73.5
|
|
|
$
|
108.9
|
|
|
$
|
78.6
|
|
|
$
|
106.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
65.7
|
|
|
$
|
153.9
|
|
|
$
|
62.5
|
|
|
$
|
81.0
|
|
|
$
|
179.3
|
|
Total assets
(3)
|
2,702.6
|
|
|
2,655.5
|
|
|
2,582.7
|
|
|
2,729.9
|
|
|
1,319.5
|
|
|||||
Total debt
(3)
|
1,779.0
|
|
|
1,420.8
|
|
|
1,537.0
|
|
|
1,808.9
|
|
|
1,025.0
|
|
|||||
Capital leases and other debt
|
109.1
|
|
|
34.0
|
|
|
27.7
|
|
|
27.6
|
|
|
—
|
|
|||||
Redeemable non-controlling interest
|
7.6
|
|
|
12.4
|
|
|
12.6
|
|
|
11.5
|
|
|
—
|
|
|||||
Total stockholders' (deficit) equity
|
(12.2
|
)
|
|
290.2
|
|
|
202.7
|
|
|
118.6
|
|
|
22.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial and Operating Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Depreciation and amortization
(4)
|
89.5
|
|
|
93.9
|
|
|
89.7
|
|
|
91.5
|
|
|
42.0
|
|
|||||
Net cash provided by operating activities
|
165.5
|
|
|
234.2
|
|
|
225.2
|
|
|
98.5
|
|
|
189.9
|
|
|||||
Net cash used in investing activities
|
(62.4
|
)
|
|
(59.7
|
)
|
|
(10.4
|
)
|
|
(1,213.0
|
)
|
|
(55.0
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(185.1
|
)
|
|
(90.7
|
)
|
|
(238.1
|
)
|
|
(1,013.4
|
)
|
|
70.8
|
|
|||||
Basic earnings per common share
|
3.43
|
|
|
1.19
|
|
|
1.79
|
|
|
1.30
|
|
|
1.74
|
|
|||||
Diluted earnings per common share
|
3.38
|
|
|
1.17
|
|
|
1.75
|
|
|
1.28
|
|
|
1.70
|
|
|||||
Capital expenditures
|
62.4
|
|
|
65.9
|
|
|
47.5
|
|
|
40.0
|
|
|
50.5
|
|
(1)
|
Includes Sealy results of operations from March 18, 2013 through December 31, 2013. Information presented for periods prior to March 18, 2013 do not include Sealy and as a result, the information may not be comparable.
|
(2)
|
Income tax provision for 2015 includes approximately $60.7 million related to changes in estimate related to the uncertain tax position regarding the Danish Tax Matter, as defined in Note 12, "Income Taxes," in our Consolidated Financial Statements included in Part II, ITEM 8 of this Report.
|
(3)
|
Includes issuance of $375.0 million of 2020 Senior Notes in December 2012, with cash proceeds held in escrow at December 31, 2012. The net proceeds from the 2020 Senior Notes were used as part of the financing for the 2013 acquisition of Sealy Corporation and its subsidiaries. Refer to Note
6
, “
Debt
,” in our Consolidated Financial Statements included in Part II, ITEM 8 of this Report for additional information regarding the 2020 Senior Notes.
|
(4)
|
Includes
$16.2 million
,
$22.5 million
,
$13.4 million
,
$16.9 million
,
$5.7 million
in non-cash, stock-based compensation expense related to restricted stock units, performance restricted stock units, deferred stock units and stock options in
2016
,
2015
,
2014
,
2013
, and
2012
, respectively.
|
•
|
an overview of our business and strategy;
|
•
|
factors impacting results of operations;
|
•
|
results of operations including our net sales and costs in the periods presented as well as changes between periods;
|
•
|
expected sources of liquidity for future operations; and
|
•
|
our use of certain non-GAAP financial measures.
|
•
|
Total net sales decreased 0.8% to
$3,127.3 million
from
$3,151.2 million
in 2015. On a constant currency basis, which is a non-GAAP financial measure, total net sales increased 0.7%, with growth in both the North America and International business segments.
|
•
|
Gross margin was
41.9%
as compared to
39.6%
in 2015. Adjusted gross margin, which is a non-GAAP financial measure, was
41.9%
as compared to
40.1%
in 2015.
|
•
|
Net income was
$202.1 million
as compared to
$73.5 million
in 2015. During the fourth quarter of 2015, we re-evaluated our uncertain tax position regarding the Danish Tax Matter. As a result of the re-evaluation, including consideration of certain events that occurred during the fourth quarter of 2015, we recorded a change in estimate of its uncertain tax positions related to this matter of approximately $60.7 million. Adjusted net income, which is a non-GAAP financial measure, increased 21.3% to $242.4 million as compared to $199.9 million in 2015.
|
•
|
Earnings before interest, taxes, depreciation and amortization ("EBITDA"), which is a non-GAAP financial measure, increased
31.3%
to
$510.8 million
as compared to
$388.9 million
in 2015. Adjusted EBITDA, which is a non-GAAP financial measure, increased
14.4%
to
$521.6 million
as compared to
$455.8 million
in 2015.
|
•
|
Operating income increased 34.4% to $
415.5 million
, as compared to $
309.1 million
in 2015. Adjusted operating income, which is a non-GAAP financial measure, was
$425.0 million
, or
13.6%
of net sales, as compared to
$373.8 million
, or
11.9%
of net sales, in 2015.
|
•
|
Earnings per share ("EPS") was
$3.38
as compared to
$1.17
in 2015. Adjusted EPS, which is a non-GAAP financial measure, increased
27.0%
to
$4.05
as compared to adjusted EPS of
$3.19
in 2015. On a constant currency basis, which is a non-GAAP financial measure, adjusted EPS increased 30.7%.
|
(in millions, except percentages and
|
Year Ended December 31,
|
|||||||||||||||||||
per common share amounts)
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Net sales
|
$
|
3,127.3
|
|
|
100.0
|
%
|
|
$
|
3,151.2
|
|
|
100.0
|
%
|
|
$
|
2,989.8
|
|
|
100.0
|
%
|
Cost of sales
|
1,817.9
|
|
|
58.1
|
|
|
1,902.3
|
|
|
60.4
|
|
|
1,839.4
|
|
|
61.5
|
|
|||
Gross profit
|
1,309.4
|
|
|
41.9
|
|
|
1,248.9
|
|
|
39.6
|
|
|
1,150.4
|
|
|
38.5
|
|
|||
Selling and marketing expenses
|
648.5
|
|
|
20.7
|
|
|
648.0
|
|
|
20.6
|
|
|
619.9
|
|
|
20.7
|
|
|||
General, administrative and other expenses
|
278.2
|
|
|
8.9
|
|
|
322.0
|
|
|
10.2
|
|
|
280.6
|
|
|
9.4
|
|
|||
Equity income in earnings of unconsolidated affiliates
|
(13.3
|
)
|
|
(0.4
|
)
|
|
(11.9
|
)
|
|
(0.4
|
)
|
|
(8.3
|
)
|
|
(0.3
|
)
|
|||
Royalty income, net of royalty expense
|
(19.5
|
)
|
|
(0.6
|
)
|
|
(18.3
|
)
|
|
(0.6
|
)
|
|
(18.1
|
)
|
|
(0.6
|
)
|
|||
Operating income
|
415.5
|
|
|
13.3
|
|
|
309.1
|
|
|
9.8
|
|
|
276.3
|
|
|
9.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
85.2
|
|
|
2.7
|
|
|
96.1
|
|
|
3.0
|
|
|
91.9
|
|
|
3.1
|
|
|||
Loss on extinguishment of debt
|
47.2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Loss on disposal, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.2
|
|
|
0.8
|
|
|||
Other (income) expense, net
|
(0.2
|
)
|
|
(0.1
|
)
|
|
12.9
|
|
|
0.5
|
|
|
(13.7
|
)
|
|
(0.4
|
)
|
|||
Total other expense
|
132.2
|
|
|
4.1
|
|
|
109.0
|
|
|
3.5
|
|
|
101.4
|
|
|
3.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
283.3
|
|
|
9.1
|
|
|
200.1
|
|
|
6.3
|
|
|
174.9
|
|
|
5.8
|
|
|||
Income tax provision
|
(86.8
|
)
|
|
(2.8
|
)
|
|
(125.4
|
)
|
|
(4.0
|
)
|
|
(64.9
|
)
|
|
(2.2
|
)
|
|||
Net income before non-controlling interests
|
196.5
|
|
|
6.3
|
|
|
74.7
|
|
|
2.3
|
|
|
110.0
|
|
|
3.6
|
|
|||
Less: Net (loss) income attributable to non-controlling interests
|
(5.6
|
)
|
|
(0.2
|
)
|
|
1.2
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
202.1
|
|
|
6.5
|
%
|
|
$
|
73.5
|
|
|
2.3
|
%
|
|
$
|
108.9
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
$
|
3.38
|
|
|
|
|
$
|
1.17
|
|
|
|
|
$
|
1.75
|
|
|
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
59.8
|
|
|
|
|
62.6
|
|
|
|
|
62.1
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
Consolidated
|
|
North America
|
|
International
|
||||||||||||||||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
Net sales by channel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Retail channel
|
$
|
2,808.4
|
|
|
$
|
2,874.5
|
|
|
$
|
2,750.2
|
|
|
$
|
2,419.4
|
|
|
$
|
2,461.5
|
|
|
$
|
2,308.6
|
|
|
$
|
389.0
|
|
|
$
|
413.0
|
|
|
$
|
441.6
|
|
Other channel
|
318.9
|
|
|
276.7
|
|
|
239.6
|
|
|
150.7
|
|
|
115.7
|
|
|
96.3
|
|
|
168.2
|
|
|
161.0
|
|
|
143.3
|
|
|||||||||
Total net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
$
|
2,989.8
|
|
|
$
|
2,570.1
|
|
|
$
|
2,577.2
|
|
|
$
|
2,404.9
|
|
|
$
|
557.2
|
|
|
$
|
574.0
|
|
|
$
|
584.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net sales by product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Bedding
|
$
|
2,891.5
|
|
|
$
|
2,887.2
|
|
|
$
|
2,726.5
|
|
|
$
|
2,447.8
|
|
|
$
|
2,428.9
|
|
|
$
|
2,261.9
|
|
|
$
|
443.7
|
|
|
$
|
458.3
|
|
|
$
|
464.6
|
|
Other products
|
235.8
|
|
|
264.0
|
|
|
263.3
|
|
|
122.3
|
|
|
148.3
|
|
|
143.0
|
|
|
113.5
|
|
|
115.7
|
|
|
120.3
|
|
|||||||||
Total net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
$
|
2,989.8
|
|
|
$
|
2,570.1
|
|
|
$
|
2,577.2
|
|
|
$
|
2,404.9
|
|
|
$
|
557.2
|
|
|
$
|
574.0
|
|
|
$
|
584.9
|
|
•
|
North America
net sales
decreased
0.3%
. Net sales of Bedding products were relatively flat. Our sales to Mattress Firm decreased approximately $80 million as compared to 2015. Excluding Mattress Firm, our sales increased 4%. Net sales of Other products decreased $26.0 million, or 17.5%, primarily as a result of a decline in net sales of pillows and other accessories. Canada net sales increased 2.9%, and, on a constant currency basis, increased 6.2%.
|
•
|
International
net sales
decreased
2.9%
due to unfavorable foreign exchange rates. On a constant currency basis, our International net sales increased
3.9%
, primarily driven by the success of new product introductions, an increase in direct sales of our Tempur products in Asia-Pacific and an increase in net sales of our Sealy products in Latin America.
|
•
|
North America
net sales increased $172.3 million, or 7.2%. On a constant currency basis, our North America net sales increased approximately 8.5%. The increase was primarily due to a $167.0 million increase in net sales of Bedding products, driven primarily by strong U.S. net sales growth across both the Tempur and Sealy brands, which benefited from new product introductions and 2015 pricing actions. This increase was offset by a 6.3% decrease in Canada net sales due to unfavorable foreign exchange rates. On a constant currency basis, Canada net sales grew 8.6%.
|
•
|
International
net sales decreased $10.9 million, or 1.9%. On a constant currency basis, our International net sales increased approximately 13.2%, primarily due to strong sales growth of our Sealy products in Asia-Pacific and Latin America. Net sales growth was also driven by an increase in sales of Tempur products through Company-owned stores.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
Margin Change
|
|||||||||||||||||||
(in millions, except percentages)
|
Gross Profit
|
|
Gross Margin
|
|
Gross Profit
|
|
Gross Margin
|
|
Gross Profit
|
|
Gross Margin
|
|
2016 vs 2015
|
|
2015 vs 2014
|
|||||||||||
North America
|
$
|
1,017.4
|
|
|
39.6
|
%
|
|
$
|
954.6
|
|
|
37.0
|
%
|
|
$
|
834.8
|
|
|
34.7
|
%
|
|
2.6
|
%
|
|
2.3
|
%
|
International
|
292.0
|
|
|
52.4
|
%
|
|
294.3
|
|
|
51.3
|
%
|
|
315.6
|
|
|
54.0
|
%
|
|
1.1
|
%
|
|
(2.7
|
)%
|
|||
Consolidated
|
$
|
1,309.4
|
|
|
41.9
|
%
|
|
$
|
1,248.9
|
|
|
39.6
|
%
|
|
$
|
1,150.4
|
|
|
38.5
|
%
|
|
2.3
|
%
|
|
1.1
|
%
|
•
|
North America
gross margin increased 260 basis points. The increase was driven primarily by 180 basis points of operational improvements, including sourcing improvements, 50 basis points due to pricing actions, and 30 basis points from favorable product mix.
|
•
|
International
gross margin increased 110 basis points. The increase was driven by 80 basis points of operational improvements and 50 basis points of favorable channel mix, as we expand distribution through more profitable direct-to-consumer channels.
|
•
|
North America
gross margin increased 230 basis points. The increase in gross margin was primarily due to supply chain and sourcing improvements of 210 basis points, a favorable decrease in discounts of 70 basis points driven by fewer floor model discounts and improved participation in our retail cooperative advertising programs and favorable 2015 pricing actions of 50 basis points in 2015 as compared to 2014. These factors were partially offset by unfavorable product mix of 140 basis points, primarily due to the introduction of new products.
|
•
|
International
gross margin declined 270 basis points. The decline in gross margin was driven by unfavorable product mix and manufacturing costs of 160 basis points due to the increase in sales of our Sealy products relative to sales of our Tempur products. The decrease in gross margin was also due to unfavorable channel mix of 110 basis points.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
(in millions)
|
Consolidated
|
|
North America
|
|
International
|
|
Corporate
|
||||||||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Advertising
|
$
|
352.7
|
|
|
$
|
360.5
|
|
|
$
|
316.5
|
|
|
$
|
323.0
|
|
|
$
|
36.2
|
|
|
$
|
37.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other selling and marketing
|
295.8
|
|
|
287.5
|
|
|
169.5
|
|
|
161.1
|
|
|
123.4
|
|
|
122.3
|
|
|
2.9
|
|
|
4.1
|
|
||||||||
General, administrative and other
|
278.2
|
|
|
322.0
|
|
|
127.3
|
|
|
143.6
|
|
|
54.6
|
|
|
57.0
|
|
|
96.3
|
|
|
121.4
|
|
||||||||
Total operating expense
|
$
|
926.7
|
|
|
$
|
970.0
|
|
|
$
|
613.3
|
|
|
$
|
627.7
|
|
|
$
|
214.2
|
|
|
$
|
216.8
|
|
|
$
|
99.2
|
|
|
$
|
125.5
|
|
•
|
North America
operating expenses decreased $14.4 million and decreased 50 basis points as a percentage of net sales. The decrease was primarily driven by decreased incentive compensation expenses, as well as lower overall operating expenses in selling and marketing expenses and general, administrative and other expenses.
|
•
|
International
operating expenses decreased $2.6 million and increased 60 basis points as a percentage of net sales.
