Business Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company operates in two segments: North America and International. Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results. These segments are strategic business units that are managed separately based on geography. The North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the U.S. and Canada. The International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. The Company evaluates segment performance based on net sales, gross profit and operating income.

The Company’s North America and International segment assets include investments in subsidiaries that are appropriately eliminated in the Company’s accompanying Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable and payable.

The following table summarizes total assets by segment:

	December 31,			December 31,
(in millions)	2016			2015
North America	$	2,581.4		$	2,533.1
International	572.6			477.1
Corporate	658.7			775.0
Inter-segment eliminations	(1,110.1		)	(1,129.7		)
Total assets	$	2,702.6		$	2,655.5

     The following table summarizes property, plant and equipment, net by segment:

	December 31,		December 31,
(in millions)	2016		2015
North America	$	297.4	$	239.2
International	54.9		54.8
Corporate	69.9		67.7
Total property, plant and equipment, net	$	422.2	$	361.7

The following table summarizes segment information for the year ended December 31, 2016:

(in millions)	North America		International			Corporate			Eliminations			Consolidated
Bedding sales	$	2,447.8	$	443.7		$	—		$	—		$	2,891.5
Other sales	122.3		113.5			—			—			235.8
Net sales	2,570.1		557.2			—			—			3,127.3
Inter-segment sales	$	4.6	$	0.4		$	—		$	(5.0	)	$	—
Gross profit	1,017.4		292.0			—			—			1,309.4
Inter-segment royalty expense (income)	7.2		(7.2		)	—			—			—
Operating income (loss)	411.8		102.7			(99.0		)	—			415.5
Income (loss) before income taxes	406.8		94.0			(217.5		)	—			283.3
Depreciation and amortization (1)	$	43.7	$	15.6		$	30.2		$	—		$	89.5
Capital expenditures	32.8		15.3			14.3			—			62.4

(1) Depreciation and amortization includes stock-based compensation amortization expense.

The following table summarizes segment information for the year ended December 31, 2015:

(in millions)	North America		International			Corporate			Eliminations			Consolidated
Bedding sales	$	2,428.9	$	458.3		$	—		$	—		$	2,887.2
Other sales	148.3		115.7			—			—			264.0
Net sales	2,577.2		574.0			—			—			3,151.2
Inter-segment sales	$	5.9	$	0.7		$	—		$	(6.6	)	$	—
Gross profit	954.6		294.3			—			—			1,248.9
Inter-segment royalty expense (income)	7.1		(7.1		)	—			—			—
Operating income (loss)	335.6		98.9			(125.4		)	—			309.1
Income (loss) before income taxes	324.4		73.2			(197.5		)	—			200.1
Depreciation and amortization (1)	$	43.3	$	16.0		$	34.6		$	—		$	93.9
Capital expenditures	28.9		14.8			22.2			—			65.9

(1) Depreciation and amortization includes stock-based compensation amortization expense.

The following table summarizes segment information for the year ended December 31, 2014:

(in millions)	North America		International			Corporate			Eliminations			Consolidated
Bedding sales	$	2,261.9	$	464.6		$	—		$	—		$	2,726.5
Other sales	143.0		120.3			—			—			263.3
Net sales	2,404.9		584.9			—			—			2,989.8
Inter-segment sales	$	5.1	$	0.3		$	—		$	(5.4	)	$	—
Gross profit	834.8		315.6			—			—			1,150.4
Inter-segment royalty expense (income)	6.1		(6.1		)	—			—			—
Operating income (loss)	255.0		118.8			(97.5		)	—			276.3
Income (loss) before income taxes	228.0		112.2			(165.3		)	—			174.9
Depreciation and amortization (1)	$	47.9	$	16.3		$	25.5		$	—		$	89.7
Capital expenditures	17.8		15.6			14.1			—			47.5

(1) Depreciation and amortization includes stock-based compensation amortization expense.

The following table summarizes property, plant and equipment, net by geographic region:

	December 31,		December 31,
(in millions)	2016		2015
United States	$	360.7	$	300.1
Canada	6.6		6.8
Other International	54.9		54.8
Total property, plant and equipment, net	$	422.2	$	361.7
Total International	$	61.5	$	61.6

The following table summarizes net sales by geographic region:

	Year Ended December 31,
(in millions)	2016		2015		2014
United States	$	2,361.8	$	2,374.7	$	2,188.8
Canada	208.3		202.5		216.1
Other International	557.2		574.0		584.9
Total net sales	$	3,127.3	$	3,151.2	$	2,989.8
Total International	$	765.5	$	776.5	$	801.0