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Business Segment Information

3 Months Ended

Mar. 31, 2020

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 Condensed Consolidated Financial Statements. The remaining inter-segment eliminations are comprised of intercompany accounts receivable and payable.

The following table summarizes total assets by segment:

(in millions)			March 31, 2020						December 31, 2019
North America			$	3,327.6					$	3,142.9
International			631.8						615.3
Corporate			647.5						477.1
Inter-segment eliminations			(1,300.7)						(1,173.5)
Total assets			$	3,306.2					$	3,061.8

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

(in millions)			March 31, 2020						December 31, 2019
North America			$	355.3					$	328.9
International			49.5						51.8
Corporate			55.5						55.1
Total property, plant and equipment, net			$	460.3					$	435.8

The following table summarizes operating lease right-of-use assets by segment:

(in millions)			March 31, 2020						December 31, 2019
North America			$	240.4					$	202.0
International			41.9						42.2
Corporate			0.9						1.2
Total operating lease right-of-use assets			$	283.2					$	245.4

The following table summarizes segment information for the three months ended March 31, 2020:

(in millions)			North America						International						Corporate						Eliminations						Consolidated
Net sales			$	677.2					$	145.2					$	—					$	—					$	822.4
Inter-segment sales			$	0.8					$	0.1					$	—					$	(0.9)					$	—
Inter-segment royalty expense (income)			1.4						(1.4)						—						—						—
Gross profit			277.2						79.9						—						—						357.1
Operating income (loss)			101.4						26.6						(22.7)						—						105.3
Income (loss) from continuing operations before income taxes			99.6						24.5						(39.6)						—						84.5
Depreciation and amortization (1)			$	17.6					$	3.3					$	9.6					$	—					$	30.5
Capital expenditures			21.3						2.4						2.5						—						26.2

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

The following table summarizes segment information for the three months ended March 31, 2019:

(in millions)			North America						International						Corporate						Eliminations						Consolidated
Net sales			$	544.0					$	146.9					$	—					$	—					$	690.9
Inter-segment sales			$	1.0					$	0.3					$	—					$	(1.3)					$	—
Inter-segment royalty expense (income)			1.0						(1.0)						—						—						—
Gross profit			204.4						77.4						—						—						281.8
Operating income (loss)			64.3						25.2						(29.0)						—						60.5
Income (loss) from continuing operations before income taxes			62.4						29.8						(46.3)						—						45.9
Depreciation and amortization (1)			$	15.0					$	3.3					$	9.8					$	—					$	28.1
Capital expenditures			12.9						2.9						3.3						—						19.1

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

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

(in millions)			March 31, 2020						December 31, 2019
United States			$	395.1					$	366.4
Canada			15.7						17.5
Other International			49.5						51.9
Total property, plant and equipment, net			$	460.3					$	435.8
Total International			$	65.2					$	69.4

The following table summarizes operating lease right-of-use assets by geographic region:

(in millions)			March 31, 2020						December 31, 2019
United States			$	237.1					$	198.3
Canada			4.2						4.9
Other International			41.9						42.2
Total operating lease right-of-use assets			$	283.2					$	245.4
Total International			$	46.1					$	47.1

The following table summarizes net sales by geographic region:

			Three Months Ended
			March 31,
(in millions)			2020						2019
United States			$	632.5					$	497.2
Canada			44.7						46.8
Other International			145.2						146.9
Total net sales			$	822.4					$	690.9
Total International			$	189.9					$	193.7

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- References

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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