|
•
|
Corporate
operating expenses decreased $26.3 million, or 21.0%. Executive management transition and retention compensation decreased $11.6 million and integration costs decreased $4.6 million, and additional costs related to our 2015 Annual Meeting which were not incurred in 2016 were $6.3 million. We also recorded a stock compensation benefit of $3.8 million, representing the fourth quarter change in estimate to reduce accumulated performance based stock compensation amortization to actual cost based on financial results for the year ended December 31, 2016.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
(in millions)
|
Consolidated
|
|
North America
|
|
International
|
|
Corporate
|
||||||||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Advertising
|
$
|
360.5
|
|
|
$
|
326.7
|
|
|
$
|
323.0
|
|
|
$
|
282.3
|
|
|
$
|
37.5
|
|
|
$
|
44.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other selling and marketing
|
287.5
|
|
|
293.2
|
|
|
161.1
|
|
|
172.5
|
|
|
122.3
|
|
|
117.8
|
|
|
4.1
|
|
|
2.9
|
|
||||||||
General and administrative
|
322.0
|
|
|
280.6
|
|
|
143.6
|
|
|
131.0
|
|
|
57.0
|
|
|
54.9
|
|
|
121.4
|
|
|
94.7
|
|
||||||||
Total operating expense
|
$
|
970.0
|
|
|
$
|
900.5
|
|
|
$
|
627.7
|
|
|
$
|
585.8
|
|
|
$
|
216.8
|
|
|
$
|
217.1
|
|
|
$
|
125.5
|
|
|
$
|
97.6
|
|
•
|
North America
operating expenses increased
$41.9 million
but remained flat as a percentage of net sales. This increase was primarily driven by a
$40.7 million
increase in advertising expense, driven primarily by improved participation in our retail cooperative advertising programs.
|
•
|
International
operating expenses remained relatively flat and increased 70 basis points as a percentage of net sales.
|
•
|
Corporate
operating expenses increased
$27.9 million
, or
28.6%
. The increase was primarily driven by a $26.7 million increase in general, administrative and other expenses, including $14.5 million of executive transition and related retention expenses and $3.2 million of restructuring costs related to headcount reductions. We also incurred $6.3 million in 2015 of additional costs related to our 2015 Annual Meeting and related issues.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
Margin Change
|
|||||||||||||||||||
(in millions, except percentages)
|
Operating Income
|
|
Operating Margin
|
|
Operating Income
|
|
Operating Margin
|
|
Operating Income
|
|
Operating Margin
|
|
2016 vs 2015
|
|
2015 vs 2014
|
|||||||||||
North America
|
$
|
411.8
|
|
|
16.0
|
%
|
|
$
|
335.6
|
|
|
13.0
|
%
|
|
$
|
255.0
|
|
|
10.6
|
%
|
|
3.0
|
%
|
|
2.4
|
%
|
International
|
102.7
|
|
|
18.4
|
%
|
|
98.9
|
|
|
17.2
|
%
|
|
118.8
|
|
|
20.3
|
%
|
|
1.2
|
%
|
|
(3.1
|
)%
|
|||
|
514.5
|
|
|
|
|
434.5
|
|
|
|
|
373.8
|
|
|
|
|
|
|
|
||||||||
Corporate expenses
|
(99.0
|
)
|
|
|
|
(125.4
|
)
|
|
|
|
(97.5
|
)
|
|
|
|
|
|
|
||||||||
Total operating income
|
$
|
415.5
|
|
|
13.3
|
%
|
|
$
|
309.1
|
|
|
9.8
|
%
|
|
$
|
276.3
|
|
|
9.2
|
%
|
|
3.5
|
%
|
|
0.6
|
%
|
•
|
North America
operating income increased $76.2 million and operating margin improved 300 basis points. The improvement in operating margin was primarily driven by improved gross margin of 230 basis points and an improvement in operating expense leverage of 50 basis points.
|
•
|
International
operating income increased $3.8 million and operating margin improved 120 basis points. The improvement in operating margin was primarily driven by improved gross margin of 110 basis points.
|
•
|
Corporate
operating expenses decreased $26.4 million, as discussed above, which improved our consolidated operating margin by 80 basis points.
|
•
|
North America
operating income increased $80.6 million and operating margin improved 240 basis points. The improvement in operating margin was primarily driven by improved gross margin of 230 basis points.
|
•
|
International
operating income decreased $19.9 million and operating margin decreased 310 basis points. The decrease in operating margin was primarily driven by a decrease in gross margin of 270 basis points and a decrease in operating expense leverage of 50 basis points.
|
•
|
Corporate
operating expenses increased $27.9 million, as discussed above, which reduced our consolidated operating margin by 90 basis points.
|
|
Year Ended December 31,
|
|
Percent change
|
||||||||||||||
(in millions, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||
Interest expense, net
|
$
|
85.2
|
|
|
$
|
96.1
|
|
|
$
|
91.9
|
|
|
(11.3
|
)%
|
|
4.6
|
%
|
|
Year Ended December 31,
|
|
Percent change
|
||||||||||||||
(in millions, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||
Other (income) expense, net
|
$
|
(0.2
|
)
|
|
$
|
12.9
|
|
|
$
|
(13.7
|
)
|
|
(101.6
|
)%
|
|
194.2
|
%
|
|
Year Ended December 31,
|
|
Percent change
|
||||||||||||||
(in millions, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||
Income tax
|
$
|
86.8
|
|
|
$
|
125.4
|
|
|
$
|
64.9
|
|
|
(30.8
|
)%
|
|
93.2
|
%
|
Effective tax rate
|
30.6
|
%
|
|
62.7
|
%
|
|
37.1
|
%
|
|
(32.1
|
)%
|
|
25.6
|
%
|
|
Year Ended December 31,
|
||||||||||||
(in millions, except percentages and per common share amounts)
|
2016
|
|
2015
|
|
% Change
|
|
% Change Constant Currency
(1)
|
||||||
Net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
(0.8
|
)%
|
|
0.7
|
%
|
Net income
|
202.1
|
|
|
73.5
|
|
|
175.0
|
%
|
|
184.4
|
%
|
||
EPS
|
3.38
|
|
|
1.17
|
|
|
188.9
|
%
|
|
199.1
|
%
|
||
Adjusted EPS
(1)
|
4.05
|
|
|
3.19
|
|
|
27.0
|
%
|
|
30.7
|
%
|
||
EBITDA
(1)
|
510.8
|
|
|
388.9
|
|
|
31.3
|
%
|
|
34.1
|
%
|
||
Adjusted EBITDA
(1)
|
521.6
|
|
|
455.8
|
|
|
14.4
|
%
|
|
16.8
|
%
|
(1)
|
|
Non-GAAP financial measure. Please refer to the reconciliations in the following tables.
|
|
Year Ended
|
||||||
(in millions, except per share amounts)
|
December 31, 2016
|
|
December 31, 2015
|
||||
GAAP net income
|
$
|
202.1
|
|
|
$
|
73.5
|
|
Integration costs
(1)
|
2.0
|
|
|
28.7
|
|
||
German legal settlement
(2)
|
—
|
|
|
17.6
|
|
||
Executive management transition and retention compensation
(3)
|
3.0
|
|
|
16.2
|
|
||
Restructuring costs
(4)
|
8.3
|
|
|
13.5
|
|
||
Stock compensation benefit
(5)
|
(3.8
|
)
|
|
—
|
|
||
Interest expense and financing costs
(6)
|
2.1
|
|
|
12.0
|
|
||
Other income
(7)
|
—
|
|
|
(9.5
|
)
|
||
2015 Annual Meeting costs
(8)
|
—
|
|
|
6.3
|
|
||
Pension settlement
(9)
|
—
|
|
|
1.3
|
|
||
Loss on extinguishment of debt
(10)
|
47.2
|
|
|
—
|
|
||
Tax adjustments
(11)
|
(18.5
|
)
|
|
40.3
|
|
||
Adjusted net income
|
$
|
242.4
|
|
|
$
|
199.9
|
|
|
|
|
|
||||
Adjusted earnings per share, diluted
|
$
|
4.05
|
|
|
$
|
3.19
|
|
|
|
|
|
||||
Diluted shares outstanding
|
59.8
|
|
|
62.6
|
|
(1)
|
Integration costs represents costs, including legal fees, professional fees, compensation costs and other charges related to the transition of manufacturing facilities, and other costs related to the continued alignment of the North America business segment related to the Sealy Acquisition.
|
(2)
|
German legal settlement represents the previously announced €15.5 million ($17.6 million) settlement we reached in 2015 with the FCO to fully resolve the FCO's antitrust investigation, and related legal fees.
|
(3)
|
Executive management transition and retention compensation represents certain costs associated with the transition of certain of the Company's executive officers following the 2015 Annual Meeting.
|
(4)
|
Restructuring costs represent costs associated with headcount reduction and store closures.
|
(5)
|
Stock compensation benefit represents the fourth quarter change in estimate to reduce accumulated performance based stock compensation amortization to actual cost based on financial results for the year ended December 31, 2016.
|
(6)
|
Interest expense and financing costs in 2015 represents non-cash interest costs related to the accelerated amortization of deferred financing costs associated with the $493.8 million voluntary prepayment of our term loans, subsequent to our issuance of $450 million aggregate principal amount of 2023 Senior Notes. Interest expense in 2016 represents incremental interest incurred with respect to the 2026 Senior Notes sold in the second quarter of 2016 and 2020 Senior Notes, which were repaid with the proceeds of the new 2026 Senior Notes.
|
(7)
|
Other income includes income from a partial settlement of a legal dispute.
|
(8)
|
2015 Annual Meeting costs represent additional costs related to our 2015 Annual Meeting and related issues.
|
(9)
|
Pension settlement represents pension expense recorded in conjunction with a settlement offered to terminated, vested participants in a defined benefit pension plan.
|
(10)
|
Loss on extinguishment of debt represents costs associated with the completion of the 2016 Credit Agreement and 2026 Senior Notes offering in the second quarter of 2016.
|
(11)
|
Tax adjustments represent adjustments associated with the aforementioned items and other discrete income tax events.
|
|
FULL YEAR 2016
|
|||||||||||||||||||||||
(in millions, except percentages)
|
Consolidated
|
|
Margin
|
|
North America
(1) |
|
Margin
|
|
International
(2) |
|
Margin
|
|
Corporate
(3) |
|||||||||||
Net sales
|
$
|
3,127.3
|
|
|
|
|
$
|
2,570.1
|
|
|
|
|
$
|
557.2
|
|
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit
|
$
|
1,309.4
|
|
|
41.9
|
%
|
|
$
|
1,017.4
|
|
|
39.6
|
%
|
|
$
|
292.0
|
|
|
52.4
|
%
|
|
$
|
—
|
|
Adjustments
|
2.1
|
|
|
|
|
1.0
|
|
|
|
|
1.1
|
|
|
|
|
—
|
|
|||||||
Adjusted gross profit
|
$
|
1,311.5
|
|
|
41.9
|
%
|
|
$
|
1,018.4
|
|
|
39.6
|
%
|
|
$
|
293.1
|
|
|
52.6
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (expense)
|
$
|
415.5
|
|
|
13.3
|
%
|
|
$
|
411.8
|
|
|
16.0
|
%
|
|
$
|
102.7
|
|
|
18.4
|
%
|
|
$
|
(99.0
|
)
|
Adjustments
|
9.5
|
|
|
|
|
1.6
|
|
|
|
|
5.8
|
|
|
|
|
2.1
|
|
|||||||
Adjusted operating income (expense)
|
$
|
425.0
|
|
|
13.6
|
%
|
|
$
|
413.4
|
|
|
16.1
|
%
|
|
$
|
108.5
|
|
|
19.5
|
%
|
|
$
|
(96.9
|
)
|
(1)
|
Adjustments for the North America business segment represent integration costs, which include professional fees, compensation costs and other charges related to the transition of manufacturing facilities, and other costs to support the continued alignment of the North America business related to the Sealy Acquisition. In addition, restructuring costs were incurred for the early termination of certain leased facilities.
|
(2)
|
Adjustments for the International business segment represent restructuring costs related to headcount reduction and store closures.
|
(3)
|
Adjustments for Corporate represent executive management transition and retention costs, integration costs which include professional fees and other charges to align the business related to the Sealy Acquisition, and restructuring costs related to headcount reductions. In addition, we recognized a stock compensation benefit, which represents the reduction of performance based stock compensation amortization based on financial results for the year ended December 31, 2016.
|
|
FULL YEAR 2015
|
|||||||||||||||||||||||
(in millions, except percentages)
|
Consolidated
|
|
Margin
|
|
North America
(1) |
|
Margin
|
|
International
(2) |
|
Margin
|
|
Corporate
(3) |
|||||||||||
Net sales
|
$
|
3,151.2
|
|
|
|
|
$
|
2,577.2
|
|
|
|
|
$
|
574.0
|
|
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit
|
$
|
1,248.9
|
|
|
39.6
|
%
|
|
$
|
954.6
|
|
|
37.0
|
%
|
|
$
|
294.3
|
|
|
51.3
|
%
|
|
$
|
—
|
|
Adjustments
|
15.4
|
|
|
|
|
12.6
|
|
|
|
|
2.8
|
|
|
|
|
—
|
|
|||||||
Adjusted gross profit
|
$
|
1,264.3
|
|
|
40.1
|
%
|
|
$
|
967.2
|
|
|
37.5
|
%
|
|
$
|
297.1
|
|
|
51.8
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (expense)
|
$
|
309.1
|
|
|
9.8
|
%
|
|
$
|
335.6
|
|
|
13.0
|
%
|
|
$
|
98.9
|
|
|
17.2
|
%
|
|
$
|
(125.4
|
)
|
Adjustments
|
64.7
|
|
|
|
|
25.5
|
|
|
|
|
8.8
|
|
|
|
|
30.4
|
|
|||||||
Adjusted operating income (expense)
|
$
|
373.8
|
|
|
11.9
|
%
|
|
$
|
361.1
|
|
|
14.0
|
%
|
|
$
|
107.7
|
|
|
18.8
|
%
|
|
$
|
(95.0
|
)
|
(1)
|
Adjustments for the North America business segment represent integration costs, which include professional fees, compensation costs and other charges related to the transition of manufacturing facilities, and other costs to support the continued alignment of the North America business related to the Sealy Acquisition, certain restructuring costs, and pension settlement costs, as well as executive management transition and retention costs.
|
(2)
|
Adjustments for the International business segment represent certain restructuring costs, as well as executive management transition and retention costs.
|
(3)
|
Adjustments for Corporate represent executive management transition and retention costs, integration costs which include professional fees and other charges to align the business related to the Sealy Acquisition, and certain restructuring costs, as well as executive management transition and retention costs.
|
•
|
Net income to EBITDA and adjusted EBITDA
|
•
|
Total debt to consolidated funded debt less qualified cash
|
•
|
Ratio of consolidated funded debt less qualified cash to adjusted EBITDA
|
|
|
Year Ended
|
||||||
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
GAAP net income
|
|
$
|
202.1
|
|
|
$
|
73.5
|
|
Interest expense
|
|
85.2
|
|
|
96.1
|
|
||
Loss on extinguishment of debt
|
|
47.2
|
|
|
—
|
|
||
Income taxes
|
|
86.8
|
|
|
125.4
|
|
||
Depreciation and amortization
|
|
89.5
|
|
|
93.9
|
|
||
EBITDA
|
|
$
|
510.8
|
|
|
$
|
388.9
|
|
Adjustments:
|
|
|
|
|
||||
Restructuring costs
(1)
|
|
7.8
|
|
|
11.9
|
|
||
Integration costs
(2)
|
|
2.0
|
|
|
28.6
|
|
||
Executive management transition and retention compensation
(3)
|
|
1.0
|
|
|
10.7
|
|
||
Pension settlement
(4)
|
|
—
|
|
|
1.3
|
|
||
Other income
(5)
|
|
—
|
|
|
(9.5
|
)
|
||
German legal settlement
(6)
|
|
—
|
|
|
17.6
|
|
||
2015 Annual Meeting costs
(7)
|
|
—
|
|
|
6.3
|
|
||
Adjusted EBITDA
|
|
$
|
521.6
|
|
|
$
|
455.8
|
|
|
|
|
|
|
||||
Consolidated funded debt less qualified cash
|
|
$
|
1,879.5
|
|
|
$
|
1,358.3
|
|
|
|
|
|
|
||||
Ratio of consolidated funded debt less qualified cash to Adjusted EBITDA
|
|
3.60 times
|
|
2.98 times
|
(1)
|
Restructuring costs represent costs associated with headcount reduction and store closures.
|
(2)
|
Integration costs represents costs, including legal fees, professional fees, compensation costs and other charges related to the transition of manufacturing facilities, and other costs related to the continued alignment of the North America business segment related to the Sealy Acquisition.
|
(3)
|
Executive management transition and retention compensation represents certain costs associated with the transition of certain of our executive officers following the 2015 Annual Meeting.
|
(4)
|
Pension settlement represents pension expense recorded in conjunction with a settlement offered to terminated, vested participants in a defined benefit pension plan.
|
(5)
|
Other income includes income from a partial settlement of a legal dispute.
|
(6)
|
German legal settlement represents the previously announced €15.5 million ($17.6 million) settlement we reached in 2015 with the FCO to fully resolve the FCO's antitrust investigation, and related legal fees.
