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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Inventories are stated at the lower of cost or market, determined by the first-in, first-out method and consist of the following:



	December 31,
(in millions)	2014		2013
Finished goods	$	134.0	$	126.7
Work-in-process	11.4		10.0
Raw materials and supplies	71.8		62.5
	$	217.2	$	199.2

Schedule of Property, Plant and Equipment

Property, plant and equipment are carried at cost at acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows:



	Estimated Useful Lives (in years)
Buildings	25-30
Computer equipment and software	3-5
Leasehold improvements	4-7
Machinery and equipment	3-7
Office furniture and fixtures	5-7

Property, Plant and Equipment Summary

Property, plant and equipment, net consisted of the following:



	December 31,
(in millions)	2014			2013
Machinery and equipment	$	243.5		$	270.8
Land and buildings	247.1			261.9
Computer equipment and software	69.2			72.3
Furniture and fixtures	54.9			56.7
Construction in progress	39.4			28.9
	$	654.1		$	690.6
Accumulated depreciation	(298.5		)	(279.0		)
	$	355.6		$	411.6

Changes in Accrued Sales Returns

The Company had the following activity for accrued sales returns from December 31, 2012 to December 31, 2014:



(in millions)
Balance as of December 31, 2012	5.1
Amounts accrued	104.8
Liabilities assumed as a result of Sealy Acquisition	19.9
Returns charged to accrual	(101.1		)
Balance as of December 31, 2013	$	28.7
Amounts accrued	127.4
Returns charged to accrual	(123.8		)
Balance as of December 31, 2014	$	32.3

Schedule of Warranty Terms

The following summarizes the Company’s warranty terms for mattresses and pillows:



Segment	Product/Brand	Warranty Term (in years)
Tempur North America	Mattresses	10 - 25, prorated ⁽¹⁾
Tempur North America	Pillows	3
Tempur International	Mattresses	5 - 15, prorated ⁽²⁾
Tempur International	Pillows	3
Sealy	Mattresses	10 - 25, prorated ⁽¹⁾


(1)	Products have various warranty terms, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term.


(2)	The last 10 years of warranty period are prorated on a straight-line basis

Warranty Activity

The Company had the following activity for warranties from December 31, 2012 to December 31, 2014:



(in millions)
Balance as of December 31, 2012	$	4.8
Amounts accrued	22.7
Liabilities assumed as a result of Sealy Acquisition	21.4
Warranties charged to accrual	(22.8		)
Balance as of December 31, 2013	26.1
Amounts accrued	34.2
Warranties charged to accrual	(29.0		)
Balance as of December 31, 2014	$	31.3