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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Mohawk Industries Inc | NYSE:MHK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
3.43 | 2.68% | 131.26 | 132.54 | 128.85 | 129.11 | 113,961 | 15:10:45 |
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
52-1604305
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
160 S. Industrial Blvd.,
Calhoun, Georgia
|
|
30701
|
(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock, $.01 par value
|
|
New York Stock Exchange
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Floating Rate Notes due 2019
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|
New York Stock Exchange
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2.000% Senior Notes due 2022
|
|
New York Stock Exchange
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Large accelerated filer
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|
ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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|
¨
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Emerging growth company
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¨
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Page
No.
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Item 1.
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||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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||
Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
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Business
|
•
|
Optimizing the Company’s position as the industry’s preferred provider by delivering exceptional value to customers
|
•
|
Treating employees fairly to retain the best organization
|
•
|
Driving innovation in all aspects of the business
|
•
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Taking reasonable, well considered risks to grow the business
|
•
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Enhancing the communities in which the Company operates
|
•
|
annual reports on Form 10-K;
|
•
|
quarterly reports on Form 10-Q;
|
•
|
current reports on Form 8-K; and
|
•
|
amendments to the foregoing reports.
|
Item 1A.
|
Risk Factors
|
•
|
complex and conflicting laws and regulations, which may be inconsistently or arbitrarily enforced;
|
•
|
high incidences of corruption in state regulatory agencies;
|
•
|
volatile inflation;
|
•
|
widespread poverty and resulting political instability;
|
•
|
compliance with laws governing international relations, including U.S. laws that relate to sanctions and corruption;
|
•
|
immature legal and banking systems;
|
•
|
uncertainty with respect to title to real and personal property;
|
•
|
underdeveloped infrastructure;
|
•
|
heavy state control of natural resources and energy supplies;
|
•
|
state ownership of transportation and supply chain assets;
|
•
|
high protective tariffs and inefficient customs processes; and
|
•
|
high crime rates.
|
•
|
facilitate the purchase, management, distribution, and payment for inventory items;
|
•
|
manage and monitor the daily operations of our distribution network;
|
•
|
receive, process and ship orders on a timely basis;
|
•
|
manage accurate billing to and collections from customers;
|
•
|
control logistics and quality control for our retail operations;
|
•
|
manage financial reporting; and
|
•
|
monitor point of sale activity.
|
•
|
maintaining executive offices in different locations;
|
•
|
manufacturing and selling different types of products through different distribution channels;
|
•
|
conducting business from various locations;
|
•
|
maintaining different operating systems and software on different computer hardware; and
|
•
|
retaining key employees.
|
•
|
changes in foreign country regulatory requirements;
|
•
|
differing business practices associated with foreign operations;
|
•
|
various import/export restrictions and the availability of required import/export licenses;
|
•
|
imposition of foreign or domestic tariffs and other trade barriers;
|
•
|
foreign currency exchange rate fluctuations;
|
•
|
differing inflationary or deflationary market pressures;
|
•
|
foreign country tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations in tax laws;
|
•
|
differing labor laws and changes in those laws;
|
•
|
work stoppages and disruptions in the shipping of imported and exported products;
|
•
|
government price controls;
|
•
|
extended payment terms and the inability to collect accounts receivable;
|
•
|
potential difficulties repatriating cash from non-U.S. subsidiaries; and
|
•
|
compliance with laws governing international relations, including those U.S. laws that relate to sanctions and corruption.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Location
|
|
Function / Use
|
|
Owned / Leased
|
Global Ceramics Segment:
|
|
|
|
|
Borriol, Spain
|
|
Manufacturing & Distribution
|
|
Owned
|
Castellon, Spain
|
|
Manufacturing
|
|
Owned
|
Dickson, Tennessee
|
|
Manufacturing & Distribution
|
|
Owned
|
El Paso, Texas
|
|
Manufacturing
|
|
Owned
|
Eldersburg, Maryland
|
|
Distribution
|
|
Leased
|
Fayette, Alabama
|
|
Manufacturing & Distribution
|
|
Owned
|
Finale Emilia, Italy
|
|
Manufacturing
|
|
Owned
|
Fiorano, Italy
|
|
Manufacturing
|
|
Owned
|
Florence, Alabama
|
|
Manufacturing & Distribution
|
|
Owned
|
Isperih, Bulgaria
|
|
Manufacturing & Distribution
|
|
Owned
|
Lewisport, Kentucky
|
|
Manufacturing
|
|
Owned
|
Malino, Russia
|
|
Manufacturing & Distribution
|
|
Owned
|
Mexicali, Mexico
|
|
Manufacturing
|
|
Owned
|
Monterrey, Mexico
|
|
Manufacturing
|
|
Owned
|
Monterrey, Mexico
|
|
Distribution
|
|
Leased
|
Muskogee, Oklahoma
|
|
Manufacturing & Distribution
|
|
Owned
|
Ontario, California
|
|
Distribution
|
|
Leased
|
Location
|
|
Function / Use
|
|
Owned / Leased
|
Orel, Russia
|
|
Manufacturing & Distribution
|
|
Owned
|
Piechowice, Poland
|
|
Manufacturing
|
|
Owned
|
Salamanca, Mexico
|
|
Manufacturing
|
|
Owned
|
Sassuolo, Italy
|
|
Manufacturing & Distribution
|
|
Owned
|
Shumen, Bulgaria
|
|
Manufacturing & Distribution
|
|
Owned
|
Solignano, Italy
|
|
Manufacturing
|
|
Owned
|
Sunnyvale, Texas
|
|
Manufacturing
|
|
Owned
|
Sunnyvale, Texas
|
|
Distribution
|
|
Leased
|
|
|
|
|
|
Flooring NA Segment:
|
|
|
|
|
Bennettsville, South Carolina
|
|
Manufacturing
|
|
Owned
|
Bridgeport, Alabama
|
|
Manufacturing
|
|
Owned
|
Calhoun, Georgia
|
|
Manufacturing & Distribution
|
|
Owned
|
Dalton, Georgia
|
|
Manufacturing & Distribution
|
|
Owned
|
Danville, Virginia
|
|
Manufacturing
|
|
Owned
|
Eden, North Carolina
|
|
Manufacturing & Distribution
|
|
Owned
|
Flower Mound, Texas
|
|
Distribution
|
|
Leased
|
Fontana, California
|
|
Distribution
|
|
Leased
|
Garner, North Carolina
|
|
Manufacturing
|
|
Owned
|
Garner, North Carolina
|
|
Distribution
|
|
Leased
|
Glasgow, Virginia
|
|
Manufacturing
|
|
Owned
|
Hillsville, Virginia
|
|
Manufacturing
|
|
Owned
|
Lyerly, Georgia
|
|
Manufacturing
|
|
Owned
|
Melbourne, Arkansas
|
|
Manufacturing
|
|
Owned
|
Milledgeville, Georgia
|
|
Manufacturing
|
|
Owned
|
Mt. Gilead, North Carolina
|
|
Manufacturing
|
|
Owned
|
Pembroke Park, Florida
|
|
Distribution
|
|
Leased
|
Roanoke, Alabama
|
|
Manufacturing
|
|
Owned
|
Sugar Valley, Georgia
|
|
Manufacturing
|
|
Owned
|
Summerville, Georgia
|
|
Manufacturing
|
|
Owned
|
Thomasville, North Carolina
|
|
Manufacturing
|
|
Owned
|
|
|
|
|
|
Flooring ROW Segment:
|
|
|
|
|
Avelgem, Belgium
|
|
Manufacturing
|
|
Owned
|
Avelgem, Belgium
|
|
Manufacturing
|
|
Leased
|
Bazeilles, France
|
|
Manufacturing
|
|
Owned
|
Chesterfield, United Kingdom
|
|
Manufacturing
|
|
Owned
|
Desselgem, Belgium
|
|
Manufacturing
|
|
Owned
|
Dzerzhinsk, Russia
|
|
Manufacturing
|
|
Owned
|
Feluy, Belgium
|
|
Manufacturing
|
|
Owned
|
Izegem, Belgium
|
|
Manufacturing
|
|
Owned
|
Meath County, Ireland
|
|
Manufacturing
|
|
Owned
|
Moeskroen, Belgium
|
|
Manufacturing
|
|
Owned
|
Oisterwijk, Netherlands
|
|
Manufacturing
|
|
Owned
|
Oostrozebeke, Belgium
|
|
Manufacturing & Distribution
|
|
Owned
|
Sungai Pentani, Malaysia
|
|
Manufacturing
|
|
Owned
|
Sury-le-Comtal, France
|
|
Manufacturing
|
|
Owned
|
Vielsalm, Belgium
|
|
Manufacturing
|
|
Owned
|
Vyskov, Czech Republic
|
|
Manufacturing
|
|
Owned
|
Wielsbeke, Belgium
|
|
Manufacturing & Distribution
|
|
Owned
|
Wiltz, Luxembourg
|
|
Manufacturing
|
|
Owned
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Item 6.