|
(7)
|
2015 Annual Meeting costs represent additional costs related to our 2015 Annual Meeting and related issues.
|
(in millions)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Total debt, net
|
$
|
1,888.1
|
|
|
$
|
1,454.8
|
|
Plus: Deferred financing costs
(1)
|
12.9
|
|
|
24.8
|
|
||
Total debt
|
1,901.0
|
|
|
1,479.6
|
|
||
Plus: Letters of credit outstanding
|
23.0
|
|
|
19.8
|
|
||
Consolidated funded debt
|
$
|
1,924.0
|
|
|
$
|
1,499.4
|
|
Less:
|
|
|
|
||||
Domestic qualified cash
(2)
|
12.7
|
|
|
121.8
|
|
||
Foreign qualified cash
(2)
|
31.8
|
|
|
19.3
|
|
||
Consolidated funded debt less qualified cash
|
$
|
1,879.5
|
|
|
$
|
1,358.3
|
|
(1)
|
We present deferred financing costs as a direct reduction from the carrying amount of the related debt in the Consolidated Balance Sheets. For purposes of determining total debt for financial covenants, we added these costs back to total debt, net as calculated in the Consolidated Balance Sheets.
|
(2)
|
Qualified cash as defined in the 2016 Credit Agreement and 2012 Credit Agreement equals 100.0% of unrestricted domestic cash plus 60.0% of unrestricted foreign cash. For purposes of calculating leverage ratios, qualified cash is capped at $150.0 million.
|
(in millions)
|
|
Payment Due By Period
|
||||||||||||||||||||||||||
Contractual Obligations
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
After
2021
|
|
Total
Obligations
|
||||||||||||||
Debt
(1)
|
|
$
|
30.0
|
|
|
$
|
30.0
|
|
|
$
|
37.5
|
|
|
$
|
52.5
|
|
|
$
|
591.9
|
|
|
$
|
1,050.0
|
|
|
$
|
1,791.9
|
|
Letters of credit
|
|
23.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.0
|
|
|||||||
Interest payments
(2)
|
|
75.0
|
|
|
70.7
|
|
|
70.0
|
|
|
68.4
|
|
|
60.8
|
|
|
190.4
|
|
|
535.3
|
|
|||||||
Operating leases
|
|
24.6
|
|
|
18.8
|
|
|
15.1
|
|
|
9.6
|
|
|
8.2
|
|
|
12.3
|
|
|
88.6
|
|
|||||||
Capital lease obligations and other
|
|
40.3
|
|
|
4.9
|
|
|
5.4
|
|
|
6.0
|
|
|
6.7
|
|
|
45.8
|
|
|
109.1
|
|
|||||||
Pension obligations
|
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|
1.1
|
|
|
22.9
|
|
|
28.0
|
|
|||||||
Total
(3)
|
|
$
|
193.9
|
|
|
$
|
125.4
|
|
|
$
|
129.0
|
|
|
$
|
137.5
|
|
|
$
|
668.7
|
|
|
$
|
1,321.4
|
|
|
$
|
2,575.9
|
|
(1)
|
Debt excludes capital lease obligations and other and deferred financing costs.
|
(2)
|
Interest payments represent obligations under our debt outstanding as of
December 31, 2016
, applying
December 31, 2016
interest rates and assuming scheduled payments are paid as contractually required through maturity.
|
(3)
|
Uncertain tax positions are excluded from this table given the timing of payments cannot be reasonably estimated.
|
INDEX TO HISTORICAL FINANCIAL STATEMENTS
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
$
|
2,989.8
|
|
Cost of sales
|
1,817.9
|
|
|
1,902.3
|
|
|
1,839.4
|
|
|||
Gross profit
|
1,309.4
|
|
|
1,248.9
|
|
|
1,150.4
|
|
|||
Selling and marketing expenses
|
648.5
|
|
|
648.0
|
|
|
619.9
|
|
|||
General, administrative and other expenses
|
278.2
|
|
|
322.0
|
|
|
280.6
|
|
|||
Equity income in earnings of unconsolidated affiliates
|
(13.3
|
)
|
|
(11.9
|
)
|
|
(8.3
|
)
|
|||
Royalty income, net of royalty expense
|
(19.5
|
)
|
|
(18.3
|
)
|
|
(18.1
|
)
|
|||
Operating income
|
415.5
|
|
|
309.1
|
|
|
276.3
|
|
|||
|
|
|
|
|
|
||||||
Other expense, net:
|
|
|
|
|
|
||||||
Interest expense, net
|
85.2
|
|
|
96.1
|
|
|
91.9
|
|
|||
Loss on extinguishment of debt
|
47.2
|
|
|
—
|
|
|
—
|
|
|||
Loss on disposal, net
|
—
|
|
|
—
|
|
|
23.2
|
|
|||
Other (income) expense, net
|
(0.2
|
)
|
|
12.9
|
|
|
(13.7
|
)
|
|||
Total other expense
|
132.2
|
|
|
109.0
|
|
|
101.4
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
283.3
|
|
|
200.1
|
|
|
174.9
|
|
|||
Income tax provision
|
(86.8
|
)
|
|
(125.4
|
)
|
|
(64.9
|
)
|
|||
Net income before non-controlling interests
|
196.5
|
|
|
74.7
|
|
|
110.0
|
|
|||
Less: net (loss) income attributable to non-controlling interests
|
(5.6
|
)
|
|
1.2
|
|
|
1.1
|
|
|||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
202.1
|
|
|
$
|
73.5
|
|
|
$
|
108.9
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.43
|
|
|
$
|
1.19
|
|
|
$
|
1.79
|
|
Diluted
|
$
|
3.38
|
|
|
$
|
1.17
|
|
|
$
|
1.75
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
59.0
|
|
|
61.7
|
|
|
60.8
|
|
|||
Diluted
|
59.8
|
|
|
62.6
|
|
|
62.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income before non-controlling interests
|
$
|
196.5
|
|
|
$
|
74.7
|
|
|
$
|
110.0
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of tax
|
(4.5
|
)
|
|
(61.4
|
)
|
|
(38.4
|
)
|
|||
Net change in unrecognized gain on interest rate swap, net of tax
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|||
Net change in pension benefits, net of tax
|
(0.8
|
)
|
|
1.0
|
|
|
(5.6
|
)
|
|||
Unrealized (loss) income on cash flow hedging derivatives, net of tax
|
(6.0
|
)
|
|
5.3
|
|
|
1.3
|
|
|||
Other comprehensive loss, net of tax
|
(11.3
|
)
|
|
(54.4
|
)
|
|
(42.0
|
)
|
|||
Comprehensive income
|
185.2
|
|
|
20.3
|
|
|
68.0
|
|
|||
Less: Comprehensive (loss) income attributable to non-controlling interests
|
(5.6
|
)
|
|
1.2
|
|
|
1.1
|
|
|||
Comprehensive income attributable to Tempur Sealy International, Inc.
|
$
|
190.8
|
|
|
$
|
19.1
|
|
|
$
|
66.9
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
65.7
|
|
|
$
|
153.9
|
|
Accounts receivable, net
|
345.1
|
|
|
379.4
|
|
||
Inventories
|
196.8
|
|
|
199.2
|
|
||
Prepaid expenses and other current assets
|
63.9
|
|
|
76.6
|
|
||
Total Current Assets
|
671.5
|
|
|
809.1
|
|
||
Property, plant and equipment, net
|
422.2
|
|
|
361.7
|
|
||
Goodwill
|
722.5
|
|
|
709.4
|
|
||
Other intangible assets, net
|
678.7
|
|
|
695.4
|
|
||
Deferred income taxes
|
22.5
|
|
|
12.2
|
|
||
Other non-current assets
|
185.2
|
|
|
67.7
|
|
||
Total Assets
|
$
|
2,702.6
|
|
|
$
|
2,655.5
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
219.3
|
|
|
$
|
266.3
|
|
Accrued expenses and other current liabilities
|
250.1
|
|
|
254.0
|
|
||
Income taxes payable
|
5.8
|
|
|
11.2
|
|
||
Current portion of long-term debt
|
70.3
|
|
|
181.5
|
|
||
Total Current Liabilities
|
545.5
|
|
|
713.0
|
|
||
Long-term debt, net
|
1,817.8
|
|
|
1,273.3
|
|
||
Deferred income taxes
|
174.6
|
|
|
195.4
|
|
||
Other non-current liabilities
|
169.3
|
|
|
171.2
|
|
||
Total Liabilities
|
2,707.2
|
|
|
2,352.9
|
|
||
|
|
|
|
||||
Redeemable non-controlling interest
|
7.6
|
|
|
12.4
|
|
||
|
|
|
|
||||
Stockholders' (Deficit) Equity:
|
|
|
|
||||
Common stock, $0.01 par value, 300.0 million shares authorized; 99.2 million shares issued as of December 31, 2016 and 2015
|
1.0
|
|
|
1.0
|
|
||
Additional paid in capital
|
492.8
|
|
|
463.4
|
|
||
Retained earnings
|
1,312.4
|
|
|
1,110.3
|
|
||
Accumulated other comprehensive loss
|
(121.4
|
)
|
|
(110.1
|
)
|
||
Treasury stock at cost; 44.8 million and 36.8 million shares as of December 31, 2016 and 2015, respectively
|
(1,700.0
|
)
|
|
(1,174.4
|
)
|
||
Total stockholders' (deficit) equity, net of non-controlling interests in subsidiaries
|
(15.2
|
)
|
|
290.2
|
|
||
Non-controlling interest in subsidiaries
|
3.0
|
|
|
—
|
|
||
Total Stockholders' (Deficit) Equity
|
(12.2
|
)
|
|
290.2
|
|
||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' (Deficit) Equity
|
$
|
2,702.6
|
|
|
$
|
2,655.5
|
|
|
|
|
Tempur Sealy International, Inc. Stockholders' Equity (Deficit)
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Redeemable
Non-controlling Interest
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Non-controlling Interest in Subsidiaries
|
|
Total Stockholders' Equity (Deficit)
|
||||||||||||||||||||||
|
|
Shares Issued
|
|
At Par
|
|
Shares Issued
|
|
At Cost
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
|
|
||||||||||||||||||||||
Balance, December 31, 2013
|
$
|
11.5
|
|
|
99.2
|
|
|
$
|
1.0
|
|
|
38.6
|
|
|
$
|
(1,193.1
|
)
|
|
$
|
396.5
|
|
|
$
|
927.9
|
|
|
$
|
(13.7
|
)
|
|
$
|
—
|
|
|
$
|
118.6
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
108.9
|
|
|
|
|
|
|
108.9
|
|
||||||||||||||||
Net income attributable to non-controlling interest
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjustment to pension liability, net of tax of $(3.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.6
|
)
|
|
|
|
(5.6
|
)
|
||||||||||||||||
Derivative instruments accounted for as hedges, net of tax of $(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.0
|
|
|
|
|
2.0
|
|
||||||||||||||||
Foreign currency adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(38.4
|
)
|
|
|
|
(38.4
|
)
|
||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
(0.2
|
)
|
|
2.5
|
|
|
1.8
|
|
|
|
|
|
|
|
|
4.3
|
|
||||||||||||||
Issuances of PRSUs, RSUs, and DSUs
|
|
|
|
|
|
|
(0.1
|
)
|
|
1.5
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Tax adjustments related to stock compensation
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
1.7
|
|
||||||||||||||||
Treasury stock repurchased
|
|
|
|
|
|
|
|
|
(2.2
|
)
|
|
|
|
|
|
|
|
|
|
(2.2
|
)
|
||||||||||||||||
Amortization of unearned stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
13.4
|
|
|
|
|
|
|
|
|
13.4
|
|
||||||||||||||||
Balance, December 31, 2014
|
$
|
12.6
|
|
|
99.2
|
|
|
$
|
1.0
|
|
|
38.3
|
|
|
$
|
(1,191.3
|
)
|
|
$
|
411.9
|
|
|
$
|
1,036.8
|
|
|
$
|
(55.7
|
)
|
|
$
|
—
|
|
|
$
|
202.7
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
73.5
|
|
|
|
|
|
|
73.5
|
|
||||||||||||||||
Net income attributable to non-controlling interest
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Distributions paid to non-controlling interest
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Adjustment to pension liability, net of tax of $0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
|
|
|
1.0
|
|
||||||||||||||||
Derivative instruments accounted for as hedges, net of tax of $(2.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.0
|
|
|
|
|
6.0
|
|
||||||||||||||||
Foreign currency adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(61.4
|
)
|
|
|
|
(61.4
|
)
|
||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
(1.3
|
)
|
|
16.5
|
|
|
3.9
|
|
|
|
|
|
|
|
|
20.4
|
|
||||||||||||||
Treasury stock issued to CEO
|
|
|
|
|
|
|
(0.1
|
)
|
|
0.9
|
|
|
4.1
|
|
|
|
|
|
|
|
|
5.0
|
|
||||||||||||||
Issuances of PRSUs, RSUs, and DSUs
|
|
|
|
|
|
|
(0.1
|
)
|
|
0.8
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Tax adjustments related to stock compensation
|
|
|
|
|
|
|
|
|
|
|
21.8
|
|
|
|
|
|
|
|
|
21.8
|
|
||||||||||||||||
Treasury stock repurchased
|
|
|
|
|
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
(1.3
|
)
|
||||||||||||||||
Amortization of unearned stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
22.5
|
|
|
|
|
|
|
|
|
22.5
|
|
||||||||||||||||
Balance, December 31, 2015
|
$
|
12.4
|
|
|
99.2
|
|
|
$
|
1.0
|
|
|
36.8
|
|
|
$
|
(1,174.4
|
)
|
|
$
|
463.4
|
|
|
$
|
1,110.3
|
|
|
$
|
(110.1
|
)
|
|
$
|
—
|
|
|
$
|
290.2
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
202.1
|
|
|
|
|
|
|
202.1
|
|
||||||||||||||||
Net loss attributable to non-controlling interests
|
(4.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|||||||||||||||
Acquisition of non-controlling interest in subsidiary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.8
|
|
|
3.8
|
|
||||||||||||||||
Adjustment to pension liability, net of tax of $(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
(0.8
|
)
|
||||||||||||||||
Derivative instruments accounted for as hedges, net of tax of $(2.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6.0
|
)
|
|
|
|
(6.0
|
)
|
||||||||||||||||
Foreign currency adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4.5
|
)
|
|
|
|
(4.5
|
)
|
||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
(0.6
|
)
|
|
7.9
|
|
|
7.8
|
|
|
|
|
|
|
|
|
15.7
|
|
||||||||||||||
Issuances of PRSUs, RSUs, and DSUs
|
|
|
|
|
|
|
(0.1
|
)
|
|
1.5
|
|
|
(1.6
|
)
|
|
|
|
|
|
|
|
(0.1
|
)
|
||||||||||||||
Tax adjustments related to stock compensation
|
|
|
|
|
|
|
|
|
|
|
7.0
|
|
|
|
|
|
|
|
|
7.0
|
|
||||||||||||||||
Treasury stock repurchased
|
|
|
|
|
|
|
8.7
|
|
|
(533.0
|
)
|
|
|
|
|
|
|
|
|
|
(533.0
|
)
|
|||||||||||||||
Treasury stock repurchased - PRSU/RSU/DSU releases
|
|
|
|
|
|
|
—
|
|
|
(2.0
|
)
|
|
|
|
|
|
|
|
|
|
(2.0
|
)
|
|||||||||||||||
Amortization of unearned stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
16.2
|
|
|
|
|
|
|
|
|
16.2
|
|
||||||||||||||||
Balance, December 31, 2016
|
$
|
7.6
|
|
|
99.2
|
|
|
$
|
1.0
|
|
|
44.8
|
|
|
$
|
(1,700.0
|
)
|
|
$
|
492.8
|
|
|
$
|
1,312.4
|
|
|
$
|
(121.4
|
)
|
|
$
|
3.0
|
|
|
$
|
(12.2
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income before non-controlling interests
|
$
|
196.5
|
|
|
$
|
74.7
|
|
|
$
|
110.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
73.3
|
|
|
71.4
|
|
|
76.3
|
|
|||
Amortization of stock-based compensation
|
16.2
|
|
|
22.5
|
|
|
13.4
|
|
|||
Amortization of deferred financing costs
|
3.5
|
|
|
20.3
|
|
|
12.5
|
|
|||
Bad debt expense
|
4.2
|
|
|
6.9
|
|
|
4.9
|
|
|||
Deferred income taxes
|
(31.1
|
)
|
|
(21.3
|
)
|
|
(27.2
|
)
|
|||
Dividends received from unconsolidated affiliates
|
10.8
|
|
|
9.1
|
|
|
2.0
|
|
|||
Equity income in earnings of unconsolidated affiliates
|
(13.3
|
)
|
|
(11.9
|
)
|
|
(8.3
|
)
|
|||
Non-cash interest expense on 8.0% Sealy Notes
|
4.0
|
|
|
6.3
|
|
|
5.1
|
|
|||
Loss on extinguishment of debt
|
47.2
|
|
|
—
|
|
|
—
|
|
|||
Loss on sale of assets
|
1.3
|
|
|
1.5
|
|
|
3.9
|
|
|||
Loss on disposal of business
|
—
|
|
|
—
|
|
|
23.2
|
|
|||
Foreign currency adjustments and other
|
(0.5
|
)
|
|
5.5
|
|
|
1.8
|
|
|||
Changes in operating assets and liabilities, net of effect of business acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
17.3
|
|
|
(35.3
|
)
|
|
(58.8
|
)
|
|||
Inventories
|
1.5
|
|
|
10.7
|
|
|
(34.0
|
)
|
|||
Prepaid expenses and other assets
|
(124.4
|
)
|
|
(58.7
|
)
|
|
(14.9
|
)
|
|||
Accounts payable
|
(47.8
|
)
|
|
46.1
|
|
|
47.8
|
|
|||
Accrued expenses and other
|
3.5
|
|
|
90.3
|
|
|
56.7
|
|
|||
Income taxes
|
3.3
|
|
|
(3.9
|
)
|
|
10.8
|
|
|||
Net cash provided by operating activities
|
165.5
|
|
|
234.2
|
|
|
225.2
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(8.5
|
)
|
|||
Proceeds from disposition of business
|
—
|
|
|
7.2
|
|
|
43.5
|
|
|||
Purchases of property, plant and equipment
|
(62.4
|
)
|
|
(65.9
|
)
|
|
(47.5
|
)
|
|||
Other
|
—
|
|
|
(1.0
|
)
|
|
2.1
|
|
|||
Net cash used in investing activities
|
(62.4
|
)
|
|
(59.7
|
)
|
|
(10.4
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from borrowings under long-term debt obligations
|
2,233.3
|
|
|
863.5
|
|
|
271.5
|
|
|||
Repayments of borrowings under long-term debt obligations
|
(1,867.7
|
)
|
|
(988.3
|
)
|
|
(510.9
|
)
|
|||
Proceeds from exercise of stock options
|
15.7
|
|
|
20.4
|
|
|
4.3
|
|
|||
Excess tax benefit from stock-based compensation
|
7.0
|
|
|
21.8
|
|
|
1.7
|
|
|||
Treasury stock repurchased
|
(535.0
|
)
|
|
(1.3
|
)
|
|
(2.2
|
)
|
|||
Payment of deferred financing costs
|
(6.9
|
)
|
|
(8.0
|
)
|
|
(3.1
|
)
|
|||
Fees paid to lenders
|
(7.8
|
)
|
|
—
|
|
|
—
|
|
|||
Call premium on 2020 Senior Notes
|
(23.6
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from purchase of treasury shares by CEO
|
—
|
|
|
5.0
|
|
|
—
|
|
|||
Other
|
(0.1
|
)
|
|
(3.8
|
)
|
|
0.6
|
|
|||
Net cash used in financing activities
|
(185.1
|
)
|
|
(90.7
|
)
|
|
(238.1
|
)
|
|||
|
|
|
|
|
|
||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(6.2
|
)
|
|
7.6
|
|
|
4.8
|
|
|||
(Decrease) increase in cash and cash equivalents
|
(88.2
|
)
|
|
91.4
|
|
|
(18.5
|
)
|
|||
CASH AND CASH EQUIVALENTS, beginning of period
|
153.9
|
|
|
62.5
|
|
|
81.0
|
|
|||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
65.7
|
|
|
$
|
153.9
|
|
|
$
|
62.5
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
76.8
|
|
|
$
|
59.9
|
|
|
$
|
73.5
|
|
Income taxes, net of refunds
|
$
|
81.3
|
|
|
$
|
94.9
|
|
|
$
|
56.3
|
|
•
|
Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments.
