TUP 10Q 6.27.15
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 June 27, 2015
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 July 30, 2015, 49,885,952 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
26 weeks ended
(In millions, except per share amounts)
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Net sales
$
588.9

 
$
674.3

 
$
1,170.7

 
$
1,337.5

Cost of products sold
189.1

 
225.7

 
380.7

 
447.3

Gross margin
399.8

 
448.6

 
790.0

 
890.2

 
 
 
 
 
 
 
 
Delivery, sales and administrative expense
310.1

 
348.6

 
623.5

 
693.1

Re-engineering and impairment charges
1.5

 
3.4

 
17.7

 
5.7

Gains on disposal of assets
10.8

 
0.5

 
11.4

 
2.3

Operating income
99.0

 
97.1

 
160.2

 
193.7

 
 
 
 
 
 
 
 
Interest income
0.5

 
0.5

 
1.0

 
1.2

Interest expense
12.0

 
11.6

 
25.3

 
24.0

Other expense
1.1

 
16.0

 
8.3

 
30.1

Income before income taxes
86.4

 
70.0

 
127.6

 
140.8

 
 
 
 
 
 
 
 
Provision for income taxes
24.4

 
22.4

 
36.1

 
41.0

Net income
$
62.0


$
47.6

 
$
91.5

 
$
99.8

 
 
 
 
 
 
 
 
Earnings per share:
 

 
 

 
 
 
 
Basic
$
1.24

 
$
0.95

 
$
1.84

 
$
1.99

Diluted
1.23

 
0.93

 
1.82

 
1.95

 
 
 
 
 
 
 
 
Weighted-average shares outstanding:
 
 
 

 
 
 
 
Basic
49.8

 
50.2

 
49.8

 
50.2

Diluted
50.4

 
51.1

 
50.3

 
51.1

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.68

 
$
0.68

 
$
1.36

 
$
1.36


See accompanying Notes to Consolidated Financial Statements (Unaudited).

3
Table of Contents

TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
13 weeks ended
 
26 weeks ended
(In millions)
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Net income
$
62.0

 
$
47.6

 
$
91.5

 
$
99.8

Other comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustments
(19.4
)
 
7.3

 
(44.6
)
 
6.4

Deferred gain (loss) on cash flow hedges, net of tax benefit of $0.2, $0.5, $0.6 and $0.3, respectively
(1.8
)
 
(1.4
)
 
(2.2
)
 
0.1

Pension and other post-retirement income, net of tax provision of $0.0, $0.3, $1.1 and $0.4, respectively
0.1

 
0.5

 
3.0

 
0.8

Other comprehensive income (loss)
(21.1
)
 
6.4

 
(43.8
)
 
7.3

Total comprehensive income
$
40.9

 
$
54.0

 
$
47.7

 
$
107.1


See accompanying Notes to Consolidated Financial Statements (Unaudited).

4
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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except share amounts)
June 27,
2015
 
December 27,
2014
ASSETS
 

 
 

Cash and cash equivalents
$
74.1

 
$
77.0

Accounts receivable, less allowances of $35.3 and $34.5, respectively
173.6

 
168.1

Inventories
299.1

 
306.0

Deferred income tax benefits, net
110.2

 
118.8

Non-trade amounts receivable, net
43.7

 
61.8

Prepaid expenses and other current assets
24.6

 
21.6

Total current assets
725.3

 
753.3

Deferred income tax benefits, net
410.6

 
416.7

Property, plant and equipment, net
262.9

 
290.3

Long-term receivables, less allowances of $12.2 and $13.1, respectively
14.8

 
17.3

Trademarks and tradenames, net
94.8

 
104.2

Other intangible assets, net
0.7

 
1.5

Goodwill
157.5

 
164.7

Other assets, net
27.6

 
32.0

Total assets
$
1,694.2

 
$
1,780.0

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

Accounts payable
$
95.9

 
$
142.8

Short-term borrowings and current portion of long-term debt and capital lease obligations
264.0

 
221.4

Accrued liabilities
326.8

 
383.2

Total current liabilities
686.7

 
747.4

Long-term debt and capital lease obligations
609.3

 
612.1

Other liabilities
220.7

 
234.7

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
193.0

 
190.7

Retained earnings
1,368.3

 
1,348.2

Treasury stock, 13,722,138 and 13,924,568 shares, respectively, at cost
(931.9
)
 
(945.0
)
Accumulated other comprehensive loss
(452.5
)
 
(408.7
)
Total shareholders' equity
177.5

 
185.8

Total liabilities and shareholders' equity
$
1,694.2

 
$
1,780.0


See accompanying Notes to Consolidated Financial Statements (Unaudited).

5
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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
26 weeks ended
(In millions)
June 27,
2015
 
June 28,
2014
Operating Activities:
 
 
 

Net income
$
91.5

 
$
99.8

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation and amortization
31.0

 
31.6

Unrealized foreign exchange loss
7.0

 
29.2

Equity compensation
8.2

 
8.5

Amortization of deferred debt costs
0.6

 
0.4

Net gains on disposal of assets
(11.1
)
 
(2.2
)
Provision for bad debts
6.4

 
6.6

Write-down of inventories
8.9

 
10.6

Non-cash impact of re-engineering and impairment costs
13.5

 
0.4

Net change in deferred income taxes
(12.6
)
 
(21.1
)
Excess tax benefits from share-based payment arrangements
(0.7
)
 
(7.1
)
Changes in assets and liabilities:
 

 
 

