Business Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company operates in three business segments: Tempur North America, Tempur International and Sealy. As a result of the Sealy Acquisition, the Company now has a new reportable business segment which represents Sealy’s results of operations. These reportable segments are strategic business units that are managed separately based on the fundamental differences in their operations. The Tempur North America segment consists of the two U.S. manufacturing facilities and the Tempur North America distribution subsidiaries. The Tempur International segment consists of the manufacturing facility in Denmark, whose customers include all of the distribution subsidiaries and third party distributors outside the Tempur North America segment. The Sealy segment consists of manufacturing and distribution subsidiaries related to Sealy. The Company evaluates segment performance based on net sales and operating income. Certain corporate operating expenses included in the Tempur North America segment for the year ended December 31, 2013, 2012 and 2011 were $83.0 million, $58.0 million and $55.8 million, respectively. There were no material allocations of corporate operating expenses to the Tempur International or Sealy segments year ended December 31, 2013, 2012 and 2011. The Company’s Tempur North America, Tempur International and Sealy segment assets include investments in subsidiaries which are appropriately eliminated in the Company’s accompanying Condensed Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable. The effect of the elimination of the investments in subsidiaries is included in the inter-segment eliminations as shown below.

The following table summarizes total assets by segment:

	December 31,
(in millions)	2013			2012
Tempur North America	$	2,110.7		$	1,166.9
Tempur International	477.7			504.1
Sealy	1,956.6			—
Inter-segment eliminations	(1,815.1		)	(351.5		)
Total assets	$	2,729.9		$	1,319.5

The following table summarizes long-lived assets by segment:

	December 31,
(in millions)	2013		2012
Tempur North America	$	393.1	$	395.7
Tempur International	68.7		69.5
Sealy	1,459.5		—
Total long lived assets	$	1,921.3	$	465.2

The following table summarizes long-lived assets by geographic region:

	Year Ended December 31,
(in millions)	2013		2012
United States	$	1,647.0	$	374.7
Canada	52.1		20.8
Other International	222.2		69.7
	$	1,921.3	$	465.2
Total International	274.3		90.5

The following table summarizes net sales by geographic region:

	Year Ended December 31,
(in millions)	2013		2012		2011
United States	$	1,736.8	$	923.4	$	958.0
Canada	190.2		40.8		46.7
Other International	537.3		438.7		413.2
	$	2,464.3	$	1,402.9	$	1,417.9
Total International	727.5		479.5		459.9

The following table summarizes segment information:

	Year Ended December 31,
(in millions)	2013		2012		2011
Net sales to external customers:
Tempur North America
Bedding	$	830.4	$	882.3	$	916.7
Other products	79.6		82.0		88.0
	$	910.0	$	964.3	$	1,004.7
Tempur International
Bedding	$	327.7	$	332.4	$	309.8
Other products	111.9		106.2		103.4
	$	439.6	$	438.6	$	413.2
Sealy
Bedding	$	1,040.3	$	—	$	—
Other products	74.4		—		—
	$	1,114.7	$	—	$	—
	$	2,464.3	$	1,402.9	$	1,417.9
Inter-segment sales:
Tempur North America	$	0.2	$	0.9	$	5.0

Tempur International	0.6			1.5			2.2
Sealy	5.9			—			—
Intercompany eliminations	(6.7		)	(2.4		)	(7.2		)
	$	—		$	—		$	—
Gross profit:
Tempur North America	$	392.7		$	449.3		$	499.8
Tempur International	269.8			265.3			243.3
Sealy	352.4			—			—
	$	1,014.9		$	714.6		$	743.1
Operating income:
Tempur North America	$	67.6		$	144.4		$	236.9
Tempur International	107.5			103.9			103.6
Sealy	68.7			—			—
	$	243.8		$	248.3		$	340.5
Income (loss) before income taxes:
Tempur North America	$	(33.8	)	$	126.2		$	224.6
Tempur International	102.6			103.0			103.8
Sealy	59.2			—			—
	$	128.0		$	229.2		$	328.4
Depreciation and amortization (including stock-based compensation amortization):
Tempur North America	$	42.0		$	30.6		$	41.1
Tempur International	12.8			11.4			9.9
Sealy	36.7			—			—
	$	91.5		$	42.0		$	51.0
Intercompany royalties:
Tempur North America	$	5.8		$	12.7		$	12.3
Tempur International	(5.8		)	(12.7		)	(12.3		)
Sealy	—			—			—
	$	—		$	—		$	—
Capital expenditures:
Tempur North America	$	20.7		$	36.8		$	18.8
Tempur International	10.1			13.7			10.7
Sealy	9.2			—			—
	$	40.0		$	50.5		$	29.5