Document
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 30, 2019
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
________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
TUP
New York Stock Exchange

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 every Interactive Data File required to be submitted 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 
Accelerated filer
o
 
 
 
 
 
Non-accelerated filer
o
 
Smaller reporting company
o
 
 
 
 
 
 
 
 
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 April 30, 2019, 48,736,747 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
(In millions, except per share amounts)
March 30,
2019
 
March 31,
2018
Net sales
$
487.3

 
$
542.6

Cost of products sold
161.2

 
179.0

Gross margin
326.1

 
363.6

 
 
 
 
Delivery, sales and administrative expense
262.7

 
289.2

Re-engineering and impairment charges
4.3

 
7.6

(Loss) gain on disposal of assets
(0.9
)
 
2.2

Operating income
58.2

 
69.0

 
 
 
 
Interest income
0.6

 
0.7

Interest expense
10.2

 
11.1

Other (income) expense
(3.3
)
 
0.2

Income before income taxes
51.9

 
58.4

 
 
 
 
Provision for income taxes
15.0

 
22.7

Net income
$
36.9

 
$
35.7

 
 
 
 
Earnings per share:
 
 
 
Basic
$
0.76

 
$
0.70

Diluted
0.76

 
0.70

 
 
 
 
Weighted-average shares outstanding:
 
 
 
Basic
48.7

 
51.1

Diluted
48.8

 
51.3


See accompanying Notes to Consolidated Financial Statements (Unaudited).

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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
13 weeks ended
(In millions)
March 30,
2019
 
March 31,
2018
Net income
$
36.9

 
$
35.7

Other comprehensive income:
 
 
 
Foreign currency translation adjustments
20.7

 
10.1

Deferred loss on cash flow hedges, net of tax benefit of $0.6 and $0.3, respectively
(1.8
)
 
(0.7
)
Pension and other post-retirement benefits (costs), net of tax (provision) benefit of ($0.1) and $0.6, respectively
0.1

 
(1.7
)
Other comprehensive income
19.0

 
7.7

Total comprehensive income
$
55.9

 
$
43.4


See accompanying Notes to Consolidated Financial Statements (Unaudited).

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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions, except share amounts)
March 30,
2019
 
December 29,
2018
ASSETS
 

 
 

Cash and cash equivalents
$
146.8

 
$
149.0

Accounts receivable, less allowances of $49.5 and $45.3, respectively
167.0

 
144.7

Inventories
269.0

 
257.7

Non-trade amounts receivable, net
51.8

 
49.9

Prepaid expenses and other current assets
21.0

 
19.3

Total current assets
655.6

 
620.6

Deferred income tax benefits, net
226.7

 
217.0

Property, plant and equipment, net
277.9

 
276.0

Long-term receivables, less allowances of $16.8 and $16.0, respectively
17.6

 
18.7

Trademarks and tradenames, net
52.3

 
52.9

Goodwill
77.5

 
76.1

Operating lease assets
82.0

 
—

Other assets, net
49.2

 
47.5

Total assets
$
1,438.8

 
$
1,308.8

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

Accounts payable
$
81.5

 
$
129.2

Short-term borrowings and current portion of long-term debt and finance lease obligations
367.8

 
285.5

Accrued liabilities
347.6

 
344.4

Total current liabilities
796.9

 
759.1

Long-term debt and finance lease obligations
603.0

 
603.4

Operating lease liabilities
52.7

 
—

Other liabilities
170.2

 
181.5

Shareholders' deficit:
 

 
 

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
216.5

 
219.3

Retained earnings
1,121.8

 
1,086.8

Treasury stock, 14,872,114 and 14,940,286 shares, respectively, at cost
(934.8
)
 
(939.8
)
Accumulated other comprehensive loss
(588.1
)
 
(602.1
)
Total shareholders' deficit
(184.0
)
 
(235.2
)
Total liabilities and shareholders' deficit
$
1,438.8

 
$
1,308.8


See accompanying Notes to Consolidated Financial Statements (Unaudited).

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Tupperware Brands Corporation
Consolidated Statements of Shareholders' Equity
(Unaudited)
 
Common Stock
 
Treasury Stock
 
Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total Shareholders' Equity
(Dollars in millions)
Shares
 
Dollars
 
Shares
 
Dollars
 
 
 
 
December 30, 2017
63.6
 
$
0.6

 
12.6
 
$
(851.5
)
 
$
217.8

 
$
1,043.1

 
$
(529.4
)
 
$
(119.4
)
Net income
 
 
 
 
 
 
 
 
 
 
35.7

 
 
 
35.7

Other Comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
7.7

 
7.7

Cash dividends declared ($0.68 per share)
 
 
 
 
 
 
 
 
 
 
(34.9
)
 
 
 
(34.9
)
Stock and options issued for incentive plans
 
 
 
 
(0.1
)
 
4.4

 
(2.8
)
 
0.9

 
 
 
2.5

March 31, 2018
63.6
 
$
0.6

 
12.5
 
$
(847.1
)
 
$
215.0

 
$
1,044.8

 
$
(521.7
)
 
$
(108.4
)

 
Common Stock
 
Treasury Stock
 
Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total Shareholders' Equity
(in millions, except per share amounts)
Shares
 
Dollars
 
Shares
 
Dollars
 
 
 
 
December 29, 2018
63.6
 
$
0.6

 
15.0
 
$
(939.8
)
 
$
219.3

 
$
1,086.8

 
$
(602.1
)
 
$
(235.2
)
Net income
 
 
 
 
 
 
 
 
 
 
36.9

 
 
 
36.9

Cumulative effect of change in accounting principles
 
 
 
 
 
 
 
 
 
 
12.1

 
(5.0
)
 
7.1

Other Comprehensive income
 
 
 
 
 
 
 
 
 
 
 
 
19.0

 
19.0

Cash dividends declared ($0.27 per share)
 
 
 
 
 
 
 
 
 
 
(12.9
)
 
 
 
(12.9
)
Stock and options issued for incentive plans
 
 
 
 
(0.1
)
 
5.0

 
(2.8
)
 
(1.1
)
 
 
 
1.1

March 30, 2019
63.6
 
$
0.6

 
14.9
 
$
(934.8
)
 
$
216.5

 
$
1,121.8

 
$
(588.1
)
 
$
(184.0
)



See accompanying Notes to Consolidated Financial Statements (Unaudited).