Accounts and notes receivable
(23.0
)
 
(27.1
)
Inventories
(22.6
)
 
(47.4
)
Non-trade amounts receivable
(1.9
)
 
(10.7
)
Prepaid expenses
(5.0
)
 
(8.6
)
Other assets
0.8

 
(0.7
)
Accounts payable and accrued liabilities
(37.7
)
 
(1.6
)
Income taxes payable
(24.3
)
 
(17.2
)
Other liabilities
0.3

 
1.2

Net cash impact from hedging activity
(5.1
)
 
(0.6
)
Other
(0.1
)
 
0.1

Net cash provided by operating activities
24.1

 
44.1

Investing Activities:
 

 
 

Capital expenditures
(27.8
)
 
(31.2
)
Proceeds from disposal of property, plant and equipment
14.4

 
5.5

Net cash used in investing activities
(13.4
)
 
(25.7
)
Financing Activities:
 

 
 

Dividend payments to shareholders
(69.7
)
 
(66.9
)
Proceeds from exercise of stock options
4.9

 
10.7

Repurchase of common stock
(0.9
)
 
(31.4
)
Repayment of capital lease obligations
(1.7
)
 
(2.0
)
Net change in short-term debt
62.1

 
63.5

Debt issuance costs
(0.7
)
 
—

Excess tax benefits from share-based payment arrangements
0.7

 
7.1

Net cash used in financing activities
(5.3
)
 
(19.0
)
Effect of exchange rate changes on cash and cash equivalents
(8.3
)
 
(44.0
)
Net change in cash and cash equivalents
(2.9
)
 
(44.6
)
Cash and cash equivalents at beginning of year
77.0

 
127.3

Cash and cash equivalents at end of period
$
74.1

 
$
82.7


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 audited 2014 financial statements included in the Company's Annual Report on Form 10-K for the year ended December 27, 2014.
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 presentation of the results for the interim periods. Certain information and note disclosures normally included in the balance sheet, statements of income, 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.
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.
Venezuela Foreign Currency Translation: The bolivar to U.S. dollar exchange rates used in translating the Company’s 2014 operating activity were 6.3 in the first quarter, 10.8 in the second quarter and 50.0 in the second half of 2014 and in January 2015. In February 2015, the Venezuelan government launched an overhaul of its foreign currency exchange structure for obtaining U.S. dollars, introducing the Simadi mechanism. The Company used rates determined under this mechanism of 172.0 bolivars to the U.S. dollar to translate its February 2015 operating activity and 190.0 to translate March 2015 operating activity and the end of March balance sheet of Venezuela. The Company used a rate of 198.0 as of the end of the second quarter of 2015. The Company expects to continue to use the Simadi rate to translate future operating activity. The expense of re-measuring the net monetary assets and recording in cost of sales inventory at the exchange rate when it was purchased or manufactured was $1.8 million and $22.2 million for the second quarters of 2015 and 2014, respectively, and $11.1 million and $35.7 million for the year-to-date periods ended June 27, 2015 and June 28, 2014, respectively. The amounts related to remeasurement are included in other expense.
As of June 27, 2015, the Company had approximately $2 million of net monetary assets in Venezuela, which were of a nature that would generate income or expense associated with future exchange rate fluctuations versus the U.S. dollar. In addition, there were $25.5 million in cumulative foreign currency translation losses related to Venezuela included in equity within the consolidated balance sheets.
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 delivery, sales 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 second quarters of 2015 and 2014 were $35.8 million and $41.3 million, respectively, and $70.5 million and $80.0 million for the year-to-date periods ended June 27, 2015 and June 28, 2014, respectively.

7
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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Note 3:
Promotional Costs
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 $97.8 million and $111.4 million for the second quarters of 2015 and 2014, respectively, and $199.8 million and $225.2 million for the year-to-date periods ended June 27, 2015 and June 28, 2014, respectively.
Note 4:
Inventories
(In millions)
June 27,
2015
 
December 27,
2014
Finished goods
$
238.2

 
$
242.5

Work in process
24.9

 
26.8

Raw materials and supplies
36.0

 
36.7

Total inventories
$
299.1

 
$
306.0

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 elements of the earnings per share computations were as follows:
 
13 weeks ended
 
26 weeks ended
(In millions, except per share amounts)
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Net income
$
62.0

 
$
47.6

 
$
91.5

 
$
99.8

Weighted-average shares of common stock outstanding
49.8

 
50.2

 
49.8

 
50.2

Common equivalent shares:
 
 
 
 
 
 
 
Assumed exercise of dilutive options, restricted shares, restricted stock units and performance share units
0.6

 
0.9

 
0.5

 
0.9

Weighted-average common and common equivalent shares outstanding
50.4

 
51.1

 
50.3

 
51.1

Basic earnings per share
$
1.24

 
$
0.95

 
$
1.84

 
$
1.99

Diluted earnings per share
$
1.23

 
$
0.93

 
$
1.82

 
$
1.95

Shares excluded from the determination of potential common stock because inclusion would have been anti-dilutive
0.7

 
0.4

 
0.7

 
0.4


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

Note 6:
Accumulated Other Comprehensive Loss
(In millions, net of tax)
Foreign Currency Items
 
Cash Flow Hedges
 
Pension and Other Post-retirement Items
 
Total
Balance at December 27, 2014
$
(368.3
)
 
$
7.8

 
$
(48.2
)
 
$
(408.7
)
Other comprehensive income (loss) before reclassifications
(44.6
)
 