|
Selected Financial Data
|
|
As of or for the Years Ended December 31,
|
||||||||||||||
|
2017
(a)
|
|
2016
|
|
2015
(b)
|
|
2014
|
|
2013
(c)
|
||||||
|
(In thousands, except per share data)
|
||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
$
|
9,491,290
|
|
|
8,959,087
|
|
|
8,071,563
|
|
|
7,803,446
|
|
|
7,348,754
|
|
Cost of sales
|
6,494,876
|
|
|
6,146,262
|
|
|
5,660,877
|
|
|
5,649,254
|
|
|
5,427,945
|
|
|
Gross profit
|
2,996,414
|
|
|
2,812,825
|
|
|
2,410,686
|
|
|
2,154,192
|
|
|
1,920,809
|
|
|
Selling, general and administrative expenses
|
1,642,241
|
|
|
1,532,882
|
|
|
1,573,120
|
|
|
1,381,396
|
|
|
1,373,878
|
|
|
Operating income
|
1,354,173
|
|
|
1,279,943
|
|
|
837,566
|
|
|
772,796
|
|
|
546,931
|
|
|
Interest expense
|
31,111
|
|
|
40,547
|
|
|
71,086
|
|
|
98,207
|
|
|
92,246
|
|
|
Other expense (income), net
|
5,205
|
|
|
(1,729
|
)
|
|
17,619
|
|
|
10,698
|
|
|
9,114
|
|
|
Earnings from continuing operations before income taxes
|
1,317,857
|
|
|
1,241,125
|
|
|
748,861
|
|
|
663,891
|
|
|
445,571
|
|
|
Income tax expense
|
343,165
|
|
|
307,559
|
|
|
131,875
|
|
|
131,637
|
|
|
78,385
|
|
|
Earnings from continuing operations
|
974,692
|
|
|
933,566
|
|
|
616,986
|
|
|
532,254
|
|
|
367,186
|
|
|
Loss from discontinued operations, net of income tax benefit of $1,050
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,895
|
)
|
|
Net earnings including noncontrolling interest
|
974,692
|
|
|
933,566
|
|
|
616,986
|
|
|
532,254
|
|
|
349,291
|
|
|
Less: Net earnings attributable to the noncontrolling interest
|
3,054
|
|
|
3,204
|
|
|
1,684
|
|
|
289
|
|
|
505
|
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
971,638
|
|
|
930,362
|
|
|
615,302
|
|
|
531,965
|
|
|
348,786
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings from continuing operations per share
|
$
|
13.07
|
|
|
12.55
|
|
|
8.37
|
|
|
7.30
|
|
|
5.11
|
|
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
13.07
|
|
|
12.55
|
|
|
8.37
|
|
|
7.30
|
|
|
4.86
|
|
Diluted earnings from continuing operations per share
|
$
|
12.98
|
|
|
12.48
|
|
|
8.31
|
|
|
7.25
|
|
|
5.07
|
|
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
12.98
|
|
|
12.48
|
|
|
8.31
|
|
|
7.25
|
|
|
4.82
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||
Working capital
|
$
|
1,417,612
|
|
|
753,192
|
|
|
(9,056
|
)
|
|
1,033,762
|
|
|
1,764,907
|
|
Total assets
|
12,094,853
|
|
|
10,230,596
|
|
|
9,934,400
|
|
|
8,285,544
|
|
|
8,494,177
|
|
|
Long-term debt (including current portion)
|
2,763,578
|
|
|
2,511,485
|
|
|
3,191,967
|
|
|
2,253,440
|
|
|
2,260,008
|
|
|
Total stockholders’ equity
|
7,067,009
|
|
|
5,783,487
|
|
|
4,860,863
|
|
|
4,422,813
|
|
|
4,470,306
|
|
(a)
|
During 2017, the Company acquired Emil as discussed in Note 2 of the Notes to Consolidated Financial Statements.
|
(b)
|
During 2015, the Company acquired the IVC Group, the KAI Group and Xtratherm as discussed in Note 2 of the Notes to Consolidated Financial Statements.
|
(c)
|
During 2013, the Company acquired Pergo, Marazzi and Spano.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
(In millions)
|
|||||||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales
|
$
|
9,491.3
|
|
|
100.0
|
%
|
|
$
|
8,959.1
|
|
|
100.0
|
%
|
|
$
|
8,071.6
|
|
|
100.0
|
%
|
Cost of sales (1)
|
6,494.9
|
|
|
68.4
|
%
|
|
6,146.3
|
|
|
68.6
|
%
|
|
5,660.9
|
|
|
70.1
|
%
|
|||
Gross profit
|
2,996.4
|
|
|
31.6
|
%
|
|
2,812.8
|
|
|
31.4
|
%
|
|
2,410.7
|
|
|
29.9
|
%
|
|||
Selling, general and administrative expenses (2)
|
1,642.2
|
|
|
17.3
|
%
|
|
1,532.9
|
|
|
17.1
|
%
|
|
1,573.1
|
|
|
19.5
|
%
|
|||
Operating income
|
1,354.2
|
|
|
14.3
|
%
|
|
1,279.9
|
|
|
14.3
|
%
|
|
837.6
|
|
|
10.4
|
%
|
|||
Interest expense (3)
|
31.1
|
|
|
0.3
|
%
|
|
40.5
|
|
|
0.5
|
%
|
|
71.1
|
|
|
0.9
|
%
|
|||
Other expense (income) (4)
|
5.2
|
|
|
0.1
|
%
|
|
(1.7
|
)
|
|
—
|
%
|
|
17.6
|
|
|
0.2
|
%
|
|||
Earnings before income taxes
|
1,317.9
|
|
|
13.9
|
%
|
|
1,241.1
|
|
|
13.9
|
%
|
|
748.9
|
|
|
9.3
|
%
|
|||
Income tax expense (5)
|
343.2
|
|
|
3.6
|
%
|
|
307.6
|
|
|
3.4
|
%
|
|
131.9
|
|
|
1.6
|
%
|
|||
Earnings from continuing operations
|
974.7
|
|
|
10.3
|
%
|
|
933.5
|
|
|
10.4
|
%
|
|
617.0
|
|
|
7.6
|
%
|
|||
Net earnings including noncontrolling interest
|
974.7
|
|
|
10.3
|
%
|
|
933.5
|
|
|
10.4
|
%
|
|
617.0
|
|
|
7.6
|
%
|
|||
Less: Net earnings attributable to the noncontrolling interest
|
3.1
|
|
|
—
|
%
|
|
3.2
|
|
|
—
|
%
|
|
1.7
|
|
|
—
|
%
|
|||
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
971.6
|
|
|
10.2
|
%
|
|
$
|
930.3
|
|
|
10.4
|
%
|
|
$
|
615.3
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(1) Cost of sales includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring, acquisition and integration-related charges
|
$
|
36.0
|
|
|
0.4
|
%
|
|
$
|
38.3
|
|
|
0.4
|
%
|
|
$
|
45.6
|
|
|
0.6
|
%
|
Acquisition inventory step-up
|
13.3
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
13.3
|
|
|
0.2
|
%
|
|||
(2) Selling, general and administrative expenses include:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Restructuring, acquisition and integration-related charges
|
12.9
|
|
|
0.1
|
%
|
|
12.3
|
|
|
0.1
|
%
|
|
29.1
|
|
|
0.4
|
%
|
|||
Legal settlement and reserve
|
—
|
|
|
—
|
%
|
|
(90.0
|
)
|
|
(1.0
|
)%
|
|
124.5
|
|
|
1.5
|
%
|
|||
Tradename impairment
|
—
|
|
|
—
|
%
|
|
47.9
|
|
|
0.5
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other charges
|
—
|
|
|
—
|
%
|
|
9.9
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
|||
(3) Interest expense includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Debt extinguishment costs
|
0.2
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Deferred loan cost write-off
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
0.7
|
|
|
—
|
%
|
|||
(4) Other expense (income) includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reversal of uncertain tax position indemnification asset
|
4.5
|
|
|
—
|
%
|
|
5.4
|
|
|
0.1
|
%
|
|
11.2
|
|
|
0.1
|
%
|
|||
(5) Income tax expense includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax reform and related, net
|
0.8
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Reversal of uncertain tax position
|
(4.5
|
)
|
|
—
|
%
|
|
(5.4
|
)
|
|
(0.1
|
)%
|
|
(11.2
|
)
|
|
(0.1
|
)%
|
|
2017
|
|
2016
|
|
Change
|
||||
First quarter
|
$
|
2,220.6
|
|
|
2,172.0
|
|
|
2.2
|
%
|
Second quarter
|
2,453.0
|
|
|
2,310.3
|
|
|
6.2
|
%
|
|
Third quarter
|
2,448.5
|
|
|
2,294.1
|
|
|
6.7
|
%
|
|
Fourth quarter
|
2,369.1
|
|
|
2,182.6
|
|
|
8.5
|
%
|
|
Total year
|
$
|
9,491.3
|
|
|
8,959.1
|
|
|
5.9
|
%
|
|
2016
|
|
2015
|
|
Change
|
||||
First quarter
|
$
|
2,172.0
|
|
|
1,881.2
|
|
|
15.5
|
%
|
Second quarter
|
2,310.3
|
|
|
2,041.7
|
|
|
13.2
|
%
|
|
Third quarter
|
2,294.1
|
|
|
2,150.7
|
|
|
6.7
|
%
|
|
Fourth quarter
|
2,182.6
|
|
|
1,998.0
|
|
|
9.2
|
%
|
|
Total year
|
$
|
8,959.1
|
|
|
8,071.6
|
|
|
11.0
|
%
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||
Contractual obligations and commitments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including current maturities and capital leases
|
$
|
2,763.6
|
|
|
1,203.7
|
|
|
360.5
|
|
|
0.6
|
|
|
0.4
|
|
|
598.0
|
|
|
600.3
|
|
Interest payments on long-term debt and capital leases (1)
|
171.8
|
|
|
39.1
|
|
|
35.3
|
|
|
35.3
|
|
|
35.3
|
|
|
24.2
|
|
|
2.6
|
|
|
Operating leases
|
391.0
|
|
|
115.7
|
|
|
91.2
|
|
|
70.1
|
|
|
47.4
|
|
|
26.9
|
|
|
39.6
|
|
|
Purchase commitments (2)
|
567.2
|
|
|
172.9
|
|
|
76.9
|
|
|
31.2
|
|
|
31.2
|
|
|
25.5
|
|
|
229.5
|
|
|
Expected pension contributions (3)
|
3.3
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Uncertain tax positions (4)
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Guarantees (5)
|
23.8
|
|
|
23.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
3,921.9
|
|
|
1,559.7
|
|
|
563.9
|
|
|
137.2
|
|
|
114.3
|
|
|
674.6
|
|
|
872.0
|
|
(1)
|
For fixed rate debt, the Company calculated interest based on the applicable rates and payment dates. For variable rate debt, the Company estimated average outstanding balances for the respective periods and applied interest rates in effect as of
December 31, 2017
to these balances.