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TUPPERWARE BRANDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
13 weeks ended
(In millions)
March 30,
2019
 
March 31,
2018
Operating Activities:
 
 
 

Net income
$
36.9

 
$
35.7

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

 
 

Depreciation and amortization
14.1

 
15.5

Equity compensation
1.9

 
3.3

Amortization of deferred debt costs
0.2

 
0.2

Net loss (gain) on disposal of assets
0.8

 
(2.2
)
Provision for bad debts
5.0

 
4.3

Write-down of inventories
2.7

 
2.3

Net change in deferred income taxes
(4.5
)
 
16.4

Changes in assets and liabilities:
 

 
 

Accounts and notes receivable
(25.0
)
 
(24.1
)
Inventories
(11.5
)
 
(21.0
)
Non-trade amounts receivable
(11.5
)
 
(4.8
)
Prepaid expenses
(0.5
)
 
(3.7
)
Other assets
(0.1
)
 
(0.4
)
Accounts payable and accrued liabilities
(32.5
)
 
(22.0
)
Income taxes payable
(14.5
)
 
(42.5
)
Other liabilities
(2.5
)
 
(3.4
)
Net cash impact from hedging activity
0.8

 
5.4

Other
0.1

 
0.2

Net cash used in operating activities
$
(40.1
)
 
$
(40.8
)
Investing Activities:
 

 
 

Capital expenditures
(12.9
)
 
(15.2
)
Proceeds from disposal of property, plant and equipment
0.6

 
5.9

Net cash used in investing activities
(12.3
)
 
(9.3
)
Financing Activities:
 

 
 

Dividend payments to shareholders
(33.9
)
 
(35.4
)
Proceeds from exercise of stock options
—

 
0.2

Repurchase of common stock
(0.7
)
 
(1.0
)
Repayment of finance lease obligations
(0.3
)
 
(0.5
)
Net change in short-term debt
84.1

 
97.2

Debt issuance costs
(1.3
)
 
—

Net cash provided by financing activities
47.9

 
60.5

Effect of exchange rate changes on cash, cash equivalents and restricted cash
3.1

 
4.1

Net change in cash, cash equivalents and restricted cash
(1.4
)
 
14.5

Cash, cash equivalents and restricted cash at beginning of year
151.9

 
147.2

Cash, cash equivalents and restricted cash at end of period
$
150.5

 
$
161.7


See accompanying Notes to Consolidated Financial Statements (Unaudited).

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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 2018 financial statements included in the Company's Annual Report on Form 10-K for the year ended December 29, 2018.
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 balance sheet, statements of income, comprehensive income, statements of shareholder’s equity 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.
Hedging: On December 30, 2018, the Company adopted new guidance on hedge accounting, which required a cumulative-effect adjustment to the opening balance of retained earnings and accumulated other comprehensive income of $5.0 million, net of taxes. As part of the adoption, the Company elected to include forward points in the assessment of hedge effectiveness for net equity and cash flow hedges and exclude forward points in the assessment for fair value hedges. In addition, the Company now records the entire change in fair value of hedging instruments in the same income statement line item as the earnings effect of the hedged item. Prior to adoption, the impact from forward points was recorded as interest expense. Refer to Note 11 to the Consolidated Financial Statements for further discussion on impact from new hedge accounting guidance.
Leases: On December 30, 2018, the Company adopted new guidance on lease accounting using the modified retrospective method, which required a cumulative-effect adjustment to the opening balance of retained earnings of $7.1 million, net of taxes. Prior periods have not been restated. The standard did not materially impact consolidated net income or liquidity, and did not have an impact on debt-covenant compliance under the Company's debt agreements. The new guidance was applied to all operating and capital leases at the date of initial application. Leases historically referred to as capital leases are now referred to as finance leases under the new guidance.
The Company elected the package of practical expedients permitted under the transition guidance, and as a basis for its lease policies, which allowed the Company to carryforward its historical assessments of: (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company also elected to not separate lease and non-lease components for all classes of underlying assets in which it is the lessee, and made an accounting policy election to not account for leases with an initial term of 12 months or less on the balance sheet. In addition, the Company did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases. The Company recognizes payments on these leases on a straight-line basis over the lease term.
Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $82.0 million and $83.3 million, respectively, as of March 30, 2019 related to the Company's operating leases. The standard did not materially impact the Company's consolidated net earnings or cash flows. Refer to Note 8 to the Consolidated Financial Statements for further information.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Foreign Currency Translation: Inflation in Argentina and Venezuela has been at a high level the past several years. The Company uses a blended index of the Consumer Price Index and National Consumer Price Index for determining highly inflationary status in these countries. For Argentina, this blended index reached cumulative three-year inflation in excess of 100 percent in 2018 and as such, the Company transitioned to highly inflationary status as of July 1, 2018. Venezuela was determined to be highly inflationary starting in 2010. Gains and losses resulting from the translation of the financial statements of subsidiaries operating in highly inflationary economies are recorded in earnings. As of March 30, 2019, the Company had approximately $1.7 million of net monetary assets in Argentina, which are of a nature that will generate income or expense for the change in value associated with exchange rate fluctuations versus the U.S. dollar. There were no material monetary assets or liabilities in Venezuela as of March 30, 2019.
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, duties, 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 expenses ("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 were $32.8 million and $35.5 million for the first quarters of 2019 and 2018, respectively.
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 other activities, ancillary to the Company's business, but considered separate and distinct services from sales, which are measured by defined group/team sales levels, addition of new sales force members or other business-critical functions. The awards offered are in the form of 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 $78.6 million and $88.4 million for the first quarters of 2019 and 2018, respectively.
Note 4:
Inventories
(In millions)
March 30,
2019
 
