Guarantor/Non-Guarantor Financial Information (Tables)

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule of supplemental condensed consolidated statements of income and comprehensive income

Supplemental Condensed Consolidated Statements of Income and Comprehensive Income

Three Months Ended September 30, 2019

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	641.9		$	200.1		$	(21.0	)	$	821.0
Cost of sales	—			366.5			114.9			(21.0		)	460.4
Gross profit	—			275.4			85.2			—			360.6
Selling and marketing expenses	2.8			119.8			46.0			—			168.6
General, administrative and other expenses	4.3			57.1			14.2			(0.3		)	75.3
Equity income in earnings of unconsolidated affiliates	—			—			(3.9		)	—			(3.9		)
Operating (loss) income	(7.1		)	98.5			28.9			0.3			120.6
Other expense (income), net:
Third party interest expense, net	14.0			6.4			0.4			—			20.8
Intercompany interest (income) expense, net	(2.4		)	3.4			(1.0		)	—			—
Interest expense (income), net	11.6			9.8			(0.6		)	—			20.8
Other expense (income), net	—			1.5			(1.4		)	1.2			1.3
Total other expense (income), net	11.6			11.3			(2.0		)	1.2			22.1
Income from equity investees	88.8			21.6			—			(110.4		)	—
Income from continuing operations before income taxes	70.1			108.8			30.9			(111.3		)	98.5
Income tax benefit (provision)	3.1			(20.0		)	(9.3		)	0.1			(26.1		)
Income from continuing operations	73.2			88.8			21.6			(111.2		)	72.4
Income from discontinued operations, net of tax	—			—			—			0.8			0.8
Net income before non-controlling interest	73.2			88.8			21.6			(110.4		)	73.2
Less: Net loss attributable to non-controlling interest	(0.1		)	—			(0.1		)	0.1			(0.1		)
Net income attributable to Tempur Sealy International, Inc.	$	73.3		$	88.8		$	21.7		$	(110.5	)	$	73.3
Comprehensive income attributable to Tempur Sealy International, Inc.	$	66.6		$	92.8		$	11.0		$	(103.8	)	$	66.6

Supplemental Condensed Consolidated Statements of Income and Comprehensive Income

Three Months Ended September 30, 2018

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	556.6		$	197.4		$	(24.5	)	$	729.5
Cost of sales	—			338.6			114.1			(23.2		)	429.5
Gross profit	—			218.0			83.3			(1.3		)	300.0
Selling and marketing expenses	2.2			98.2			48.1			(2.6		)	145.9
General, administrative and other expenses	4.6			56.3			13.8			(1.5		)	73.2
Equity income in earnings of unconsolidated affiliates	—			—			(3.8		)	—			(3.8		)
Operating (loss) income	(6.8		)	63.5			25.2			2.8			84.7
Other expense, net:
Third party interest expense, net	14.9			7.8			1.1			(0.2		)	23.6
Intercompany interest (income) expense, net	(1.7		)	3.3			(1.6		)	—			—
Interest expense (income), net	13.2			11.1			(0.5		)	(0.2		)	23.6
Other (income) expense, net	—			(1.5		)	2.5			0.4			1.4
Total other expense, net	13.2			9.6			2.0			0.2			25.0
Income (loss) from equity investees	57.8			(14.9		)	—			(42.9		)	—
Income from continuing operations before income taxes	37.8			39.0			23.2			(40.3		)	59.7
Income tax benefit (provision)	3.6			18.8			(38.1		)	0.1			(15.6		)
Income (loss) from continuing operations	41.4			57.8			(14.9		)	(40.2		)	44.1
Loss from discontinued operations, net of tax	—			—			—			(2.7		)	(2.7		)
Net income (loss) before non-controlling interest	41.4			57.8			(14.9		)	(42.9		)	41.4
Less: Net loss attributable to non-controlling interest	(0.9		)	(0.8		)	(0.1		)	0.9			(0.9		)
Net income (loss) attributable to Tempur Sealy International, Inc.	$	42.3		$	58.6		$	(14.8	)	$	(43.8	)	$	42.3
Comprehensive income (loss) attributable to Tempur Sealy International, Inc.	$	44.7		$	58.6		$	(12.4	)	$	(46.2	)	$	44.7