|
(2)
|
Includes volume commitments for natural gas, electricity and raw material purchases.
|
(3)
|
Includes the estimated pension contributions for
2018
only, as the Company is unable to estimate the pension contributions beyond
2018
. The Company’s projected benefit obligation and plan assets as of
December 31, 2017
were
$65.4 million
and
$53.4 million
, respectively. The projected benefit obligation liability has not been presented in the table above due to uncertainty as to amounts and timing regarding future payments.
|
(4)
|
Excludes
$59.3 million
of non-current accrued income tax liabilities and related interest and penalties for uncertain tax positions. These liabilities have not been presented in the table above due to uncertainty as to amounts and timing regarding future payments.
|
(5)
|
Includes bank guarantees and letters of credit.
|
•
|
Accounts receivable and revenue recognition.
Revenues are recognized when there is persuasive evidence of an arrangement, delivery has occurred, the price has been fixed or is determinable, and collectability can be reasonably
|
•
|
Inventories are stated at the lower of cost or market (net realizable value).
Cost has been determined using the first-in first-out method (“FIFO”). Costs included in inventory include raw materials, direct and indirect labor and employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. Market, with respect to all inventories, is replacement cost or net realizable value. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence. Actual results could differ from assumptions used to value obsolete inventory, excessive inventory or inventory expected to be sold below cost and additional reserves may be required. A 10% change in the Company’s reserve for excess or obsolete inventory would have affected net earnings by approximately
$9 million
for the year ended
December 31, 2017
.
|
•
|
Acquisition Accounting.
The fair value of the consideration we pay for each new acquisition is allocated to tangible assets and identifiable intangible assets, liabilities assumed, any non-controlling interest in the acquired entity and goodwill. The accounting for acquisitions involves a considerable amount of judgment and estimate, including the fair value of certain forms of consideration; fair value of acquired intangible assets involving projections of future revenues and cash flows that are then either discounted at an estimated discount rate or measured at an estimated royalty rate; fair value of other acquired assets and assumed liabilities, including potential contingencies; and the useful lives of the acquired assets. The assumptions used are determined at the time of the acquisition in accordance with accepted valuation models. Projections are developed using internal forecasts, available industry and market data and estimates of long-term rates of growth for our business. The impact of prior or future acquisitions on our financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates. See Note 2-Acquisitions for further discussion of business combination accounting valuation methodology and assumptions.
|
•
|
Goodwill and other intangibles.
Goodwill is tested annually for impairment on the first day of the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. The goodwill impairment tests are based on determining the fair value of the specified reporting units based on management judgments and assumptions using the discounted cash flows and comparable company market valuation approaches. The Company has identified Global Ceramic, Flooring NA and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about appropriate sales growth rates, operating margins, weighted average cost of capital (“WACC”), and comparable company market multiples. When developing these key judgments and assumptions, the Company considers economic, operational and market conditions that could impact the fair value of the reporting unit. However, estimates are inherently uncertain and represent only management’s reasonable expectations regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Should a significant or prolonged deterioration in economic conditions occur, such as declines in spending for new construction, remodeling and replacement activities; the inability to pass increases in the costs of raw materials and fuel on to customers; or a decline in comparable company market multiples, then key judgments and assumptions could be impacted. Generally, a decline in estimated after tax cash flows of more than
35%
or a more than
24%
increase in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment.
|
•
|
Income taxes.
The Company’s effective tax rate is based on its income, statutory tax rates and tax planning opportunities available in the jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining the Company’s tax expense and in evaluating the Company’s tax positions. Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in a future period. The Company evaluates the recoverability of these future tax benefits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely on estimates, including business forecasts and other projections of financial results over an extended period of time. In the event that the Company is not able to realize all or a portion of its deferred tax assets in the future, a valuation allowance is provided. The Company would recognize such amounts through a charge to income in the period in which that determination is made or when tax law changes are enacted. For further information regarding the Company’s valuation allowances, see Note 12-Income Taxes.
|
•
|
Environmental and legal accruals.
Environmental and legal accruals are estimates based on judgments made by the Company relating to ongoing environmental and legal proceedings, as disclosed in the Company’s consolidated financial statements. In determining whether a liability is probable and reasonably estimable, the Company consults with its internal experts. The Company believes that the amounts recorded in the accompanying financial statements are based on the best estimates and judgments available to it.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Consolidated Financial Statements and Supplementary Data
|
|
|
/s/ KPMG LLP
|
/s/ KPMG LLP
|
|
2017
|
|
2016
|
|||
|
(In thousands, except per share data)
|
|||||
ASSETS
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
84,884
|
|
|
121,665
|
|
Receivables, net
|
1,558,159
|
|
|
1,376,151
|
|
|
Inventories
|
1,948,663
|
|
|
1,675,751
|
|
|
Prepaid expenses
|
376,836
|
|
|
267,724
|
|
|
Other current assets
|
104,425
|
|
|
30,221
|
|
|
Total current assets
|
4,072,967
|
|
|
3,471,512
|
|
|
Property, plant and equipment, net
|
4,270,790
|
|
|
3,370,348
|
|
|
Goodwill
|
2,471,459
|
|
|
2,274,426
|
|
|
Tradenames
|
644,208
|
|
|
580,147
|
|
|
Other intangible assets, net
|
247,559
|
|
|
254,459
|
|
|
Deferred income taxes and other non-current assets
|
387,870
|
|
|
279,704
|
|
|
|
$
|
12,094,853
|
|
|
10,230,596
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
1,203,683
|
|
|
1,382,738
|
|
Accounts payable and accrued expenses
|
1,451,672
|
|
|
1,335,582
|
|
|
Total current liabilities
|
2,655,355
|
|
|
2,718,320
|
|
|
Deferred income taxes
|
328,103
|
|
|
361,416
|
|
|
Long-term debt, less current portion
|
1,559,895
|
|
|
1,128,747
|
|
|
Other long-term liabilities
|
455,028
|
|
|
214,930
|
|
|
Total liabilities
|
4,998,381
|
|
|
4,423,413
|
|
|
Commitments and contingencies (Note 13)
|
|
|
|
|||
Redeemable noncontrolling interest
|
29,463
|
|
|
23,696
|
|
|
Stockholders’ equity:
|
|
|
|
|||
Preferred stock, $.01 par value; 60 shares authorized; no shares issued
|
—
|
|
|
—
|
|
|
Common stock, $.01 par value; 150,000 shares authorized; 81,771 and 81,519 shares issued in 2017 and 2016, respectively
|
818
|
|
|
815
|
|
|
Additional paid-in capital
|
1,828,131
|
|
|
1,791,540
|
|
|
Retained earnings
|
6,004,506
|
|
|
5,032,914
|
|
|
Accumulated other comprehensive loss
|
(558,527
|
)
|
|
(833,027
|
)
|
|
|
7,274,928
|
|
|
5,992,242
|
|
|
Less treasury stock at cost; 7,350 and 7,351 shares in 2017 and 2016, respectively
|
215,766
|
|
|
215,791
|
|
|
Total Mohawk Industries, Inc. stockholders’ equity
|
7,059,162
|
|
|
5,776,451
|
|
|
Noncontrolling interest
|
7,847
|
|
|
7,036
|
|
|
Total stockholders' equity
|
7,067,009
|
|
|
5,783,487
|
|
|
|
$
|
12,094,853
|
|
|
10,230,596
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
(In thousands, except per share data)
|
||||||||
Net sales
|
$
|
9,491,290
|
|
|
8,959,087
|
|
|
8,071,563
|
|
Cost of sales
|
6,494,876
|
|
|
6,146,262
|
|
|
5,660,877
|
|
|
Gross profit
|
2,996,414
|
|
|
2,812,825
|
|
|
2,410,686
|
|
|
Selling, general and administrative expenses
|
1,642,241
|
|
|
1,532,882
|
|
|
1,573,120
|
|
|
Operating income
|
1,354,173
|
|
|
1,279,943
|
|
|
837,566
|
|
|
Interest expense
|
31,111
|
|
|
40,547
|
|
|
71,086
|
|
|
Other expense (income)
|
5,205
|
|
|
(1,729
|
)
|
|
17,619
|
|
|
Earnings before income taxes
|
1,317,857
|
|
|
1,241,125
|
|
|
748,861
|
|
|
Income tax expense
|
343,165
|
|
|
307,559
|
|
|
131,875
|
|
|
Net earnings including noncontrolling interest
|
974,692
|
|
|
933,566
|
|
|
616,986
|
|
|
Net earnings attributable to noncontrolling interest
|
3,054
|
|
|
3,204
|
|
|
1,684
|
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
971,638
|
|
|
930,362
|
|
|
615,302
|
|
|
|
|
|
|
|
||||
Basic earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
||||
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
13.07
|
|
|
12.55
|
|
|
8.37
|
|
Weighted-average common shares outstanding—basic
|
74,357
|
|
|
74,104
|
|
|
73,516
|
|
|
|
|
|
|
|
|
||||
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|||
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
12.98
|
|
|
12.48
|
|
|
8.31
|
|
Weighted-average common shares outstanding—diluted
|
74,839
|
|
|
74,568
|
|
|
74,043
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||||
Net earnings including noncontrolling interest
|
|
$
|
974,692
|
|
|
933,566
|
|
|
616,986
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
281,655
|
|
|
(36,702
|
)
|
|
(360,147
|
)
|
|
Prior pension and post-retirement benefit service cost and actuarial loss
|
|
(2,927
|
)
|
|
(2,757
|
)
|
|
(4,100
|
)
|
|
Other comprehensive income (loss)
|
|
278,728
|
|
|
(39,459
|
)
|
|
(364,247
|
)
|
|
Comprehensive income
|
|
1,253,420
|
|
|
894,107
|
|
|
252,739
|
|
|
Comprehensive income attributable to the non-controlling interest
|
|
7,282
|
|
|
3,204
|
|
|
1,684
|
|
|
Comprehensive income attributable to Mohawk Industries, Inc.
