Business Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company operates in three business segments: Tempur North America, Tempur International and Sealy. The Tempur North America segment consists of two U.S. manufacturing facilities and the Tempur North America distribution subsidiaries. The Tempur International segment consists of a manufacturing facility in Denmark, whose customers include all of the distribution subsidiaries and third party distributors outside of the Tempur North America and Sealy segments. The Sealy segment consists of company-owned and operated bedding and component manufacturing facilities located around the world, along with distribution subsidiaries, joint ventures, and licensees. 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 three months ended March 31, 2014 and 2013 were $17.7 million and $29.3 million, respectively. There were no material allocations of corporate operating expenses to the Tempur International or Sealy segments for the three months ended March 31, 2014 and 2013. 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:

(in millions)	March 31,			December 31,
Total assets:	2014			2013
Tempur North America	$	2,502.1		$	2,110.7
Tempur International	509.2			477.7
Sealy	1,949.8			1,956.6
Inter-segment eliminations	(2,189.7		)	(1,815.1		)
	$	2,771.4		$	2,729.9

The following table summarizes long-lived assets by segment:

(in millions)	March 31,		December 31,
Long-lived assets:	2014		2013
Tempur North America	$	391.1	$	393.1
Tempur International	67.4		68.7
Sealy	1,452.0		1,459.5
	$	1,910.5	$	1,921.3

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

(in millions)	March 31,		December 31,
	2014		2013
United States	$	1,637.7	$	1,647.0
Canada	49.5		52.1
Other International	223.3		222.2
	$	1,910.5	$	1,921.3
Total International	272.8		274.3

The following table summarizes net sales by geographic region:

(in millions)	Three Months Ended
	March 31,
	2014		2013
United States	$	504.0	$	253.3
Canada	48.7		15.0
Other International	149.2		121.8
	$	701.9	$	390.1
Total International	$	197.9	$	136.8

The following table summarizes segment information:

(in millions)	Three Months Ended
	March 31,
	2014			2013
Net sales to external customers:
Tempur North America
Bedding	$	199.5		$	204.6
Other products	13.5			21.3
	$	213.0		$	225.9
Tempur International
Bedding	$	95.2		$	89.3
Other products	30.5			28.2
	$	125.7		$	117.5
Sealy (1)
Bedding	$	341.3		$	44.7
Other products	21.9			2.0
	$	363.2		$	46.7
	$	701.9		$	390.1
Inter-segment sales:
Tempur North America	$	0.1		$	0.1
Tempur International	0.1			0.1
Sealy	4.3			—
Intercompany eliminations	(4.5		)	(0.2		)
	$	—		$	—
Gross profit:
Tempur North America	$	85.8		$	103.5
Tempur International	75.1			74.2
Sealy	108.6			10.7
	$	269.5		$	188.4
(1) The Company's results for the first quarter of 2013 include Sealy's results of operations from March 18, 2013 through March 31, 2013

Operating income:
Tempur North America	$	11.1		$	15.9
Tempur International	28.0			31.3
Sealy	23.3			(2.7		)
	$	62.4		$	44.5
(Loss) income before income taxes:
Tempur North America	$	(8.2	)	$	(11.7	)
Tempur International	27.4			30.3
Sealy	20.0			(3.5		)
	$	39.2		$	15.1
Depreciation and amortization (including stock-based compensation amortization):
Tempur North America	$	8.4		$	9.8
Tempur International	3.2			3.1
Sealy	12.4			1.8
	$	24.0		$	14.7
Intercompany royalties:
Tempur North America	$	1.5		$	1.3
Tempur International	(1.5		)	(1.3		)
Sealy	—			—
	$	—		$	—
Capital expenditures:
Tempur North America	$	2.0		$	3.9
Tempur International	1.7			1.7
Sealy	4.1			—
	$	7.8		$	5.6