Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Prior to January 1, 2015, the Company operated under three reportable segments: Tempur North America, Tempur International and Sealy. The following summarizes changes to the Company’s goodwill, by reportable segment for the period December 31, 2013 to December 31, 2014:



(in millions)	Tempur North America			Tempur International			Sealy			Total
Balance as of December 31, 2013	$	107.7		$	107.3		$	544.6		$	759.6
Disposal of business	—			—			(21.4		)	(21.4		)
Goodwill resulting from acquisitions	—			2.3			—			2.3
Foreign currency translation adjustments	(1.5		)	(1.2		)	(1.3		)	(4.0		)
Balance as of December 31, 2014	$	106.2		$	108.4		$	521.9		$	736.5

Effective January 1, 2015, the Company realigned its organizational structure and updated its segments in light of the progress made in 2013 and 2014 integrating Sealy into its historical business. The Company's updated reportable segments are North America and International. For additional information regarding the Company's realignment and reportable segment determination, see Note 16, "Segment Information".

As a result of the Company's segment realignment, the composition of the Company's reporting units for the evaluation of goodwill impairment also changed. Historically, the Company's reporting units were the same as the reportable segments: Tempur North America, Tempur International, and Sealy. Effective January 1, 2015, the Company identified three reporting units for purposes of evaluating goodwill impairment: Tempur Sealy U.S. and Tempur Sealy Canada reporting units within the North America segment and one reporting unit comprising the International segment.

As the composition of the reporting units changed, the Company reassigned historical goodwill to the new reporting units based on a relative fair value allocation approach. The relative fair value allocation approach yielded the reassignment of total Sealy goodwill as of December 31, 2014 of $521.9 million. The following summarizes the reassignment of goodwill from the historical segments to the new segments:



(in millions)	Reassigned Goodwill by Segment
North America segment:
Tempur North America segment goodwill as of January 1, 2015	$	106.2
Sealy segment goodwill as of January 1, 2015 reassigned to the North America segment	468.3
Total North America segment goodwill as of January 1, 2015	$	574.5

International segment:
Tempur International segment goodwill as of January 1, 2015	$	108.4
Sealy segment goodwill as of January 1, 2015 reassigned to the International segment	53.6
Total International segment goodwill as of January 1, 2015	$	162.0

The following summarizes changes to the Company’s goodwill, by new reportable segment for the period January 1, 2015 to December 31, 2015:



(in millions)	North America			International			Consolidated
Balance as of January 1, 2015	$	574.5		$	162.0		$	736.5
Foreign currency translation adjustments and other	(11.7		)	(15.4		)	(27.1		)
Balance as of December 31, 2015	$	562.8		$	146.6		$	709.4

The following table summarizes information relating to the Company’s other intangible assets, net:



($ in millions)		December 31, 2015						December 31, 2014
	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Carrying Amount		Accumulated Amortization		Net Carrying Amount
Unamortized indefinite life intangible assets:
Trade names		$	558.1	$	—	$	558.1	$	569.0	$	—	$	569.0
Amortized intangible assets:
Contractual distributor relationships	15	$	84.8	$	15.8	$	69.0	$	88.2	$	10.4	$	77.8
Technology and other	4-10	90.8		39.2		51.6		92.6		32.6		60.0
Patents, other trademarks, and other trade names	5-20	27.2		16.9		10.3		27.3		14.6		12.7
Customer databases, relationships and reacquired rights	2-5	24.5		18.1		6.4		24.1		16.5		7.6
Total		$	785.4	$	90.0	$	695.4	$	801.2	$	74.1	$	727.1

Amortization expense relating to intangible assets for the Company was $17.9 million, $18.5 million and $15.2 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is recorded in general, administrative and other expenses in the Company's Consolidated Statements of Income. No impairments of goodwill or other intangible assets have adjusted the gross carrying amount of these assets in any period.

Estimated annual amortization of intangible assets is expected to be as follows for the years ending December 31:



(in millions)	Amount
2016	$	17.9
2017	17.2
2018	15.4
2019	14.8
2020	13.8

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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