TUP 10Q 3.31.12
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________
FORM 10-Q
________________________________________
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the 13 weeks ended March 31, 2012
OR
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition period from               to             
Commission file number 1-11657
________________________________________
TUPPERWARE BRANDS CORPORATION
(Exact name of registrant as specified in its charter)  
 ________________________________________
Delaware
36-4062333
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
14901 South Orange Blossom Trail, Orlando, Florida
32837
(Address of principal executive offices)
(Zip Code)
 
Registrant's telephone number, including area code: (407) 826-5050
________________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
x
 
Accelerated filer
o
 
 
 
 
 
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o  No   x
As of May 3, 2012, 55,914,357 shares of the common stock, $0.01 par value, of the registrant were outstanding.

Table of Contents

TABLE OF CONTENTS

 
 
Page
Number  
PART I. FINANCIAL INFORMATION
 
 
 
Item 1.
Financial Statements (Unaudited)
 
 
 
 
 
Consolidated Statements of Income 13 weeks ended March 31, 2012 and 14 weeks ended April 2, 2011
 
 
 
 
Consolidated Statements of Comprehensive Income 13 weeks ended March 31, 2012 and 14 weeks ended April 2, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
PART II. OTHER INFORMATION
 
 
 
Item 2.
 
 
 
Item 6.
 
 


2
Table of Contents


Item 1.
Financial Statements (Unaudited)

TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
13 weeks ended
 
14 weeks ended
(Dollars in millions, except per share amounts)
March 31,
2012
 
April 2,
2011
 
 
 
 
Net sales
$
639.5

 
$
636.4

Cost of products sold
213.1

 
214.9

Gross margin
426.4

 
421.5

 
 
 
 
Delivery, sales and administrative expense
339.6

 
339.4

Re-engineering and impairment charges
0.9

 
1.4

Gains on disposal of assets, including insurance recoveries
0.2

 
—

Operating income
86.1

 
80.7

 
 
 
 
Interest income
0.7

 
0.9

Interest expense
9.8

 
7.5

Other (income) expense
(0.3
)
 
0.1

Income before income taxes
77.3

 
74.0

 
 
 
 
Provision for income taxes
19.0

 
18.2

Net income
$
58.3


$
55.8

 
 

 
 

 
 
 
 
Earnings per share:
 

 
 

Basic
$
1.04

 
$
0.90

Diluted
1.02

 
0.88

 
 
 
 
Weighted-average shares outstanding:
 

 
 

Basic
55.9

 
62.3

Diluted
57.1

 
63.5

 
 
 
 
Dividends declared per common share
$
0.36

 
$
0.30


See accompanying Notes to Consolidated Financial Statements (Unaudited).

3
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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 
13 weeks ended
 
14 weeks ended
(Dollars in millions, except per share amounts)
March 31,
2012
 
April 2,
2011
Net income
$
58.3

 
$
55.8

Foreign currency translation adjustments
41.0

 
34.3

Deferred (loss) gain on cash flow hedges, net of tax benefit of $0.5 in 2012 and tax provision of $0.7 million in 2011
(1.6
)
 
0.1

Pension and other post-retirement costs, net of tax benefit of $0.3 in 2012 and tax provision of $0.7 in 2011
0.3

 
0.6

Comprehensive income
$
98.0

 
$
90.8


See accompanying Notes to Consolidated Financial Statements (Unaudited).

4
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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(Dollars in millions, except share amounts)
March 31,
2012
 
December 31,
2011
ASSETS
 

 
 

Cash and cash equivalents
$
105.7

 
$
138.2

Accounts receivable, less allowances of $30.8 million in 2012 and $26.8 million in 2011
191.0

 
163.7

Inventories
331.0

 
302.5

Deferred income tax benefits, net
105.2

 
94.2

Non-trade amounts receivable, net
40.6

 
47.5

Prepaid expenses and other current assets
36.6

 
23.3

Total current assets
810.1

 
769.4

Deferred income tax benefits, net
325.2

 
339.2

Property, plant and equipment, net
287.6

 
273.1

Long-term receivables, less allowances of $24.5 million in 2012 and $23.3 million in 2011
22.0

 
23.2

Trademarks and tradenames
164.5

 
157.1

Other intangible assets, net
6.9

 
7.2

Goodwill
251.0

 
241.4

Other assets, net
33.9

 
33.6

Total assets
$
1,901.2

 
$
1,844.2

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

Accounts payable
$
120.5

 
$
157.2

Short-term borrowings and current portion of long-term debt and capital lease obligations
267.7

 
195.7

Accrued liabilities
325.4

 
322.5

Total current liabilities
713.6

 
675.4

Long-term debt and capital lease obligations
416.3

 
415.2

Other liabilities
233.8

 
252.8

Shareholders' equity:
 

 
 

Preferred stock, $0.01 par value, 200,000,000 shares authorized; none issued
—

 
—

Common stock, $0.01 par value, 600,000,000 shares authorized; 63,607,090 shares issued
0.6

 
0.6

Paid-in capital
131.9

 
126.8

Retained earnings
1,115.2

 
1,091.7

Treasury stock 7,607,862 and 7,099,345 shares in 2012 and 2011, respectively, at cost
(454.4
)
 
(422.8
)
Accumulated other comprehensive loss
(255.8
)
 
(295.5
)
Total shareholders' equity
537.5

 
500.8

Total liabilities and shareholders' equity
$
1,901.2

 
$
1,844.2


See accompanying Notes to Consolidated Financial Statements (Unaudited).

