Tempur Sealy finalizes agreement on Danish tax dispute
Tempur Sealy has executed an agreement between the Company, the U.S. Internal Revenue Service and the Danish Tax Authority with respect to income tax assessments from SKAT for the disputed tax years 2001 to 2011. As discussed in the Company's periodic reports filed with the U.S. Securities and Exchange Commission, the Company had received significant income tax assessments from SKAT for prior tax years that the Company had disputed. The tax assessments related to the appropriate royalty rate to be paid to the Company's Danish subsidiary for the right to utilize certain intangible assets owned by the Danish subsidiary. The resolution reached in the three-party agreement is consistent with the Company's tax liability disclosed in its previously filed financial statements, which is significantly less than the amounts originally assessed by SKAT. The settlement will not have a material impact on the Company's financial position or liquidity as the Company maintains funds equal to the estimated Danish tax liability on deposit with SKAT. The Company's go forward effective tax rate is not expected to be materially impacted by the agreement. The Company is in the process of entering into negotiations with the U.S. Internal Revenue Service and SKAT to reach a mutual agreement with respect to the appropriate royalty rates for years after 2011. The outcome of these discussions is not expected to have a material impact on the Company's results of operations, liquidity or financial position.