|
|
$
|
1,246,138
|
|
|
890,903
|
|
|
251,055
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
||||||||||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interest
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury Stock
|
|
Noncontrolling Interest
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
|
||||||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Balances at December 31, 2014
|
$
|
—
|
|
|
81,070
|
|
|
$
|
811
|
|
|
$
|
1,598,887
|
|
|
$
|
3,487,079
|
|
|
$
|
(429,321
|
)
|
|
(8,157
|
)
|
|
$
|
(239,450
|
)
|
|
$
|
4,807
|
|
|
$
|
4,422,813
|
|
IVC Group acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
129,445
|
|
|
—
|
|
|
—
|
|
|
806
|
|
|
23,651
|
|
|
—
|
|
|
153,096
|
|
||||||||
Shares issued under employee and director stock plans
|
—
|
|
|
210
|
|
|
2
|
|
|
(6,536
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(6,530
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
32,552
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,552
|
|
||||||||
Tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
5,668
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,668
|
|
||||||||
Accretion of redeemable noncontrolling interest
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
||||||||
Noncontrolling earnings
|
1,428
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|
256
|
|
||||||||
Currency translation adjustment on noncontrolling interests
|
(713
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(970
|
)
|
|
(970
|
)
|
||||||||
Acquisition of noncontrolling interest, net of taxes
|
21,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,597
|
|
|
3,117
|
|
||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360,147
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360,147
|
)
|
||||||||
Pension prior service cost and actuarial gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,100
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615,302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615,302
|
|
||||||||
Balances at December 31, 2015
|
21,952
|
|
|
81,280
|
|
|
813
|
|
|
1,760,016
|
|
|
4,102,707
|
|
|
(793,568
|
)
|
|
(7,351
|
)
|
|
(215,795
|
)
|
|
6,690
|
|
|
4,860,863
|
|
||||||||
Shares issued under employee and director stock plans
|
—
|
|
|
239
|
|
|
2
|
|
|
(8,232
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(8,226
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
35,059
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,059
|
|
||||||||
Tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
4,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,697
|
|
||||||||
Accretion of redeemable noncontrolling interest
|
123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
||||||||
Noncontrolling earnings
|
2,864
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
340
|
|
||||||||
Currency translation adjustment on non-controlling interests
|
(1,243
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
||||||||
Acquisition of noncontrolling interest, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,702
|
)
|
||||||||
Pension prior service cost and actuarial loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,757
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,757
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930,362
|
|
||||||||
Balances at December 31, 2016
|
23,696
|
|
|
81,519
|
|
|
815
|
|
|
1,791,540
|
|
|
5,032,914
|
|
|
(833,027
|
)
|
|
(7,351
|
)
|
|
(215,791
|
)
|
|
7,036
|
|
|
5,783,487
|
|
||||||||
Shares issued under employee and director stock plans
|
—
|
|
|
252
|
|
|
3
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
25
|
|
|
—
|
|
|
297
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
36,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,322
|
|
||||||||
Distribution to noncontrolling interest, net of adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|
(750
|
)
|
||||||||
Accretion of redeemable noncontrolling interest
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
||||||||
Noncontrolling earnings
|
2,544
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
510
|
|
|
510
|
|
||||||||
Currency translation adjustment on non-controlling interests
|
3,177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,051
|
|
|
1,051
|
|
||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277,427
|
|
||||||||
Prior pension and post-retirement benefit service cost and actuarial loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,927
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,927
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
971,638
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
971,638
|
|
||||||||
Balances as of December 31, 2017
|
$
|
29,463
|
|
|
81,771
|
|
|
$
|
818
|
|
|
$
|
1,828,131
|
|
|
$
|
6,004,506
|
|
|
$
|
(558,527
|
)
|
|
(7,350
|
)
|
|
$
|
(215,766
|
)
|
|
$
|
7,847
|
|
|
$
|
7,067,009
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net earnings
|
$
|
974,692
|
|
|
933,566
|
|
|
616,986
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||
Restructuring
|
37,085
|
|
|
38,463
|
|
|
33,085
|
|
|
Intangible asset impairment
|
—
|
|
|
47,905
|
|
|
—
|
|
|
Depreciation and amortization
|
446,672
|
|
|
409,467
|
|
|
362,647
|
|
|
Deferred income taxes
|
(75,591
|
)
|
|
(34,009
|
)
|
|
(28,883
|
)
|
|
Loss on disposal of property, plant and equipment
|
4,303
|
|
|
3,932
|
|
|
3,007
|
|
|
Stock-based compensation expense
|
36,322
|
|
|
35,059
|
|
|
32,552
|
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||
Receivables, net
|
(60,566
|
)
|
|
(158,888
|
)
|
|
(14,383
|
)
|
|
Inventories
|
(153,245
|
)
|
|
(81,923
|
)
|
|
6,400
|
|
|
Accounts payable and accrued expenses
|
25,365
|
|
|
85,572
|
|
|
6,473
|
|
|
Other assets and prepaid expenses
|
(52,115
|
)
|
|
54,267
|
|
|
(75,813
|
)
|
|
Other liabilities
|
10,673
|
|
|
11,878
|
|
|
(12,919
|
)
|
|
Net cash provided by operating activities
|
1,193,595
|
|
|
1,345,289
|
|
|
929,152
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||
Additions to property, plant and equipment
|
(905,998
|
)
|
|
(672,125
|
)
|
|
(503,657
|
)
|
|
Acquisitions, net of cash acquired
|
(250,799
|
)
|
|
—
|
|
|
(1,370,567
|
)
|
|
Purchases of short-term investments
|
(83,904
|
)
|
|
—
|
|
|
—
|
|
|
Net cash used in investing activities
|
(1,240,701
|
)
|
|
(672,125
|
)
|
|
(1,874,224
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
||||
Payments on Senior Credit Facilities
|
(454,637
|
)
|
|
(707,129
|
)
|
|
(1,376,082
|
)
|
|
Proceeds from Senior Credit Facilities
|
447,884
|
|
|
631,807
|
|
|
1,315,930
|
|
|
Payments on Commercial Paper
|
(15,584,017
|
)
|
|
(20,210,585
|
)
|
|
(15,934,767
|
)
|
|
Proceeds from Commercial Paper
|
15,761,954
|
|
|
20,301,372
|
|
|
16,402,507
|
|
|
Proceeds from Floating Rate Notes
|
357,569
|
|
|
—
|
|
|
—
|
|
|
Repayment of senior notes
|
—
|
|
|
(645,555
|
)
|
|
—
|
|
|
Payments on asset securitization borrowings
|
(500,000
|
)
|
|
—
|
|
|
—
|
|
|
Proceeds from senior note issuance
|
—
|
|
|
—
|
|
|
564,653
|
|
|
Payments on other debt
|
—
|
|
|
—
|
|
|
(9,530
|
)
|
|
Payments on acquired debt and other financings
|
(18,811
|
)
|
|
—
|
|
|
(7,109
|
)
|
|
Debt issuance costs
|
(1,478
|
)
|
|
(1,336
|
)
|
|
—
|
|
|
Change in outstanding checks in excess of cash
|
(3,402
|
)
|
|
(1,754
|
)
|
|
(2,052
|
)
|
|
Shares redeemed for taxes
|
(13,902
|
)
|
|
(13,039
|
)
|
|
(11,589
|
)
|
|
Proceeds and net tax benefit from stock transactions
|
1,845
|
|
|
4,583
|
|
|
4,843
|
|
|
Net cash (used in) provided by financing activities
|
(6,995
|
)
|
|
(641,636
|
)
|
|
946,804
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
17,320
|
|
|
8,445
|
|
|
(17,917
|
)
|
|
Net change in cash and cash equivalents
|
(36,781
|
)
|
|
39,973
|
|
|
(16,185
|
)
|
|
Cash and cash equivalents, beginning of year
|
121,665
|
|
|
81,692
|
|
|
97,877
|
|
|
Cash and cash equivalents, end of year
|
$
|
84,884
|
|
|
121,665
|
|
|
81,692
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Earnings attributable to Mohawk Industries, Inc.