Supplemental Condensed Consolidated Statements of Income and Comprehensive Income

Nine Months Ended September 30, 2019

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations				Consolidated
Net sales	$	—		$	1,706.3		$	581.3		$	(52.9	)		$	2,234.7
Cost of sales	—			1,001.1			330.7			(52.9		)		1,278.9
Gross profit	—			705.2			250.6			—				955.8
Selling and marketing expenses	8.4			335.9			141.2			(0.1		)		485.4
General, administrative and other expenses	12.8			165.4			42.6			(2.1		)		218.7
Equity income in earnings of unconsolidated affiliates	—			—			(10.4		)	—				(10.4		)
Operating (loss) income	(21.2		)	203.9			77.2			2.2				262.1
														—
Other expense (income), net:
Third party interest expense, net	42.2			21.0			2.5			—				65.7
Intercompany interest (income) expense, net	(7.5		)	8.8			(1.3		)	—				—
Interest expense, net	34.7			29.8			1.2			—				65.7
Other income, net	—			(5.1		)	(2.9		)	1.5			—	(6.5		)
Total other expense (income), net	34.7			24.7			(1.7		)	1.5				59.2
Income from equity investees	189.3			58.0			—			(247.3		)		—
Income from continuing operations before income taxes	133.4			237.2			78.9			(246.6		)		202.9
Income tax benefit (provision)	9.9			(47.9		)	(20.9		)	0.1				(58.8		)
Income from continuing operations	143.3			189.3			58.0			(246.5		)		144.1
Loss from discontinued operations, net of tax	—			—			—			(0.8		)		(0.8		)
Net income attributable to Tempur Sealy International, Inc.	$	143.3		$	189.3		$	58.0		$	(247.3	)		$	143.3
Comprehensive income attributable to Tempur Sealy International, Inc.	$	143.6		$	194.8		$	52.8		$	(247.6	)		$	143.6

Supplemental Condensed Consolidated Statements of Income and Comprehensive Income

Nine Months Ended September 30, 2018

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	1,507.6		$	594.3		$	(75.1	)	$	2,026.8
Cost of sales	—			918.0			338.5			(67.2		)	1,189.3
Gross profit	—			589.6			255.8			(7.9		)	837.5
Selling and marketing expenses	6.3			296.5			152.0			(10.2		)	444.6
General, administrative and other expenses	14.3			154.0			42.5			(4.8		)	206.0
Equity income in earnings of unconsolidated affiliates	—			—			(11.5		)	—			(11.5		)
Operating (loss) income	(20.6		)	139.1			72.8			7.1			198.4
Other expense, net:
Third party interest expense, net	44.7			22.3			4.2			(1.7		)	69.5
Intercompany interest (income) expense, net	(5.3		)	7.8			(2.5		)	—			—
Interest expense, net	39.4			30.1			1.7			(1.7		)	69.5
Other (income) expense, net	—			(7.1		)	7.4			(2.1		)	(1.8		)
Total other expense, net	39.4			23.0			9.1			(3.8		)	67.7
Income from equity investees	134.1			15.1			—			(149.2		)	—
Income from continuing operations before income taxes	74.1			131.2			63.7			(138.3		)	130.7
Income tax benefit (provision)	11.3			2.9			(48.6		)	—			(34.4		)
Income from continuing operations	85.4			134.1			15.1			(138.3		)	96.3
Loss from discontinued operations, net of tax	—			—			—			(10.9		)	(10.9		)
Net income before non-controlling interest	85.4			134.1			15.1			(149.2		)	85.4
Less: Net loss attributable to non-controlling interest	(2.8		)	(2.6		)	(0.2		)	2.8			(2.8		)
Net income attributable to Tempur Sealy International, Inc.	$	88.2		$	136.7		$	15.3		$	(152.0	)	$	88.2
Comprehensive income attributable to Tempur Sealy International, Inc.	$	78.9		$	136.1		$	6.6		$	(142.7	)	$	78.9