|
•
|
Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements.
|
|
December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Finished goods
|
$
|
130.1
|
|
|
$
|
126.7
|
|
Work-in-process
|
10.7
|
|
|
14.0
|
|
||
Raw materials and supplies
|
56.0
|
|
|
58.5
|
|
||
|
$
|
196.8
|
|
|
$
|
199.2
|
|
|
Estimated
Useful Lives
(in years)
|
Buildings
|
25-30
|
Computer equipment and software
|
3-5
|
Leasehold improvements
|
4-7
|
Machinery and equipment
|
3-7
|
Office furniture and fixtures
|
5-7
|
|
December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Machinery and equipment
|
$
|
283.9
|
|
|
$
|
257.0
|
|
Land and buildings
|
302.6
|
|
|
243.7
|
|
||
Computer equipment and software
|
97.2
|
|
|
78.2
|
|
||
Furniture and fixtures
|
50.4
|
|
|
52.3
|
|
||
Construction in progress
|
52.9
|
|
|
57.4
|
|
||
Total property, plant, and equipment
|
787.0
|
|
|
688.6
|
|
||
Accumulated depreciation
|
(364.8
|
)
|
|
(326.9
|
)
|
||
Total property, plant and equipment, net
|
$
|
422.2
|
|
|
$
|
361.7
|
|
(in millions)
|
North America
|
|
International
|
|
Consolidated
|
||||||
Balance as of January 1, 2015
|
$
|
574.5
|
|
|
$
|
162.0
|
|
|
$
|
736.5
|
|
Foreign currency translation adjustments and other
|
(11.7
|
)
|
|
(15.4
|
)
|
|
(27.1
|
)
|
|||
Balance as of December 31, 2015
|
$
|
562.8
|
|
|
$
|
146.6
|
|
|
$
|
709.4
|
|
Goodwill resulting from acquisition
|
7.4
|
|
|
—
|
|
|
7.4
|
|
|||
Foreign currency translation adjustments and other
|
1.8
|
|
|
3.9
|
|
|
5.7
|
|
|||
Balance as of December 31, 2016
|
$
|
572.0
|
|
|
$
|
150.5
|
|
|
$
|
722.5
|
|
($ in millions)
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Useful
Lives
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
Unamortized indefinite life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
|
$
|
559.8
|
|
|
$
|
—
|
|
|
$
|
559.8
|
|
|
$
|
558.1
|
|
|
$
|
—
|
|
|
$
|
558.1
|
|
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contractual distributor relationships
|
15
|
|
$
|
85.0
|
|
|
$
|
21.5
|
|
|
$
|
63.5
|
|
|
$
|
84.8
|
|
|
$
|
15.8
|
|
|
$
|
69.0
|
|
Technology and other
|
4-10
|
|
90.4
|
|
|
46.5
|
|
|
43.9
|
|
|
90.8
|
|
|
39.2
|
|
|
51.6
|
|
||||||
Patents, other trademarks and other trade names
|
5-20
|
|
27.1
|
|
|
19.2
|
|
|
7.9
|
|
|
27.2
|
|
|
16.9
|
|
|
10.3
|
|
||||||
Customer databases, relationships and reacquired rights
|
2-5
|
|
24.2
|
|
|
20.6
|
|
|
3.6
|
|
|
24.5
|
|
|
18.1
|
|
|
6.4
|
|
||||||
Total
|
|
|
$
|
786.5
|
|
|
$
|
107.8
|
|
|
$
|
678.7
|
|
|
$
|
785.4
|
|
|
$
|
90.0
|
|
|
$
|
695.4
|
|
(in millions)
|
|
||
2017
|
$
|
18.7
|
|
2018
|
16.1
|
|
|
2019
|
14.3
|
|
|
2020
|
14.6
|
|
|
2021
|
11.9
|
|
(in millions)
|
2016
|
|
2015
|
||||
Current assets
|
$
|
58.6
|
|
|
$
|
50.0
|
|
Non-current assets
|
14.2
|
|
|
15.7
|
|
||
Current liabilities
|
41.8
|
|
|
37.3
|
|
||
Equity
|
31.0
|
|
|
28.4
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
155.2
|
|
|
$
|
131.6
|
|
|
$
|
99.2
|
|
Gross profit
|
101.7
|
|
|
85.0
|
|
|
62.1
|
|
|||
Income from operations
|
32.2
|
|
|
26.2
|
|
|
16.8
|
|
|||
Net income
|
24.8
|
|
|
20.1
|
|
|
13.1
|
|
(in millions)
|
December 31, 2016
|
|
December 31, 2015
|
|
|
||||||||
Debt:
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Maturity Date
|
||||
2016 Credit Agreement:
|
|
|
|
|
|
|
|
|
|
||||
Term A Facility
|
$
|
585.0
|
|
|
(1)
|
|
$
|
—
|
|
|
N/A
|
|
April 6, 2021
|
Revolving Credit Facility
|
156.9
|
|
|
(1)
|
|
—
|
|
|
N/A
|
|
April 6, 2021
|
||
2012 Credit Agreement:
|
|
|
|
|
|
|
|
|
|
||||
Term A Facility
|
—
|
|
|
N/A
|
|
409.4
|
|
|
(2)
|
|
|
||
Term B Facility
|
—
|
|
|
N/A
|
|
100.1
|
|
|
(3)
|
|
|
||
2026 Senior Notes
|
600.0
|
|
|
5.500%
|
|
—
|
|
|
N/A
|
|
June 15, 2026
|
||
2023 Senior Notes
|
450.0
|
|
|
5.625%
|
|
450.0
|
|
|
5.625%
|
|
October 15, 2023
|
||
2020 Senior Notes
|
—
|
|
|
N/A
|
|
375.0
|
|
|
6.875%
|
|
|
||
8.0% Sealy Notes
|
—
|
|
|
8.0%
|
|
111.1
|
|
|
8.0%
|
|
|
||
Capital lease obligations
(4)
|
73.3
|
|
|
|
|
21.2
|
|
|
|
|
Various
|
||
Other
|
35.8
|
|
|
|
|
12.8
|
|
|
|
|
|
||
Total debt
|
1,901.0
|
|
|
|
|
1,479.6
|
|
|
|
|
|
||
Less: deferred financing costs
|
(12.9
|
)
|
|
|
|
(24.8
|
)
|
|
|
|
|
||
Total debt, net
|
1,888.1
|
|
|
|
|
1,454.8
|
|
|
|
|
|
||
Less: current portion
|
(70.3
|
)
|
|
|
|
(181.5
|
)
|
|
|
|
|
||
Total long term debt, net
|
$
|
1,817.8
|
|
|
|
|
$
|
1,273.3
|
|
|
|
|
|
(1)
|
Interest at LIBOR plus applicable margin of 1.50% as of December 31, 2016.
|
(2)
|
Interest at LIBOR plus applicable margin of 2.00% as of December 31, 2015.
|
(3)
|
Interest at LIBOR, subject to a 0.75% floor plus applicable margin of 2.75% as of December 31, 2015.
|
(4)
|
Capital lease obligations are a non-cash financing activity.
|
|
|
Fair Value
|
||||||
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
2020 Senior Notes
|
|
$
|
—
|
|
|
$
|
393.8
|
|
2023 Senior Notes
|
|
468.5
|
|
|
453.4
|
|
||
2026 Senior Notes
|
|
606.8
|
|
|
—
|
|
||
8.0% Sealy Notes
|
|
—
|
|
|
112.7
|
|
(in millions)
|
|
|
||
2017
|
|
$
|
70.3
|
|
2018
|
|
34.9
|
|
|
2019
|
|
42.9
|
|
|
2020
|
|
58.5
|
|
|
2021
|
|
598.6
|
|
|
Thereafter
|
|
1,095.8
|
|
|
Total
|
|
$
|
1,901.0
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
$
|
0.9
|
|
Interest cost
|
1.2
|
|
|
1.9
|
|
|
1.8
|
|
|||
Expected return on assets
|
(1.3
|
)
|
|
(2.2
|
)
|
|
(2.1
|
)
|
|||
Curtailment loss
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Amortization of net gain
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Settlement loss
|
0.2
|
|
|
1.3
|
|
|
—
|
|
|||
Net periodic pension cost
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
0.6
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Net loss
|
$
|
1.5
|
|
|
$
|
0.2
|
|
|
$
|
9.0
|
|
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Amortization or settlement recognition of net (loss) gain
|
(0.2
|
)
|
|
(1.3
|
)
|
|
0.1
|
|
|||
New prior service cost
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Total recognized in other comprehensive loss (income)
|
$
|
1.3
|
|
|
$
|
(1.0
|
)
|
|
$
|
9.0
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate
(a)
|
4.27
|
%
|
|
4.12
|
%
|
|
4.01
|
%
|
Expected long-term return on plan assets
|
6.71
|
%
|
|
7.05
|
%
|
|
7.00
|
%
|
(a)
|
The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were
4.26%
and
4.30%
, respectively. The discount rates used in 2015 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were
3.94%
and
4.20%
, respectively. The discount rates used in 2014 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were
3.94%
and
5.00%
, respectively.
|
(in millions)
|
2016
|
|
2015
|
||||
Change in Benefit Obligation:
|
|
|
|
||||
Projected benefit obligation at beginning of year
|
$
|
28.2
|
|
|
$
|
47.1
|
|
Service cost
|
0.8
|
|
|
0.8
|
|
||
Interest cost
|
1.2
|
|
|
1.9
|
|
||
Plan amendments
|
—
|
|
|
0.1
|
|
||
Actuarial loss (gain)
|
0.8
|
|
|
(3.3
|
)
|
||
Settlements
|
(2.0
|
)
|
|
(16.9
|
)
|
||
Benefits paid
|
(1.1
|
)
|
|
(0.8
|
)
|
||
Expenses paid
|
—
|
|
|
(0.1
|
)
|
||
Foreign currency exchange rate changes
|
0.1
|
|
|
(0.6
|
)
|
||
Projected benefit obligation at end of year
|
$
|
28.0
|
|
|
$
|
28.2
|
|
Change in Plan Assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
13.9
|
|
|
$
|
32.5
|
|
Actual return (loss) on assets
|
0.6
|
|
|
(1.3
|
)
|
||
Employer contribution
|
10.2
|
|
|
1.1
|
|
||
Settlements
|
(2.0
|
)
|
|
(16.9
|
)
|
||
Benefits paid
|
(1.1
|
)
|
|
(0.8
|
)
|
||
Expenses paid
|
—
|
|
|
(0.1
|
)
|
||
Foreign currency exchange rate changes
|
0.1
|
|
|
(0.6
|
)
|
||
Fair value of plan assets at end of year
|
$
|
21.7
|
|
|
$
|
13.9
|
|
Funded status
|
$
|
(6.3
|
)
|
|
$
|
(14.3
|
)
|
|
December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Amounts recognized in the Consolidated Balance Sheets:
|
|
|
|
||||
Non-current benefit liability
|
$
|
6.3
|
|
|
$
|
14.5
|
|
Non-current benefit asset
|
—
|
|
|
0.2
|
|
|
2016
|
|
2015
|
||
Discount rate
(a)
|
4.06
|
%
|
|
4.44
|
%
|
(a)
|
The discount rates used in 2016 to determine the expenses for the U.S. retirement plan and Canadian retirement plan were
4.06%
and
4.10%
, respectively. The discount rates used in 2015 to determine the benefit obligations for the U.S. and Canadian defined benefit pension plans were
4.26%
and
4.30%
, respectively.