|
$
|
971,638
|
|
|
930,362
|
|
|
615,302
|
|
Accretion of redeemable noncontrolling interest
(a)
|
(46
|
)
|
|
(123
|
)
|
|
(194
|
)
|
|
Net earnings available to common stockholders
|
$
|
971,592
|
|
|
930,239
|
|
|
615,108
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding-basic and diluted:
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
74,357
|
|
|
74,104
|
|
|
73,516
|
|
|
Add weighted-average dilutive potential common shares - options and RSUs to purchase common shares, net
|
482
|
|
|
464
|
|
|
527
|
|
|
Weighted-average common shares outstanding-diluted
|
74,839
|
|
|
74,568
|
|
|
74,043
|
|
|
Earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
||||
Basic
|
$
|
13.07
|
|
|
12.55
|
|
|
8.37
|
|
Diluted
|
$
|
12.98
|
|
|
12.48
|
|
|
8.31
|
|
|
Foreign currency translation adjustments
|
|
Pensions and post-retirement benefits
|
|
Total
|
||||
Balance as of December 31, 2014
|
$
|
(428,505
|
)
|
|
(816
|
)
|
|
(429,321
|
)
|
Current period other comprehensive income (loss) before reclassifications
|
(360,147
|
)
|
|
(4,100
|
)
|
|
(364,247
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of December 31, 2015
|
(788,652
|
)
|
|
(4,916
|
)
|
|
(793,568
|
)
|
|
Current period other comprehensive income (loss) before reclassifications
|
(36,702
|
)
|
|
(2,757
|
)
|
|
(39,459
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of December 31, 2016
|
(825,354
|
)
|
|
(7,673
|
)
|
|
(833,027
|
)
|
|
Current period other comprehensive income (loss) before reclassifications
|
277,427
|
|
|
(2,927
|
)
|
|
274,500
|
|
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of December 31, 2017
|
$
|
(547,927
|
)
|
|
(10,600
|
)
|
|
(558,527
|
)
|
•
|
In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and
|
•
|
In connection with the Company's cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions including accelerated depreciation and workforce reductions.
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Cost of sales
|
|
|
|
|
|
|
||||
Restructuring costs
|
|
$
|
33,109
|
|
|
33,582
|
|
|
35,956
|
|
Acquisition integration-related costs
|
|
2,916
|
|
|
4,722
|
|
|
9,597
|
|
|
Restructuring and integration-related costs
|
|
$
|
36,025
|
|
|
38,304
|
|
|
45,553
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
||||
Restructuring costs
|
|
$
|
3,976
|
|
|
4,881
|
|
|
5,779
|
|
Acquisition transaction-related costs
|
|
2,751
|
|
|
—
|
|
|
9,502
|
|
|
Acquisition integration-related costs
|
|
6,188
|
|
|
7,438
|
|
|
13,770
|
|
|
Restructuring, acquisition and integration-related costs
|
|
$
|
12,915
|
|
|
12,319
|
|
|
29,051
|
|
|
Lease
impairments
|
|
Asset write-downs
|
|
Severance
|
|
Other
restructuring
costs
|
|
Total
|
||||||
Balance as of December 31, 2015
|
$
|
—
|
|
|
—
|
|
|
8,965
|
|
|
1,065
|
|
|
10,030
|
|
Provision - Global Ceramic segment
|
—
|
|
|
795
|
|
|
1,396
|
|
|
79
|
|
|
2,270
|
|
|
Provision - Flooring NA segment
|
—
|
|
|
10,048
|
|
|
3,850
|
|
|
18,170
|
|
|
32,068
|
|
|
Provision - Flooring ROW segment
|
—
|
|
|
184
|
|
|
1,932
|
|
|
2,009
|
|
|
4,125
|
|
|
Cash payments
|
—
|
|
|
—
|
|
|
(10,958
|
)
|
|
(9,982
|
)
|
|
(20,940
|
)
|
|
Non-cash items
|
—
|
|
|
(11,027
|
)
|
|
(2
|
)
|
|
(5,098
|
)
|
|
(16,127
|
)
|
|
Balance as of December 31, 2016
|
—
|
|
|
—
|
|
|
5,183
|
|
|
6,243
|
|
|
11,426
|
|
|
Provision - Global Ceramic segment
|
492
|
|
|
—
|
|
|
1,082
|
|
|
(32
|
)
|
|
1,542
|
|
|
Provision - Flooring NA segment
|
316
|
|
|
6,849
|
|
|
2,500
|
|
|
22,131
|
|
|
31,796
|
|
|
Provision - Flooring ROW segment
|
—
|
|
|
650
|
|
|
1,518
|
|
|
1,465
|
|
|
3,633
|
|
|
Provision - Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
114
|
|
|
114
|
|
|
Cash payments
|
(449
|
)
|
|
(190
|
)
|
|
(9,469
|
)
|
|
(29,725
|
)
|
|
(39,833
|
)
|
|
Non-cash items
|
—
|
|
|
(7,309
|
)
|
|
(230
|
)
|
|
(44
|
)
|
|
(7,583
|
)
|
|
Balance as of December 31, 2017
|
$
|
359
|
|
|
—
|
|
|
584
|
|
|
152
|
|
|
1,095
|
|
|
December 31,
2017 |
|
December 31,
2016 |
|||
Customers, trade
|
$
|
1,538,348
|
|
|
1,386,306
|
|
Income tax receivable
|
9,835
|
|
|
8,616
|
|
|
Other
|
96,079
|
|
|
59,564
|
|
|
|
1,644,262
|
|
|
1,454,486
|
|
|
Less allowance for discounts, returns, claims and doubtful accounts
|
86,103
|
|
|
78,335
|
|
|
Receivables, net
|
$
|
1,558,159
|
|
|
1,376,151
|
|
|
Balance at
beginning
of year
|
|
Acquisitions
|
|
Additions
charged to
net sales or
costs and
expenses
|
|
Deductions(1)
|
|
Balance
at end
of year
|
||||||
2015
|
$
|
72,603
|
|
|
7,750
|
|
|
272,329
|
|
|
273,735
|
|
|
78,947
|
|
2016
|
78,947
|
|
|
—
|
|
|
296,419
|
|
|
297,031
|
|
|
78,335
|
|
|
2017
|
78,335
|
|
|
6,510
|
|
|
308,507
|
|
|
307,249
|
|
|
86,103
|
|
(1)
|
Represents charge-offs, net of recoveries.