5
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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
13 Weeks
Ended
 
14 Weeks
Ended
(In millions)
March 31,
2012
 
April 2,
2011
Operating Activities:
 
 
 

Net income
$
58.3

 
$
55.8

Adjustments to reconcile net income to net cash used in operating activities:
 

 
 

Depreciation and amortization
12.1

 
12.8

Equity compensation
3.5

 
3.6

Amortization of deferred debt costs
0.3

 
0.2

Net gains on disposal of assets, including insurance recoveries
(0.3
)
 
(0.1
)
Provision for bad debts
3.6

 
2.8

Write-down of inventories
4.4

 
4.1

Net change in deferred income taxes
1.0

 
(0.3
)
Excess tax benefits from share-based payment arrangements
(5.4
)
 
(6.0
)
Changes in assets and liabilities:
 

 
 

Accounts and notes receivable
(23.0
)
 
(7.2
)
Inventories
(23.1
)
 
(20.3
)
Non-trade amounts receivable
(0.8
)
 
0.2

Prepaid expenses
(12.6
)
 
(11.6
)
Other assets
(0.2
)
 
(0.7
)
Accounts payable and accrued liabilities
(36.2
)
 
(40.0
)
Income taxes payable
(7.3
)
 
(12.2
)
Other liabilities
(2.4
)
 
(0.3
)
Proceeds from insurance recoveries, net of costs
0.2

 
—

Net cash impact from hedging activity
3.0

 
6.7

Other
0.1

 
(0.2
)
Net cash used in operating activities
(24.8
)
 
(12.7
)
Investing Activities:
 

 
 

Capital expenditures
(18.8
)
 
(12.1
)
Proceeds from disposal of property, plant and equipment
1.0

 
1.0

Net cash used in investing activities
(17.8
)
 
(11.1
)
Financing Activities:
 

 
 

Dividend payments to shareholders
(17.4
)
 
(19.0
)
Proceeds from exercise of stock options
4.2

 
10.9

Repurchase of common stock
(54.1
)
 
(52.0
)
Repayment of capital lease obligations
(0.4
)
 
(0.5
)
Net change in short-term debt
68.3

 
—

Excess tax benefits from share-based payment arrangements
5.4

 
6.0

Net cash provided by (used in) financing activities
6.0

 
(54.6
)
Effect of exchange rate changes on cash and cash equivalents
4.1

 
5.5

Net change in cash and cash equivalents
(32.5
)
 
(72.9
)
Cash and cash equivalents at beginning of year
138.2

 
248.7

Cash and cash equivalents at end of period
$
105.7

 
$
175.8


See accompanying Notes to Consolidated Financial Statements (Unaudited).

6
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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1:
Summary of Significant Accounting Policies
Basis of Presentation: The condensed consolidated financial statements include the accounts of Tupperware Brands Corporation and its subsidiaries, collectively “Tupperware” or the “Company”, with all intercompany transactions and balances having been eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with the 2011 audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.
Certain prior year amounts have been reclassified to conform with current year presentation.
These condensed consolidated financial statements are unaudited and have been prepared following the rules and regulations of the United States Securities and Exchange Commission and, in the Company's opinion, reflect all adjustments, including normal recurring items that are necessary for a fair statement of the results for the interim periods. Certain information and note disclosures normally included in the statement of financial position, results of operations, comprehensive income and cash flows prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. Operating results of any interim period presented herein are not necessarily indicative of the results that may be expected for a full fiscal year.
The Company's fiscal year ends on the last Saturday of December and, as a result, the 2012 fiscal year will contain 52 weeks, as compared with 53 weeks for fiscal 2011. The first quarter of 2012 contained 13 weeks as compared with the first quarter of 2011 that contained 14 weeks.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates.

Note 2:
Shipping and Handling Costs
The cost of products sold line item includes costs related to the purchase and manufacture of goods sold by the Company. Among these costs are inbound freight charges, purchasing and receiving costs, inspection costs, depreciation expense, internal transfer costs and warehousing costs of raw material, work in process and packing materials. The warehousing and distribution costs of finished goods are included in distribution, selling and administrative expense (“DS&A”). Distribution costs are comprised of outbound freight and associated labor costs. Fees billed to customers associated with the distribution of products are classified as revenue. The distribution costs included in DS&A expense for the first quarters of 2012 and 2011 were $37.4 million and $37.6 million, respectively.

Note 3:
Promotional Accruals
The Company frequently makes promotional offers to members of its independent sales force to encourage them to fulfill specific goals or targets for sales levels, party attendance, recruiting of new sales force members or other business-critical functions. The awards offered are in the form of cash, product awards, special prizes or trips.
The Company accrues for the costs of these awards during the period over which the sales force qualifies for the award and reports these costs primarily as a component of DS&A expense. These accruals require estimates as to the cost of the awards, based upon estimates of achievement and actual cost to be incurred. During the qualification period, actual results are monitored and changes to the original estimates are made when known. Promotional and other sales force compensation expenses included in DS&A expense totaled $112.5 million and $111.8 million for the first quarters of 2012 and 2011, respectively.


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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Note 4:
Inventories
 
 
March 31,
2012
 
December 31,
2011
 
(in millions)
Finished goods
$
221.5

 
$
206.4

Work in process
25.7

 
22.0

Raw materials and supplies
83.8

 
74.1

Total inventories
$
331.0

 
$
302.5


Note 5:
Net Income Per Common Share
Basic per share information is calculated by dividing net income by the weighted average number of shares outstanding. Diluted per share information is calculated by also considering the impact of potential common stock on both net income and the weighted average number of shares outstanding. The Company's potential common stock consists of employee and director stock options, restricted stock, restricted stock units and performance share units. Performance share awards are included in the diluted per share calculation when the performance criteria are achieved. The Company's potential common stock is excluded from the basic per share calculation and is included in the diluted per share calculation when doing so would not be anti-dilutive.
The elements of the earnings per share computations were as follows (in millions, except per share amounts):
 
13 weeks ended
 
14 weeks ended
 
March 31,
2012
 
April 2,
2011
Net income
$
58.3

 
$
55.8

Weighted-average shares of common stock outstanding
55.9

 
62.3

Common equivalent shares:
 
 
 
Assumed exercise of dilutive options, restricted shares, restricted stock units and performance share units
1.2

 
1.2

Weighted-average common and common equivalent shares outstanding
57.1

 
63.5

Basic earnings per share
$
1.04

 
$
0.90

Diluted earnings per share
$
1.02

 
$
0.88

Shares excluded from the determination of potential common stock because inclusion would have been anti-dilutive
0.1

 
0.4


Note 6:
Re-engineering Costs
The Company recorded $0.9 million and $1.4 million in re-engineering and impairment charges during the first quarter of 2012 and 2011, respectively, primarily related in 2012 to the relocation of the corporate office in Poland, and in both years for severance incurred for small scale reductions in headcount in several of the Company’s operations in connection with changes in its management structures.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

The balances included in accrued liabilities related to re-engineering and impairment charges as of March 31, 2012 and December 31, 2011 were as follows (in millions):
 
March 31,
2012
 
December 31,
2011
Beginning of the year balance
$
3.0

 
$
2.4

Provision
0.9

 
7.9

Cash expenditures:
 
 
 

Severance
(1.3
)
 
(5.7
)
Other
(1.0
)
 
(1.1
)
Non-cash asset impairments
—

 
(0.5
)
End of period balance
$
1.6

 
$
3.0

The accrual balance as of March 31, 2012, relates primarily to expected payments from the decision to merge the Nutrimetics and Tupperware businesses in Malaysia as well as severance costs related to other units. Payments are mainly expected to be made by the end of 2012.
 