|
(in millions)
|
|
||
Fiscal 2017
|
$
|
1.0
|
|
Fiscal 2018
|
1.0
|
|
|
Fiscal 2019
|
1.0
|
|
|
Fiscal 2020
|
1.0
|
|
|
Fiscal 2021
|
1.1
|
|
|
Fiscal 2022 ‑ Fiscal 2026
|
6.6
|
|
|
2016
Target |
|
2016
Actual |
||
Common/collective trust consisting primarily of:
|
|
|
|
||
Equity securities
|
60.00
|
%
|
|
74.51
|
%
|
Debt securities
|
40.00
|
%
|
|
22.53
|
%
|
Other
|
—
|
%
|
|
2.96
|
%
|
Total plan assets
|
100.00
|
%
|
|
100.00
|
%
|
(in millions)
|
2016
|
|
2015
|
||||
Asset Category
|
|
|
|
||||
Common/collective trust
|
|
|
|
||||
U.S. equity
|
$
|
12.5
|
|
|
$
|
7.7
|
|
International equity
|
3.7
|
|
|
2.7
|
|
||
Total equity based funds
|
16.2
|
|
|
10.4
|
|
||
Common/collective trust - fixed income
|
4.9
|
|
|
2.9
|
|
||
Money market funds
|
0.6
|
|
|
0.6
|
|
||
Total
|
$
|
21.7
|
|
|
$
|
13.9
|
|
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Multi‑employer retirement plan expense
|
$
|
4.9
|
|
|
$
|
5.0
|
|
|
$
|
4.7
|
|
Multi‑employer health and welfare plan expense
|
2.8
|
|
|
2.4
|
|
|
2.2
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Pension Fund
|
|
EIN/Pension Plan Number
|
|
Date of Plan Year-End
|
|
Pension Protection Act
Zone Status (1) 2015 |
|
FIP/RP Status
Pending/Implemented (2) |
|
Contributions of the Company 2015
|
|
Surcharge Imposed
(3)
|
|
Expiration Date
of Collective Bargaining Agreement |
|
Year Contributions to Plan Exceeded More than 5 Percent of Total Contributions
|
||||
|
||||||||||||||||||||
United Furniture Workers Pension Fund A
(4)
|
|
13-5511877-001
|
|
2/28/15
|
|
Red
|
|
Implemented
|
|
$
|
1.1
|
|
|
Yes, 10.0%
|
|
2016
|
|
2013, 2014, 2015
|
||
Pension Plan of the National Retirement Fund
|
|
13-6130178-001
|
|
12/31/14
|
|
Red
|
|
Implemented
|
|
$
|
1.2
|
|
|
Yes, 10.0%
|
|
2016
|
|
N/A
|
||
Central States, Southeast & Southwest Areas Pension Plan
|
|
36-6044243-001
|
|
12/31/14
|
|
Red
|
|
Implemented
|
|
$
|
0.5
|
|
|
Yes, 10.0%
|
|
2016
|
|
N/A
|
(1)
|
The Pension Protection Act of 2006 ranks the funded status of multi-employer pension plans depending upon a plan’s current and projected funding. A plan is in the Red Zone (Critical) if it has a current funded percentage of less than
65.0%
. A plan is in the Yellow Zone (Endangered) if it has a current funded percentage of less than
80.0%
, or projects a credit balance deficit within
seven
years. A plan is in the Green Zone (Healthy) if it has a current funded percentage greater than
80.0%
and does not have a projected credit balance deficit within
seven
years. The zone status is based on the plan’s year end rather than the Company’s. The zone status listed for each plan is based on information that the Company received from that plan and is certified by that plan’s actuary for the most recent year available.
|
(2)
|
Funding Improvement Plan or Rehabilitation Plan as defined in the Employee Retirement Income Security Act of 1974 has been implemented or is pending.
|
(3)
|
Indicates whether the Company paid a surcharge to the plan in the most current year due to funding shortfalls and the amount of the surcharge.
|
(4)
|
The Company represented more than
5.0%
of the total contributions for the most recent plan year available. For year ended December 31, 2014, the Company contributed
$0.9 million
to the plan.
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign Currency Translation
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
(115.4
|
)
|
|
$
|
(54.0
|
)
|
|
$
|
(15.6
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
(1)
|
(4.5
|
)
|
|
(61.4
|
)
|
|
(38.4
|
)
|
|||
Tax benefit
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
(119.9
|
)
|
|
$
|
(115.4
|
)
|
|
$
|
(54.0
|
)
|
|
|
|
|
|
|
||||||
Interest Rate Swap Agreement
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
$
|
(1.4
|
)
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Net change from period revaluation:
|
—
|
|
|
3.1
|
|
|
3.0
|
|
|||
Tax expense
(2)
|
—
|
|
|
(1.2
|
)
|
|
(1.2
|
)
|
|||
Total other comprehensive income before reclassifications, net of tax
|
—
|
|
|
1.9
|
|
|
1.8
|
|
|||
Net amount reclassified to earnings
(3)
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|||
Tax benefit
(2)
|
—
|
|
|
0.7
|
|
|
0.8
|
|
|||
Total amount reclassified from accumulated other comprehensive loss, net of tax
|
—
|
|
|
(1.2
|
)
|
|
(1.1
|
)
|
|||
Total other comprehensive income
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|||
Balance at end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.7
|
)
|
|
|
|
|
|
|
||||||
Pension Benefits
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
(1.4
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
3.2
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Net change from period revaluation:
|
(1.5
|
)
|
|
0.2
|
|
|
(9.0
|
)
|
|||
Tax benefit
(2)
|
0.6
|
|
|
—
|
|
|
3.4
|
|
|||
Total other comprehensive (loss) income before reclassifications, net of tax
|
(0.9
|
)
|
|
0.2
|
|
|
(5.6
|
)
|
|||
Net amount reclassified to earnings
|
0.2
|
|
|
1.3
|
|
|
—
|
|
|||
Tax expense
(2)
|
(0.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Total amount reclassified from accumulated other comprehensive loss, net of tax
|
0.1
|
|
|
0.8
|
|
|
—
|
|
|||
Total other comprehensive (loss) income
|
(0.8
|
)
|
|
1.0
|
|
|
(5.6
|
)
|
|||
Balance at end of period
|
$
|
(2.2
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(2.4
|
)
|
|
|
|
|
|
|
||||||
Foreign Exchange Forward Contracts
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
6.6
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Net change from period revaluation:
|
(3.6
|
)
|
|
14.6
|
|
|
3.4
|
|
|||
Tax benefit (expense)
(2)
|
1.0
|
|
|
(3.8
|
)
|
|
(0.9
|
)
|
|||
Total other comprehensive (loss) income before reclassifications, net of tax
|
(2.6
|
)
|
|
10.8
|
|
|
2.5
|
|
|||
Net amount reclassified to earnings
(4)
|
(4.6
|
)
|
|
(7.4
|
)
|
|
(1.6
|
)
|
|||
Tax benefit
(2)
|
1.2
|
|
|
1.9
|
|
|
0.4
|
|
|||
Total amount reclassified from accumulated other comprehensive loss, net of tax
|
(3.4
|
)
|
|
(5.5
|
)
|
|
(1.2
|
)
|
|||
Total other comprehensive (loss) income
|
(6.0
|
)
|
|
5.3
|
|
|
1.3
|
|
|||
Balance at end of period
|
$
|
0.6
|
|
|
$
|
6.6
|
|
|
$
|
1.3
|
|
(1)
|
In 2016, 2015 and 2014, there were
no
tax impacts related to foreign currency translation adjustments and
no
amounts were reclassified to earnings.
|
(2)
|
These amounts were included in the income tax provision in the accompanying Consolidated Statements of Income.
|
(3)
|
This amount was included in interest expense, net in the accompanying Consolidated Statements of Income.
|
(4)
|
This amount was included in cost of sales, net in the accompanying Consolidated Statements of Income
.
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
2016
|
|
2015
|
||||
Wages and benefits
|
$
|
65.5
|
|
|
$
|
72.4
|
|
Advertising
|
48.6
|
|
|
48.4
|
|
||
Sales returns
|
30.3
|
|
|
28.5
|
|
||
Rebates
|
8.4
|
|
|
11.5
|
|
||
Warranty
|
14.3
|
|
|
14.9
|
|
||
Other
|
83.0
|
|
|
78.3
|
|
||
|
$
|
250.1
|
|
|
$
|
254.0
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
PRSU expense
|
$
|
3.9
|
|
|
$
|
13.7
|
|
|
$
|
3.5
|
|
Stock option expense
|
5.3
|
|
|
6.6
|
|
|
7.0
|
|
|||
RSU/DSU expense
|
7.0
|
|
|
2.2
|
|
|
2.9
|
|
|||
Total stock-based compensation expense
|
$
|
16.2
|
|
|
$
|
22.5
|
|
|
$
|
13.4
|
|
(shares in millions)
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Awards unvested at December 31, 2014
|
0.3
|
|
|
$
|
53.45
|
|
Granted
|
1.7
|
|
|
70.43
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(0.1
|
)
|
|
56.74
|
|
|
Awards unvested at December 31, 2015
|
1.9
|
|
|
68.17
|
|
|
Granted
|
0.2
|
|
|
60.78
|
|
|
Vested
|
(0.1
|
)
|
|
51.87
|
|
|
Forfeited
|
(0.3
|
)
|
|
70.43
|
|
|
Awards unvested at December 31, 2016
|
1.7
|
|
|
$
|
68.02
|
|
(shares in millions)
|
|
|
|
|
||||
Number of Shares Granted
|
|
Maximum Number of Shares to be Awarded
|
|
Performance Date
|
|
Vesting Schedule
|
||
0.1
|
|
|
0.1
|
|
|
December 31, 2017
(1)
|
|
December 31, 2017
(1)
|
0.1
|
|
|
0.1
|
|
|
December 31, 2016
|
|
Five annual installments beginning on each applicable grant date
|
(1)
|
These shares will vest in full if the Company achieves the performance metric per the award agreement in 2017. In addition, if this target is not met in 2017 but the Company achieves the performance metric in 2018, then one-third of the PRSUs will vest, and the remaining PRSUs shall be forfeited.
|
(shares in millions)
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Options unvested at December 31, 2014
|
0.5
|
|
|
$
|
46.23
|
|
Granted
|
0.8
|
|
|
63.55
|
|
|
Vested
|
(0.4
|
)
|
|
44.25
|
|
|
Forfeited
|
(0.1
|
)
|
|
57.12
|
|
|
Options unvested at December 31, 2015
|
0.8
|
|
|
$
|
62.34
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
(0.3
|
)
|
|
61.28
|
|
|
Forfeited
|
0.0
|
|
58.37
|
|
||
Options unvested at December 31, 2016
|
0.5
|
|
|
$
|
63.09
|
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
|
2014
|
Expected volatility range of stock
|
N/A
|
|
34.0% - 36.2%
|
|
56.7% - 66.5%
|
Expected life of option, range in years
|
N/A
|
|
3 - 5
|
|
2 - 4
|
Risk-free interest range rate
|
N/A
|
|
0.9% - 1.5%
|
|
0.4% - 1.4%
|
Expected dividend yield on stock
|
N/A
|
|
0.0% - 0.0%
|
|
0.6% - 0.7%
|
(in millions, except per share amounts)
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Options outstanding at December 31, 2014
|
2.8
|
|
|
$
|
24.18
|
|
|
|
|
|
||
Granted
|
0.8
|
|
|
63.55
|
|
|
|
|
|
|||
Released
|
(1.4
|
)
|
|
14.70
|
|
|
|
|
|
|||
Forfeited
|
(0.1
|
)
|
|
57.12
|
|
|
|
|
|
|||
Options outstanding at December 31, 2015
|
2.1
|
|
|
$
|
42.75
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Released
|
(0.6
|
)
|
|
24.72
|
|
|
|
|
|
|||
Forfeited
|
0.0
|
|
|
58.37
|
|
|
|
|
|
|||
Options outstanding at December 31, 2016
|
1.5
|
|
|
$
|
50.46
|
|
|
6.71
|
|
$
|
19.1
|
|
|
|
|
|
|
|
|
|
|||||
Options exercisable at December 31, 2016
|
1.0
|
|
|
$
|
44.45
|
|
|
5.98
|
|
$
|
23.6
|
|
(in millions, except per share amounts)
|
Shares
|
|
Weighted Average Release Price
|
|
Aggregate Intrinsic Value
|
|||||
Awards outstanding at December 31, 2014
|
0.1
|
|
|
$
|
50.41
|
|
|
|
||
Granted
|
0.1
|
|
|
70.44
|
|
|
|
|||
Vested
|
(0.1
|
)
|
|
58.73
|
|
|
|
|||
Terminated
|
0.0
|
|
|
49.63
|
|
|
|
|||
Awards outstanding at December 31, 2015
|
0.1
|
|
|
$
|
66.41
|
|
|
|
||
Granted
|
0.3
|
|
|
53.77
|
|
|
|
|||
Vested
|
0.0
|
|
60.17
|
|
|
|
||||
Terminated
|
0.0
|
|
|
53.45
|
|
|
|
|||
Awards outstanding at December 31, 2016
|
0.4
|
|
|
$
|
59.37
|
|
|
$
|
27.1
|
|
(in millions, except years)
|
December 31, 2016
|
|
Weighted Average Remaining Vesting Period (Years)
|
||
Unrecognized stock option expense
|
5.3
|
|
|
1.51
|
|
Unrecognized DSU/RSU expense
|
11.9
|
|
|
2.97
|
|
Unrecognized PRSU expense
|
14.2
|
|
|
2.56
|
|
Total unrecognized stock-based compensation expense
|
$
|
31.4
|
|
|
2.54
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Income before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
179.0
|
|
|
$
|
120.2
|
|
|
$
|
46.9
|
|
Rest of the world
|
104.3
|
|
|
79.9
|
|
|
128.0
|
|
|||
|
$
|
283.3
|
|
|
$
|
200.1
|
|
|
$
|
174.9
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(dollars in millions)
|
Amount
|
|
Percentage of Income
Before Income Taxes
|
|
Amount
|
|
Percentage of Income
Before Income Taxes |
|
Amount
|
|
Percentage of Income
Before Income Taxes |
|||||||||
Statutory U.S. federal income tax
|
$
|
99.2
|
|
|
35.0
|
%
|
|
$
|
70.0
|
|
|
35.0
|
%
|
|
$
|
61.2
|
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
8.0
|
|
|
2.8
|
%
|
|
1.1
|
|
|
0.6
|
%
|
|
1.1
|
|
|
0.6
|
%
|
|||
Foreign repatriation, net of foreign tax credits
|
(4.3
|
)
|
|
(1.5
|
)%
|
|
0.0
|
|
|
0.0
|
%
|
|
13.5
|
|
|
7.7
|
%
|
|||
Foreign tax differential
|
(11.9
|
)
|
|
(4.2
|
)%
|
|
(10.0
|
)
|
|
(5.0
|
)%
|
|
(12.6
|
)
|
|
(7.2
|
)%
|
|||
Change in valuation allowances
|
20.2
|
|
|
7.1
|
%
|
|
2.5
|
|
|
1.2
|
%
|
|
(17.7
|
)
|
|
(10.0
|
)%
|
|||
Uncertain tax positions
|
(27.1
|
)
|
|
(9.6
|
)%
|
|
59.7
|
|
|
29.8
|
%
|
|
10.9
|
|
|
6.1
|
%
|
|||
Subpart F income
|
2.0
|
|
|
0.7
|
%
|
|
1.9
|
|
|
1.0
|
%
|
|
1.9
|
|
|
1.1
|
%
|
|||
Manufacturing deduction
|
(4.2
|
)
|
|
(1.5
|
)%
|
|
(1.6
|
)
|
|
(0.8
|
)%
|
|
(3.7
|
)
|
|
(2.1
|
)%
|
|||
Goodwill on disposal of business
|
0.0
|
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
|
7.5
|
|
|
4.2
|
%
|
|||
Permanent and other
|
4.9
|
|
|
1.8
|
%
|
|
1.8
|
|
|
0.9
|
%
|
|
2.8
|
|
|
1.7
|
%
|
|||
Effective income tax provision
|
$
|
86.8
|
|
|
30.6
|
%
|
|
$
|
125.4
|
|
|
62.7
|
%
|
|
$
|
64.9
|
|
|
37.1
|
%
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
Current provision
|
|
|
|
|
|
||||||
Federal
|
$
|
73.5
|
|
|
$
|
107.1
|
|
|
$
|
50.7
|
|
State
|
4.5
|
|
|
7.2
|
|
|
4.5
|
|
|||
Foreign
|
39.9
|
|
|
32.4
|
|
|
36.9
|
|
|||
Total current
|
$
|
117.9
|
|
|
$
|
146.7
|
|
|
$
|
92.1
|
|
Deferred provision
|
|
|
|
|
|
||||||
Federal
|
$
|
(21.4
|
)
|
|
$
|
(12.3
|
)
|
|
$
|
(25.2
|
)
|
State
|
1.6
|
|
|
(3.7
|
)
|
|
(1.2
|
)
|
|||
Foreign
|
(11.3
|
)
|
|
(5.3
|
)
|
|
(0.8
|
)
|
|||
Total deferred
|
(31.1
|
)
|
|
(21.3
|
)
|
|
(27.2
|
)
|
|||
Total income tax provision
|
$
|
86.8
|
|
|
$
|
125.4
|
|
|
$
|
64.9
|
|
|
December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Stock-based compensation
|
$
|
18.4
|
|
|
$
|
16.0
|
|
Accrued expenses and other
|
49.9
|
|
|
57.6
|
|
||
Net operating losses, foreign tax credits and other tax attribute carryforwards
|
98.5
|
|
|
33.1
|
|
||
Inventories
|
7.2
|
|
|
5.1
|
|
||
Transaction costs
|
10.2
|
|
|
22.0
|
|
||
Property, plant and equipment
|
3.4
|
|
|
2.9
|
|
||
Total deferred tax assets
|
187.6
|
|
|
136.7
|
|
||
Valuation allowances
|
(45.2
|
)
|
|
(24.2
|
)
|
||
Total net deferred tax assets
|
$
|
142.4
|
|
|
$
|
112.5
|
|
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
$
|
(242.4
|
)
|
|
$
|
(247.8
|
)
|
Property, plant and equipment
|
(42.4
|
)
|
|
(42.0
|
)
|
||