|
|
December 31,
2017 |
|
December 31,
2016 |
|||
Finished goods
|
$
|
1,326,038
|
|
|
1,127,573
|
|
Work in process
|
159,921
|
|
|
137,310
|
|
|
Raw materials
|
462,704
|
|
|
410,868
|
|
|
Total inventories
|
$
|
1,948,663
|
|
|
1,675,751
|
|
|
Global Ceramic
|
|
Flooring NA
|
|
Flooring ROW
|
|
Total
|
|||||
Balances as of December 31, 2015
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
1,472,757
|
|
|
867,916
|
|
|
1,280,117
|
|
|
3,620,790
|
|
Accumulated impairments losses
|
(531,930
|
)
|
|
(343,054
|
)
|
|
(452,441
|
)
|
|
(1,327,425
|
)
|
|
|
940,827
|
|
|
524,862
|
|
|
827,676
|
|
|
2,293,365
|
|
|
Goodwill recognized during the year
|
—
|
|
|
1,848
|
|
|
1,158
|
|
|
3,006
|
|
|
Currency translation during the year
|
9,469
|
|
|
—
|
|
|
(31,414
|
)
|
|
(21,945
|
)
|
|
Balances as of December 31, 2016
|
|
|
|
|
|
|
|
|||||
Goodwill
|
1,482,226
|
|
|
869,764
|
|
|
1,249,861
|
|
|
3,601,851
|
|
|
Accumulated impairments losses
|
(531,930
|
)
|
|
(343,054
|
)
|
|
(452,441
|
)
|
|
(1,327,425
|
)
|
|
|
950,296
|
|
|
526,710
|
|
|
797,420
|
|
|
2,274,426
|
|
|
Goodwill recognized during the year
|
$
|
60,493
|
|
|
—
|
|
|
—
|
|
|
60,493
|
|
Currency translation during the year
|
25,153
|
|
|
—
|
|
|
111,387
|
|
|
136,540
|
|
|
Balances as of December 31, 2017
|
|
|
|
|
|
|
|
|||||
Goodwill
|
1,567,872
|
|
|
869,764
|
|
|
1,361,248
|
|
|
3,798,884
|
|
|
Accumulated impairments losses
|
(531,930
|
)
|
|
(343,054
|
)
|
|
(452,441
|
)
|
|
(1,327,425
|
)
|
|
|
$
|
1,035,942
|
|
|
526,710
|
|
|
908,807
|
|
|
2,471,459
|
|
|
Customer
relationships
|
|
Patents
|
|
Other
|
|
Total
|
|||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|||||
Balances as of December 31, 2015
|
$
|
271,123
|
|
|
26,985
|
|
|
6,084
|
|
|
304,192
|
|
Intangible assets acquired during the year
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Amortization during the year
|
(25,778
|
)
|
|
(13,141
|
)
|
|
(626
|
)
|
|
(39,545
|
)
|
|
Currency translation during the year
|
(9,641
|
)
|
|
(420
|
)
|
|
(127
|
)
|
|
(10,188
|
)
|
|
Balances as of December 31, 2016
|
235,704
|
|
|
13,424
|
|
|
5,331
|
|
|
254,459
|
|
|
Intangible assets acquired during the year
|
3,175
|
|
|
—
|
|
|
—
|
|
|
3,175
|
|
|
Amortization during the year
|
(26,602
|
)
|
|
(7,543
|
)
|
|
(134
|
)
|
|
(34,279
|
)
|
|
Currency translation during the year
|
22,558
|
|
|
1,180
|
|
|
466
|
|
|
24,204
|
|
|
Balances as of December 31, 2017
|
$
|
234,835
|
|
|
7,061
|
|
|
5,663
|
|
|
247,559
|
|
|
December 31, 2017
|
||||||||||
|
Cost
|
Acquisitions
|
Currency translation
|
Accumulated amortization
|
Net Value
|
||||||
Customer Relationships
|
$
|
569,980
|
|
3,175
|
|
52,108
|
|
390,428
|
|
234,835
|
|
Patents
|
234,022
|
|
—
|
|
32,947
|
|
259,908
|
|
7,061
|
|
|
Other
|
6,330
|
|
—
|
|
495
|
|
1,162
|
|
5,663
|
|
|
Total
|
$
|
810,332
|
|
3,175
|
|
85,550
|
|
651,498
|
|
247,559
|
|
|
|
|
|
|
|
|
December 31, 2016
|
||||||||||
|
Cost
|
Acquisitions
|
Currency translation
|
Accumulated amortization
|
Net Value
|
||||||
Customer Relationships
|
$
|
588,716
|
|
—
|
|
(18,736
|
)
|
334,276
|
|
235,704
|
|
Patents
|
243,258
|
|
—
|
|
(9,236
|
)
|
220,598
|
|
13,424
|
|
|
Other
|
6,790
|
|
—
|
|
(460
|
)
|
999
|
|
5,331
|
|
|
Total
|
$
|
838,764
|
|
—
|
|
(28,432
|
)
|
555,873
|
|
254,459
|
|
|
Years Ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
||||
Amortization expense
|
$
|
34,279
|
|
|
39,545
|
|
|
29,909
|
|
|
December 31,
2017 |
|
December 31,
2016 |
|||
Land
|
$
|
385,027
|
|
|
288,633
|
|
Buildings and improvements
|
1,413,877
|
|
|
1,189,408
|
|
|
Machinery and equipment
|
4,603,911
|
|
|
3,979,349
|
|
|
Furniture and fixtures
|
211,730
|
|
|
236,183
|
|
|
Leasehold improvements
|
78,803
|
|
|
77,976
|
|
|
Construction in progress
|
792,936
|
|
|
472,226
|
|
|
|
7,486,284
|
|
|
6,243,775
|
|
|
Less accumulated depreciation and amortization
|
3,215,494
|
|
|
2,873,427
|
|
|
Net property, plant and equipment
|
$
|
4,270,790
|
|
|
3,370,348
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|||||
3.85% senior notes, payable February 1, 2023; interest payable semiannually
|
$
|
622,752
|
|
|
600,000
|
|
|
615,006
|
|
|
600,000
|
|
2.00% senior notes, payable January 14, 2022; interest payable annually
|
634,193
|
|
|
600,096
|
|
|
556,460
|
|
|
525,984
|
|
|
Floating Rate Notes, payable September 11, 2019, interest payable quarterly
|
360,807
|
|
|
360,058
|
|
|
—
|
|
|
—
|
|
|
U.S. commercial paper
|
228,500
|
|
|
228,500
|
|
|
283,800
|
|
|
283,800
|
|
|
European commercial paper
|
912,146
|
|
|
912,146
|
|
|
536,503
|
|
|
536,503
|
|
|
Five-year senior secured credit facility, due March 26, 2022
|
62,104
|
|
|
62,104
|
|
|
60,672
|
|
|
60,672
|
|
|
Securitization facility
|
—
|
|
|
—
|
|
|
500,000
|
|
|
500,000
|
|
|
Capital leases and other
|
6,934
|
|
|
6,934
|
|
|
11,643
|
|
|
11,643
|
|
|
Unamortized debt issuance costs
|
(6,260
|
)
|
|
(6,260
|
)
|
|
(7,117
|
)
|
|
(7,117
|
)
|
|
Total debt
|
2,821,176
|
|
|
2,763,578
|
|
|
2,556,967
|
|
|
2,511,485
|
|
|
Less current portion of long term debt and commercial paper
|
1,203,683
|
|
|
1,203,683
|
|
|
1,382,738
|
|
|
1,382,738
|
|
|
Long-term debt, less current portion
|
$
|
1,617,493
|
|
|
1,559,895
|
|
|
1,174,229
|
|
|
1,128,747
|
|
2018
|
$
|
1,203,683
|
|
2019
|
360,514
|
|
|
2020
|
599
|
|
|
2021
|
441
|
|
|
2022
|
597,995
|
|
|
Thereafter
|
600,346
|
|
|
|
$
|
2,763,578
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||
Outstanding checks in excess of cash
|
$
|
8,879
|
|
|
12,269
|
|
Accounts payable, trade
|
810,034
|
|
|
729,415
|
|
|
Accrued expenses
|
363,919
|
|
|
333,942
|
|
|
Product warranties
|
39,035
|
|
|
46,347
|
|
|
Accrued interest
|
22,363
|
|
|
20,396
|
|
|
Accrued compensation and benefits
|
207,442
|
|
|
193,213
|
|
|
Total accounts payable and accrued expenses
|
$
|
1,451,672
|
|
|
1,335,582
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Options outstanding at beginning of year
|
91
|
|
|
169
|
|
|
298
|
|
|
Options exercised
|
(28
|
)
|
|
(78
|
)
|
|
(66
|
)
|
|
Options forfeited and expired
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
Options outstanding at end of year
|
63
|
|
|
91
|
|
|
169
|
|
|
Options exercisable at end of year
|
63
|
|
|
90
|
|
|
164
|
|
|
Option prices per share:
|
|
|
|
|
|
||||
Options exercised during the year
|
$ 57.34-66.14
|
|
|
28.37-93.65
|
|
|
28.37-93.65
|
|
|
Options forfeited and expired during the year
|
$
|
—
|
|
|
—
|
|
|
28.37-88.33
|
|
Options outstanding at end of year
|
$ 57.34-66.14
|
|
|
57.34-66.14
|
|
|
28.37-93.65
|
|
|
Options exercisable at end of year
|
$ 57.34-66.14
|
|
|
57.34-66.14
|
|
|
28.37-93.65
|
|
|
Shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
|
|||||
Options outstanding, December 31, 2016
|
91
|
|
|
$
|
63.84