4.4

 
1.5

 
(38.7
)
Amounts reclassified from accumulated other comprehensive loss
—

 
(6.6
)
 
1.5

 
(5.1
)
Net current-period other comprehensive income (loss)
(44.6
)
 
(2.2
)
 
3.0

 
(43.8
)
Balance at June 27, 2015
$
(412.9
)
 
$
5.6

 
$
(45.2
)
 
$
(452.5
)
(In millions, net of tax)
Foreign Currency Items
 
Cash Flow Hedges
 
Pension and Other Post-retirement Items
 
Total
Balance at December 28, 2013
$
(283.1
)
 
$
2.2

 
$
(35.9
)
 
$
(316.8
)
Other comprehensive income before reclassifications
6.4

 
2.6

 
0.1

 
9.1

Amounts reclassified from accumulated other comprehensive loss
—

 
(2.5
)
 
0.7

 
(1.8
)
Net current-period other comprehensive income
6.4

 
0.1

 
0.8

 
7.3

Balance at June 28, 2014
$
(276.7
)
 
$
2.3

 
$
(35.1
)
 
$
(309.5
)
Pretax amounts reclassified from accumulated other comprehensive loss that related to cash flow hedges consisted of net gains of $8.5 million and $3.2 million for the year-to-date periods ended June 27, 2015 and June 28, 2014, respectively. Associated with these items were tax provisions of $1.9 million and $0.7 million, respectively. See Note 10 for further discussion of derivatives.
For the year-to-date periods ended June 27, 2015 and June 28, 2014, pretax amounts reclassified from accumulated other comprehensive loss related to pension and other post-retirement items consisted of prior service benefits of $0.6 million and $0.4 million, respectively, and actuarial losses of $2.1 million and $1.3 million, respectively. For the period ended June 27, 2015, there were pension settlement costs of $0.4 million. There were no such costs for the period ended June 28, 2014. The tax benefit associated with these items was $0.4 million and $0.2 million, respectively. See Note 12 for further discussion of pension and other post-retirement benefit costs.
Note 7:
Re-engineering and Impairment Costs
The Company recorded $1.5 million and $3.4 million in re-engineering charges during the second quarters of 2015 and 2014, respectively, and $4.2 million and $5.7 million for the respective year-to-date periods. In both years, these charges were primarily related to severance costs incurred for headcount reductions in several of the Company’s operations in connection with changes in its management and organizational structures, and in 2014, the decision to cease operating the Armand Dupree business in the United States.

9
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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 June 27, 2015 and December 27, 2014 were as follows:
(In millions)
June 27,
2015
 
December 27,
2014
Beginning of the year balance
$
2.4

 
$
2.6

Provision
4.2

 
11.0

Non-cash charges
—

 
(1.8
)
Cash expenditures:
 
 
 

Severance
(4.2
)
 
(7.1
)
Other
(0.9
)
 
(2.3
)
End of period balance
$
1.5

 
$
2.4

The accrual balance as of June 27, 2015, related primarily to severance payments to be made by the end of the third quarter of 2015. In connection with the decisions to cease operating the Armand Dupree business in the United States and the Nutrimetics business in Thailand, the Company recorded $1.9 million and $0.4 million, respectively, in cost of sales for inventory obsolescence during the first half of 2014.
In February 2015, the Venezuelan government launched an overhaul of its foreign currency exchange structure and created a new exchange mechanism called Simadi that has provided an exchange rate significantly lower than the rate available to the Company under the previous SICAD 2 mechanism. As a result, and based on the perceived impact of this change to the operations of its Venezuelan unit, the Company deemed this change to be a triggering event to evaluate the $15.7 million of long-term fixed assets in Venezuela. This evaluation involved performing an undiscounted cash flow analysis to determine if the carrying value of the assets were recoverable and whether the amount included on the balance sheet was greater than fair value. The Company considered many economic and operating factors, including uncertainty surrounding the interpretation and enforcement of certain product pricing restrictions in Venezuela, the inability to obtain the necessary raw materials locally to meet production demands and the significant decline in the global price of oil. Due to the decline of the global price of oil, the Venezuelan government has not made U.S. dollars widely available through any of the exchange mechanisms it has had in place. Given the devaluation of the Venezuelan bolivar compared with the U.S. dollar, and the lack of U.S dollars available to use for the purchase of raw materials from on-going operations, the Company did not believe it would be able to operate the business profitably. As a result, the Company concluded that the carrying value of the long-term fixed assets in Venezuela was not recoverable. The Company then estimated the fair value of the long-term fixed assets using estimated selling prices available in Venezuela. The primary assets that were considered to continue to maintain a marketable value in Venezuela included commercial office space, a show room and parking spaces. As a result of this evaluation in the first quarter of 2015, the Company recorded an impairment charge of $13.5 million to reduce the long-term fixed asset carrying value in Venezuela to the estimated fair value of $2.2 million, which is considered a non-recurring Level 3 measurement within the fair value hierarchy.
Note 8:
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.

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

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®, which sells 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® brand in the United States, Canada and Puerto Rico and Fuller Cosmetics® brands in Mexico and Central America.
South America
Both housewares and beauty products under the Fuller®, Nutrimetics®, Nuvo® and Tupperware® brands.
Worldwide sales of beauty and personal care products totaled $115.4 million and $136.8 million in the second quarters of 2015 and 2014, respectively, and $228.3 million and $264.4 million for the respective year-to-date periods.
 