Note 7:
Segment Information
The Company manufactures and distributes a broad portfolio of products, primarily through independent direct sales consultants. Certain operating segments have been aggregated based upon consistency of economic substance, geography, products, production process, class of customers and distribution method.
The Company's reportable segments include the following:
Europe
Primarily design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware® brand. Europe also includes Avroy Shlain® and Nutrimetics® units that sell beauty and personal care products. Asia Pacific also sells beauty and personal care products in some of its units under the NaturCare®,Nutrimetics® and Fuller® brands.

Asia Pacific
Tupperware North America
Beauty North America
Premium cosmetics, skin care and personal care products marketed under the BeautiControl® and Armand Dupree® brands in the United States, Canada and Puerto Rico and the Fuller Cosmetics® brand in Mexico and Central America.
South America
Both houseware and beauty products under the Fuller®, Nuvo® and Tupperware® brands.
Worldwide sales of beauty and personal care products totaled $147.5 million and $169.4 million in the first quarters of 2012 and 2011, respectively.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

 
13 weeks ended
 
14 weeks ended
(In millions)
March 31,
2012
 
April 2,
2011
Net sales:
 
 
 
Europe
$
218.2

 
$
231.3

Asia Pacific
177.8

 
160.1

Tupperware North America
84.6

 
87.4

Beauty North America
87.4

 
100.0

South America
71.5

 
57.6

Total net sales
$
639.5

 
$
636.4

Segment profit:
 
 
 

Europe
$
36.1

 
$
39.7

Asia Pacific
33.9

 
28.1

Tupperware North America
13.3

 
12.2

Beauty North America
6.9

 
8.2

South America
10.0

 
8.2

Total segment profit
$
100.2

 
$
96.4

Unallocated expenses
(13.1
)
 
(14.4
)
Re-engineering and impairment charges (a)
(0.9
)
 
(1.4
)
Gains on disposal of assets, including insurance recoveries
0.2

 
—

Interest expense, net
(9.1
)
 
(6.6
)
Income before taxes
$
77.3

 
$
74.0

Identifiable assets:
March 31,
2012
 
December 31,
2011
Europe
$
419.4

 
$
395.9

Asia Pacific
347.8

 
330.6

Tupperware North America
169.1

 
130.4

Beauty North America
387.8

 
373.7

South America
120.0

 
105.4

Corporate
457.1

 
508.2

Total identifiable assets
$
1,901.2

 
$
1,844.2

_________________________
(a)
See Note 6 to the Consolidated Financial Statements for a discussion of re-engineering and impairment charges.

Note 8:
Debt
On June 2, 2011, the Company completed the sale of $400 million in aggregate principal amount of 4.750% senior notes due June 1, 2021 (the “Notes”) at an issue price of 98.989%, pursuant to a purchase agreement, dated as of May 25, 2011, that included the Company and its wholly-owned subsidiary, Dart Industries Inc. (the “Guarantor”). As security for its obligations under the guarantee of the Notes, the Guarantor has granted a security interest in certain "Tupperware" trademarks and service marks.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Also on June 2, 2011, the Company and its wholly owned subsidiary Tupperware International Holdings B.V. (the “Subsidiary Borrower”), entered into a multicurrency Credit Agreement (the “Credit Agreement”) with a consortium of lenders. The Credit Agreement makes available to the Company and the Subsidiary Borrower a committed five-year credit facility in an aggregate amount of $450 million (the “Facility Amount”). The Credit Agreement provides (i) a revolving credit facility, available up to the full amount of the Facility Amount, (ii) a letter of credit facility, available up to $50 million of the Facility Amount, and (iii) a swingline facility, available up to $50 million of the Facility Amount. Each of such facilities is fully available to the Company and is available to the Subsidiary Borrower up to an aggregate amount not to exceed $225 million. With the agreement of its lenders, the Company is permitted to increase, on up to three occasions, the Facility Amount by a total of up to $200 million (for a maximum aggregate Facility Amount of $650 million), subject to certain conditions. As of March 31, 2012, the Company had $265.2 million of borrowings outstanding under its $450 million Credit Agreement with $183.2 million denominated in euros.
The Company routinely increases its revolver borrowings under the Credit Agreement during each quarter to fund operating, investing and financing activities, and uses cash available at the end of each quarter to reduce borrowing levels. As a result, the Company has higher foreign exchange exposure on the value of its cash during each quarter than at the end of each quarter.
Loans taken under the Credit Agreement bear interest under a formula that includes, at the Company's option, one of three different base rates plus an applicable spread.  The Company generally selects the London interbank offered rate ("LIBOR"). As of March 31, 2012, the Credit Agreement dictated a spread of 150 basis points, which gave the Company an interest rate at that time of 2.2 percent on borrowings under the Credit Agreement.
The Credit Agreement contains customary covenants including financial covenants requiring a minimum level of interest coverage and allowing a maximum amount of leverage. As of March 31, 2012, and currently, the Company had considerable leeway under its financial covenants.
The Guarantor unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrower relating to this Credit Agreement through a security interest in certain "Tupperware" trademarks and service marks.
At March 31, 2012, the Company had $290.1 million of unused lines of credit, including $181.6 million under the committed, secured $450 million Credit Agreement, and $108.5 million available under various uncommitted lines around the world.