Accrued expenses and other
|
(9.7
|
)
|
|
(5.9
|
)
|
||
Total deferred tax liabilities
|
(294.5
|
)
|
|
(295.7
|
)
|
||
Net deferred tax liabilities
|
$
|
(152.1
|
)
|
|
$
|
(183.2
|
)
|
(in millions)
|
2016
|
|
2015
|
||||
State net operating losses (“SNOLs”)
|
$
|
131.2
|
|
|
$
|
128.8
|
|
U.S. federal foreign tax credits (“FTCs”)
|
12.2
|
|
|
7.8
|
|
||
U.S. state income tax credits ("SITCs")
|
4.0
|
|
|
5.5
|
|
||
Foreign net operating losses (“FNOLs”)
|
34.1
|
|
|
38.0
|
|
||
Charitable contribution carryover ("CCCs")
|
38.4
|
|
|
23.7
|
|
(in millions)
|
|
||
Balance as of December 31, 2014
|
$
|
47.6
|
|
Additions based on tax positions related to 2015
|
0.9
|
|
|
Additions for tax positions of prior years
|
25.7
|
|
|
Expiration of statutes of limitations
|
(2.1
|
)
|
|
Settlements of uncertain tax positions with tax authorities
|
(2.3
|
)
|
|
Balance as of December 31, 2015
|
$
|
69.8
|
|
Additions based on tax positions related to 2016
|
2.5
|
|
|
Additions for tax positions of prior years
|
29.2
|
|
|
Expiration of statutes of limitations
|
(5.0
|
)
|
|
Settlements of uncertain tax positions with tax authorities
|
(24.8
|
)
|
|
Balance as of December 31, 2016
|
$
|
71.7
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per common share amounts)
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
202.1
|
|
|
$
|
73.5
|
|
|
$
|
108.9
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic earnings per common share—weighted average shares
|
59.0
|
|
|
61.7
|
|
|
60.8
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Employee stock-based compensation
|
0.8
|
|
|
0.9
|
|
|
1.3
|
|
|||
Denominator for diluted earnings per common share—adjusted weighted average shares
|
59.8
|
|
|
62.6
|
|
|
62.1
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per common share
|
$
|
3.43
|
|
|
$
|
1.19
|
|
|
$
|
1.79
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
$
|
3.38
|
|
|
$
|
1.17
|
|
|
$
|
1.75
|
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
2016
|
|
2015
|
||||
North America
|
$
|
2,581.4
|
|
|
$
|
2,533.1
|
|
International
|
572.6
|
|
|
477.1
|
|
||
Corporate
|
658.7
|
|
|
775.0
|
|
||
Inter-segment eliminations
|
(1,110.1
|
)
|
|
(1,129.7
|
)
|
||
Total assets
|
$
|
2,702.6
|
|
|
$
|
2,655.5
|
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
2016
|
|
2015
|
||||
North America
|
$
|
297.4
|
|
|
$
|
239.2
|
|
International
|
54.9
|
|
|
54.8
|
|
||
Corporate
|
69.9
|
|
|
67.7
|
|
||
Total property, plant and equipment, net
|
$
|
422.2
|
|
|
$
|
361.7
|
|
(in millions)
|
North America
|
|
International
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Bedding sales
|
$
|
2,447.8
|
|
|
$
|
443.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,891.5
|
|
Other sales
|
122.3
|
|
|
113.5
|
|
|
—
|
|
|
—
|
|
|
235.8
|
|
|||||
Net sales
|
2,570.1
|
|
|
557.2
|
|
|
—
|
|
|
—
|
|
|
3,127.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Inter-segment sales
|
$
|
4.6
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
(5.0
|
)
|
|
$
|
—
|
|
Gross profit
|
1,017.4
|
|
|
292.0
|
|
|
—
|
|
|
—
|
|
|
1,309.4
|
|
|||||
Inter-segment royalty expense (income)
|
7.2
|
|
|
(7.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating income (loss)
|
411.8
|
|
|
102.7
|
|
|
(99.0
|
)
|
|
—
|
|
|
415.5
|
|
|||||
Income (loss) before income taxes
|
406.8
|
|
|
94.0
|
|
|
(217.5
|
)
|
|
—
|
|
|
283.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(1)
|
$
|
43.7
|
|
|
$
|
15.6
|
|
|
$
|
30.2
|
|
|
$
|
—
|
|
|
$
|
89.5
|
|
Capital expenditures
|
32.8
|
|
|
15.3
|
|
|
14.3
|
|
|
—
|
|
|
62.4
|
|
(1)
|
Depreciation and amortization includes stock-based compensation amortization expense.
|
(in millions)
|
North America
|
|
International
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Bedding sales
|
$
|
2,428.9
|
|
|
$
|
458.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,887.2
|
|
Other sales
|
148.3
|
|
|
115.7
|
|
|
—
|
|
|
—
|
|
|
264.0
|
|
|||||
Net sales
|
2,577.2
|
|
|
574.0
|
|
|
—
|
|
|
—
|
|
|
3,151.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Inter-segment sales
|
$
|
5.9
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
(6.6
|
)
|
|
$
|
—
|
|
Gross profit
|
954.6
|
|
|
294.3
|
|
|
—
|
|
|
—
|
|
|
1,248.9
|
|
|||||
Inter-segment royalty expense (income)
|
7.1
|
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating income (loss)
|
335.6
|
|
|
98.9
|
|
|
(125.4
|
)
|
|
—
|
|
|
309.1
|
|
|||||
Income (loss) before income taxes
|
324.4
|
|
|
73.2
|
|
|
(197.5
|
)
|
|
—
|
|
|
200.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(1)
|
$
|
43.3
|
|
|
$
|
16.0
|
|
|
$
|
34.6
|
|
|
$
|
—
|
|
|
$
|
93.9
|
|
Capital expenditures
|
28.9
|
|
|
14.8
|
|
|
22.2
|
|
|
—
|
|
|
65.9
|
|
(1)
|
Depreciation and amortization includes stock-based compensation amortization expense.
|
(in millions)
|
North America
|
|
International
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Bedding sales
|
$
|
2,261.9
|
|
|
$
|
464.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,726.5
|
|
Other sales
|
143.0
|
|
|
120.3
|
|
|
—
|
|
|
—
|
|
|
263.3
|
|
|||||
Net sales
|
2,404.9
|
|
|
584.9
|
|
|
—
|
|
|
—
|
|
|
2,989.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Inter-segment sales
|
$
|
5.1
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(5.4
|
)
|
|
$
|
—
|
|
Gross profit
|
834.8
|
|
|
315.6
|
|
|
—
|
|
|
—
|
|
|
1,150.4
|
|
|||||
Inter-segment royalty expense (income)
|
6.1
|
|
|
(6.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating income (loss)
|
255.0
|
|
|
118.8
|
|
|
(97.5
|
)
|
|
—
|
|
|
276.3
|
|
|||||
Income (loss) before income taxes
|
228.0
|
|
|
112.2
|
|
|
(165.3
|
)
|
|
—
|
|
|
174.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(1)
|
$
|
47.9
|
|
|
$
|
16.3
|
|
|
$
|
25.5
|
|
|
$
|
—
|
|
|
$
|
89.7
|
|
Capital expenditures
|
17.8
|
|
|
15.6
|
|
|
14.1
|
|
|
—
|
|
|
47.5
|
|
(1)
|
Depreciation and amortization includes stock-based compensation amortization expense.
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
2016
|
|
2015
|
||||
United States
|
$
|
360.7
|
|
|
$
|
300.1
|
|
Canada
|
6.6
|
|
|
6.8
|
|
||
Other International
|
54.9
|
|
|
54.8
|
|
||
Total property, plant and equipment, net
|
$
|
422.2
|
|
|
$
|
361.7
|
|
Total International
|
$
|
61.5
|
|
|
$
|
61.6
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
2,361.8
|
|
|
$
|
2,374.7
|
|
|
$
|
2,188.8
|
|
Canada
|
208.3
|
|
|
202.5
|
|
|
216.1
|
|
|||
Other International
|
557.2
|
|
|
574.0
|
|
|
584.9
|
|
|||
Total net sales
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
$
|
2,989.8
|
|
Total International
|
$
|
765.5
|
|
|
$
|
776.5
|
|
|
$
|
801.0
|
|
(in millions, except per share amounts)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
721.0
|
|
|
$
|
804.4
|
|
|
$
|
832.4
|
|
|
$
|
769.5
|
|
Gross profit
|
291.0
|
|
|
336.9
|
|
|
362.1
|
|
|
319.4
|
|
||||
Operating income
|
76.7
|
|
|
100.2
|
|
|
131.1
|
|
|
107.5
|
|
||||
Net income
|
39.6
|
|
|
21.3
|
|
|
77.8
|
|
|
63.4
|
|
||||
Basic earnings per common share
|
$
|
0.64
|
|
|
$
|
0.35
|
|
|
$
|
1.34
|
|
|
$
|
1.14
|
|
Diluted earnings per common share
|
$
|
0.63
|
|
|
$
|
0.35
|
|
|
$
|
1.32
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
739.5
|
|
|
$
|
764.4
|
|
|
$
|
880.0
|
|
|
$
|
767.3
|
|
Gross profit
|
278.7
|
|
|
297.5
|
|
|
359.6
|
|
|
313.1
|
|
||||
Operating income
|
54.4
|
|
|
52.0
|
|
|
110.9
|
|
|
91.8
|
|
||||
Net income (loss)
|
23.4
|
|
|
21.2
|
|
|
40.2
|
|
|
(11.3
|
)
|
||||
Basic earnings (loss) per common share
|
$
|
0.38
|
|
|
$
|
0.35
|
|
|
$
|
0.65
|
|
|
$
|
(0.18
|
)
|
Diluted earnings (loss) per common share
|
$
|
0.38
|
|
|
$
|
0.34
|
|
|
$
|
0.64
|
|
|
$
|
(0.18
|
)
|
|
Tempur Sealy International, Inc. (Ultimate Parent)
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,355.9
|
|
|
$
|
835.9
|
|
|
$
|
(64.5
|
)
|
|
$
|
3,127.3
|
|
Cost of sales
|
—
|
|
|
1,409.4
|
|
|
473.0
|
|
|
(64.5
|
)
|
|
1,817.9
|
|
|||||
Gross profit
|
—
|
|
|
946.5
|
|
|
362.9
|
|
|
—
|
|
|
1,309.4
|
|
|||||
Selling and marketing expenses
|
2.9
|
|
|
458.6
|
|
|
187.0
|
|
|
—
|
|
|
648.5
|
|
|||||
General, administrative and other expenses
|
14.8
|
|
|
186.8
|
|
|
76.6
|
|
|
—
|
|
|
278.2
|
|
|||||
Equity income in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(13.3
|
)
|
|
—
|
|
|
(13.3
|
)
|
|||||
Royalty income, net of royalty expense
|
—
|
|
|
(19.5
|
)
|
|
—
|
|
|
—
|
|
|
(19.5
|
)
|
|||||
Operating (loss) income
|
(17.7
|
)
|
|
320.6
|
|
|
112.6
|
|
|
—
|
|
|
415.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third party interest expense, net
|
66.0
|
|
|
15.4
|
|
|
3.8
|
|
|
—
|
|
|
85.2
|
|
|||||
Intercompany interest (income) expense, net
|
(4.1
|
)
|
|
(0.1
|
)
|
|
4.2
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense, net
|
61.9
|
|
|
15.3
|
|
|
8.0
|
|
|
—
|
|
|
85.2
|
|
|||||
Loss on extinguishment of debt
|
34.3
|
|
|
12.9
|
|
|
—
|
|
|
—
|
|
|
47.2
|
|
|||||
Other (income) expense, net
|
—
|
|
|
(1.4
|
)
|
|
1.2
|
|
|
—
|
|
|
(0.2
|
)
|
|||||
Total other expense
|
96.2
|
|
|
26.8
|
|
|
9.2
|
|
|
—
|
|
|
132.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from equity investees
|
271.6
|
|
|
76.8
|
|
|
—
|
|
|
(348.4
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
157.7
|
|
|
370.6
|
|
|
103.4
|
|
|
(348.4
|
)
|
|
283.3
|
|
|||||
Income tax benefit (provision)
|
38.8
|
|
|
(99.0
|
)
|
|
(26.6
|
)
|
|
—
|
|
|
(86.8
|
)
|
|||||
Net income before non-controlling interest
|
196.5
|
|
|
271.6
|
|
|
76.8
|
|
|
(348.4
|
)
|
|
196.5
|
|
|||||
Less: net loss attributable to non-controlling interests
|
(5.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
5.6
|
|
|
(5.6
|
)
|
|||||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
202.1
|
|
|
$
|
271.6
|
|
|
$
|
82.4
|
|
|
$
|
(354.0
|
)
|
|
$
|
202.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
$
|
190.8
|
|
|
$
|
271.7
|
|
|
$
|
71.2
|
|
|
$
|
(342.9
|
)
|
|
$
|
190.8
|
|
|
Tempur Sealy International, Inc. (Ultimate Parent)
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,422.9
|
|
|
$
|
778.9
|
|
|
$
|
(50.6
|
)
|
|
$
|
3,151.2
|
|
Cost of sales
|
—
|
|
|
1,532.6
|
|
|
420.3
|
|
|
(50.6
|
)
|
|
1,902.3
|
|
|||||
Gross profit
|
—
|
|
|
890.3
|
|
|
358.6
|
|
|
—
|
|
|
1,248.9
|
|
|||||
Selling and marketing expenses
|
4.1
|
|
|
460.1
|
|
|
183.8
|
|
|
—
|
|
|
648.0
|
|
|||||
General, administrative and other expenses
|
20.8
|
|
|
232.6
|
|
|
68.6
|
|
|
—
|
|
|
322.0
|
|
|||||
Equity income in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|||||
Royalty income, net of royalty expense
|
—
|
|
|
(18.3
|
)
|
|
—
|
|
|
—
|
|
|
(18.3
|
)
|
|||||
Operating (loss) income
|
(24.9
|
)
|
|
215.9
|
|
|
118.1
|
|
|
—
|
|
|
309.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third party interest expense, net
|
27.2
|
|
|
66.2
|
|
|
2.7
|
|
|
—
|
|
|
96.1
|
|
|||||
Intercompany interest expense (income), net
|
32.9
|
|
|
(35.5
|
)
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense, net
|
60.1
|
|
|
30.7
|
|
|
5.3
|
|
|
—
|
|
|
96.1
|
|
|||||
Other (income) expense, net
|
—
|
|
|
(8.1
|
)
|
|
21.0
|
|
|
—
|
|
|
12.9
|
|
|||||
Total other expense
|
60.1
|
|
|
22.6
|
|
|
26.3
|
|
|
—
|
|
|
109.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from equity investees
|
132.9
|
|
|
64.7
|
|
|
—
|
|
|
(197.6
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
47.9
|
|
|
258.0
|
|
|
91.8
|
|
|
(197.6
|
)
|
|
200.1
|
|
|||||
Income tax benefit (provision)
|
26.8
|
|
|
(125.1
|
)
|
|
(27.1
|
)
|
|
—
|
|
|
(125.4
|
)
|
|||||
Net income before non-controlling interest
|
74.7
|
|
|
132.9
|
|
|
64.7
|
|
|
(197.6
|
)
|
|
74.7
|
|
|||||
Less: net income attributable to non-controlling interests
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
(1.2
|
)
|
|
1.2
|
|
|||||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
73.5
|
|
|
$
|
131.7
|
|
|
$
|
64.7
|
|
|
$
|
(196.4
|
)
|
|
$
|
73.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income (loss)
|
$
|
19.1
|
|
|
$
|
130.9
|
|
|
$
|
(3.3
|
)
|
|
$
|
(127.6
|
)
|
|
$
|
19.1
|
|
|
Tempur Sealy International, Inc. (Ultimate Parent)
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
2,229.5
|
|
|
$
|
802.9
|
|
|
$
|
(42.6
|
)
|
|
$
|
2,989.8
|
|
Cost of sales
|
—
|
|
|
1,465.3
|
|
|
416.7
|
|
|
(42.6
|
)
|
|
1,839.4
|
|
|||||
Gross profit
|
—
|
|
|
764.2
|
|
|
386.2
|
|
|
—
|
|
|
1,150.4
|
|
|||||
Selling and marketing expenses
|
2.4
|
|
|
431.2
|
|
|
186.3
|
|
|
—
|
|
|
619.9
|
|
|||||
General, administrative and other expenses
|
13.4
|
|
|
200.5
|
|
|
66.7
|
|
|
—
|
|
|
280.6
|
|
|||||
Equity income in earnings of unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
(8.3
|
)
|
|||||
Royalty income, net of royalty expense
|
—
|
|
|
(18.1
|
)
|
|
—
|
|
|
—
|
|
|
(18.1
|
)
|
|||||
Operating (loss) income
|
(15.8
|
)
|
|
150.6
|
|
|
141.5
|
|
|
—
|
|
|
276.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Third party interest expense, net
|
27.0
|
|
|
62.4
|
|
|
2.5
|
|
|
—
|
|
|
91.9
|
|
|||||
Intercompany interest expense (income), net
|
32.7
|
|
|
(34.6
|
)
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense, net
|
59.7
|
|
|
27.8
|
|
|
4.4
|
|
|
—
|
|
|
91.9
|
|
|||||
Loss on disposal, net
|
—
|
|
|
23.2
|
|
|
—
|
|
|
—
|
|
|
23.2
|
|
|||||
Other (income) expense, net
|
—
|
|
|
(17.2
|
)
|
|
3.5
|
|
|
—
|
|
|
(13.7
|
)
|
|||||
Total other expense
|
59.7
|
|
|
33.8
|
|
|
7.9
|
|
|
—
|
|
|
101.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from equity investees
|
159.2
|
|
|
98.7
|
|
|
—
|
|
|
(257.9
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
83.7
|
|
|
215.5
|
|
|
133.6
|
|
|
(257.9
|
)
|
|
174.9
|
|
|||||
Income tax benefit (provision)
|
26.3
|
|
|
(56.3
|
)
|
|
(34.9
|
)
|
|
—
|
|
|
(64.9
|
)
|
|||||
Net income before non-controlling interest
|
110.0
|
|
|
159.2
|
|
|
98.7
|
|
|
(257.9
|
)
|
|
110.0
|
|
|||||
Less: net income attributable to non-controlling interests
|
1.1
|
|
|
1.1
|
|
|
—
|
|
|
(1.1
|
)
|
|
1.1
|
|
|||||
Net income attributable to Tempur Sealy International, Inc.