13 weeks ended
 
26 weeks ended
(In millions)
June 27,
2015
 
June 28,
2014
 
June 27,
2015
 
June 28,
2014
Net sales:
 
 
 
 
 
 
 
Europe
$
156.1

 
$
186.3

 
$
327.8

 
$
399.6

Asia Pacific
193.7

 
211.1

 
385.4

 
410.1

Tupperware North America
93.8

 
93.4

 
173.3

 
174.9

Beauty North America
65.9

 
77.7

 
128.8

 
151.2

South America
79.4

 
105.8

 
155.4

 
201.7

Total net sales
$
588.9

 
$
674.3

 
$
1,170.7

 
$
1,337.5

Segment profit (loss):
 
 
 

 
 
 
 
Europe
$
26.4

 
$
27.9

 
$
55.7

 
$
68.2

Asia Pacific
41.5

 
46.5

 
80.5

 
87.4

Tupperware North America
20.2

 
19.8

 
33.2

 
33.4

Beauty North America (a)
3.3

 
3.0

 
3.0

 
2.3

South America
13.7

 
(0.4
)
 
16.9

 
3.0

Total segment profit
$
105.1

 
$
96.8

 
$
189.3

 
$
194.3

Unallocated expenses
(16.5
)
 
(12.9
)
 
(31.1
)
 
(27.3
)
Re-engineering and impairment charges (a)
(1.5
)
 
(3.4
)
 
(17.7
)
 
(5.7
)
Gains on disposal of assets
10.8

 
0.5

 
11.4

 
2.3

Interest expense, net
(11.5
)
 
(11.0
)
 
(24.3
)
 
(22.8
)
Income before taxes
$
86.4

 
$
70.0

 
$
127.6

 
$
140.8


11
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

(In millions)
June 27,
2015
 
December 27,
2014
Identifiable assets:
 
 
 
Europe
$
305.3

 
$
337.3

Asia Pacific
321.3

 
321.4

Tupperware North America
139.1

 
137.1

Beauty North America
293.3

 
317.0

South America
116.8

 
131.1

Corporate
518.4

 
536.1

Total identifiable assets
$
1,694.2

 
$
1,780.0

_________________________
(a)
See Note 7 to the unaudited Consolidated Financial Statements for a discussion of re-engineering and impairment charges.
Note 9:
Debt
Debt Obligations
(In millions)
June 27, 2015
 
December 27, 2014
Fixed rate Senior Notes due 2021
$
599.3

 
$
599.2

Five year Revolving Credit Agreement (a)
258.1

 
209.0

Belgium facility capital lease
11.6

 
13.9

Other
4.3

 
11.4

Total debt obligations
$
873.3

 
$
833.5

____________________
(a)
$179.6 million denominated in euros as of June 27, 2015.

Credit Agreement
On June 9, 2015, the Company and its wholly owned subsidiary Tupperware International Holdings B.V. (the “Subsidiary Borrower”), entered into Amendment No. 2 (the "Amendment”) to their multicurrency Amended and Restated Credit Agreement dated as of September 11, 2013, as amended by Amendment No. 1 dated as of June 2, 2014 (as so amended, the “Credit Agreement”). The terms and structure of the Credit Agreement remain largely the same. The Amendment (i) reduced the aggregate amount available to the Company and the Subsidiary Borrower under the Credit Agreement from $650 million to $600 million (the “Facility Amount”), (ii) extended the final maturity date of the Credit Agreement from September 11, 2018 to June 9, 2020, and (iii) amends the applicable margins for borrowings and the commitment fee to be generally more favorable for the Company. The Credit Agreement continues to provide (a) a revolving credit facility, available up to the full amount of the Facility Amount, (b) a letter of credit facility, available up to $50 million of the Facility Amount, and (c) a swingline facility, available up to $100 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 $325 million. 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 $800 million), subject to certain conditions.

12
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Unaudited)

Loans made under the Credit Agreement bear interest under a formula that includes, at the Company's option, one of three different base rates. The Company generally selects the London Interbank Offered Rate ("LIBOR") for the applicable currency and interest period as its base for its interest rate. As provided in the Credit Agreement, a margin is added to the base. The applicable margin is determined by a pricing schedule and is based upon the better for the Company of (a) the ratio (the "Consolidated Leverage Ratio") of the consolidated funded indebtedness of the Company and its subsidiaries to the consolidated EBITDA (as defined in the Credit Agreement) of the Company and its subsidiaries for the four fiscal quarters then most recently ended, or (b) the Company’s then existing long-term debt securities rating by Moody’s Investor Service, Inc. or Standard and Poor’s Financial Services, Inc. As of June 27, 2015, the Company had a weighted average interest rate on outstanding LIBOR based borrowings of 1.51 percent under the Credit Agreement.
At June 27, 2015, the Company had $612.1 million of unused lines of credit, including $340.1 million under the committed, secured Credit Agreement, and $272.0 million available under various uncommitted lines around the world.
The Credit Agreement has customary financial covenants related to interest coverage and leverage. These restrictions are not expected to impact the Company's operations. As of June 27, 2015, and currently, the Company had considerable cushion under its financial covenants.
Note 10:
Derivative Instruments and Hedging Activities
The Company 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 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 $3.7 million and $2.8 million in the second quarters of 2015 and 2014, respectively, and $6.4 million and $5.2 million for the respective year-to-date periods.
The Company also uses derivative financial instruments to hedge foreign currency exposures resulting from certain forecasted purchases and classifies these as cash flow hedges. At initiation, the Company's cash flow hedge contracts are for periods ranging from one to fifteen months. The effective portion of the gain or loss on the hedging instrument is recorded in other comprehensive income and is reclassified into earnings as the transactions being hedged are recorded. As such, the balance at the end of the reporting period in other comprehensive income, related to cash flow hedges, 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.
The Company also uses financial instruments, such as forward contracts and certain euro denominated borrowings under the Company's Credit Agreement, 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 financial instruments, excluding any ineffective portion of the hedges, are included in foreign currency translation adjustments within accumulated other comprehensive loss. The Company recorded, net of tax, a net gain associated with these hedges, in other comprehensive income of $6.9 million and $26.4 million in the second quarter and year-to-date periods of 2015, respectively, and a net loss of $0.5 million and $3.8 million for the respective periods of 2014. 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 twelve months. In assessing hedge effectiveness, the Company excludes forward points, which are included as a component of interest expense.

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

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 were outflows of $5.1 million and $0.6 million for the year-to-date periods ended June 27, 2015 and June 28, 2014, respectively.
The Company considers the total notional value of its forward contracts as the best measure of the volume of derivative transactions. As of June 27, 2015 and December 27, 2014, the notional amounts of outstanding forward contracts to purchase currencies were $84.5 million and $185.1 million, respectively, and the notional amounts of outstanding forward contracts to sell currencies were $89.4 million and $184.2 million, respectively. As of June 27, 2015, the notional values of the largest positions outstanding were to purchase euro $54.2 million and to sell Indonesian rupiah $15.2 million.
The following table summarizes the Company's derivative positions, which are the only assets and liabilities recorded at fair value on a recurring basis, and the impact they had on the Company's financial position as of June 27, 2015 and December 27, 2014. Fair values were determined based on third party quotations (Level 2 fair value measurement):

 
Asset derivatives
 
Liability derivatives
 
 
 
 
Fair value
 
 
 
Fair value
Derivatives designated as hedging instruments (in millions)
 
Balance sheet location
 
Jun 27,
2015
 
Dec 27,
2014
 
Balance sheet location
 
Jun 27,
2015
 
Dec 27,
2014
Foreign exchange contracts
 
Non-trade amounts receivable
 
$
15.7

 
$
35.0

 
Accrued liabilities
 
$
18.7

 
$
30.3

The following table summarizes the impact of the Company's fair value hedging positions on the results of operations for the second quarters of 2015 and 2014:
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
 
 
 
 
2015
 
2014
 
 
 
2015
 
2014
Foreign exchange contracts
 
Other expense
 
$
(15.0
)
 
$
4.8

 
Other expense
 
$
14.8

 
$
(5.0
)
The following table summarizes the impact of Company's hedging activities on comprehensive income for the second quarters of 2015 and 2014:
Cash flow and net equity hedges (in millions)
 
Amount of gain or (loss) recognized in OCI (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 (ineffective portion and amount excluded from effectiveness testing)
 
Amount of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cash flow hedging relationships
 
2015
 
2014
 
 
 
2015
 
2014
 
 
 
2015
 
2014
Foreign exchange contracts
 
$
2.1

 
$
(0.4
)
 
Cost of products sold
 
$
4.2

 
$
1.5

 
Interest expense
 
$
(1.7
)
 
$
(1.5
)
Net equity hedging relationships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
12.8

 
(0.9
)
 
Other expense
 
—

 
—

 
Interest expense
 
(4.5
)
 
(3.1
)
Euro denominated debt
 
(1.9
)
 
—

 
Other expense
 
—

 
—

 
Other expense
 
—

 
—


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

The following table summarizes the impact of the Company's fair value hedging positions on the results of operations for the year-to-date periods ended June 27, 2015 and June 28, 2014:
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
 
 
 
 
2015
 
2014
 
 
 
2015
 
2014
Foreign exchange contracts
 
Other expense
 
$
(39.8
)
 
$
5.8

 
Other expense
 
$
40.0

 
$
(5.5
)
The following table summarizes the impact of Company's hedging activities on comprehensive income for the year-to-date periods ended June 27, 2015 and June 28, 2014:
Cash flow and net equity hedges (in millions)
 
Amount of gain or (loss) recognized in OCI (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 (ineffective portion and amount excluded from effectiveness testing)
 
Amount of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cash flow hedging relationships
 
2015
 
2014
 
 
 
2015
 
2014
 
 
 
2015
 
2014
Foreign exchange contracts
 
$
5.5

 
$
2.9

 
Cost of products sold
 
$
8.5

 
$
3.2

 
Interest expense
 
$
(4.6
)
 
$
(2.8
)
Net equity hedging relationships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
32.3

 
(6.0
)
 
Other expense
 
—

 
—

 
Interest expense
 
(8.0
)
 
(6.7
)
Euro denominated debt
 
9.0

 
—

 
Other expense
 
—

 
—

 
Other expense
 
—

 
—

Note 11:
Fair Value Measurements
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 June 27, 2015 and December 27, 2014. The Company estimates that, based on current market conditions, the value of its 4.750% 2021 Senior Notes was $628.0 million at June 27, 2015, compared with the carrying value of $599.3 million. The higher fair value resulted from changes, since issuance, in the corporate bond market and investor preferences. The fair value of debt is classified as a Level 2 liability, and is estimated using quoted market prices as provided in secondary markets which consider the Company's credit risk and market related conditions. See Note 10 to the Consolidated Financial Statements for discussion of the Company's derivative instruments and related fair value measurements.
Note 12:
Retirement Benefit Plans
Components of net periodic benefit cost for the second quarter and year-to-date periods ended June 27, 2015 and June 28, 2014 were as follows:
 
Second Quarter
 
Year-to-Date
 
Pension benefits
 
Post-retirement benefits
 
Pension benefits
 
Post-retirement benefits
(In millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Service cost
$
2.7

 
$
2.8

 
$
—

 
$
0.1

 
$
5.5

 
$
5.6

 
$
—

 
$
0.1

Interest cost
1.7

 
2.2

 
0.2

 
0.2

 
3.5

 
4.4

 
0.4

 
0.6

Expected return on plan assets
(1.4
)
 
(1.5
)
 
—

 
—

 
(2.8
)
 
(3.1
)
 
—

 
—

Settlement/curtailment
0.4

 
—

 
—

 
—

 
0.4

 
—

 
—

 
—

Net amortization
1.1

 
0.6

 
(0.3
)
 
(0.1
)
 
2.1

 
1.2

 
(0.6
)
 
(0.3
)
Net periodic benefit cost
$
4.5

 
$
4.1

 
$
(0.1
)
 
$
0.2

 
$
8.7

 
$
8.1

 
$
(0.2
)
 
$
0.4


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

During the year-to-date periods ended June 27, 2015 and June 28, 2014, approximately $1.9 million and $0.9 million, respectively, of pretax expenses 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 13:
Income Taxes
The effective tax rate was 28.3 percent for both the second quarter and year-to-date period of 2015 compared with 32.0 percent and 29.1 percent, respectively, for the comparable 2014 periods. The higher 2014 rates were due to higher 2014 losses incurred related to the devaluation of the Venezuelan bolivar for which no tax benefit could be recognized. In addition, the Company reported favorable audit settlements in various jurisdictions in the second quarter of 2015 that impacted the rate. The effective tax rates are below the U.S. statutory rate primarily due to lower foreign effective tax rates.
As of June 27, 2015 and December 27, 2014, the Company's gross unrecognized tax benefit was $20.5 million and $22.5 million, respectively. The Company estimates that approximately $18.4 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 $4.8 million and $6.5 million as of June 27, 2015 and December 27, 2014, respectively. During 2015, the accrual for uncertain tax positions decreased by $2.3 million primarily as a result of the Company agreeing to audit settlements with various jurisdictions, $1.3 million of which reduced the accrual for interest and penalties. The accrual for uncertain tax positions also increased for positions being taken in various global tax filings, and decreased due to the impact of net weaker foreign currency exchange rates versus the U.S. dollar.
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 $1.0 million. For the remaining balance as of June 27, 2015, 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 including changes in laws that could also, in turn, impact the Company's assessment relative to the establishment of valuation allowances against certain existing deferred tax assets. These valuation allowances relate to tax assets in jurisdictions where it is management's best estimate that there is not a greater than 50 percent probability that the benefit of the assets will be realized in the associated tax returns. The likelihood of realizing the benefit of deferred tax assets is assessed on an ongoing basis. This assessment requires estimates as to future operating results, as well as an evaluation of the effectiveness of the Company's tax planning strategies. 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.
Note 14:
Statement of Cash Flow Supplemental Disclosure
Under the Company's stock incentive programs, employees are allowed to use shares retained by the Company to satisfy U.S. minimum statutorily required withholding taxes. In the year-to-date periods ended June 27, 2015 and June 28, 2014, 12,300 and 87,290 shares, respectively, were retained to fund withholding taxes, with values totaling $0.9 million and $7.0 million, respectively, which were included as a component of stock repurchases in the Consolidated Statements of Cash Flows.
During the first quarter of 2014, the Company entered into a joint venture with a real estate development partner. The Company contributed land to the joint venture in exchange for 50 percent ownership of the joint venture. The carrying value of the land was $3.1 million. The Company's ownership interest in the joint venture is accounted for using the equity method and was included in long-term other assets on the June 27, 2015 and December 27, 2014 balance sheets at the carrying value of the contributed land. The Company does not expect to have any significant cash inflows or outflows related to the joint venture until such time as the joint venture completes and sells its development.
There were no capital lease arrangements initiated in the year-to-date periods ended June 27, 2015 or June 28, 2014.

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

Note 15:
Stock Based Compensation
Stock option activity for 2015 is summarized in the following table:
 
Shares subject to option
 
Weighted average exercise price per share
 
Aggregate intrinsic value
(in millions)
Outstanding at December 27, 2014
2,192,136

 
$
48.95

 
 
Granted
7,132

 
62.40

 
 
Expired / Forfeited
(5,469
)
 
69.04

 
 
Exercised
(110,535
)
 
44.73

 
 
Outstanding at June 27, 2015
2,083,264

 
$
49.15

 
$
41.7

Exercisable at June 27, 2015
1,471,794

 
$
41.26

 
$
39.7

The intrinsic value of options exercised totaled $0.3 million and $5.5 million in the second quarters of 2015 and 2014, respectively, and $2.6 million and $13.9 million in the respective year-to-date periods.
The Company also has time-vested, performance-vested and market-vested share awards. The activity for such awards in 2015 is summarized in the following table:
 
Shares outstanding
 
Weighted average grant date fair value
December 27, 2014
651,849

 
$
59.76

Time-vested shares granted
21,287

 
65.72

Market-vested shares granted
23,637

 
64.21

Performance shares granted
62,722

 
72.61

Performance share adjustments
2,735

 
79.42

Vested
(249,819
)
 
36.48

Forfeited
(3,551
)
 
72.13

June 27, 2015
508,860

 
$
73.11

Compensation expense related to the Company's stock based compensation for the second quarter and year-to-date periods ended June 27, 2015 and June 28, 2014 were as follows:
 
Second Quarter
 
Year-to-Date
(In millions)
2015
 
2014
 
2015
 
2014
Stock options
$
0.5

 
$
0.5

 
$
1.1

 
$
0.9

Time, performance and market vested share awards
3.9

 
3.0

 
7.1

 
7.6

As of June 27, 2015, total unrecognized stock based compensation expense related to all stock based awards was $24.3 million, which is expected to be recognized over a weighted average period of 1.8 years.
Note 16:
Allowance for Long-Term Receivables
As of June 27, 2015, $12.9 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.

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

The balance of the allowance for long-term receivables as of June 27, 2015 was as follows:
(In millions)
 
Balance at December 27, 2014
$
13.1

Write-offs
(0.6
)
Provision and reclassifications
0.7

Currency translation adjustment
(1.0
)
Balance at June 27, 2015
$
12.2

Note 17:
Guarantor Information
The Company's payment obligations under the Senior Notes are fully and unconditionally guaranteed, on a senior secured basis, by the Guarantor. The guarantee is secured by certain "Tupperware" trademarks and service marks owned by the Guarantor.
Condensed consolidated financial information as of June 27, 2015 and December 27, 2014 and for the quarter-to-date periods ended June 27, 2015 and June 28, 2014 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. 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.




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

Consolidating Statement of Income
 
13 Weeks Ended June 27, 2015
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
589.6

 
$
(0.7
)
 
$
588.9

Other revenue
—

 
28.5

 
9.7

 
(38.2
)
 
—

Cost of products sold
—

 
9.7

 
215.9

 
(36.5
)
 
189.1

Gross margin
—

 
18.8

 
383.4

 
(2.4
)
 
399.8

Delivery, sales and administrative expense
4.1

 
20.8

 
287.6

 
(2.4
)
 
310.1

Re-engineering and impairment charges
—

 
—

 
1.5

 
—

 
1.5

Gains on disposal of assets
—

 
—

 
10.8

 
—

 
10.8

Operating income (loss)
(4.1
)
 
(2.0
)
 
105.1

 
—

 
99.0

Interest income
8.1

 
6.2

 
1.4

 
(15.2
)
 
0.5

Interest expense
12.1

 
9.0

 
6.1

 
(15.2
)
 
12.0

Income from equity investments in subsidiaries
66.9

 
64.6

 
—

 
(131.5
)
 
—

Other expense
—

 
—

 
1.1

 
—

 
1.1

Income before income taxes
58.8

 
59.8

 
99.3

 
(131.5
)
 
86.4

Provision (benefit) for income taxes
(3.2
)
 
(2.3
)
 
29.9

 
—

 
24.4

Net income (loss)
$
62.0

 
$
62.1

 
$
69.4

 
$
(131.5
)
 
$
62.0

Comprehensive income (loss)
$
40.9

 
$
42.2

 
$
58.7

 
$
(100.9
)
 
$
40.9


Consolidating Statement of Income
 
13 Weeks Ended June 28, 2014
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
677.5

 
$
(3.2
)
 
$
674.3

Other revenue
—

 
38.4

 
6.4

 
(44.8
)
 
—

Cost of products sold
—

 
6.4

 
264.9

 
(45.6
)
 
225.7

Gross margin
—

 
32.0

 
419.0

 
(2.4
)
 
448.6

Delivery, sales and administrative expense
3.2

 
20.4

 
327.4

 
(2.4
)
 
348.6

Re-engineering and impairment charges
—

 
—

 
3.4

 
—

 
3.4

Gains on disposal of assets
—

 
—

 
0.5

 
—

 
0.5

Operating income (loss)
(3.2
)
 
11.6

 
88.7

 
—

 
97.1

Interest income
0.1

 
7.4

 
1.1

 
(8.1
)
 
0.5

Interest expense
9.3

 
5.4

 
5.0

 
(8.1
)
 
11.6

Income from equity investments in subsidiaries
55.6

 
47.5

 
—

 
(103.1
)
 
—

Other expense
—

 
0.1

 
15.9

 
—

 
16.0

Income before income taxes
43.2

 
61.0

 
68.9

 
(103.1
)
 
70.0

Provision (benefit) for income taxes
(4.4
)
 
5.1

 
21.7

 
—

 
22.4

Net income (loss)
$
47.6

 
$
55.9

 
$
47.2

 
$
(103.1
)
 
$
47.6

Comprehensive income (loss)
$
54.0

 
$
61.3

 
$
46.8

 
$
(108.1
)
 
$
54.0


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

Consolidating Statement of Income
 
26 Weeks Ended June 27, 2015
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
1,171.6

 
$
(0.9
)
 
$
1,170.7

Other revenue
—

 
56.8

 
14.9

 
(71.7
)
 
—

Cost of products sold
—

 
14.9

 
434.0

 
(68.2
)
 
380.7

Gross margin
—

 
41.9

 
752.5

 
(4.4
)
 
790.0

Delivery, sales and administrative expense
7.6

 
38.7

 
581.6

 
(4.4
)
 
623.5

Re-engineering and impairment charges
—

 
—

 
17.7

 
—

 
17.7

Gains on disposal of assets
—

 
—

 
11.4

 
—

 
11.4

Operating income (loss)
(7.6
)
 
3.2

 
164.6

 
—

 
160.2

Interest income
15.3

 
12.7

 
2.4

 
(29.4
)
 
1.0

Interest expense
24.9

 
17.1

 
12.7

 
(29.4
)
 
25.3

Income from equity investments in subsidiaries
102.2

 
99.3

 
—

 
(201.5
)
 
—

Other expense
—

 
—

 
8.3

 
—

 
8.3

Income before income taxes
85.0

 
98.1

 
146.0

 
(201.5
)
 
127.6

Provision (benefit) for income taxes
(6.5
)
 
(0.7
)
 
43.3

 
—

 
36.1

Net income (loss)
$
91.5

 
$
98.8

 
$
102.7

 
$
(201.5
)
 
$
91.5

Comprehensive income (loss)
$
47.7

 
$
49.8

 
$
63.5

 
$
(113.3
)
 
$
47.7


Consolidating Statement of Income
 
26 Weeks Ended June 28, 2014
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
1,341.1

 
$
(3.6
)
 
$
1,337.5

Other revenue
—

 
63.2

 
12.2

 
(75.4
)
 
—

Cost of products sold
—

 
12.2

 
509.3

 
(74.2
)
 
447.3

Gross margin
—

 
51.0

 
844.0

 
(4.8
)
 
890.2

Delivery, sales and administrative expense
7.8

 
35.5

 
654.6

 
(4.8
)
 
693.1

Re-engineering and impairment charges
—

 
—

 
5.7

 
—

 
5.7

Gains on disposal of assets
—

 
—

 
2.3

 
—

 
2.3

Operating income (loss)
(7.8
)
 
15.5

 
186.0

 
—

 
193.7

Interest income
0.2

 
14.6

 
2.2

 
(15.8
)
 
1.2

Interest expense
18.9

 
9.9

 
11.0

 
(15.8
)
 
24.0

Income from equity investments in subsidiaries
116.9

 
106.1

 
—

 
(223.0
)
 
—

Other expense
—

 
0.2

 
29.9

 
—

 
30.1

Income before income taxes
90.4

 
126.1

 
147.3

 
(223.0
)
 
140.8

Provision (benefit) for income taxes
(9.4
)
 
7.7

 
42.7

 
—

 
41.0

Net income (loss)
$
99.8

 
$
118.4

 
$
104.6

 
$
(223.0
)
 
$
99.8

Comprehensive income (loss)
$
107.1

 
$
125.1

 
$
107.9

 
$
(233.0
)
 
$
107.1


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

Condensed Consolidating Balance Sheet
 
June 27, 2015
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
ASSETS
 

 
 

 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
0.1

 
$
74.0

 
$
—

 
$
74.1

Accounts receivable, net
—

 
—

 
173.6

 
—

 
173.6

Inventories
—

 
—

 
299.1

 
—

 
299.1

Deferred income tax benefits, net
6.2

 
36.9

 
67.1

 
—

 
110.2

Non-trade amounts receivable, net
—

 
40.7

 
93.2

 
(90.2
)
 
43.7

Intercompany receivables
18.7

 
667.1

 
231.5

 
(917.3
)
 
—

Prepaid expenses and other current assets
1.2

 
4.4

 
69.3

 
(50.3
)
 
24.6

Total current assets
26.1

 
749.2

 
1,007.8

 
(1,057.8
)
 
725.3

Deferred income tax benefits, net
98.2

 
188.4

 
124.0

 
—

 
410.6

Property, plant and equipment, net
—

 
43.5

 
219.4

 
—

 
262.9

Long-term receivables, net
—

 
0.1

 
14.7

 
—

 
14.8

Trademarks and tradenames, net
—

 
—

 
94.8

 
—

 
94.8

Other intangible assets, net
—

 
—

 
0.7

 
—

 
0.7

Goodwill
—

 
2.9

 
154.6

 
—

 
157.5

Investments in subsidiaries
1,131.8

 
474.5

 
—

 
(1,606.3
)
 
—

Intercompany notes receivable
455.7

 
536.0

 
289.6

 
(1,281.3
)
 
—

Other assets, net
2.3

 
0.9

 
154.5

 
(130.1
)
 
27.6

Total assets
$
1,714.1

 
$
1,995.5

 
$
2,060.1

 
$
(4,075.5
)
 
$
1,694.2

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

 
 

 
 

 
 

Accounts payable
$
1.0

 
$
1.0

 
$
93.9

 
$
—

 
$
95.9

Short-term borrowings and current portion of long-term debt and capital lease obligations
168.8

 
—

 
95.2

 
—

 
264.0

Intercompany payables
518.5

 
235.1

 
163.7

 
(917.3
)
 
—

Accrued liabilities
138.1

 
61.7

 
267.5

 
(140.5
)
 
326.8

Total current liabilities
826.4

 
297.8

 
620.3

 
(1,057.8
)
 
686.7

Long-term debt and capital lease obligations
599.3

 
—

 
10.0

 
—

 
609.3

Intercompany notes payable
93.1

 
457.3

 
730.9

 
(1,281.3
)
 
—

Other liabilities
17.8

 
155.4

 
177.6

 
(130.1
)
 
220.7

Shareholders' equity
177.5

 
1,085.0

 
521.3

 
(1,606.3
)
 
177.5

Total liabilities and shareholders' equity
$
1,714.1

 
$
1,995.5

 
$