Note 9:
Derivative Instruments and Hedging Activities
The Company markets its products in almost 100 countries and is exposed to fluctuations in foreign currency exchange rates on the earnings, cash flows and financial position of its international operations. Although this currency risk is partially mitigated by the natural hedge arising from the Company's local manufacturing in many markets, a strengthening U.S. dollar generally has a negative impact on the Company. In response to this fact, the Company uses financial instruments to hedge certain of its exposures and to manage the foreign exchange impact to its financial statements. At its inception, a derivative financial instrument used for hedging is designated as a fair value, cash flow or net equity hedge.
Fair value hedges are entered into with financial instruments such as forward contracts with the objective of limiting exposure to certain foreign exchange risks primarily associated with accounts receivable, accounts payable and non-permanent intercompany transactions. For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings. In assessing hedge effectiveness, the Company excludes forward points, which are considered to be a component of interest expense. The forward points on fair value hedges resulted in pretax gains of $2.9 million and $1.7 million in first quarters of 2012 and 2011, respectively.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

The Company also uses derivative financial instruments to hedge foreign currency exposures resulting from certain forecasted purchases and classifies these as cash flow hedges. The Company generally enters into cash flow hedge contracts for periods ranging from three to twelve months. The effective portion of the gain or loss on the hedging instrument is recorded in other comprehensive loss and is reclassified into earnings as the transactions being hedged are recorded. As such, the balance at the end of each reporting period in other comprehensive loss will be reclassified into earnings within the next twelve months. The associated asset or liability on the open hedges is recorded in other current assets or accrued liabilities, as applicable. In assessing hedge effectiveness, the Company excludes forward points, which are included as a component of interest expense. Forward points on cash flow hedges resulted in pretax losses of $0.9 million and $0.6 million in the first quarters of 2012 and 2011, respectively.
The Company also uses financial instruments, such as forward contracts, to hedge a portion of its net equity investment in international operations and classifies these as net equity hedges. Changes in the value of these derivative instruments, excluding any ineffective portion of the hedges, are included in foreign currency translation adjustments within accumulated other comprehensive loss. The Company recorded a net loss associated with these hedges, in other comprehensive income, net of tax, of $14.3 million and $6.7 million in the first quarters of 2012 and 2011, respectively. Due to the permanent nature of the investments, the Company does not anticipate reclassifying any portion of these amounts to the income statement in the next 12 months. In assessing hedge effectiveness, the Company excludes forward points, which are included as a component of interest expense. For the first quarters of 2012 and 2011, forward points on net equity hedges resulted in pretax losses of $3.9 million and $2.5 million, respectively.
While the Company's net equity and fair value hedges of non-permanent intercompany balances mitigate its exposure to foreign exchange gains or losses, they result in an impact to operating cash flows as they are settled, whereas the hedged items do not generate offsetting cash flows. The net cash flow impact of these currency hedges was an inflow of $3.0 million and $6.7 million for the first quarters of 2012 and 2011, respectively.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Following is a listing of the Company's outstanding derivative financial instruments at fair value as of March 31, 2012 and December 31, 2011. Related to the forward contracts, the “buy” amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the “sell” amounts represent the U.S. dollar equivalent of commitments to sell foreign currencies, all translated at the period-end market exchange rates for the U.S. dollar. All forward contracts are hedging net investments in certain foreign subsidiaries, cross-currency intercompany loans that are not permanent in nature, cross-currency external payables and receivables or forecasted purchases. Some amounts are between two foreign currencies:
Forward Contracts
 
March 31, 2012
 
December 31, 2011
(in millions)
 
Buy
 
Sell 
 
Buy
 
Sell
U.S. dollar
 
$
65.2

 

 
$
48.5

 

Euro
 
45.5

 

 
61.4

 

Philippine peso
 
5.4

 


 
4.2

 


Malaysian ringgit
 
4.9

 


 
5.0

 


New Zealand dollar
 
3.5

 


 
4.6

 


South Korean won
 
3.1

 


 
6.8

 


Brazilian real
 
2.0

 


 
6.3

 


Singapore Dollar
 
1.1

 


 


 
$
1.3

Japanese yen
 


 
$
28.4

 


 
28.4

Mexican peso
 


 
25.4

 
1.8

 


Turkish lira
 


 
13.4

 


 
14.4

Australian dollar
 


 
13.3

 


 
17.5

Canadian dollar
 


 
8.8

 


 
8.6

Swiss franc
 


 
8.1

 


 
39.2

Russian ruble
 


 
5.1

 


 
9.3

Argentine peso
 


 
4.7

 


 
4.3

British pound
 


 
4.0

 


 
3.8

Indonesian rupiah
 


 
3.6

 
6.6

 


South African rand
 


 
3.5

 
0.5

 


Hungarian forint
 

 
2.9

 

 
2.0

Thai baht
 


 
2.8

 


 
2.6

Croatian kuna
 


 
2.6

 


 
2.5

Indian Rupee
 


 
2.2

 


 
2.0

Norwegian krone
 


 
2.1

 


 
2.0

Czech koruna
 


 
2.0

 


 
1.9

Polish zloty
 


 
1.7

 


 
1.5

Swedish krona
 


 
1.6

 


 
1.5

Ukraine hryvnia
 


 
1.3

 


 
1.3

Kazakhstan tenge
 


 
0.3

 


 
0.3

Other currencies (net)
 


 
1.1

 

 
0.6

 
 
$
130.7

 
$
138.9

 
$
145.7

 
$
145.0

In agreements to sell foreign currencies in exchange for U.S. dollars, for example, an appreciating dollar versus the opposing currency would generate a cash inflow for the Company at settlement, with the opposite result in agreements to buy foreign currencies for U.S. dollars. The above noted notional amounts change based upon changes in the Company's outstanding currency exposures.

13
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

At the time the Company's previous credit facility was terminated during the second quarter of 2011 in conjunction with the signing of the Credit Agreement, the Company maintained four interest rate swap agreements that expire in 2012. These swaps were at the time the previous credit facility was terminated, and continue to be, out-of-the-money and the Company continues to pay amounts required under these swaps. The liability under these swaps as of March 31, 2012 was $7.1 million, and changes in fair value of these swaps during the first quarter of 2012, which were not material, have been recorded in current earnings.
The following tables summarize the Company's derivative positions and the impact they have on the Company's financial position as of March 31, 2012 and December 31, 2011:
 
March 31, 2012
 
Asset derivatives
 
Liability derivatives
Derivatives not designated as hedging
instruments (in millions)
Balance sheet location
 
Fair value
 
Balance sheet location
 
Fair value
Interest rate contracts
Non-trade amounts receivable
 
$
—

 
Accrued liabilities
 
$
7.1

Derivatives designated as hedging
instruments (in millions)
 
 
 
 
 
 
 
Foreign exchange contracts
Non-trade amounts receivable
 
12.1

 
Accrued liabilities
 
18.9

Total derivatives instruments
 
 
$
12.1

 
 