December 29,
2018
Finished goods
$
208.7

 
$
203.9

Work in process
28.6

 
25.0

Raw materials and supplies
31.7

 
28.8

Total inventories
$
269.0

 
$
257.7

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.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The elements of the earnings per share computations were as follows:
 
13 weeks ended
(In millions, except per share amounts)
March 30,
2019
 
March 31,
2018
Net income
$
36.9

 
$
35.7

Weighted average shares of common stock outstanding
48.7

 
51.1

Common equivalent shares:
 
 
 
Assumed exercise of dilutive options, restricted shares, restricted stock units and performance share units
0.1

 
0.2

Weighted average common and common equivalent shares outstanding
48.8

 
51.3

Basic earnings per share
$
0.76

 
$
0.70

Diluted earnings per share
$
0.76

 
$
0.70

Shares excluded from the determination of potential common stock because inclusion would have been anti-dilutive
3.9

 
2.0

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 29, 2018
$
(579.1
)
 
$
1.7

 
$
(24.7
)
 
$
(602.1
)
Cumulative effect of change in accounting principle
(3.8
)
 
(1.2
)
 
—

 
(5.0
)
Other comprehensive income (loss) before reclassifications
20.7

 
(2.1
)
 
0.2

 
18.8

Amounts reclassified from accumulated other comprehensive loss
—

 
0.3

 
(0.1
)
 
0.2

Net current-period other comprehensive income (loss)
20.7

 
(1.8
)
 
0.1

 
19.0

Balance at March 30, 2019
$
(562.2
)
 
$
(1.3
)
 
$
(24.6
)
 
$
(588.1
)
(In millions, net of tax)
Foreign Currency Items
 
Cash Flow Hedges
 
Pension and Other Post-retirement Items
 
Total
Balance at December 30, 2017
$
(501.9
)
 
$
1.6

 
$
(29.1
)
 
$
(529.4
)
Other comprehensive income (loss) before reclassifications
10.1

 
(0.8
)
 
(1.6
)
 
7.7

Amounts reclassified from accumulated other comprehensive loss
—

 
0.1

 
(0.1
)
 
—

Net current-period other comprehensive income (loss)
10.1

 
(0.7
)
 
(1.7
)
 
7.7

Balance at March 31, 2018
$
(491.8
)
 
$
0.9

 
$
(30.8
)
 
$
(521.7
)
Pretax amounts reclassified from accumulated other comprehensive loss that related to cash flow hedges consisted of net loss of $0.5 million and a gain of $0.1 million in the first quarters of 2019 and 2018, respectively. Associated with these items were a tax benefit of $0.2 million and a provision of $0.2 million, respectively. See Note 11 for further discussion of derivatives.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

In the first quarters of 2019 and 2018, pretax amounts reclassified from accumulated other comprehensive loss related to pension and other post-retirement items consisted of prior service benefits of $0.3 million and $0.4 million, respectively, and in 2018, an actuarial loss of $0.1 million and a pension settlement cost of $0.1 million. Associated with these items were tax provisions of $0.2 million and $0.1 million in 2019 and 2018, respectively. See Note 13 to the Consolidated Financial Statements for further discussion of pension and other post-retirement benefit costs.
Note 7:
Re-engineering and Impairment Costs
The Company recorded $4.3 million and $7.6 million in re-engineering charges during the first quarters of 2019 and 2018, respectively.
In 2019 and 2018, the re-engineering and impairment charges incurred were primarily related to severance costs and restructuring actions taken in connection with the Company's plans to rationalize its supply chain and to adjust the cost base of several marketing units. The Company incurred $3.1 million and $7.6 million in the first quarters of 2019 and 2018, respectively, related to the revitalization program announced in July 2017.
In January 2019, the Company announced an acceleration of investment in its Global Growth Strategy initiatives through the commencement of a transformation program running through 2022. In the first quarter of 2019, the Company incurred $1.2 million in transformation program costs in Europe, primarily related to outside consulting services and project team expenses.
The re-engineering charges related to the 2017 revitalization program by segment during the first quarter of 2019 and 2018 were as follows:
 
13 weeks ended
(In millions)
March 30, 2019
March 31, 2018
Europe
$
1.3

$
5.7

Asia Pacific
0.9

0.8

North America
0.5

0.7

South America
0.4

0.4

Total re-engineering charges
$
3.1

$
7.6

The balances included in accrued liabilities related to re-engineering and impairment charges for the 2017 revitalization program as of March 30, 2019 and December 29, 2018 were as follows:
(In millions)
March 30,
2019
 
December 29,
2018
Beginning of the year balance
$
23.3

 
$
45.4

Provision
3.1

 
15.9

Non-cash charges
—

 
(2.0
)
Adjustments
—

 
5.0

Cash expenditures:
 
 
 

Severance
(6.5
)
 
(27.1
)
Other
(1.8
)
 
(12.8
)
Currency translation adjustment
(0.1
)
 
(1.1
)
End of period balance
$
18.0

 
$
23.3

The balance included in accrued liabilities related to re-engineering and impairment charges for the 2019 transformation program, as of March 30, 2019, was $0.8 million.

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TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 8:
Leases
The Company leases certain equipment, vehicles, office space, and manufacturing and distribution facilities, and recognizes the associated lease expense on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
Some leases include one or more options to renew, with renewal terms that can extend the lease term from one to 5 years or more. The exercise of lease renewal options is at the Company's discretion and renewal options that are reasonably certain to be exercised have been included in the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
Certain lease agreements held by the Company include rental payments adjusted periodically for inflation. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease expense in the first quarter of 2019 were as follows:
 
13 weeks ended
(In millions)
March 30, 2019
Operating lease cost (a) (c)
$
13.0

Finance lease cost
 
Amortization of right-of-use assets (a)
0.2

Interest on lease liabilities (b)
0.1

Total finance lease cost
$
0.3

____________________
(a) 
Included in DS&A and cost of products sold.
(b)
Included in interest expense.
(c)
Includes immaterial amounts related to short-term rent expense and variable rent expense.