Schedule of supplemental condensed consolidated balance sheets

Supplemental Condensed Consolidated Balance Sheets

September 30, 2019

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	14.2	$	38.7	$	—		$	52.9
Accounts receivable, net	1.0		23.1		379.2		27.9			431.2
Inventories	—		210.5		60.3		—			270.8
Prepaid expenses and other current assets	289.0		66.3		136.7		(286.4		)	205.6
Total Current Assets	290.0		314.1		614.9		(258.5		)	960.5
Property, plant and equipment, net	—		363.8		67.7		—			431.5
Goodwill	—		512.1		218.3		—			730.4
Other intangible assets, net	—		567.7		76.3		—			644.0
Operating lease right-of-use assets	—		179.6		47.6		—			227.2
Deferred income taxes	13.6		—		13.6		(13.6		)	13.6
Other non-current assets	3.8		52.5		39.6		—			95.9
Net investment in subsidiaries	819.7		317.5		—		(1,137.2		)	—
Due from affiliates	382.7		135.1		24.3		(542.1		)	—
Total Assets	$	1,509.8	$	2,442.4	$	1,102.3	$	(1,951.4	)	$	3,103.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	—	$	194.7	$	53.6	$	27.9		$	276.2
Accrued expenses and other current liabilities	21.4		250.3		214.7		—			486.4
Current portion of long-term debt	—		56.7		3.4		—			60.1
Income taxes payable	—		296.4		15.3		(286.4		)	25.3
Total Current Liabilities	21.4		798.1		287.0		(258.5		)	848.0
Long-term debt, net	1,044.0		431.3		34.2		—			1,509.5
Long-term operating lease obligations	—		152.8		33.4		—			186.2
Deferred income taxes	—		108.6		15.1		(13.6		)	110.1
Other non-current liabilities	—		56.7		56.1		—			112.8
Due to affiliates	107.9		75.2		359.0		(542.1		)	—
Total Liabilities	1,173.3		1,622.7		784.8		(814.2		)	2,766.6
Total Stockholders' Equity	336.5		819.7		317.5		(1,137.2		)	336.5
Total Liabilities and Stockholders’ Equity	$	1,509.8	$	2,442.4	$	1,102.3	$	(1,951.4	)	$	3,103.1

Supplemental Condensed Consolidated Balance Sheets

December 31, 2018

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Reclassifications and Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	0.1	$	6.2	$	39.5	$	—		$	45.8
Accounts receivable, net	—		15.2		303.3		3.0			321.5
Inventories	—		159.4		62.9		—			222.3
Prepaid expenses and other current assets	276.9		65.4		148.1		(274.6		)	215.8
Total Current Assets	277.0		246.2		553.8		(271.6		)	805.4
Property, plant and equipment, net	—		350.7		70.1		—			420.8
Goodwill	—		508.8		214.2		—			723.0
Other intangible assets, net	—		572.7		76.6		—			649.3
Deferred income taxes	15.0		—		22.6		(15.0		)	22.6
Other non-current assets	—		49.2		45.1		—			94.3
Net investment in subsidiaries	661.7		210.0		—		(871.7		)	—
Due from affiliates	422.1		153.8		15.4		(591.3		)	—
Total Assets	$	1,375.8	$	2,091.4	$	997.8	$	(1,749.6	)	$	2,715.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	—	$	186.7	$	63.3	$	3.0		$	253.0
Accrued expenses and other current liabilities	6.7		143.9		208.6		—			359.2
Current portion of long-term debt	—		44.0		3.1		—			47.1
Income taxes payable	—		274.7		9.6		(274.6		)	9.7
Total Current Liabilities	6.7		649.3		284.6		(271.6		)	669.0
Long-term debt, net	1,043.0		547.1		9.0		—			1,599.1
Deferred income taxes	—		118.0		14.5		(15.0		)	117.5
Other non-current liabilities	1.9		58.2		52.2		—			112.3
Due to affiliates	106.7		57.1		427.5		(591.3		)	—
Total Liabilities	1,158.3		1,429.7		787.8		(877.9		)	2,497.9
Total Stockholders' Equity	217.5		661.7		210.0		(871.7		)	217.5
Total Liabilities and Stockholders’ Equity	$	1,375.8	$	2,091.4	$	997.8	$	(1,749.6	)	$	2,715.4