 
$
26.0

 
 
 
December 31, 2011
 
Asset derivatives
 
Liability derivatives
Derivatives designated as hedging
instruments (in millions)
Balance sheet location
 
Fair value
 
Balance sheet location
 
Fair value
Interest rate contracts
Non-trade amounts receivable
 
$
—

 
Accrued liabilities
 
$
10.2

Foreign exchange contracts
Non-trade amounts receivable
 
21.4

 
Accrued liabilities
 
18.7

Total derivatives designated as hedging instruments
 
 
$
21.4

 
 
 
$
28.9

The following tables summarize the Company's derivative positions and the impact they had on the Company's results of operations and comprehensive income for the first quarters ended March 31, 2012 and April 2, 2011:
Derivatives designated as fair
value hedges (in millions)
 
Location of gain or
(loss) recognized in
income on derivatives
 
Amount of gain or
(loss) recognized in
income on derivatives 
 
Location of gain or
(loss) recognized in
income on related
hedged items
 
Amount of gain or (loss)
recognized in income on
related hedged items
 
 
 
 
2012
2011
 
 
 
2012
2011
Foreign exchange contracts
 
Other expense
 
$
19.9

$
12.3

 
Other expense
 
$
(19.7
)
$
(12.3
)
Derivatives designated as
cash flow and net equity
hedges (in millions)
 
Amount of gain or
(loss) recognized in
OCI on derivatives
(effective portion)
 
Location of gain or
(loss) reclassified from
accumulated OCI  into
income (effective
portion)
 
Amount of gain or
(loss) reclassified
from accumulated
OCI into income
(effective portion)
 
Location of gain or
(loss) recognized
in income on
derivatives
(ineffective portion
and amount
excluded from
effectiveness
testing)
 
Amount of gain or
(loss) recognized
in income on
derivatives
(ineffective
portion and
amount excluded
from effectiveness
testing)
Cash flow hedging relationships
 
2012
2011
 
 
 
2012
2011
 
 
 
2012
2011
Interest rate contracts
 
$
—

$
2.9

 
Interest expense
 
$
—

$
—

 
Interest expense
 
$
—

$
—

Foreign exchange contracts
 
(2.8
)
(2.5
)
 
Cost of products sold and DS&A
 
0.9

(0.7
)
 
Interest expense
 
(0.9
)
(0.6
)
Net equity hedging relationships
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
(22.3
)
(10.5
)
 
Other expense
 
—

—

 
Interest expense
 
(3.9
)
(2.5
)

14
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)


Note 10:
Fair Value Measurements
The following table presents those assets and liabilities recorded at fair value on a recurring basis:
Description of Assets (in millions)
 
March 31, 2012
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Money market funds
 
$
9.6

 
$
9.6

 
$
—

 
$
—

Foreign currency derivative contracts
 
12.1

 
—

 
12.1

 
—

Total
 
$
21.7

 
$
9.6

 
$
12.1

 
$
—

 
 
 
 
 
 
 
 
 
Description of Liabilities (in millions)
 
 

 
 

 
 

 
 

Interest rate swaps
 
$
7.1

 
$
—

 
$
7.1

 
$
—

Foreign currency derivative contracts
 
18.9

 
—

 
18.9

 
—

Total
 
$
26.0

 
$
—

 
$
26.0

 
$
—

 
 
 
 
 
 
 
 
 
Description of Assets (in millions)
 
December 31, 2011
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Money market funds
 
$
9.5

 
$
9.5

 
$
—

 
$
—

Foreign currency derivative contracts
 
21.4

 
—

 
21.4

 
—

Total
 
$
30.9

 
$
9.5

 
$
21.4

 
$
—

 
 
 
 
 
 
 
 
 
Description of Liabilities (in millions)
 
 

 
 

 
 

 
 

Interest rate swaps
 
$
10.2

 
$
—

 
$
10.2

 
$
—

Foreign currency derivative contracts
 
18.7

 
—

 
18.7

 
—

Total
 
$
28.9

 
$
—

 
$
28.9

 
$
—

The Company uses financial instruments to hedge certain of its exposures and to manage the foreign exchange impact to its financial statements. As of March 31, 2012 and December 31, 2011, the Company held foreign currency forward contracts to hedge various currencies which had a net fair value, determined based on third party quotations, of negative $6.8 million and positive $2.7 million, respectively. Changes in fair market value are recorded either in other comprehensive income or earnings, depending on the designation of the hedge as outlined in Note 9 to the Consolidated Financial Statements.
The fair value of interest rate swap contracts was based on the discounted net present value of the swap using third party quotes. Changes in fair market value were recorded in other comprehensive income through the termination date of the related credit facility in the second quarter of 2011. The changes resulting from ineffectiveness during the first quarter of 2012, which were not material, have been recorded in current earnings.
Included in the Company's cash equivalents balances as of March 31, 2012 and December 31, 2011 were $9.6 million and $9.5 million, respectively, in money market funds, which are highly liquid investments with a maturity of three months or less. These assets are classified within Level 1 of the fair value hierarchy, as the money market funds are valued using quoted market prices in active markets.

15
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Fair Value of Financial Instruments
Due to their short maturities or their insignificance, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued liabilities and short-term borrowings approximated their fair values at March 31, 2012 and December 31, 2011. The Company estimates that, based on current market conditions, the value of its 4.750% 2021 Notes debt was $414 million at March 31, 2012 compared with the carrying value of $396 million. The higher fair value resulted from changes, since issuance, in the corporate bond market and investor preferences.

Note 11:
Retirement Benefit Plans
Components of net periodic benefit cost for the first quarters ended March 31, 2012 and April 2, 2011 were as follows (in millions):
 
First Quarter
 
Pension benefits
 
Postretirement benefits
 
2012
2011
 
2012
2011
Service cost
$
2.5

$
2.5

 
$
—

$
—

Interest cost
2.3

2.5

 
0.4

0.5

Expected return on plan assets
(1.4
)
(1.6
)
 
—

—

Settlement/Curtailment
—

1.0

 
—

—

Net amortization
1.0

0.9

 
—

(0.1
)
Net periodic benefit cost
$
4.4

$
5.3

 
$
0.4

$
0.4

During the first quarters of 2012 and 2011, approximately $1.0 million and $1.8 million, respectively, were reclassified from other comprehensive income to a component of net periodic benefit cost. As they relate to foreign plans, the Company uses current exchange rates to make these reclassifications. The impact of exchange rate fluctuations is included on the net amortization line of the table above.