Supplemental cash flow information related to leases is as follows:
 
13 weeks ended
(In millions)
March 30, 2019
Cash paid for amounts included in the measurement of lease liabilities
 
Operating cash flows from operating leases
$
(12.6
)
Operating cash flows from finance leases
(0.1
)
Financing cash flows from finance leases
(0.3
)
Leased assets obtained in exchange for new operating lease liabilities
$
7.7



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

Supplemental balance sheet information related to leases is as follows:
(In millions, except lease term and discount rate)
March 30, 2019
Operating Leases
 
Operating lease right-of-use assets
$
82.0

 
 
Accrued liabilities
$
30.6

Operating lease liabilities
52.7

Total Operating lease liabilities
$
83.3

 
 
Finance Leases
 
Property, plant and equipment, at cost
$
18.2

Accumulated amortization
9.8

Property, plant and equipment, net
$
8.4

 
 
Current portion of finance lease obligations
$
1.6

Long-term finance lease obligations
3.4

Total Finance lease liabilities
$
5.0

 
 
Weighted Average Remaining Lease Term
 
Operating Leases
4.6 years

Finance Leases
3.2 years

Weighted Average Discount Rate (a)
 
Operating Leases
5.4
%
Finance Leases
4.8
%
_________________________
(a) Calculated using Company's incremental borrowing rate.

Maturities of lease liabilities as of March 30, 2019 were as follows:
(In millions)
Operating Leases
Finance Leases
2019
$
27.1

$
1.5

2020
22.6

1.4

2021
14.5

1.4

2022
7.8

1.1

2023
5.0

—

Thereafter
15.9

—

Total lease payments
$
92.9

$
5.4

Less imputed interest
9.6

0.4

Total
$
83.3

$
5.0





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

Maturities of lease liabilities as of December 29, 2018 were as follows:
(In millions)
Operating Leases
Finance Leases
2019
$
28.3

$
1.6

2020
19.2

1.3

2021
15.8

1.4

2022
8.3

1.0

2023
6.3

—

Thereafter
25.3

—

Total
$
103.2

$
5.3

Rental expense for operating leases totaled $32.2 million and gross payments of financing leases totaled $2.5 million in fiscal year 2018.
As of March 30, 2019, the Company had an immaterial amount of operating and finance leases that had not yet commenced.

Note 9:
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 geography, consistency of economic substance, products, production process, class of customers and distribution method.
The Company's reportable segments primarily sell design-centric preparation, storage and serving solutions for the kitchen and home through the Tupperware® brand. Europe includes Avroy Shlain® in South Africa and Nutrimetics® in France, which sell beauty and personal care products. Some units in Asia Pacific also sell beauty and personal care products under the NaturCare®, Nutrimetics® and Fuller® brands. North America also includes the Fuller Mexico beauty and personal care products business, and sells products under the Fuller Cosmetics® brand in that unit and in Central America. South America also sells beauty products under the Fuller®, Nutrimetics® and Nuvo® brands.
Worldwide sales of beauty and personal care products totaled $66.1 million and $72.8 million in the first quarters of 2019 and 2018, respectively.

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

 
13 weeks ended
(In millions)
March 30,
2019
 
March 31,
2018
Net sales:
 
 
 
Europe
$
138.6

 
$
143.9

Asia Pacific
156.1

 
172.2

North America
119.6

 
135.0

South America
73.0

 
91.5

Total net sales
$
487.3

 
$
542.6

Segment profit:
 
 
 
Europe
$
17.7

 
$
12.4

Asia Pacific
30.0

 
37.9

North America
17.4

 
19.0

South America
8.9

 
17.3

Total segment profit
$
74.0

 
$
86.6

Unallocated expenses
(7.3
)
 
(12.4
)
Re-engineering and impairment charges (a)
(4.3
)
 
(7.6
)
(Loss) gain on disposal of assets
(0.9
)
 
2.2

Interest expense, net
(9.6
)
 
(10.4
)
Income before taxes
$
51.9

 
$
58.4

(In millions)
March 30,
2019
 
December 29,
2018
Identifiable assets:
 
 
 
Europe
$
335.2

 
$
291.0

Asia Pacific
312.2

 
281.2

North America
294.1

 
250.9

South America
139.5

 
125.0

Corporate
357.8

 
360.7

Total identifiable assets
$
1,438.8

 
$
1,308.8

_________________________
(a) 
See Note 7 to the Consolidated Financial Statements for a discussion of re-engineering and impairment charges.
Note 10:
Debt
Debt Obligations
(In millions)
March 30,
2019
 
December 29, 2018
Fixed rate senior notes due 2021
$
599.6

 
$
599.7

Five year Revolving Credit Agreement (a)
366.2

 
283.9

Belgium facility finance lease
5.0

 
5.3

Total debt obligations
$
970.8

 
$
888.9

____________________
(a) 
$204.5 million and $186.8 million denominated in euros as of March 30, 2019 and December 29, 2018, respectively.