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(28
|
)
|
|
66.08
|
|
|
|
|
|
|||
Forfeited and expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options outstanding, December 31, 2017
|
63
|
|
|
$
|
62.86
|
|
|
3.8
|
|
$
|
13,446
|
|
Vested and expected to vest as of December 31, 2017
|
63
|
|
|
$
|
62.86
|
|
|
3.8
|
|
$
|
13,446
|
|
Exercisable as of December 31, 2017
|
63
|
|
|
$
|
62.86
|
|
|
3.8
|
|
$
|
13,446
|
|
|
Outstanding
|
|
Exercisable
|
||||||||||||
Exercise price range
|
Number of
shares
|
|
Average
life
|
|
Average
price
|
|
Number of
shares
|
|
Average
price
|
||||||
$57.34-$57.34
|
23
|
|
|
3.15
|
|
57.34
|
|
|
23
|
|
|
57.34
|
|
||
$66.14-$66.14
|
40
|
|
|
4.14
|
|
66.14
|
|
|
40
|
|
|
66.14
|
|
||
Total
|
63
|
|
|
3.77
|
|
$
|
63.84
|
|
|
63
|
|
|
$
|
63.82
|
|
|
Shares
|
|
Weighted
average grant date fair value
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic value
|
|||||
Restricted Stock Units outstanding, December 31, 2016
|
695
|
|
|
$
|
113.51
|
|
|
|
|
|
||
Granted
|
154
|
|
|
226.91
|
|
|
|
|
|
|||
Released
|
(284
|
)
|
|
106.30
|
|
|
|
|
|
|||
Forfeited
|
(10
|
)
|
|
190.53
|
|
|
|
|
|
|||
Restricted Stock Units outstanding, December 31, 2017
|
555
|
|
|
$
|
147.28
|
|
|
1.1
|
|
$
|
152,017
|
|
Expected to vest as of December 31, 2017
|
546
|
|
|
|
|
|
1.1
|
|
$
|
146,650
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Restricted Stock Units outstanding, January 1
|
695
|
|
|
750
|
|
|
725
|
|
Granted
|
154
|
|
|
187
|
|
|
248
|
|
Released
|
(284
|
)
|
|
(226
|
)
|
|
(212
|
)
|
Forfeited
|
(10
|
)
|
|
(16
|
)
|
|
(11
|
)
|
Restricted Stock Units outstanding, December 31
|
555
|
|
|
695
|
|
|
750
|
|
Expected to vest as of December 31
|
546
|
|
|
682
|
|
|
731
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Foreign currency losses
|
$
|
8,395
|
|
|
1,099
|
|
|
9,295
|
|
Release of indemnification asset
|
4,459
|
|
|
5,371
|
|
|
11,180
|
|
|
All other, net
|
(7,649
|
)
|
|
(8,199
|
)
|
|
(2,856
|
)
|
|
Total other expense (income)
|
$
|
5,205
|
|
|
(1,729
|
)
|
|
17,619
|
|
|
2017
|
|
2016
|
|
2015
|
||||
United States
|
$
|
754,562
|
|
|
627,567
|
|
|
324,210
|
|
Foreign
|
563,295
|
|
|
613,558
|
|
|
424,651
|
|
|
Earnings before income taxes
|
$
|
1,317,857
|
|
|
1,241,125
|
|
|
748,861
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Current income taxes:
|
|
|
|
|
|
||||
U.S. federal
|
$
|
327,697
|
|
|
247,917
|
|
|
117,602
|
|
State and local
|
17,811
|
|
|
31,939
|
|
|
11,175
|
|
|
Foreign
|
73,248
|
|
|
61,712
|
|
|
31,981
|
|
|
Total current
|
418,756
|
|
|
341,568
|
|
|
160,758
|
|
|
Deferred income taxes:
|
|
|
|
|
|
||||
U.S. federal
|
(17,419
|
)
|
|
(16,167
|
)
|
|
4,165
|
|
|
State and local
|
(3,046
|
)
|
|
(22,115
|
)
|
|
(3,983
|
)
|
|
Foreign
|
(55,126
|
)
|
|
4,273
|
|
|
(29,065
|
)
|
|
Total deferred
|
(75,591
|
)
|
|
(34,009
|
)
|
|
(28,883
|
)
|
|
Total
|
$
|
343,165
|
|
|
307,559
|
|
|
131,875
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Income taxes at statutory rate
|
$
|
461,250
|
|
|
434,394
|
|
|
262,102
|
|
State and local income taxes, net of federal income tax benefit
|
10,133
|
|
|
6,298
|
|
|
4,951
|
|
|
Foreign income taxes
(a)
|
(113,520
|
)
|
|
(111,217
|
)
|
|
(95,198
|
)
|
|
Change in valuation allowance
|
10,008
|
|
|
(21,106
|
)
|
|
(14,237
|
)
|
|
2017 revaluation of deferred tax assets and liabilities
(b)
|
(150,546
|
)
|
|
—
|
|
|
—
|
|
|
Deemed Repatriation Transition Tax
|
105,165
|
|
|
—
|
|
|
—
|
|
|
Tax contingencies and audit settlements, net
|
23,097
|
|
|
2,496
|
|
|
(23,032
|
)
|
|
Other, net
|
(2,422
|
)
|
|
(3,306
|
)
|
|
(2,711
|
)
|
|
|
$
|
343,165
|
|
|
307,559
|
|
|
131,875
|
|
|
2017
|
|
2016
|
|||
Deferred tax assets:
|
|
|
|
|||
Accounts receivable
|
$
|
18,481
|
|
|
23,521
|
|
Inventories
|
41,169
|
|
|
48,673
|
|
|
Employee benefits
|
42,191
|
|
|
76,143
|
|
|
Accrued expenses and other
|
52,635
|
|
|
72,258
|
|
|
Deductible state tax and interest benefit
|
2,087
|
|
|
5,186
|
|
|
Intangibles
|
22,119
|
|
|
12,874
|
|
|
Federal, foreign and state net operating losses and credits
|
530,978
|
|
|
456,130
|
|
|
Gross deferred tax assets
|
709,660
|
|
|
694,785
|
|
|
Valuation allowance
|
(362,963
|
)
|
|
(289,078
|
)
|
|
Net deferred tax assets
|
346,697
|
|
|
405,707
|
|
|
Deferred tax liabilities:
|
|
|
|
|||
Inventories
|
(14,423
|
)
|
|
(13,099
|
)
|
|
Plant and equipment
|
(397,668
|
)
|
|
(426,087
|
)
|
|
Intangibles
|
(170,817
|
)
|
|
(243,339
|
)
|
|
Other liabilities
|
(31,702
|
)
|
|
(50,041
|
)
|
|
Gross deferred tax liabilities
|
(614,610
|
)
|
|
(732,566
|
)
|
|
Net deferred tax liability
|
$
|
(267,913
|
)
|
|
(326,859
|
)
|
|
2017
|
|
2016
|
|||
Balance as of January 1
|
$
|
46,434
|
|
|
51,037
|
|
Additions based on tax positions related to the current year
|
28,663
|
|
|
2,221
|
|
|
Additions for tax positions of acquired companies
|
1,776
|
|
|
—
|
|
|
Additions for tax positions of prior years
|
876
|
|
|
6,412
|
|
|
Reductions resulting from the lapse of the statute of limitations
|
(14,502
|
)
|
|
(6,294
|
)
|
|
Settlements with taxing authorities
|
(655
|
)
|
|
(6,555
|
)
|
|
Effects of foreign currency translation
|
3,039
|
|
|
(387
|
)
|
|
Balance as of December 31
|
$
|
65,631
|
|
|
46,434
|
|
|
Capital
|
|
Operating
|
|
Total Future
Payments
|
||||
2018
|
$
|
1,433
|
|
|
115,736
|
|
|
117,169
|
|
2019
|
1,094
|
|
|
91,226
|
|
|
92,320
|
|
|
2020
|
769
|
|
|
70,146
|
|
|
70,915
|
|
|
2021
|
597
|
|
|
47,356
|
|
|
47,953
|
|
|
2022
|
590
|
|
|
26,927
|
|
|
27,517
|
|
|
Thereafter
|
3,954
|
|
|
39,615
|
|
|
43,569
|
|
|
Total payments
|
8,437
|
|
|
391,006
|
|
|
399,443
|
|
|
Less amount representing interest
|
1,510
|
|
|
|
|
|
|||
Present value of capitalized lease payments
|
$
|
6,927
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Net cash paid (received) during the years for:
|
|
|
|
|
|
||||
Interest
|
$
|
33,952
|
|
|
57,269
|
|
|
67,974
|
|
Income taxes
|
$
|
373,900
|
|
|
276,789
|
|
|
133,283
|
|
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
30,643
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||||
Fair value of net assets acquired in acquisition
|
$
|
369,956
|
|
|
—
|
|
|
1,564,970
|
|
Noncontrolling interest of assets acquired
|
—
|
|
|
—
|
|
|
(24,160
|
)
|
|
Liabilities assumed in acquisition
|
(119,157
|
)
|
|
—
|
|
|
(17,147
|
)
|
|
Shares issued for acquisitions
|
—
|
|
|
—
|
|
|
(153,096
|
)
|
|
|
$
|
250,799
|
|
|
—
|
|
|
1,370,567
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Net sales:
|
|
|
|
|
|
||||
Global Ceramic
|
$
|
3,405,100
|
|
|
3,174,706
|
|
|
3,012,859
|
|
Flooring NA
|
4,010,858
|
|
|
3,865,746
|
|
|
3,602,112
|
|
|
Flooring ROW
|
2,075,452
|
|
|
1,918,635
|
|
|
1,456,898
|
|
|
Intersegment sales
|
(120
|
)
|
|
—
|
|
|
(306
|
)
|
|
|
$
|
9,491,290