Note 12:
Income Taxes
As of March 31, 2012 and December 31, 2011, the Company's gross unrecognized tax benefit was $29.6 million and $28.6 million, respectively. The accrual for uncertain tax positions increased for positions being taken in various global tax filings, and the impact of foreign currency fluctuations. The Company estimates that approximately $24.2 million of the unrecognized tax benefits, if recognized, would impact the effective tax rate. Interest and penalties related to uncertain tax positions in the Company's global operations are recorded as a component of the provision for income taxes. Accrued interest and penalties were $6.3 million and $5.8 million as of March 31, 2012 and December 31, 2011, respectively.
The Company estimates that it may settle one or more foreign audits in the next twelve months that may result in a decrease in the amount of accrual for uncertain tax positions of up to $3.6 million. For the remaining balance as of March 31, 2012, the Company is not able to reliably estimate the timing or ultimate settlement amount. While the Company does not currently expect material changes, it is possible that the amount of unrecognized benefit with respect to the uncertain tax positions will significantly increase or decrease related to audits in various foreign jurisdictions that may conclude during that period or new developments that could also, in turn, impact the Company's assessment relative to the establishment of valuation allowances against certain existing deferred tax assets. At this time, the Company is not able to make a reasonable estimate of the range of impact on the balance of unrecognized tax benefits or the impact on the effective tax rate related to these items.
The effective tax rate was 24.6 percent for the first quarter of both 2012 and 2011. The effective tax rates are below the U.S. statutory rate primarily due to lower foreign effective tax rates.


16
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Note 13:
Statement of Cash Flow Supplemental Disclosure
Under the Company's stock incentive programs, employees are allowed to use shares to satisfy minimum statutorily required withholding taxes. In the first quarters of 2012 and 2011, 64,927 and 29,550 shares, respectively, were retained to fund withholding taxes, with values totaling $4.1 million and $1.6 million, respectively, which were included as a component of stock repurchases in the Consolidated Statement of Cash Flows. For the first quarter ended March 31, 2012, the Company acquired $1.2 million of property, plant and equipment under capital lease arrangements. There were no such capital lease arrangements initiated in the first quarter of 2011.

Note 14:
Stock Based Compensation
The Company records compensation expense using the applicable accounting guidance for share-based payments related to stock options, restricted stock, restricted stock units and performance share awards granted to directors and employees. Compensation expense for share-based awards is recorded straight line over the required service period, based on the fair value of the award.
Stock Options
Stock options to purchase the Company's common stock are granted to employees, upon approval by the Company's Board of Directors, with an exercise price equal to the fair market value of the stock on the date of grant. Options generally become exercisable in three years, in equal installments beginning one year from the date of grant, and generally expire 10 years from the date of grant. In February 2012, the Company granted a stock option on 24,300 shares. The fair value of the Company’s stock option was estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used to value the 2012 option grant: dividend yield of 2.4 percent; expected volatility of 40 percent; risk-free interest rate of 1.6 percent; and expected life of 8 years. The grant date fair value of the stock option granted during the first quarter of 2012 was $20.83 per share. No stock options were granted in the first quarter of 2011. Compensation expense associated with all outstanding stock option awards was $0.6 million and $0.5 million in the first quarters of 2012 and 2011, respectively.
Stock option activity for 2012, under all of the Company's incentive plans, is summarized in the following table:
 
Outstanding
 
Exercisable
Stock options
Shares subject
to option
 
Weighted
average exercise
price per share
 
Options
exercisable at
end of period
 
Weighted
average exercise
price per share
December 31, 2011
3,153,506

 

$31.43

 
2,405,638

 

$25.85

Granted
24,300

 
62.20

 
 

 
 

Expired / Forfeited
—

 
—

 
 

 
 

Exercised
(169,068
)
 
25.00

 
 

 
 

March 31, 2012
3,008,738

 

$32.04

 
2,275,854

 

$25.79

The intrinsic value of options exercised totaled $6.2 million and $16.7 million, respectively, in the first quarters of 2012 and 2011.
Performance Awards, Restricted Stock and Restricted Stock Units
The Company also grants performance awards, restricted stock and restricted stock units to employees and directors. The Company has time-vested and performance-vested awards, which typically have initial vesting periods ranging from one to six years. Compensation expense associated with restricted stock and restricted stock units is equal to the market value of the Company's common stock on the date of grant, and for time-vested awards, is recorded straight-line over the required service period. For performance-vested awards, expense is recorded over the required service period, subject to a probability assessment of achieving the performance criteria.

17
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

The Company granted 68,000 and 73,975 performance-vested awards shares under its performance share plan in February 2012 and 2011, respectively. The Company's performance-vested awards provide incentive opportunity based on the overall success of the Company, as reflected through cash flow and earnings per share achieved over a three year performance period. The program is based upon a pre-defined number of performance share units. Depending on achievement under the performance measures, the actual payout can be up to 150 percent of shares initially granted.
In January 2011, the Company granted 101,000 shares of time-vested restricted stock with a fair value of $56.67 per share that vest over an average period of 3 years. There were no such awards in the first quarter of 2012.
For the first quarters of 2012 and 2011, compensation expense associated with all employee and director restricted stock and restricted stock unit awards outstanding, including performance shares, was $2.8 million and $3.1 million, respectively.
Restricted stock, restricted stock units, and performance share award activity for 2012 under all of the Company's incentive plans is summarized in the following table:
 
Shares
outstanding
 
Weighted average
grant date fair value
December 31, 2011
945,265

 

$34.93

Granted
68,000

 
62.20

Performance share adjustments
(10,145
)
 
50.78

Vested
(208,669
)
 
17.66

Forfeited
(1,009
)
 
47.60

March 31, 2012
793,442

 

$41.63

The fair value of performance awards, restricted stock and restricted stock units vested in the first quarters of 2012 and 2011 was $13.0 million and $9.6 million, respectively.
As of March 31, 2012, total unrecognized stock based compensation expense related to all stock based awards was $23.8 million, which is expected to be recognized over a weighted average period of 2.1 years. The average remaining contractual life on outstanding and exercisable stock options was 5.9 years and 5.0 years, respectively.