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

Credit Agreement
On March 29, 2019, the Company and its wholly owned subsidiaries Tupperware Nederland B.V., Administradora Dart, S. de R.L. de C.V., and Tupperware Brands Asia Pacific Pte. Ltd. (the “Subsidiary Borrowers”), amended and restated its multicurrency Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent (the “Administrative Agent”), swingline lender, joint lead arranger and joint bookrunner, and Credit Agricole Corporate and Investment Bank, HSBC Securities (USA) Inc., Mizuho Bank, Ltd. and Wells Fargo Securities, LLC, as syndication agents, joint lead arrangers and joint bookrunners. The Credit Agreement replaces the Credit Agreement dated September 11, 2013 and as amended (the “Old Credit Agreement”) and, other than an increased aggregate amount that may be borrowed, an improvement in the consolidated leverage ratio covenant and a slightly more favorable commitment fee rate, has terms and conditions similar to that of the Old Credit Agreement. The Credit Agreement makes available to the Company and the Subsidiary Borrowers a committed five-year credit facility in an aggregate amount of $650 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 $100 million of the Facility Amount. Each of such facilities is fully available to the Company and the Facility Amount is available to the Subsidiary Borrowers up to an aggregate amount not to exceed $325 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 $850 million), subject to certain conditions. As of March 30, 2019, the Company had total borrowings of $366.2 million outstanding under the Credit Agreement, with $204.5 million of that amount denominated in euros.
Loans made under the Credit Agreement will be composed of (i) “Eurocurrency Borrowings”, bearing interest determined in reference to the London interbank offered rate ("LIBOR") for the applicable currency and interest period, plus a margin, and/or (ii) “ABR Borrowings”, bearing interest at the sum of (A) the greatest of (x) the rate of interest publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate, (y) the NYFRB rate plus 0.5%, and (z) adjusted LIBOR on such day (or if such day is not a business day, the immediately preceding business day) for a deposit in U.S. dollars with a maturity of one month plus 1%, and (B) a margin. The applicable margin in each case will be determined by reference to a pricing schedule and will be based upon the better for the Company of (a) the Consolidated Leverage Ratio (computed as 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) for the fiscal quarter referred to in the quarterly or annual financial statements most recently delivered, 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. Under the Credit Agreement, the applicable margin for ABR Borrowings ranges from 0.375% to 0.875%, the applicable margin for Eurocurrency Borrowings ranges from 1.375% to 1.875%, and the applicable margin for the commitment fee ranges from 0.150% to 0.275%. Loans made under the swingline facility will bear interest, if denominated in U.S. Dollars, at the same rate as an ABR Borrowing and, if denominated in another currency, at the same rate as a Eurocurrency Borrowing. As of March 30, 2019, the Credit Agreement dictated a base rate spread of 150 basis points, which gave the Company a weighted average interest rate of 2.6 percent on LIBOR-based borrowings under the Credit Agreement that has a final maturity date of March 29, 2024.
Similar to the Old Credit Agreement, the Credit Agreement contains customary covenants that, among other things, generally restrict the Company's ability to incur subsidiary indebtedness, create liens on and sell assets, engage in certain liquidations or dissolutions, engage in certain mergers or consolidations, or change lines of business. These covenants are subject to significant exceptions and qualifications.
The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.75 to 1.0 and a minimum interest coverage ratio of 3.0 to 1.0 (defined as consolidated EBITDA divided by consolidated total interest expense). For purposes of the Credit Agreement, consolidated EBITDA represents earnings before interest, income taxes, depreciation and amortization, as adjusted to exclude unusual, non-recurring gains as well as non-cash charges and certain other items. As of March 30, 2019, and currently, the Company had considerable cushion under its financial covenants as well as the necessary bond credit ratings to prevent default.

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

Under the Credit Agreement and consistent with the Old Credit Agreement, the Guarantor unconditionally guarantees all obligations and liabilities of the Company and the Subsidiary Borrowers relating to the Credit Agreement, supported by a security interest in certain "Tupperware" trademarks and service marks. The Credit Agreement includes a trigger whereby the Company would be required to provide additional collateral and subsidiary guarantees if either Moody's Investors Services, Inc. or S&P Global Ratings downgrades its existing ratings two notches or more.
The Company had routinely increased its revolver borrowings under the Old Credit Agreement each quarter, and expects to continue to do so under the Credit Agreement, to fund operating, investing and other financing activities. It also has in the past and expects to in the future, use cash available at the end of each quarter to reduce borrowing levels. As a result, the Company has higher interest expense and foreign exchange exposure on the value of its cash during each quarter than would relate solely to the quarter end cash and debt balances.
At March 30, 2019, the Company had $364.9 million of unused lines of credit, including $282.2 million under the committed, secured Credit Agreement, and $82.7 million available under various uncommitted lines around the world.
Note 11:
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, 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 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, as of the beginning of 2019, the Company made the accounting policy election in accordance with ASU 2017-12 to exclude forward points and record their impact in the same income statement line item that is used to present the earnings effect of the hedged item for 2019, Other (income) expense. Prior to 2019, the forward points had been included as a component of interest expense. The forward points on fair value hedges resulted in pretax income of $3.7 million and $6.1 million in the first quarters of 2019 and 2018, respectively.
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 majority of cash flow hedge contracts that the Company enters into relate to inventory purchases. At initiation, the Company's cash flow hedge contracts are generally for periods ranging from one month to fifteen months. The effective portion of the gain or loss on the open hedging instrument is recorded in other comprehensive income and is reclassified into earnings when settled through the same line item as the transaction being hedged. As such, the balance at the end of the current reporting period in other comprehensive income, related to cash flow hedges, will generally be reclassified 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 made an accounting policy change as of December 30, 2018 to include forward points in the assessment of effectiveness for cash flow hedges causing the impact from forward points to be recorded as part of other comprehensive income compared to interest expense as it previously had been recorded. Based on the interest expense incurred for open cash flow hedges as of December 30, 2018, the Company recorded an adjustment of $1.2 million, net of taxes, to accumulated comprehensive income and retained earnings to reflect this accounting policy change. The impact from forward points recorded in other comprehensive income for activity related to the first quarter of 2019 was $0.8 million. The Company recognized $1.0 million expense in cost of products sold related to the forward point impact from the settlement of cash flow hedges in the first quarter of 2019.