|
|
|
8,959,087
|
|
|
8,071,563
|
|
Operating income (loss):
|
|
|
|
|
|
||||
Global Ceramic
|
$
|
525,401
|
|
|
478,448
|
|
|
414,154
|
|
Flooring NA
|
540,337
|
|
|
505,115
|
|
|
264,271
|
|
|
Flooring ROW
|
329,054
|
|
|
333,091
|
|
|
203,370
|
|
|
Corporate and intersegment eliminations
|
(40,619
|
)
|
|
(36,711
|
)
|
|
(44,229
|
)
|
|
|
$
|
1,354,173
|
|
|
1,279,943
|
|
|
837,566
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||
Global Ceramic
|
$
|
161,913
|
|
|
135,370
|
|
|
118,801
|
|
Flooring NA
|
159,980
|
|
|
148,067
|
|
|
137,064
|
|
|
Flooring ROW
|
114,794
|
|
|
116,048
|
|
|
97,239
|
|
|
Corporate
|
9,985
|
|
|
9,982
|
|
|
9,543
|
|
|
|
$
|
446,672
|
|
|
409,467
|
|
|
362,647
|
|
Capital expenditures (excluding acquisitions):
|
|
|
|
|
|
||||
Global Ceramic
|
$
|
310,650
|
|
|
263,401
|
|
|
247,829
|
|
Flooring NA
|
355,941
|
|
|
248,843
|
|
|
148,598
|
|
|
Flooring ROW
|
221,763
|
|
|
144,207
|
|
|
95,447
|
|
|
Corporate
|
17,644
|
|
|
15,674
|
|
|
11,783
|
|
|
|
$
|
905,998
|
|
|
672,125
|
|
|
503,657
|
|
Assets:
|
|
|
|
|
|
||||
Global Ceramic
|
$
|
4,838,310
|
|
|
4,024,859
|
|
|
3,846,133
|
|
Flooring NA
|
3,702,137
|
|
|
3,410,856
|
|
|
3,164,525
|
|
|
Flooring ROW
|
3,245,424
|
|
|
2,689,592
|
|
|
2,805,246
|
|
|
Corporate and intersegment eliminations
|
308,982
|
|
|
105,289
|
|
|
118,496
|
|
|
|
$
|
12,094,853
|
|
|
10,230,596
|
|
|
9,934,400
|
|
Geographic net sales:
|
|
|
|
|
|
||||
United States
|
$
|
6,009,165
|
|
|
5,842,683
|
|
|
5,399,561
|
|
All other countries
|
3,482,125
|
|
|
3,116,404
|
|
|
2,672,002
|
|
|
|
$
|
9,491,290
|
|
|
8,959,087
|
|
|
8,071,563
|
|
Long-lived assets (1):
|
|
|
|
|
|
||||
United States
|
$
|
3,339,363
|
|
|
3,092,902
|
|
|
2,945,783
|
|
Belgium
|
1,705,947
|
|
|
1,371,397
|
|
|
1,377,533
|
|
|
All other countries
|
1,696,939
|
|
|
1,180,475
|
|
|
1,117,167
|
|
|
|
$
|
6,742,249
|
|
|
5,644,774
|
|
|
5,440,483
|
|
Net sales by product categories (2):
|
|
|
|
|
|
||||
Soft surface
|
$
|
3,655,525
|
|
|
3,414,956
|
|
|
3,056,946
|
|
Tile
|
3,485,245
|
|
|
3,258,136
|
|
|
3,094,389
|
|
|
Laminate and wood
|
2,350,520
|
|
|
2,285,995
|
|
|
1,920,228
|
|
|
|
$
|
9,491,290
|
|
|
8,959,087
|
|
|
8,071,563
|
|
(1)
|
Long-lived assets are composed of property, plant and equipment, net, and goodwill.
|
(2)
|
The soft surface product category includes carpets, rugs, carpet pad, LVT and sheet vinyl. The tile product category includes ceramic tile, porcelain tile and natural stone. The laminate and wood product category includes laminate, hardwood, roofing elements, insulation boards, MDF, chipboards, and licensing.
|
|
Quarters Ended
|
|||||||||||
|
April 1,
2017 |
|
July 1,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
|||||
Net sales
|
$
|
2,220,645
|
|
|
2,453,038
|
|
|
2,448,510
|
|
|
2,369,097
|
|
Gross profit
|
680,353
|
|
|
779,136
|
|
|
783,301
|
|
|
753,624
|
|
|
Net earnings
|
200,554
|
|
|
260,681
|
|
|
270,025
|
|
|
240,378
|
|
|
Basic earnings per share
|
2.70
|
|
|
3.51
|
|
|
3.63
|
|
|
3.23
|
|
|
Diluted earnings per share
|
2.68
|
|
|
3.48
|
|
|
3.61
|
|
|
3.21
|
|
|
Quarters Ended
|
|||||||||||
|
April 2,
2016 |
|
July 2,
2016 |
|
October 1,
2016 |
|
December 31,
2016 |
|||||
Net sales
|
$
|
2,172,046
|
|
|
2,310,336
|
|
|
2,294,139
|
|
|
2,182,566
|
|
Gross profit
|
639,679
|
|
|
755,588
|
|
|
726,559
|
|
|
690,999
|
|
|
Net earnings
|
171,548
|
|
|
255,188
|
|
|
269,878
|
|
|
233,748
|
|
|
Basic earnings per share
|
2.32
|
|
|
3.44
|
|
|
3.64
|
|
|
3.15
|
|
|
Diluted earnings per share
|
2.30
|
|
|
3.42
|
|
|
3.62
|
|
|
3.13
|
|
Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
Mohawk Exhibit Number
|
|
Description
|
|
|
|
*2.1
|
|
Agreement and Plan of Merger dated as of December 3, 1993 and amended as of January 17, 1994 among Mohawk, AMI Acquisition Corp., Aladdin and certain Shareholders of Aladdin. (Incorporated herein by reference to Exhibit 2.1(a) in the Company's Registration Statement on Form S-4, Registration No. 333-74220.)
|
|
|
|
*3.1
|
|
Restated Certificate of Incorporation of Mohawk, as amended. (Incorporated herein by reference to Exhibit 3.1 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998.)
|
|
|
|
*3.2
|
|
|
|
|
|
*4.4
|
|
|
|
|
|
*4.2
|
|
|
|
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|
*4.3
|
|
|
|
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|
*4.4
|
|
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|
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|
*4.5
|
|
|
|
|
|
*10.1
|
|
Registration Rights Agreement by and among Mohawk and the former shareholders of Aladdin. (Incorporated herein by reference to Exhibit 10.32 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1993.)
|
|
|
|
*10.2
|
|
Waiver Agreement between Alan S. Lorberbaum and Mohawk dated as of March 23, 1994 to the Registration Rights Agreement dated as of February 25, 1994 between Mohawk and those other persons who are signatories thereto. (Incorporated herein by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q (File No. 001-13697) for the quarter ended July 2, 1994.)
|
|
|
|
*10.3
|
|
|
|
|
|
*10.4
|
|
|
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|
*10.5
|
|
|
|
|
|
*10.6
|
|
|
|
|
|
*10.7
|
|
|
|
|
|
*10.8
|
|
|
|
|
|
*10.9
|
|
|
|
|
|
*10.10
|
|
|
|
|
|
*10.11
|
|
|
|
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|
*10.12
|
|
|
|
|
|
*10.13
|
|
|
|
|
|
*10.14
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Indicates exhibit incorporated by reference.
|
Mohawk Industries, Inc.
|
|
|
|
By:
|
/s/ J
EFFREY
S. L
ORBERBAUM
|
February 28, 2018
|
|
Jeffrey S. Lorberbaum,
|
|
|
Chairman and Chief Executive Officer
|
February 28, 2018
|
/s/ J
EFFREY
S. L
ORBERBAUM
|
|
Jeffrey S. Lorberbaum,
|
|
Chairman and Chief Executive Officer
(principal executive officer)
|
February 28, 2018
|
/s/ F
RANK
H. B
OYKIN
|
|
Frank H. Boykin,
|
|
Chief Financial Officer and Vice President-Finance
(principal financial officer)
|
February 28, 2018
|
/s/ J
AMES
F. B
RUNK
|
|
James F. Brunk,
|
|
Vice President and Corporate Controller
(principal accounting officer)
|
February 28, 2018
|
/s/ F
ILIP
B
ALCAEN
|
|
Filip Balcaen,
Director
|
February 28, 2018
|
/s/ B
RUCE
C. B
RUCKMANN
|
|
Bruce C. Bruckmann,
Director
|
February 28, 2018
|
/s/ F
RANS
D
E
C
OCK
|
|
Frans De Cock,
Director
|
February 28, 2018
|
/s/ R
ICHARD
C. I
LL
|
|
Richard C. Ill,
Director
|
February 28, 2018
|
/s/ J
OSEPH
A. O
NORATO
|
|
Joseph A. Onorato,
Director
|
February 28, 2018
|
/s/ W
ILLIAM
H. R
UNGE
III
|
|
William Henry Runge III
Director
|
February 28, 2018
|
/s/ K
AREN
A. S
MITH
B
OGART
|
|
Karen A. Smith Bogart,
Director
|
February 28, 2018
|
/s/ W. C
HRISTOPHER
W
ELLBORN
|
|
W. Christopher Wellborn,
Director
|
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