Guarantor/Non-Guarantor Financial Information (Tables)

9 Months Ended

Sep. 30, 2018

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, 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

Three Months Ended September 30, 2017

(in millions)



	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	520.2		$	222.8		$	(31.5	)	$	711.5
Cost of sales	—			300.4			130.4			(26.3		)	404.5
Gross profit	—			219.8			92.4			(5.2		)	307.0
Selling and marketing expenses	1.4			101.7			52.3			(3.4		)	152.0
General, administrative and other expenses	4.9			42.4			23.7			(4.5		)	66.5
Equity income in earnings of unconsolidated affiliates	—			—			(3.5		)	—			(3.5		)
Royalty income, net of royalty expense	—			(5.3		)	—			—			(5.3		)
Operating (loss) income	(6.3		)	81.0			19.9			2.7			97.3

Other expense, net:
Third party interest expense, net	14.8			6.7			10.5			(9.9		)	22.1
Intercompany interest (income) expense, net	(1.1		)	2.8			(1.7		)	—			—
Interest expense, net	13.7			9.5			8.8			(9.9		)	22.1
Other (income) expense, net	—			(4.5		)	5.6			(0.1		)	1.0
Total other expense, net	13.7			5.0			14.4			(10.0		)	23.1

Income from equity investees	53.8			1.7			—			(55.5		)	—

Income from continuing operations before income taxes	33.8			77.7			5.5			(42.8		)	74.2
Income tax benefit (provision)	7.4			(23.9		)	(3.8		)	(0.7		)	(21.0		)
Income from continuing operations	41.2			53.8			1.7			(43.5		)	53.2
Loss from discontinued operations, net of tax	—			—			—			(12.0		)	(12.0		)
Net income before non-controlling interest	41.2			53.8			1.7			(55.5		)	41.2
Less: Net loss attributable to non-controlling interest	(3.4		)	—			(3.4		)	3.4			(3.4		)
Net income attributable to Tempur Sealy International, Inc.	$	44.6		$	53.8		$	5.1		$	(58.9	)	$	44.6

Comprehensive income attributable to Tempur Sealy International, Inc.	$	54.2		$	54.0		$	14.6		$	(68.6	)	$	54.2

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

Supplemental Condensed Consolidated Statements of Income and Comprehensive Income

Nine Months Ended September 30, 2017

(in millions)



	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net sales	$	—		$	1,522.4		$	641.2		$	(94.4	)	$	2,069.2
Cost of sales	—			920.9			375.3			(80.1		)	1,216.1
Gross profit	—			601.5			265.9			(14.3		)	853.1
Selling and marketing expenses	4.2			308.9			148.3			(10.0		)	451.4
General, administrative and other expenses	13.8			132.2			60.5			(6.7		)	199.8
Customer termination charges, net	(8.4		)	21.8			1.0			—			14.4
Equity income in earnings of unconsolidated affiliates	—			—			(10.6		)	—			(10.6		)
Royalty income, net of royalty expense	—			(15.0		)	—			—			(15.0		)
Operating (loss) income	(9.6		)	153.6			66.7			2.4			213.1

Other expense, net:
Third party interest expense, net	44.7			19.4			12.1			(10.8		)	65.4
Intercompany interest (income) expense, net	(3.6		)	5.6			(2.0		)	—			—
Interest expense, net	41.1			25.0			10.1			(10.8		)	65.4
Other (income) expense, net	—			(13.6		)	5.2			1.7			(6.7		)
Total other expense, net	41.1			11.4			15.3			(9.1		)	58.7

Income from equity investees	129.1			33.6			—			(162.7		)	—

Income from continuing operations before income taxes	78.4			175.8			51.4			(151.2		)	154.4
Income tax benefit (provision)	16.5			(46.7		)	(17.8		)	1.5			(46.5		)
Income from continuing operations	94.9			129.1			33.6			(149.7		)	107.9
Loss from discontinued operations, net of tax	—			—			—			(13.0		)	(13.0		)
Net income before non-controlling interest	94.9			129.1			33.6			(162.7		)	94.9
Less: Net loss attributable to non-controlling interest	(8.1		)	—			(8.1		)	8.1			(8.1		)
Net income attributable to Tempur Sealy International, Inc.	$	103.0		$	129.1		$	41.7		$	(170.8	)	$	103.0