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

The Company also uses financial instruments, such as forward contracts and certain euro denominated borrowings under its 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, in other comprehensive income net losses of $13.1 million and $16.9 million associated with these hedges in the first quarters of 2019 and 2018, 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 twelve months. In assessing hedge effectiveness, the Company made an accounting policy change as of December 30, 2018 to include forward points in the assessment of effectiveness for net equity hedges causing the impact from forward points to be recorded as part of other comprehensive income compared to interest expense as it previously had been recorded. Based on the interest expense associated with forward points incurred for open net equity hedges as of December 30, 2018, the Company recorded an adjustment of $3.8 million, net of taxes, to accumulated comprehensive income to reflect this accounting policy change. Beginning in 2019, the impact of forward points is being recorded in other comprehensive income, and will remain there indefinitely since that is where the gains and losses on hedges of net equity are recorded. The impact related to forward points on hedges of net equity recorded as a component of other comprehensive income in the first quarter of 2019 was $4.3 million.
While the forward contracts used for 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 for the first quarters of 2019 and 2018 were inflows of $0.8 million and $5.4 million, respectively.
The Company considers the total notional value of its forward contracts as the best measure of the volume of derivative transactions. As of March 30, 2019 and December 29, 2018, the notional amounts of outstanding forward contracts to purchase currencies were $87.9 million and $186.8 million, respectively, and the notional amounts of outstanding forward contracts to sell currencies were $89.1 million and $184.6 million, respectively. As of March 30, 2019, the notional values of the largest positions outstanding were to purchase $28.8 million of U.S. dollars, $26.9 million of euros and $19.9 million of Swiss francs and to sell $26.2 million of Mexican pesos.
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 March 30, 2019 and December 29, 2018. 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
 
Mar 30,
2019
 
Dec 29,
2018
 
Balance sheet location
 
Mar 30,
2019
 
Dec 29,
2018
Foreign exchange contracts
 
Non-trade amounts receivable
 
$
17.3

 
$
26.7

 
Accrued liabilities
 
$
16.6

 
$
22.6

The following table summarizes the impact of the Company's fair value hedging positions on the results of operations for the first quarters of 2019 and 2018:
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
 
 
 
 
2019
 
2018
 
 
 
2019
 
2018
Foreign exchange contracts
 
Other expense
 
$
17.3

 
$
15.1

 
Other expense
 
$
(17.3
)
 
$
(14.7
)

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

The following table summarizes the impact of the Company's hedging activities on comprehensive income for the first quarters of 2019 and 2018:
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
 
2019
 
2018
 
 
 
2019
 
2018
 
 
 
2019
 
2018
Foreign exchange contracts
 
$
(2.8
)
 
$
(0.9
)
 
Cost of products sold
 
$
(0.5
)
 
$
0.1

 
Interest expense
 
$
—

 
$
(1.1
)
Net equity hedging relationships
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
(17.7
)
 
(17.6
)
 
 
 
 
 
 
 
Interest expense
 
—

 
(6.0
)
Euro denominated debt
 
0.8

 
(4.1
)
 
 
 
 
 
 
 
 
 
 
 
 
Note 12:
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, leased assets and liabilities and short-term borrowings approximated their fair values at March 30, 2019 and December 29, 2018. The Company estimates that, based on current market conditions, the value of its 4.75%, 2021 senior notes was $617.2 million at March 30, 2019, compared with the carrying value of $599.6 million. The higher fair value resulted from changes, since issuance, in the corporate debt markets 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 that consider the Company's credit risk and market related conditions. See Note 11 to the Consolidated Financial Statements for discussion of the Company's derivative instruments and related fair value measurements.
Note 13:
Retirement Benefit Plans
Components of net periodic benefit cost for the first quarters ended March 30, 2019 and March 31, 2018 were as follows:
 
First Quarter
 
Pension benefits
 
Post-retirement benefits
(In millions)
2019
 
2018
 
2019
 
2018
Service cost
$
1.9

 
$
2.6

 
$
—

 
$
—

Interest cost
1.5

 
1.4

 
0.1

 
0.1

Expected return on plan assets
(1.1
)
 
(1.1
)
 
—

 
—

Settlement/curtailment
—

 
0.1

 
—

 
—

Net amortization
—

 
—

 
(0.3
)
 
(0.3
)
Net periodic benefit cost
$
2.3

 
$
3.0

 
$
(0.2
)
 
$
(0.2
)
During the first quarters of 2019 and 2018, approximately $0.3 million and $0.2 million of pretax gain were reclassified from other comprehensive income to a component of net periodic benefit cost, respectively. As they relate to non-U.S. 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. The Company included $0.2 million related to the components of net periodic benefit cost, excluding service cost, in other expense in the first quarters of both 2019 and 2018.

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

Note 14:
Income Taxes
The effective tax rates for the first quarters of 2019 and 2018 were 28.9 percent and 38.8 percent, respectively. The change in rate was primarily due to a lower estimated full-year provision for the Global Intangible Low-Taxed income (GILTI) tax.
As of March 30, 2019 and December 29, 2018, the Company's accrual for uncertain tax positions was $15.4 million and $15.1 million, respectively. The increase in the accrual for uncertain tax positions was primarily due to the commencement of additional audits in various jurisdictions. The Company estimates that as of March 30, 2019, approximately $15.1 million of the unrecognized tax benefits, if recognized, will 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 $5.4 million and $5.5 million as of the periods ended March 30, 2019 and December 29, 2018, respectively.
The Company estimates that it may settle one or more audits in the next twelve months that may result in cash payments decreasing the amount of accrual for uncertain tax positions by up to $3.3 million. For the remaining balance as of March 30, 2019, 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 or reversal 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 15:
Statement of Cash Flow Supplemental Disclosure
Under the Company's stock incentive programs, in certain jurisdictions, employees are allowed to use shares retained by the Company to satisfy minimum statutorily required withholding taxes. In the first quarters of 2019 and 2018, 23,088 and 20,145 shares, respectively, were retained to fund withholding taxes, with values totaling $0.7 million and $1.0 million, respectively, which were included as stock repurchases in the Condensed Consolidated Statements of Cash Flows.
Restricted cash is recorded in prepaid and other current assets or in the long-term other assets balance sheet line items.
Note 16:
Stock Based Compensation
Stock option activity for the first quarter ended March 30, 2019 is summarized in the following table:
 
Shares subject to option
 
Weighted average exercise price per share
 
Aggregate intrinsic value
(in millions)
Outstanding at December 29, 2018
3,630,684

 
$
55.66

 
 
Expired / Forfeited
(13,758
)
 
66.76

 
 