Schedule of supplemental condensed consolidated statements of cash flows

Supplemental Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2019 (in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net cash (used in) provided by operating activities from continuing operations	$	(22.0	)	$	215.1		$	6.9		$	1.7		$	201.7
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
Purchases of property, plant and equipment	—			(53.5		)	(8.4		)	—			(61.9		)
Acquisitions, net of cash acquired	—			(9.0		)	(8.1		)	—			(17.1		)
Other	—			4.8			10.2			—			15.0
Contributions (paid to) received from subsidiaries and affiliates	—			(58.1		)	58.1			—			—
Net cash (used in) provided by investing activities from continuing operations	—			(115.8		)	51.8			—			(64.0		)
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
Proceeds from borrowings under long-term debt obligations	—			161.9			440.6			—			602.5
Repayments of borrowings under long-term debt obligations	—			(263.2		)	(415.3		)	—			(678.5		)
Net activity in investment in and advances from (to) subsidiaries and affiliates	64.6			16.0			(80.6		)	—			—
Excess tax benefit from stock-based compensation	12.8			—			—			—			12.8
Treasury stock repurchased	(55.5		)	—			—			—			(55.5		)
Payments of deferred financing costs	—			—			(0.1		)	—			(0.1		)
Other	—			(6.0		)	—			—			(6.0		)
Net cash provided by (used in) financing activities from continuing operations	21.9			(91.3		)	(55.4		)	—			(124.8		)
Net cash (used in) provided by continuing operations	(0.1		)	8.0			3.3			1.7			12.9
CASH USED IN DISCONTINUED OPERATIONS
Operating cash flows, net	—			—			—			(1.7		)	(1.7		)
Investing cash flows, net	—			—			—			—			—
Financing cash flows, net	—			—			—			—			—
Net cash used in discontinued operations	—			—			—			(1.7		)	(1.7		)
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	—			—			(4.1		)	—			(4.1		)
(Decrease)/increase in cash and cash equivalents	(0.1		)	8.0			(0.8		)	—			7.1
CASH AND CASH EQUIVALENTS, beginning of period	0.1			6.2			39.5			—			45.8
CASH AND CASH EQUIVALENTS, end of period	$	—		$	14.2		$	38.7		$	—		$	52.9

Supplemental Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2018

(in millions)

	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net cash (used in) provided by operating activities from continuing operations	$	(28.4	)	$	132.7		$	8.7		$	17.6		$	130.6
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
Purchases of property, plant and equipment	—			(46.4		)	(9.6		)	0.2			(55.8		)
Contributions (paid to) received from subsidiaries and affiliates	—			(83.6		)	83.6			—			—
Other	—			0.1			0.2			—			0.3
Net cash (used in) provided by investing activities from continuing operations	—			(129.9		)	74.2			0.2			(55.5		)
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
Proceeds from borrowings under long-term debt obligations	—			335.6			527.4			—			863.0
Repayments of borrowings under long-term debt obligations	—			(358.1		)	(564.6		)	—			(922.7		)
Net activity in investment in and advances from (to) subsidiaries and affiliates	27.6			21.7			(49.3		)	—			—
Proceeds from exercise of stock options	4.2			—			—			—			4.2
Treasury stock repurchased	(3.5		)	—			—			—			(3.5		)
Other	—			(3.8		)	(0.9		)	—			(4.7		)
Net cash provided by (used in) financing activities from continuing operations	28.3			(4.6		)	(87.4		)	—			(63.7		)
Net cash (used in) provided by continuing operations	(0.1		)	(1.8		)	(4.5		)	17.8			11.4
CASH USED IN DISCONTINUED OPERATIONS
Operating cash flows, net	—			—			—			(17.6		)	(17.6		)
Investing cash flows, net	—			—			—			(0.2		)	(0.2		)
Financing cash flows, net	—			—			—			—			—
Net cash used in discontinued operations	—			—			—			(17.8		)	(17.8		)
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	—			—			(2.1		)	—			(2.1		)
Decrease in cash and cash equivalents	(0.1		)	(1.8		)	(6.6		)	—			(8.5		)
CASH AND CASH EQUIVALENTS, beginning of period	0.1			12.3			29.5			—			41.9
CASH AND CASH EQUIVALENTS, end of period	—			10.5			22.9			—			33.4
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS	—			—			1.3			—			1.3
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS	$	—		$	10.5		$	21.6		$	—		$	32.1