|
$
|
108.9
|
|
|
$
|
158.1
|
|
|
$
|
98.7
|
|
|
$
|
(256.8
|
)
|
|
$
|
108.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
$
|
66.9
|
|
|
$
|
163.3
|
|
|
$
|
60.3
|
|
|
$
|
(223.6
|
)
|
|
$
|
66.9
|
|
|
Tempur Sealy International, Inc. (Ultimate Parent)
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
57.8
|
|
|
$
|
—
|
|
|
$
|
65.7
|
|
Accounts receivable, net
|
—
|
|
|
197.7
|
|
|
147.4
|
|
|
—
|
|
|
345.1
|
|
|||||
Inventories
|
—
|
|
|
117.1
|
|
|
79.7
|
|
|
—
|
|
|
196.8
|
|
|||||
Income tax receivable
|
234.2
|
|
|
—
|
|
|
—
|
|
|
(234.2
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
48.9
|
|
|
15.0
|
|
|
—
|
|
|
63.9
|
|
|||||
Total Current Assets
|
234.2
|
|
|
371.6
|
|
|
299.9
|
|
|
(234.2
|
)
|
|
671.5
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
346.9
|
|
|
75.3
|
|
|
—
|
|
|
422.2
|
|
|||||
Goodwill
|
—
|
|
|
500.2
|
|
|
222.3
|
|
|
—
|
|
|
722.5
|
|
|||||
Other intangible assets, net
|
—
|
|
|
589.8
|
|
|
88.9
|
|
|
—
|
|
|
678.7
|
|
|||||
Deferred income taxes
|
20.6
|
|
|
—
|
|
|
22.5
|
|
|
(20.6
|
)
|
|
22.5
|
|
|||||
Other non-current assets
|
—
|
|
|
41.7
|
|
|
143.5
|
|
|
—
|
|
|
185.2
|
|
|||||
Net investment in subsidiaries
|
2,207.4
|
|
|
77.7
|
|
|
—
|
|
|
(2,285.1
|
)
|
|
—
|
|
|||||
Due from affiliates
|
168.4
|
|
|
1,874.7
|
|
|
14.3
|
|
|
(2,057.4
|
)
|
|
—
|
|
|||||
Total Assets
|
$
|
2,630.6
|
|
|
$
|
3,802.6
|
|
|
$
|
866.7
|
|
|
$
|
(4,597.3
|
)
|
|
$
|
2,702.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
0.1
|
|
|
$
|
157.0
|
|
|
$
|
62.2
|
|
|
$
|
—
|
|
|
$
|
219.3
|
|
Accrued expenses and other current liabilities
|
6.8
|
|
|
172.6
|
|
|
70.7
|
|
|
—
|
|
|
250.1
|
|
|||||
Income taxes payable
|
—
|
|
|
235.9
|
|
|
4.1
|
|
|
(234.2
|
)
|
|
5.8
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
34.4
|
|
|
35.9
|
|
|
—
|
|
|
70.3
|
|
|||||
Total Current Liabilities
|
6.9
|
|
|
599.9
|
|
|
172.9
|
|
|
(234.2
|
)
|
|
545.5
|
|
|||||
Long-term debt, net
|
1,040.4
|
|
|
776.5
|
|
|
0.9
|
|
|
—
|
|
|
1,817.8
|
|
|||||
Deferred income taxes
|
—
|
|
|
174.9
|
|
|
20.3
|
|
|
(20.6
|
)
|
|
174.6
|
|
|||||
Other non-current liabilities
|
—
|
|
|
43.3
|
|
|
126.0
|
|
|
—
|
|
|
169.3
|
|
|||||
Due to affiliates
|
1,587.9
|
|
|
0.6
|
|
|
468.9
|
|
|
(2,057.4
|
)
|
|
—
|
|
|||||
Total Liabilities
|
2,635.2
|
|
|
1,595.2
|
|
|
789.0
|
|
|
(2,312.2
|
)
|
|
2,707.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable non-controlling interest
|
7.6
|
|
|
—
|
|
|
7.6
|
|
|
(7.6
|
)
|
|
7.6
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders’ (deficit) equity, net of non-controlling interests in subsidiaries
|
(15.2
|
)
|
|
2,207.4
|
|
|
67.1
|
|
|
(2,274.5
|
)
|
|
(15.2
|
)
|
|||||
Non-controlling interest in subsidiaries
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|
(3.0
|
)
|
|
3.0
|
|
|||||
Total Stockholder's (Deficit) Equity
|
(12.2
|
)
|
|
2,207.4
|
|
|
70.1
|
|
|
(2,277.5
|
)
|
|
(12.2
|
)
|
|||||
Total Liabilities and Stockholders’ (Deficit) Equity
|
$
|
2,630.6
|
|
|
$
|
3,802.6
|
|
|
$
|
866.7
|
|
|
$
|
(4,597.3
|
)
|
|
$
|
2,702.6
|
|
|
Tempur Sealy International, Inc. (Ultimate Parent)
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
119.7
|
|
|
$
|
34.2
|
|
|
$
|
—
|
|
|
$
|
153.9
|
|
Accounts receivable, net
|
—
|
|
|
231.9
|
|
|
147.5
|
|
|
—
|
|
|
379.4
|
|
|||||
Inventories
|
—
|
|
|
145.3
|
|
|
53.9
|
|
|
—
|
|
|
199.2
|
|
|||||
Income tax receivable
|
193.1
|
|
|
—
|
|
|
—
|
|
|
(193.1
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
—
|
|
|
45.6
|
|
|
31.0
|
|
|
—
|
|
|
76.6
|
|
|||||
Total Current Assets
|
193.1
|
|
|
542.5
|
|
|
266.6
|
|
|
(193.1
|
)
|
|
809.1
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
300.1
|
|
|
61.6
|
|
|
—
|
|
|
361.7
|
|
|||||
Goodwill
|
—
|
|
|
501.4
|
|
|
208.0
|
|
|
—
|
|
|
709.4
|
|
|||||
Other intangible assets, net
|
—
|
|
|
612.9
|
|
|
82.5
|
|
|
—
|
|
|
695.4
|
|
|||||
Deferred tax asset
|
16.0
|
|
|
—
|
|
|
12.2
|
|
|
(16.0
|
)
|
|
12.2
|
|
|||||
Other non-current assets
|
—
|
|
|
23.3
|
|
|
44.4
|
|
|
—
|
|
|
67.7
|
|
|||||
Net investment in subsidiaries
|
1,960.5
|
|
|
—
|
|
|
—
|
|
|
(1,960.5
|
)
|
|
—
|
|
|||||
Due from affiliates
|
548.1
|
|
|
1,655.3
|
|
|
4.8
|
|
|
(2,208.2
|
)
|
|
—
|
|
|||||
Total Assets
|
$
|
2,717.7
|
|
|
$
|
3,635.5
|
|
|
$
|
680.1
|
|
|
$
|
(4,377.8
|
)
|
|
$
|
2,655.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
212.2
|
|
|
$
|
54.1
|
|
|
$
|
—
|
|
|
$
|
266.3
|
|
Accrued expenses and other current liabilities
|
1.4
|
|
|
183.8
|
|
|
68.8
|
|
|
—
|
|
|
254.0
|
|
|||||
Income taxes payable
|
—
|
|
|
196.0
|
|
|
8.3
|
|
|
(193.1
|
)
|
|
11.2
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
168.7
|
|
|
12.8
|
|
|
—
|
|
|
181.5
|
|
|||||
Total Current Liabilities
|
1.4
|
|
|
760.7
|
|
|
144.0
|
|
|
(193.1
|
)
|
|
713.0
|
|
|||||
Long-term debt, net
|
811.9
|
|
|
461.4
|
|
|
—
|
|
|
—
|
|
|
1,273.3
|
|
|||||
Deferred income taxes
|
—
|
|
|
189.8
|
|
|
21.6
|
|
|
(16.0
|
)
|
|
195.4
|
|
|||||
Other non-current liabilities
|
—
|
|
|
166.6
|
|
|
4.6
|
|
|
—
|
|
|
171.2
|
|
|||||
Due to affiliates
|
1,601.8
|
|
|
96.5
|
|
|
604.9
|
|
|
(2,303.2
|
)
|
|
—
|
|
|||||
Total Liabilities
|
2,415.1
|
|
|
1,675.0
|
|
|
775.1
|
|
|
(2,512.3
|
)
|
|
2,352.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable non-controlling interest
|
12.4
|
|
|
12.4
|
|
|
—
|
|
|
(12.4
|
)
|
|
12.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Stockholders’ (Deficit) Equity
|
290.2
|
|
|
1,948.1
|
|
|
(95.0
|
)
|
|
(1,853.1
|
)
|
|
290.2
|
|
|||||
Total Liabilities and Stockholders’ (Deficit) Equity
|
$
|
2,717.7
|
|
|
$
|
3,635.5
|
|
|
$
|
680.1
|
|
|
$
|
(4,377.8
|
)
|
|
$
|
2,655.5
|
|
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
||||
2003 Amended and Restated Equity Incentive Plan
(1)
|
|
650,094
|
|
|
$
|
36.48
|
|
|
—
|
|
2013 Equity Incentive Plan
(2)
|
|
3,657,787
|
|
|
61.69
|
|
|
1,323,062
|
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
0
|
|
|
Total
|
|
4,307,881
|
|
|
$
|
50.46
|
|
|
1,323,062
|
|
(1)
|
In May 2013, our Board of Directors adopted a resolution that prohibited further grants under the 2003 Amended and Restated Equity Incentive Plan. The number of securities to be issued upon exercise of outstanding stock options, warrants and rights issued under the 2003 Amended and Restated Equity Incentive Plan includes 404 shares issuable under restricted stock units and deferred stock units. These restricted and deferred stock units are excluded from the weighted average exercise price calculation above.
|
(2)
|
The number of securities to be issued upon exercise of outstanding stock options, warrants and rights issued under the 2013 Equity Incentive Plan includes 396,622 shares issuable under restricted stock units and deferred stock units. Additionally, this number includes 2,452,889 performance restricted stock units which reflects a maximum payout of the awards granted. These restricted, deferred and performance restricted stock units are excluded from the weighted average exercise price calculation above.
|
(a)
|
1.
|
The following is a list of the financial statements of Tempur Sealy International, Inc. included in this Report, which are filed herewith pursuant to ITEM 8:
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
|
Consolidated Statements of Stockholders' (Deficit) Equity for the years ended December 31, 2016, 2015 and 2014
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
|
Notes to the Consolidated Financial Statements
|
|
|
|
|
2.
|
Financial Statement Schedule:
|
|
|
Schedule II—Valuation of Qualifying Accounts and Reserves
|
|
|
|
|
|
All other schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere in the Consolidated Financial Statements or notes thereto.
|
|
|
|
|
3.
|
Exhibits:
|
(b)
|
|
EXHIBIT INDEX
|
3.1
|
Amended and Restated Certificate of Incorporation of Tempur-Pedic International Inc. (filed as Exhibit 3.1 to Amendment No. 3 to the Registrant’s registration statement on Form S-1 (File No. 333-109798) as filed on December 12, 2003).
(1)
|
3.2
|
Amendment to Certificate of Incorporation of Tempur-Pedic International Inc. (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K as filed on May 24, 2013).
(1)
|
3.3
|
Sixth Amended and Restated By-laws of Tempur Sealy International, Inc. (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed on October 14, 2015).
(1)
|
3.4
|
Certificate of Designation for Series A Junior Participating Preferred Stock of Tempur Sealy International, Inc. (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 9, 2017).
(1)
|
4.1
|
Specimen certificate for shares of common stock (filed as Exhibit 4.1 to Amendment No. 3 to the Registrant’s registration statement on Form S-1 (File No. 333-109798) as filed on December 12, 2003).
(1)
|
4.2
|
Indenture dated as of December 19, 2012 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed on December 19, 2012).
(1)
|
4.3
|
Registration Rights Agreement dated as of December 19, 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K as filed on December 19, 2012).
(1)
|
4.4
|
Supplemental Indenture, dated as of March 18, 2013, among Tempur-Pedic International Inc., the additional Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed on March 18, 2013).
(1)
|
4.5
|
Indenture, dated as of July 10, 2009, by and among Sealy Mattress Company, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, with respect to Guaranteed Debt Securities (filed as Exhibit 4.1 to Sealy Corporation’s Current Report on Form 8-K (File No. 333-117081) as filed July 16, 2009).
(1)
|
4.6
|
Supplemental Indenture, dated as of July 10, 2009, by and among Sealy Mattress Company, Sealy Corporation, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, with respect to 8% Senior Secured Third Lien Convertible Notes due 2016 (filed as Exhibit 4.2 to Sealy Corporation’s Current Report on Form 8-K (File No. 333-117081) as filed July 16, 2009).
(1)
|
10.20
|
Amended and Restated Tempur-Pedic International Inc. 2003 Equity Incentive Plan (filed as Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-31922) as filed on March 25, 2009).
(1) (2)
|
10.21
|
First Amendment to the Amended and Restated 2003 Equity Incentive Plan (filed as Appendix A to the Registrant’s Registration Proxy Statement on Schedule 14A (File No. 001-31922) as filed on March 25, 2009).
(1)(2)
|
10.22
|
Tempur-Pedic International Inc. 2013 Equity Incentive Plan (filed as Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-31922) as filed on April 12, 2013).
(1)(2)
|
10.23
|
Amendment to 2013 Equity Incentive Plan.
(1) (2)
|
10.24
|
Tempur Sealy International, Inc. 2013 Long-Term Equity Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 23, 2013).
(1) (2)
|
10.25
|
Second Amended and Restated Annual Incentive Bonus Plan for Senior Executives (filed as Appendix B to the Registrant’s Definitive Proxy Statement (File No.001-31922) filed on March 16, 2015).
(1) (2)
|
10.26
|
Employment Agreement dated September 12, 2003, between Tempur International Limited and David Montgomery (filed as Exhibit 10.13 to Amendment No. 1 to the Registrant’s registration statement on Form S-4 ((File No. 333-109054-02) as filed on October 31, 2003).