Comprehensive income attributable to Tempur Sealy International, Inc.	$	130.1		$	124.6		$	73.4		$	(198.0	)	$	130.1

Schedule of supplemental condensed consolidated balance sheets

Supplemental Condensed Consolidated Balance Sheets

September 30, 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	$	—	$	10.5	$	22.9	$	(1.3	)	$	32.1
Accounts receivable, net	—		12.8		352.1		9.2			374.1
Inventories	—		160.8		61.6		(1.9		)	220.5
Prepaid expenses and other current assets	274.3		97.0		147.0		(275.0		)	243.3
Current assets of discontinued operations	—		—		—		7.6			7.6
Total Current Assets	274.3		281.1		583.6		(261.4		)	877.6
Property, plant and equipment, net	—		349.6		72.4		(1.0		)	421.0
Goodwill	—		508.8		218.0		(0.3		)	726.5
Other intangible assets, net	—		575.8		81.3		(0.1		)	657.0
Deferred income taxes	12.7		—		22.8		(12.7		)	22.8
Other non-current assets	—		51.9		50.5		(0.1		)	102.3
Net investment in subsidiaries	645.6		215.1		—		(860.7		)	—
Due from affiliates	420.1		127.2		25.4		(572.7		)	—
Non-current assets of discontinued operations	—		—		—		1.5			1.5
Total Assets	$	1,352.7	$	2,109.5	$	1,054.0	$	(1,707.5	)	$	2,808.7

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	—	$	196.0	$	61.3	$	9.3		$	266.6
Accrued expenses and other current liabilities	21.4		150.2		207.2		(2.8		)	376.0
Income taxes payable	—		270.4		15.6		(274.8		)	11.2
Current portion of long-term debt	—		40.2		32.8		—			73.0
Current liabilities of discontinued operations	—		—		—		6.9			6.9
Total Current Liabilities	21.4		656.8		316.9		(261.4		)	733.7
Long-term debt, net	1,042.7		559.7		13.6		—			1,616.0
Deferred income taxes	—		117.8		16.6		(12.7		)	121.7
Other non-current liabilities	—		76.8		51.0		(1.1		)	126.7
Due to affiliates	79.1		52.8		440.8		(572.7		)	—
Non-current liabilities of discontinued operations	—		—		—		1.1			1.1
Total Liabilities	1,143.2		1,463.9		838.9		(846.8		)	2,599.2

Total Stockholders' Equity	209.5		645.6		215.1		(860.7		)	209.5
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity	$	1,352.7	$	2,109.5	$	1,054.0	$	(1,707.5	)	$	2,808.7

Supplemental Condensed Consolidated Balance Sheets

December 31, 2017

(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	$	12.3	$	29.5	$	(0.8	)	$	41.1
Accounts receivable, net	—		5.1		322.2		(16.5		)	310.8
Inventories	—		103.4		79.6		(3.9		)	179.1
Prepaid expenses and other current assets	261.0		50.6		13.4		(261.6		)	63.4
Current assets of discontinued operations	—		—		—		13.0			13.0
Total Current Assets	261.1		171.4		444.7		(269.8		)	607.4
Property, plant and equipment, net	—		360.4		74.7		(1.6		)	433.5
Goodwill	—		507.6		225.5		(0.4		)	732.7
Other intangible assets, net	—		577.5		89.9		(0.3		)	667.1
Deferred income taxes	11.8		—		23.6		(12.0		)	23.4
Other non-current assets	—		47.2		180.2		(0.1		)	227.3
Net investment in subsidiaries	2,381.0		127.7		—		(2,508.7		)	—
Due from affiliates	87.2		1,975.9		15.6		(2,078.7		)	—
Non-current assets of discontinued operations	—		—		—		2.6			2.6
Total Assets	$	2,741.1	$	3,767.7	$	1,054.2	$	(4,869.0	)	$	2,694.0