Note 15:
Allowance for Long-Term Receivables
The Company maintains current receivable amounts with most of its independent distributors and sales force in certain markets. It also maintains long-term receivable amounts with certain of these customers. The Company regularly monitors and assesses its risk of not collecting amounts owed to it by customers. This evaluation is based upon an analysis of amounts current and past due, along with relevant history and facts particular to the customer. It is also based upon estimates of distributor business prospects, particularly related to the evaluation of the recoverability of long-term amounts due. This evaluation is performed market by market and account by account based upon historical experience, market penetration levels, access to alternative channels and similar factors. It also considers collateral of the customer that could be recovered to satisfy debts. The Company records its allowance for uncollectible accounts based on the results of this analysis. The analysis requires the Company to make significant estimates and as such, changes in facts and circumstances could result in material changes in the allowance for doubtful accounts. The Company considers any receivable balance not collected within its contractual terms past due. As of March 31, 2012, $10.7 million of long-term receivables from both active and inactive customers were considered past due, the majority of which were reserved through the Company's allowance for uncollectible accounts.

18
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

The balance of the allowance for long-term receivables as of March 31, 2012 was as follows (in millions):
December 31, 2011
$
23.3

Write-offs
(0.5
)
Provision
1.1

Currency translation adjustment
0.6

March 31, 2012
$
24.5


Note 16:
Guarantor Information
The Company's payment obligations under the Notes are fully and unconditionally guaranteed by certain "Tupperware" trademarks and service marks owned by the Guarantor, as discussed in Note 8 to the Consolidated Financial Statements.
Condensed consolidated financial information as of March 31, 2012 and December 31, 2011 and for the quarters ended March 31, 2012 and April 2, 2011 for Tupperware Brands Corporation (the "Parent"), Dart Industries Inc. (the "Guarantor") and all other subsidiaries (the "Non-Guarantors") is as follows. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent and Guarantor of the equity method of accounting to reflect ownership interests in subsidiaries that are eliminated upon consolidation. Note that the Guarantor is 100% owned by the Parent, and there are certain entities within the Non-Guarantors classification which the Parent owns directly. There are no significant restrictions on the ability of either the Parent or the Guarantor from obtaining adequate funds from their respective subsidiaries by dividend or loan that should interfere with their ability to meet their operating needs or debt repayment obligations.


19
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Condensed Consolidating Balance Sheet
 
March 31, 2012
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
ASSETS
 

 
 

 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
1.3

 
$
104.4

 
$
—

 
$
105.7

Accounts receivable, net
—

 
—

 
191.0

 
—

 
191.0

Inventories
—

 
—

 
331.0

 
—

 
331.0

Deferred income tax benefits, net
5.5

 
45.0

 
54.7

 
—

 
105.2

Non-trade amounts receivable, net
—

 
3.3

 
37.3

 
—

 
40.6

Intercompany receivables
1,855.2

 
3,762.8

 
250.2

 
(5,868.2
)
 
—

Prepaid expenses and other current assets
1.1

 
5.3

 
92.8

 
(62.6
)
 
36.6

Total current assets
1,861.8

 
3,817.7

 
1,061.4

 
(5,930.8
)
 
810.1

Deferred income tax benefits, net
74.0

 
135.0

 
117.9

 
(1.7
)
 
325.2

Property, plant and equipment, net
—

 
29.2

 
258.4

 
—

 
287.6

Long-term receivables, net
—

 
0.1

 
21.9

 
—

 
22.0

Trademarks and tradenames
—

 
—

 
164.5

 
—

 
164.5

Other intangible assets, net
—

 
—

 
6.9

 
—

 
6.9

Goodwill
—

 
2.9

 
248.1

 
—

 
251.0

Investments in subsidiaries
2,814.4

 
1,781.0

 
—

 
(4,595.4
)
 
—

Intercompany notes receivable
64.9

 
560.8

 
1,058.2

 
(1,683.9
)
 
—

Other assets, net
4.6

 
139.7

 
104.4

 
(214.8
)
 
33.9

Total assets
$
4,819.7

 
$
6,466.4

 
$
3,041.7

 
$
(12,426.6
)
 
$
1,901.2

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

 
 

 
 

 
 

Accounts payable
$
—

 
$
—

 
$
120.5

 
$
—

 
$
120.5

Short-term borrowings and current portion of long-term debt and capital lease obligations
82.0

 
—

 
185.7

 
—

 
267.7

Intercompany payables
3,292.4

 
2,571.8

 
4.0

 
(5,868.2
)
 
—

Accrued liabilities
149.1

 
93.8

 
276.5

 
(194.0
)
 
325.4

Total current liabilities
3,523.5

 
2,665.6

 
586.7

 
(6,062.2
)
 
713.6

Long-term debt and capital lease obligations
396.2

 
—

 
20.1

 
—

 
416.3

Intercompany notes payable
344.0

 
1,339.9

 
—

 
(1,683.9
)
 
—

Other liabilities
18.5

 
99.1

 
201.3

 
(85.1
)
 
233.8

Shareholders' equity
537.5

 
2,361.8

 
2,233.6

 
(4,595.4
)
 
537.5

Total liabilities and shareholders' equity
$
4,819.7

 
$
6,466.4

 
$
3,041.7

 
$
(12,426.6
)
 
$
1,901.2



20
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Condensed Consolidating Balance Sheet
 
December 31, 2011
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
ASSETS
 

 
 

 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
1.9

 
$
136.3

 
$
—

 
$
138.2

Accounts receivable, net
—

 
—

 
163.7

 
—

 
163.7

Inventories
—

 
—

 
302.5

 
—

 
302.5

Deferred income tax benefits, net
5.5

 
44.6

 
44.1

 
—

 
94.2

Non-trade amounts receivable, net
0.4

 
10.1

 
37.0

 
—

 
47.5

Intercompany receivables
1,674.7

 
3,757.3

 
257.7

 
(5,689.7
)
 
—

Prepaid expenses and other current assets
1.2

 
1.6

 
83.0

 
(62.5
)
 
23.3

Total current assets
1,681.8

 
3,815.5

 
1,024.3

 
(5,752.2
)
 