(1)(2)
|
10.27
|
Employment Agreement dated as of July 18, 2006 between Tempur-Pedic International Inc. and Richard Anderson (filed as Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q as filed November 7, 2006).
(1)(2)
|
10.28
|
Amended and Restated Employment Agreement dated March 5, 2008 by and among Tempur-Pedic International Inc., Tempur World, LLC and Dale E. Williams (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed March 7, 2008).
(1)(2)
|
10.29
|
Amendment to the Amended and Restated Employment and Non-Competition Agreement of Dale Williams dated as of July 30, 2015 (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed July 30, 2015).
(1)(2)
|
10.30
|
Employment and Noncompetition Agreement dated as June 30, 2008, between Tempur-Pedic International Inc. and Mark Sarvary (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed on June 30, 2008).
(1)(2)
|
10.31
|
First Amendment to the Employment and Non-Competition Agreement, by and between the Company and Mark Sarvary, dated as of May 22, 2015 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed on June 1, 2015).
(1) (2)
|
10.32
|
Employment and Noncompetition Agreement dated as of February 4, 2013, between Tempur-Pedic International Inc. and W. Timothy Yaggi (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed on February 4, 2013).
(1) (2)
|
10.33
|
First Amendment to Employment and Non-Competition Agreement dated March 10, 2016 between W. Timothy Yaggi and Tempur Sealy International, Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 10, 2016).
(1) (2)
|
10.34
|
Letter agreement, dated as of March 10, 2016, between W. Timothy Yaggi and the Company (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 10 2016).
(1) (2)
|
10.35
|
Amended and Restated Employment and Non-Competition Agreement of Barry Hytinen dated as of July 30, 2015 (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K as filed July 30, 2015).
(1) (2)
|
10.36
|
Employment and Noncompetition Agreement dated as of November 18, 2014, between Tempur Sealy International, Inc. and Jay Spenchian.
(2)
|
10.37
|
First Amendment to Employment and Non-Competition Agreement dated February 15, 2016 between Jay Spenchian and Tempur Sealy International, Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 17, 2017).
(1) (2)
|
10.38
|
Letter agreement, dated as of February 15, 2017, between Jay Spenchian and the Company (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on February 17, 2017).
(1) (2)
|
10.39
|
Employment and Non-Competition Agreement of Scott Thompson dated as of September 4, 2015 (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.40
|
Stock Option Agreement dated as of September 4, between the Company and Scott Thompson (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.41
|
Restricted Stock Unit Award Agreement dated as of September 4, between the Company and Scott Thompson (filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.42
|
Matching Performance Restricted Stock Unit Award Agreement dated as of September 4, between the Company and Scott Thompson (filed as Exhibit 10.4 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.43
|
2015 Performance Restricted Stock Unit Award Agreement (dated as of September 4, between the Company and Scott Thompson (filed as Exhibit 10.5 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.44
|
Subscription Agreement (dated as of September 4, between the Company and Scott Thompson (filed as Exhibit 10.6 to Registrant’s Current Report on Form 8-K as filed September 8, 2015).
(1)(2)
|
10.45
|
Amendment to Matching Performance Restricted Stock Unit Award Agreement dated as of October 12, 2015, between the Company and Scott Thompson (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed October 14, 2015).
(1)(2)
|
10.46
|
Form of 2015 Performance Restricted Stock Unit Award Agreement (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K as filed October 29, 2015).
(1)(2)
|
10.47
|
Form of Stock Option Agreement under the 2003 Equity Incentive Plan (filed as Exhibit 10.9 to Registrant’s Quarterly Report on Form 10-Q as filed August 8, 2006).
(1)(2)
|
10.48
|
Form of Stock Option Agreement under the Amended and Restated 2003 Equity Incentive Plan (Executive) (filed as Exhibit 9.1 to Registrant’s Current Report on Form 8-K as filed on May 19, 2008).
(1)(2)
|
10.49
|
Form of Stock Option Agreement under the Amended and Restated 2003 Equity Incentive Plan (Director) (filed as Exhibit 10.40 to Registrant’s Annual Report on Form 10-K as filed on February 12, 2009).
(1)(2)
|
(1)
|
Incorporated by reference.
|
(2)
|
Indicates management contract or compensatory plan or arrangement.
|
(3)
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
|
|
Additions
|
|
|
|
|
|||||||||
Description
|
|
Balance at
Beginning of
Period
|
|
Charges to
Costs and
Expenses
|
|
Charged to Other
Accounts
|
|
Deductions
|
|
Balance at
End of
Period
|
|||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Year Ended December 31, 2014
|
|
$
|
19.3
|
|
|
4.9
|
|
|
—
|
|
|
(4.7
|
)
|
|
$
|
19.5
|
|
Year Ended December 31, 2015
|
|
$
|
19.5
|
|
|
6.9
|
|
|
—
|
|
|
(3.1
|
)
|
|
$
|
23.3
|
|
Year Ended December 31, 2016
|
|
$
|
23.3
|
|
|
4.2
|
|
|
—
|
|
|
(5.4
|
)
|
|
$
|
22.1
|
|
|
|
|
|
Additions
|
|
|
|
|
|||||||||
Description
|
|
Balance at
Beginning of
Period
|
|
Charges to
Costs and
Expenses
|
|
Charged to Other
Accounts
|
|
Deductions
|
|
Balance at
End of
Period
|
|||||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Year Ended December 31, 2014
|
|
$
|
39.4
|
|
|
2.2
|
|
|
—
|
|
|
(19.9
|
)
|
|
$
|
21.7
|
|
Year Ended December 31, 2015
|
|
$
|
21.7
|
|
|
4.6
|
|
|
—
|
|
|
(2.1
|
)
|
|
$
|
24.2
|
|
Year Ended December 31, 2016
|
|
$
|
24.2
|
|
|
20.2
|
|
|
0.8
|
|
|
—
|
|
|
$
|
45.2
|
|
|
|
TEMPUR SEALY INTERNATIONAL, INC.
(Registrant)
|
||
|
|
|
|
|
Date: February 24, 2017
|
|
By:
|
|
/S/ Scott L. Thompson
|
|
|
|
|
Scott L. Thompson
Chairman, President and Chief Executive Officer
|
Signature
|
|
Capacity
|
|
|
|
/S/ SCOTT L. THOMPSON
|
|
Chairman, President and Chief Executive Officer (Principal Executive Officer)
|
Scott L. Thompson
|
|
|
|
|
|
/S/ BARRY A. HYTINEN
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
Barry A. Hytinen
|
|
|
|
|
|
/S/ BHASKAR RAO
|
|
Chief Accounting Officer and Senior Vice President Finance (Principal Accounting Officer)
|
Bhaskar Rao
|
|
|
|
|
|
/S/ EVELYN S. DILSAVER
|
|
Director
|
Evelyn S. Dilsaver
|
|
|
|
|
|
/S/ JOHN A. HEIL
|
|
Director
|
John A. Heil
|
|
|
|
|
|
/S/ JON L. LUTHER
|
|
Director
|
Jon L. Luther
|
|
|
|
|
|
/S/ USMAN NABI
|
|
Director
|
Usman Nabi
|
|
|
|
|
|
/S/ RICHARD W. NEU
|
|
Director
|
Richard W. Neu
|
|
|
|
|
|
/S/ ROBERT B. TRUSSELL, JR.
|
|
Director
|
Robert B. Trussell, Jr.
|
|
Number of Shares
in Each Installment |
Initial Exercise Date
for Shares in Installment |
_________
1
|
First Anniversary of Grant Date
|
_________
2
|
Second Anniversary of Grant Date
|
_________
3
|
Third Anniversary of Grant Date
|
__________
4
|
Fourth Anniversary of Grant Date
|
1
|
Number to represent 1/4 of the Award, rounded up to the nearest whole share.
|
2
|
Number to represent 1/4 of the Award, rounded up to the nearest whole share.
|
3
|
Number to represent 1/4 of the Award, rounded up to the nearest whole share.
|
4
|
Number to represent 1/4 of the Award, rounded up to the nearest whole share.
|
5
|
This definition is only to be used for EVP level and above and SVPs with employment agreements that define these terms. In addition, will tailor applicable terms to the terms used in David Montgomery’s agreement.
|
6
|
The first bracketed provision to be used for EVP level and above and SVPs with employment agreements that define these terms, and the second bracketed provision to be used for all others.
|
7
|
The first bracketed provision to be used for EVP level and above and SVPs with employment agreements that define these terms, and the second bracketed provision to be used for all others.
|
By:
|
|
|
|
Title:
|
|
|
Signature of Optionee
|
|
|
|
|
|
|
|
[Name of Optionee]
|
|
|
|
Optionee's Address:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ace
|
AH Beard
|
Auping
|
Ashley Sleep
|
Boyd
|
Carpe Diem
|
Carpenter
|
Casper
|
Carolina Mattress
|
Cauval Group
|
Chaide & Chaide
|
Classic Sleep Products
|
Comforpedic
|
Comfort Solutions
|
COFEL group
|
De Rucci
|
Diamona
|
Doremo Octaspring
|
Dorelan
|
Dunlopillo
|
Duxiana
|
Eastborne
|
Eminflex
|
Englander
|
Flex Group of Companies
|
Foamex
|
France Bed
|
Future Foam
|
Harrisons
|
Hastens
|
Hilding Anders Group
|
Hypnos
|
IBC
|
KayMed
|
King Koil
|
Kingsdown
|
Lady Americana
|
Land and Sky
|
Leggett & Platt
|
Lo Monaco
|
Luna
|
Magniflex
|
Metzler
|
Myers
|
Optimo
|
Ortobom
|
Natura
|
Natures Rest
|
Park Place
|
Permaflex
|
Pikolin Group
|
Recticel Group
|
Relyon
|
Restonic
|
Reverie
|
Rosen
|
Rowe
|
Saatva
|
Sapsa Bedding
|
Select Comfort
|
Serta and any direct or indirect parent company
|
Silentnight
|
Simmons Company/Beautyrest and any direct or
indirect parent company
|
Sleepmaker
|
Spring Air
|
Sterling
|
Stobel
|
Swiss Comfort
|
Swiss Sense
|
Therapedic
|
Tufts and Needles
|
Ashley
|
Innovative Mattress Solutions
|
Mattress Firm
|
Sleepy’s
|
Wayfair
|
1
|
|
This definition is only to be used for EVP level and above and any SVPs with employment agreements that define these terms. In addition, will tailor applicable terms to the terms used in David Montgomery’s agreement.
|
2
|
|
This definition is only to be used for EVP level and above and any SVPs with employment agreements that define these terms, and the second bracketed provision to be used for all others.
|
3
|
|
The first bracketed provision to be used for EVP level and above and any SVPs with employment agreements that define these terms, and the second bracketed provision to be used for all others.
|
4
|
|
To be used in agreements for VP level and above.
|
TEMPUR SEALY INTERNATIONAL, INC.
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
|
|
RECIPIENT
|
|
|
|
|
|
Recipient signature
|
|
|
|
|
|
Name of Recipient
|
Ace
|
AH Beard
|
Auping
|
Ashley Sleep
|
Boyd
|
Carpe Diem
|
Carpenter
|
Casper
|
Carolina Mattress
|
Cauval Group
|
Chaide & Chaide
|
Classic Sleep Products
|
Comforpedic
|
Comfort Solutions
|
COFEL group
|
De Rucci
|
Diamona
|
Doremo Octaspring
|
Dorelan
|
Dunlopillo
|
Duxiana
|
Eastborne
|
Eminflex
|
Englander
|
Flex Group of Companies
|
Foamex
|
France Bed
|
Future Foam
|
Harrisons
|
Hastens
|
Hilding Anders Group
|
Hypnos
|
IBC
|
KayMed
|
King Koil
|
Kingsdown
|
Lady Americana
|
Land and Sky
|
Leggett & Platt
|
Lo Monaco
|
Luna
|
Magniflex
|
Metzler
|
Myers
|
Optimo
|
Ortobom
|
Natura
|
Natures Rest
|
Park Place
|
Permaflex
|
Pikolin Group
|
Recticel Group
|
Relyon
|
Restonic
|
Reverie
|
Rosen
|
Rowe
|
Saatva
|
Sapsa Bedding
|
Select Comfort
|
Serta and any direct or indirect parent company
|
Silentnight
|
Simmons Company/Beautyrest and any direct or
indirect parent company
|
Sleepmaker
|
Spring Air
|
Sterling
|
Stobel
|
Swiss Comfort
|
Swiss Sense
|
Therapedic
|
Tufts and Needles
|
Ashley
|
Innovative Mattress Solutions
|
Mattress Firm
|
Sleepy’s
|
Wayfair
|
Entity
|
State or Country of Organization
|
Tempur World, LLC
|
Delaware
|
Tempur-Pedic Management, LLC
|
Delaware
|
Tempur Production USA, LLC
|
Virginia
|
Tempur-Pedic North America, LLC
|
Delaware
|
Tempur-Pedic Technologies, Inc.
|
Delaware
|
Tempur Retail Stores, LLC
|
Delaware
|
Sleep Insurance, Inc.
|
Vermont
|
Tempur Sealy International Distribution, LLC
|
Delaware
|
Tempur Holdings B.V.
|
Netherlands
|
Dan-Foam ApS
|
Denmark
|
Tempur Danish Holdings ApS
|
Denmark
|
Tempur Danmark P/S
|
Denmark
|
Dan-Foam Acquisition ApS
|
Denmark
|
Tempur UK, Ltd.
|
United Kingdom
|
Tempur Japan Yugen Kaisha
|
Japan
|
Tempur Sealy International Limited
|
United Kingdom
|
Tempur Sealy France SAS
|
France
|
Tempur Sealy Deutschland GmbH
|
Germany
|
Tempur Singapore Pte Ltd.
|
Singapore
|
Tempur Sealy Benelux B.V.
|
Netherlands
|
Tempur Australia Pty. Ltd.
|
Australia
|
Tempur Korea Limited
|
Republic of Korea
|
Sealy Mattress Corporation
|
Delaware
|
Sealy Mattress Company
|
Ohio
|
Sealy Mattress Company of Puerto Rico
|
Ohio
|
Sealy, Inc.
|
Ohio
|
The Ohio Mattress Company Licensing and Components Group, Inc.
|
Delaware
|
Sealy Mattress Manufacturing Company, LLC.
|
Delaware
|
Sealy Technology LLC
|
North Carolina
|
Sealy (Switzerland) Gmbh
|
Switzerland
|
Mattress Holdings International B.V.
|
The Netherlands
|
Sealy Canada, Ltd.
|
Alberta
|
Gestion Centurion Inc.
|
Quebec
|
Tempur Sealy Mexico S. de R.L. de C.V.
|
Mexico
|
Sealy Servicios de Mexico S.A. de C.V.
|
Mexico
|
Sealy Colchones de Mexico S.A. de C.V.
|
Mexico
|
(1)
|
Registration Statement (Form S-8 No. 333-160821) pertaining to the Tempur Sealy International, Inc. Amended and Restated 2003 Equity Incentive Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-154966) pertaining to the Tempur Sealy International, Inc. Amended and Restated 2003 Equity Incentive Plan,
|
(3)
|
Registration Statement (Form S-8 No. 333-111545) pertaining to the Tempur Sealy International, Inc. 2003 Equity Incentive Plan, the 2003 Employee Stock Purchase Plan, and the 2002 Stock Option Plan,
|
(4)
|
Registration Statement (Form S-8 No. 333-192220) pertaining to the Tempur Sealy International, Inc. 2013 Equity Incentive Plan,
|
(5)
|
Registration Statement (Form S-4 No. 333-189063) of Tempur Sealy International, Inc.,
|
(6)
|
Registration Statement (Form S-4 No. 333-209551) of Tempur Sealy International, Inc., and
|
(7)
|
Registration Statement (Form S-4 No. 333-212943) of Tempur Sealy International, Inc.,
|
Date: February 24, 2017
|
By:
|
/S/ SCOTT L. THOMPSON
|
|
|
Scott L. Thompson
|
|
|
President and Chief Executive Officer
|
Date: February 24, 2017
|
By:
|
/S/ BARRY A. HYTINEN
|
|
|
Barry A. Hytinen
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
Date: February 24, 2017
|
|
/S/ SCOTT L. THOMPSON
|
|
|
Scott L. Thompson
President and Chief Executive Officer
|
|
|
|
Date: February 24, 2017
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/S/ BARRY A. HYTINEN
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Barry A. Hytinen
Executive Vice President and Chief Financial Officer
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