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	—	$	174.6	$	76.2	$	(22.5	)	$	228.3
Accrued expenses and other current liabilities	7.6		144.2		82.4		(11.9		)	222.3
Income taxes payable	—		279.3		10.0		(261.1		)	28.2
Current portion of long-term debt	—		35.7		36.7		—			72.4
Current liabilities of discontinued operations	—		—		—		25.7			25.7
Total Current Liabilities	7.6		633.8		205.3		(269.8		)	576.9
Long-term debt, net	1,041.6		589.4		49.7		—			1,680.7
Deferred income taxes	—		107.8		18.3		(11.8		)	114.3
Other non-current liabilities	—		55.2		152.2		(1.3		)	206.1
Due from affiliates	1,577.2		0.5		501.0		(2,078.7		)	—
Non-current liabilities of discontinued operations	—		—		—		1.3			1.3
Total Liabilities	2,626.4		1,386.7		926.5		(2,360.3		)	2,579.3

Redeemable non-controlling interest	2.2		—		2.2		(2.2		)	2.2

Total Stockholders' Equity	112.5		2,381.0		125.5		(2,506.5		)	112.5
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity	$	2,741.1	$	3,767.7	$	1,054.2	$	(4,869.0	)	$	2,694.0

Schedule of supplemental condensed consolidated statements of cash flows

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:
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:
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

Supplemental Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2017

(in millions)



	Tempur Sealy International, Inc. (Ultimate Parent)			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Reclassifications and Eliminations			Consolidated
Net cash (used in) provided by operating activities from continuing operations	$	(27.0	)	$	352.8		$	(123.3	)	$	14.1		$	216.6

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	—			(35.9		)	(7.5		)	0.3			(43.1		)
Contributions (paid to) received from subsidiaries and affiliates	—			(159.5		)	159.5						—
Other	—			0.9			4.0			(4.0		)	0.9
Net cash (used in) provided by investing activities from continuing operations	—			(194.5		)	156.0			(3.7		)	(42.2		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under long-term debt obligations	—			523.8			462.1			—			985.9
Repayments of borrowings under long-term debt obligations	—			(703.2		)	(421.5		)	—			(1,124.7		)
Net activity in investment in and advances from (to) subsidiaries and affiliates	66.1			21.4			(87.5		)	—			—
Proceeds from exercise of stock options	6.5			—			—			—			6.5
Treasury stock repurchased	(44.9		)	—			—			—			(44.9		)
Payments of deferred financing costs	—			—			(0.5		)	—			(0.5		)
Other	—			(0.2		)	(2.7		)	—			(2.9		)
Net cash provided by (used in) financing activities from continuing operations	27.7			(158.2		)	(50.1		)	—			(180.6		)

Net cash provided by (used in) continuing operations	0.7			0.1			(17.4		)	10.4			(6.2		)

CASH USED IN DISCONTINUED OPERATIONS
Operating cash flows, net	—			—			—			(14.1		)	(14.1		)
Investing cash flows, net	—			—			—			3.7			3.7
Financing cash flows, net	—			—			—			—			—
Net cash used in discontinued operations	—			—			—			(10.4		)	(10.4		)

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	—			—			(7.3		)	—			(7.3		)
Increase (decrease) in cash and cash equivalents	0.7			0.1			(24.7		)	—			(23.9		)
CASH AND CASH EQUIVALENTS, beginning of period	—			7.9			57.8			—			65.7
CASH AND CASH EQUIVALENTS, end of period	$	0.7		$	8.0		$	33.1		$	—		$	41.8
LESS: CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS	—			—			2.2			—			2.2
CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS	$	—		$	8.0		$	30.9		$	—		$	39.6