769.4

Deferred income tax benefits, net
68.7

 
128.7

 
141.8

 
—

 
339.2

Property, plant and equipment, net
—

 
28.7

 
244.4

 
—

 
273.1

Long-term receivables, net
—

 
0.1

 
23.1

 
—

 
23.2

Trademarks and tradenames
—

 
—

 
157.1

 
—

 
157.1

Other intangible assets, net
—

 
—

 
7.2

 
—

 
7.2

Goodwill
—

 
2.9

 
238.5

 
—

 
241.4

Investments in subsidiaries
2,695.0

 
1,734.6

 
—

 
(4,429.6
)
 
—

Intercompany notes receivable
85.9

 
506.0

 
1,088.5

 
(1,680.4
)
 
—

Other assets, net
34.6

 
7.9

 
130.0

 
(138.9
)
 
33.6

Total assets
$
4,566.0

 
$
6,224.4

 
$
3,054.9

 
$
(12,001.1
)
 
$
1,844.2

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

 
 

 
 

 
 

Accounts payable
$
—

 
$
—

 
$
157.2

 
$
—

 
$
157.2

Short-term borrowings and current portion of long-term debt and capital lease obligations
—

 
—

 
195.7

 
—

 
195.7

Intercompany payables
3,270.0

 
2,415.5

 
4.2

 
(5,689.7
)
 
—

Accrued liabilities
35.5

 
116.1

 
272.4

 
(101.5
)
 
322.5

Total current liabilities
3,305.5

 
2,531.6

 
629.5

 
(5,791.2
)
 
675.4

Long-term debt and capital lease obligations
396.1

 
—

 
19.1

 
—

 
415.2

Intercompany notes payable
342.9

 
1,337.5

 
—

 
(1,680.4
)
 
—

Other liabilities
20.7

 
112.9

 
219.1

 
(99.9
)
 
252.8

Shareholders' equity
500.8

 
2,242.4

 
2,187.2

 
(4,429.6
)
 
500.8

Total liabilities and shareholders' equity
$
4,566.0

 
$
6,224.4

 
$
3,054.9

 
$
(12,001.1
)
 
$
1,844.2



21
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Consolidating Statement of Income
 
13 Weeks Ended March 31, 2012
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
640.2

 
$
(0.7
)
 
$
639.5

Other revenue
—

 
26.2

 
3.8

 
(30.0
)
 
—

Cost of products sold
—

 
4.4

 
239.4

 
(30.7
)
 
213.1

Gross margin
—

 
21.8

 
404.6

 
—

 
426.4

Delivery, sales and administrative expense
3.3

 
12.8

 
323.5

 
—

 
339.6

Re-engineering and impairment charges
—

 
—

 
0.9

 
—

 
0.9

Gains on disposal of assets, including insurance recoveries
—

 
0.2

 
—

 
—

 
0.2

Operating (loss) income
(3.3
)
 
9.2

 
80.2

 
—

 
86.1

Interest income
0.5

 
8.0

 
1.2

 
(9.0
)
 
0.7

Interest expense
7.6

 
4.6

 
6.6

 
(9.0
)
 
9.8

Income from equity investments in subsidiaries
64.9

 
54.6

 
—

 
(119.5
)
 
—

Other income
0.1

 
0.1

 
0.1

 
—

 
0.3

Income before income taxes
54.6

 
67.3

 
74.9

 
(119.5
)
 
77.3

(Benefit) provision for income taxes
(3.7
)
 
2.6

 
20.1

 
—

 
19.0

Net income
$
58.3

 
$
64.7

 
$
54.8

 
$
(119.5
)
 
$
58.3

Comprehensive income
$
98.0

 
$
103.8

 
$
64.2

 
$
(168.0
)
 
$
98.0


Consolidating Statement of Income
 
14 Weeks Ended April 2, 2011
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
637.5

 
$
(1.1
)
 
$
636.4

Other revenue
—

 
40.4

 
3.5

 
(43.9
)
 
—

Cost of products sold
—

 
3.5

 
256.4

 
(45.0
)
 
214.9

Gross margin
—

 
36.9

 
384.6

 
—

 
421.5

Delivery, sales and administrative expense
3.7

 
18.5

 
317.2

 
—

 
339.4

Re-engineering and impairment charges
—

 
—

 
1.4

 
—

 
1.4

Operating (loss) income
(3.7
)
 
18.4

 
66.0

 
—

 
80.7

Interest income
0.5

 
8.9

 
2.1

 
(10.6
)
 
0.9

Interest expense
6.7

 
3.5

 
7.9

 
(10.6
)
 
7.5

Income from equity investments in subsidiaries
62.2

 
52.5

 
—

 
(114.7
)
 
—

Other expense
—

 
—

 
0.1

 
—

 
0.1

Income before income taxes
52.3

 
76.3

 
60.1

 
(114.7
)
 
74.0

(Benefit) provision for income taxes
(3.5
)
 
16.9

 
4.8

 
—

 
18.2

Net income
$
55.8

 
$
59.4

 
$
55.3

 
$
(114.7
)
 
$
55.8

Comprehensive income
$
90.8

 
$
91.8

 
$
76.5

 
$
(168.3
)
 
$
90.8




22
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Condensed Consolidating Statement of Cash Flows
 
13 Weeks Ended March 31, 2012
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Operating Activities:
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
(42.2
)
 
$
53.5

 
$
1.8

 
$
(37.9
)
 
$
(24.8
)
Investing Activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(2.0
)
 
(16.8
)
 
—

 
(18.8
)
Proceeds from disposal of property, plant and equipment
—

 
—

 
1.0

 
—

 
1.0

Net cash used in investing activities
—

 
(2.0
)
 
(15.8
)
 
—

 
(17.8
)
Financing Activities:
 
 
 
 
 
 
 
 
 
Dividend payments to shareholders
(17.4
)
 
—

 
—

 
—

 
(17.4
)
Dividend payments to parent
—

 
—

 
(13.5
)
 
13.5

 
—

Proceeds from exercise of stock options
4.2

 
—

 
—

 
—

 
4.2

Repurchase of common stock
(54.1
)
 
—

 
—

 
—

 
(54.1
)
Repayment of long-term debt and capital lease obligations
—

 
—

 
(0.4
)
 
—

 
(0.4
)
Net change in short-term debt
82.0

 
—

 
(13.7
)
 
—

 
68.3

Excess tax benefits from share-based payment arrangements
5.4

 
—

 
—

 
—

 
5.4

Net intercompany notes payable (receivable)
22.1

 
(52.1
)
 
5.6