Outstanding at March 30, 2019
3,616,926

 
$
55.62

 
$
—

Exercisable at March 30, 2019
2,368,571

 
$
59.33

 
$
—



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

The Company also has time-vested, performance-vested and market-vested share awards. The activity for such awards in the first quarter ended March 30, 2019 is summarized in the following table:
 
Shares outstanding
 
Weighted average grant date fair value
December 29, 2018
684,184

 
$
47.68

Market-vested shares granted
42,365

 
27.12

Performance shares granted
111,536

 
30.90

Performance share adjustments
(58,194
)
 
49.12

Vested
(89,796
)
 
50.64

Forfeited
(42,217
)
 
51.96

March 30, 2019
647,878

 
$
42.63

Compensation expense related to the Company's stock-based compensation for the first quarters ended March 30, 2019 and March 31, 2018 was as follows:
 
First Quarter
(In millions)
2019
 
2018
Stock options
$
0.6

 
$
0.8

Time, performance and market vested share awards
1.3

 
2.5

As of March 30, 2019, total unrecognized stock-based compensation expense related to all stock based awards was $22.9 million, which is expected to be recognized over a weighted average period of 2.1 years.
Note 17:
Allowance for Long-Term Receivables
As of March 30, 2019, $16.8 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.
The balance of the allowance for long-term receivables as of March 30, 2019 was as follows:
(In millions)
 
Balance at December 29, 2018
$
16.0

Provision and reclassifications
0.8

Balance at March 30, 2019
$
16.8

Note 18:
Guarantor Information
The Company's payment obligations under its senior notes due in 2021 are fully and unconditionally guaranteed, on a senior secured basis, by Dart Industries Inc. (the "Guarantor"), as are the payment obligations under the Company's Credit Agreement. Both guarantees are secured by certain "Tupperware" trademarks and service marks owned by the Guarantor.
Condensed consolidated financial information as of March 30, 2019 and December 29, 2018, and for the quarters ended March 30, 2019 and March 31, 2018, for the Company (the "Parent"), 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 that the Parent owns directly. There are no significant restrictions on the ability of either the Parent or the Guarantor to obtain 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.

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


Consolidating Statement of Income
 
13 weeks ended March 30, 2019
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
488.3

 
$
(1.0
)
 
$
487.3

Other revenue
—

 
19.9

 
9.5

 
(29.4
)
 
—

Cost of products sold
—

 
9.6

 
182.0

 
(30.4
)
 
161.2

Gross margin
—

 
10.3

 
315.8

 
—

 
326.1

Delivery, sales and administrative expense
1.5

 
18.9

 
242.3

 
—

 
262.7

Re-engineering and impairment charges
—

 
0.6

 
3.7

 
—

 
4.3

Loss on disposal of assets
—

 
—

 
(0.9
)
 
—

 
(0.9
)
Operating income (loss)
(1.5
)
 
(9.2
)
 
68.9

 
—

 
58.2

Interest income
5.5

 
0.7

 
10.1

 
(15.7
)
 
0.6

Interest expense
9.5

 
13.2

 
3.2

 
(15.7
)
 
10.2

Income from equity investments in subsidiaries
40.8

 
60.3

 
—

 
(101.1
)
 
—

Other expense (income)
(0.5
)
 
3.0

 
(5.8
)
 
—

 
(3.3
)
Income (loss) before income taxes
35.8

 
35.6

 
81.6

 
(101.1
)
 
51.9

Provision (benefit) for income taxes
(1.1
)
 
(3.4
)
 
19.5

 
—

 
15.0

Net income
$
36.9

 
$
39.0

 
$
62.1

 
$
(101.1
)
 
$
36.9

Comprehensive income (loss)
$
55.9

 
$
57.6

 
$
93.0

 
$
(150.6
)
 
$
55.9


Consolidating Statement of Income
 
13 weeks ended March 31, 2018
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Net sales
$
—

 
$
—

 
$
542.8

 
$
(0.2
)
 
$
542.6

Other revenue
—

 
21.7

 
10.1

 
(31.8
)
 
—

Cost of products sold
—

 
10.0

 
198.7

 
(29.7
)
 
179.0

Gross margin
—

 
11.7

 
354.2

 
(2.3
)
 
363.6

Delivery, sales and administrative expense
3.0

 
22.3

 
266.2

 
(2.3
)
 
289.2

Re-engineering and impairment charges
—

 
0.3

 
7.3

 
—

 
7.6

Gain on disposal of assets
—

 
—

 
2.2

 
—

 
2.2

Operating income (loss)
(3.0
)
 
(10.9
)
 
82.9

 
—

 
69.0

Interest income
5.1

 
0.5

 
10.8

 
(15.7
)
 
0.7

Interest expense
9.2

 
15.5

 
2.1

 
(15.7
)
 
11.1

Income from equity investments in subsidiaries
40.8

 
70.5

 
—

 
(111.3
)
 
—

Other expense (income)
(0.6
)
 
12.0

 
(11.2
)
 
—

 
0.2

Income before income taxes
34.3

 
32.6

 
102.8

 
(111.3
)
 
58.4

Provision (benefit) for income taxes
(1.4
)
 
(6.3
)
 
30.4

 
—

 
22.7

Net income
$
35.7

 
$
38.9

 
$
72.4

 
$
(111.3
)
 
$
35.7

Comprehensive income
$
43.4

 
$
51.9

 
$
98.3

 
$
(150.2
)
 
$
43.4


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


Condensed Consolidating Balance Sheet
 
March 30, 2019
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
ASSETS
 

 
 

 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
0.3

 
$
146.5

 
$
—

 
$
146.8

Accounts receivable, net
—

 
—

 
167.0

 
—

 
167.0

Inventories
—

 
—

 
269.0

 
—

 
269.0

Non-trade amounts receivable, net
—

 
166.5

 
96.1

 
(210.8
)
 
51.8

Intercompany receivables
310.5

 
1,358.4

 
230.2

 
(1,899.1
)
 
—

Prepaid expenses and other current assets
1.0

 
5.3

 
41.5

 
(26.8
)
 
21.0

Total current assets
311.5

 
1,530.5

 
950.3

 
(2,136.7
)
 
655.6

Deferred income tax benefits, net
41.7

 
42.2

 
142.8

 
—

 
226.7

Property, plant and equipment, net
—

 
74.6

 
203.3

 
—

 
277.9

Operating lease assets
—

 
0.5

 
81.5

 
—

 
82.0

Long-term receivables, net
—

 
0.1

 
17.5

 
—

 
17.6

Trademarks and tradenames, net
—

 
—

 
52.3

 
—

 
52.3

Goodwill
—

 
2.9

 
74.6

 
—

 
77.5

Investments in subsidiaries
1,371.9

 
1,514.5

 
—

 
(2,886.4
)
 
—

Intercompany notes receivable
486.6

 
97.7

 
1,117.7

 
(1,702.0
)
 
—

Other assets, net
1.1

 
0.3

 
76.5

 
(28.7
)
 
49.2

Total assets
$
2,212.8

 
$
3,263.3

 
$
2,716.5

 
$
(6,753.8
)
 
$
1,438.8

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

 
 

 
 

 
 

Accounts payable
$
0.1

 
$
3.8

 
$
77.6

 
$
—

 
$
81.5

Short-term borrowings and current portion of long-term debt and finance lease obligations
253.3

 
—

 
114.5

 
—

 
367.8

Intercompany payables
1,276.2

 
428.5

 
194.4

 
(1,899.1
)
 
—

Accrued liabilities
265.6

 
57.7

 
261.9

 
(237.6
)
 
347.6

Total current liabilities
1,795.2

 
490.0

 
648.4

 
(2,136.7
)
 
796.9

Long-term debt and finance lease obligations
599.6

 
—

 
3.4

 
—

 
603.0

Intercompany notes payable
—

 
1,424.7

 
277.3

 
(1,702.0
)
 
—

Operating lease liabilities
—

 
0.3

 
52.4

 
—

 
52.7

Other liabilities
2.0

 
47.4

 
149.5

 
(28.7
)
 
170.2

Shareholders' equity (deficit)
(184.0
)
 
1,300.9

 
1,585.5

 
(2,886.4
)
 
(184.0
)
Total liabilities and shareholders' equity
$
2,212.8

 
$
3,263.3

 
$
2,716.5

 
$
(6,753.8
)
 
$
1,438.8



23
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Balance Sheet
 
December 29, 2018
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
ASSETS
 

 
 

 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
0.3

 
$
148.7

 
$
—

 
$
149.0

Accounts receivable, net
—

 
—

 
144.7

 
—

 
144.7

Inventories
—

 
—

 
257.7

 
—

 
257.7

Non-trade amounts receivable, net
—

 
169.0

 
71.0

 
(190.1
)
 
49.9

Intercompany receivables
309.2

 
1,430.1

 
230.5

 
(1,969.8
)
 
—

Prepaid expenses and other current assets
1.1

 
3.7

 
48.2

 
(33.7
)
 
19.3

Total current assets
310.3

 
1,603.1

 
900.8

 
(2,193.6
)
 
620.6

Deferred income tax benefits, net
41.7

 
42.2

 
133.1

 
—

 
217.0

Property, plant and equipment, net
—

 
71.3

 
204.7

 
—

 
276.0

Long-term receivables, net
—

 
0.1

 
18.6

 
—

 
18.7

Trademarks and tradenames, net
—

 
—

 
52.9

 
—

 
52.9

Goodwill
—

 
2.9

 
73.2

 
—

 
76.1

Investments in subsidiaries
1,305.3

 
1,346.8

 
—

 
(2,652.1
)
 
—

Intercompany notes receivable
515.3

 
95.4

 
1,069.4

 
(1,680.1
)
 
—

Other assets, net
0.3

 
0.5

 
75.3

 
(28.6
)
 
47.5

Total assets
$
2,172.9

 
$
3,162.3

 
$
2,528.0

 
$
(6,554.4
)
 
$
1,308.8

LIABILITIES AND SHAREHOLDERS' EQUITY
 

 
 

 
 

 
 

 
 

Accounts payable
$
—

 
$
5.7

 
$
123.5

 
$
—

 
$
129.2

Short-term borrowings and current portion of long-term debt and finance lease obligations
189.4

 
—

 
96.1

 
—

 
285.5

Intercompany payables
1,330.9

 
436.3

 
202.6

 
(1,969.8
)
 
—

Accrued liabilities
278.6

 
69.2

 
220.4

 
(223.8
)
 
344.4

Total current liabilities
1,798.9

 
511.2

 
642.6

 
(2,193.6
)
 
759.1

Long-term debt and finance lease obligations
599.7

 
—

 
3.7

 
—

 
603.4

Intercompany notes payable
6.6

 
1,366.7

 
306.8

 
(1,680.1
)
 
—

Other liabilities
2.9

 
48.1

 
159.1

 
(28.6
)
 
181.5

Shareholders' equity (deficit)
(235.2
)
 
1,236.3

 
1,415.8

 
(2,652.1
)
 
(235.2
)
Total liabilities and shareholders' equity
$
2,172.9

 
$
3,162.3

 
$
2,528.0

 
$
(6,554.4
)
 
$
1,308.8






24
Table of Contents
TUPPERWARE BRANDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Condensed Consolidating Statement of Cash Flows
 
13 weeks ended March 30, 2019
(In millions)
Parent
 
Guarantor
 
Non-Guarantors
 
Eliminations
 
Total
Operating Activities:
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
3.8

 
$
(115.4
)
 
$
74.4

 
$
(2.9
)
 
$
(40.1
)
Investing Activities:
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(7.5
)
 
(5.4
)
 
—

 
(12.9
)
Proceeds from disposal of property, plant and equipment
—

 
—

 
0.6

 
—

 
0.6

Net intercompany loans
22.2

 
53.6

 
(64.3
)
 
(11.5
)
 
—

Net cash provided by (used in) investing activities
22.2

 
46.1

 
(69.1
)
 
(11.5
)
 
(12.3
)
Financing Activities: