Company Quick10K Filing
Quick10K
Mohawk Industries
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$132.84 72 $9,620
10-Q 2019-03-30 Quarter: 2019-03-30
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-29 Quarter: 2018-09-29
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-07-01 Quarter: 2017-07-01
10-Q 2017-04-01 Quarter: 2017-04-01
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-10-01 Quarter: 2016-10-01
10-Q 2016-07-02 Quarter: 2016-07-02
10-Q 2016-04-02 Quarter: 2016-04-02
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-10-03 Quarter: 2015-10-03
10-Q 2015-07-04 Quarter: 2015-07-04
10-Q 2015-04-04 Quarter: 2015-04-04
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-27 Quarter: 2014-09-27
10-Q 2014-06-28 Quarter: 2014-06-28
10-Q 2014-03-29 Quarter: 2014-03-29
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-23 Shareholder Vote
8-K 2019-04-25 Earnings, Exhibits
8-K 2019-03-12 Officers, Regulation FD, Exhibits
8-K 2019-02-19 Amend Bylaw, Exhibits
8-K 2019-02-07 Earnings, Exhibits
8-K 2019-01-15 Officers, Exhibits
8-K 2018-11-27 Officers, Regulation FD, Exhibits
8-K 2018-11-12 Officers, Exhibits
8-K 2018-10-25 Earnings, Other Events, Exhibits
8-K 2018-07-25 Earnings, Exhibits
8-K 2018-05-24 Officers, Shareholder Vote
8-K 2018-05-18 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-05-14 Enter Agreement, Exhibits
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-02-08 Earnings, Exhibits
VLO Valero Energy 34,110
WPP WPP 15,850
UNVR Univar 3,750
LXFT Luxoft Holding 1,990
AROC Archrock Partners 1,270
IRCP Irsa Propiedades Comerciales 586
ZAGG Zagg 202
NVTR Nuvectra 106
MTBC Medical Transcription Billing 62
PTEO Proteo 0
MHK 2019-03-30
Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 mhk201910q1exhibit311.htm
EX-31.2 mhk201910q1exhibit312.htm
EX-32.1 mhk201910q1exhibit321.htm
EX-32.2 mhk201910q1exhibit322.htm
EX-95.1 mhk201910q1exhibit951.htm

Mohawk Industries Earnings 2019-03-30

MHK 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
false--12-31Q120192019-03-300000851968falseLarge Accelerated FilerMOHAWK INDUSTRIES INCfalse0.010.01150000000150000000796560007977100000.03850.02P25DT10H33M36SP38DT5H45M36S0.010.0160000600000073490007349000 0000851968 2019-01-01 2019-03-30 0000851968 2019-05-01 0000851968 2019-03-30 0000851968 2018-12-31 0000851968 2018-01-01 2018-03-31 0000851968 2018-03-31 0000851968 2017-12-31 0000851968 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0000851968 mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2018-01-01 2018-03-31 0000851968 mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2015-06-09 0000851968 mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2019-01-01 2019-03-30 0000851968 mhk:EmilceramicaS.r.lMember 2017-04-04 0000851968 mhk:EmilceramicaS.r.lMember us-gaap:TradeNamesMember 2017-04-04 0000851968 mhk:GlobalCeramicAcquisitionsMember mhk:GlobalCeramicSegmentMember 2017-04-02 2017-07-01 0000851968 mhk:ElianeSARevestimentosCeramicosMember 2018-11-16 2018-11-16 0000851968 mhk:GodfreyHirstGroupMember 2018-07-02 0000851968 mhk:GodfreyHirstGroupMember 2018-07-02 2018-07-02 0000851968 mhk:DistributionCompanyInNetherlandsMember 2019-01-31 0000851968 mhk:FlooringROWSegmentMember 2018-03-31 0000851968 mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 mhk:ElianeSARevestimentosCeramicosMember 2018-11-16 0000851968 mhk:ElianeSARevestimentosCeramicosMember us-gaap:TradeNamesMember 2018-11-16 0000851968 mhk:FlooringROWAcquisitionMember mhk:FlooringROWSegmentMember 2017-04-01 0000851968 mhk:DistributionCompanyInNetherlandsMember 2019-01-31 2019-01-31 0000851968 mhk:FlooringNAAcquisitionMember mhk:FlooringNASegmentMember 2017-04-02 2017-07-01 0000851968 mhk:EmilceramicaS.r.lMember 2017-04-04 2017-04-04 0000851968 mhk:FlooringROWAcquisitionMember mhk:FlooringROWSegmentMember 2017-01-01 2017-04-01 0000851968 mhk:GlobalCeramicAcquisitionsMember mhk:GlobalCeramicSegmentMember 2017-07-01 0000851968 mhk:GodfreyHirstGroupMember us-gaap:TradeNamesMember 2018-07-02 0000851968 mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 mhk:LaminateandWoodMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 srt:EuropeMember 2018-01-01 2018-03-31 0000851968 mhk:OtherGeographicalAreasMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 mhk:OtherProductsMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 country:US 2018-01-01 2018-03-31 0000851968 mhk:CeramicAndStoneMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 country:RU 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 mhk:CarpetAndResilientMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 2018-01-01 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 srt:EuropeMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 mhk:CarpetAndResilientMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 country:RU 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 mhk:OtherGeographicalAreasMember 2019-01-01 2019-03-30 0000851968 mhk:LaminateandWoodMember 2019-01-01 2019-03-30 0000851968 mhk:CeramicAndStoneMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:CarpetAndResilientMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:RU mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LaminateandWoodMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember srt:EuropeMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember country:US mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherProductsMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherGeographicalAreasMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 country:US 2019-01-01 2019-03-30 0000851968 mhk:OtherProductsMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:CeramicAndStoneMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember us-gaap:EmployeeSeveranceMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 mhk:LeaseImpairmentsMember 2019-01-01 2019-03-30 0000851968 mhk:OtherRestructuringCostsAndCurrencyTranslationMember 2018-12-31 0000851968 us-gaap:EmployeeSeveranceMember 2018-12-31 0000851968 mhk:LeaseImpairmentsMember 2018-12-31 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherRestructuringCostsAndCurrencyTranslationMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 mhk:OtherRestructuringCostsAndCurrencyTranslationMember 2019-01-01 2019-03-30 0000851968 us-gaap:EmployeeSeveranceMember 2019-01-01 2019-03-30 0000851968 mhk:AssetWriteDownMember 2019-03-30 0000851968 mhk:LeaseImpairmentsMember 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:AssetWriteDownMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:EmployeeSeveranceMember 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 mhk:AssetWriteDownMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LeaseImpairmentsMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember us-gaap:EmployeeSeveranceMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LeaseImpairmentsMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:AssetWriteDownMember mhk:FlooringNASegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:AssetWriteDownMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherRestructuringCostsAndCurrencyTranslationMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 mhk:OtherRestructuringCostsAndCurrencyTranslationMember 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:LeaseImpairmentsMember mhk:GlobalCeramicSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:OtherRestructuringCostsAndCurrencyTranslationMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 mhk:AssetWriteDownMember 2018-12-31 0000851968 us-gaap:OperatingSegmentsMember us-gaap:EmployeeSeveranceMember mhk:FlooringROWSegmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:CostOfSalesMember 2019-01-01 2019-03-30 0000851968 us-gaap:CostOfSalesMember 2018-01-01 2018-03-31 0000851968 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-01-01 2018-03-31 0000851968 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-03-30 0000851968 mhk:FlooringROWSegmentMember 2019-03-30 0000851968 mhk:GlobalCeramicSegmentMember 2019-03-30 0000851968 mhk:GlobalCeramicSegmentMember 2018-12-31 0000851968 mhk:FlooringROWSegmentMember 2018-12-31 0000851968 mhk:FlooringNASegmentMember 2018-12-31 0000851968 mhk:FlooringNASegmentMember 2019-03-30 0000851968 us-gaap:PatentsMember 2019-01-01 2019-03-30 0000851968 us-gaap:CustomerRelationshipsMember 2019-03-30 0000851968 us-gaap:PatentsMember 2019-03-30 0000851968 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-03-30 0000851968 us-gaap:OtherCreditDerivativesMember 2018-12-31 0000851968 us-gaap:OtherCreditDerivativesMember 2019-01-01 2019-03-30 0000851968 us-gaap:CustomerRelationshipsMember 2018-12-31 0000851968 us-gaap:PatentsMember 2018-12-31 0000851968 us-gaap:OtherCreditDerivativesMember 2019-03-30 0000851968 us-gaap:TradeNamesMember 2019-01-01 2019-03-30 0000851968 us-gaap:TradeNamesMember 2018-12-31 0000851968 us-gaap:TradeNamesMember 2019-03-30 0000851968 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-30 0000851968 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-01-01 2019-03-30 0000851968 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000851968 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-03-30 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-30 0000851968 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-30 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000851968 srt:MaximumMember 2019-01-01 2019-03-30 0000851968 srt:MinimumMember 2019-01-01 2019-03-30 0000851968 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-30 0000851968 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-03-31 0000851968 us-gaap:RestrictedStockUnitsRSUMember 2019-03-30 0000851968 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000851968 mhk:RedeemableNoncontrollingInterestMember 2018-01-01 2018-03-31 0000851968 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-03-31 0000851968 us-gaap:RetainedEarningsMember 2018-03-31 0000851968 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000851968 us-gaap:RetainedEarningsMember 2017-12-31 0000851968 us-gaap:NoncontrollingInterestMember 2017-12-31 0000851968 us-gaap:CommonStockMember 2018-03-31 0000851968 us-gaap:CommonStockMember 2017-12-31 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000851968 us-gaap:TreasuryStockMember 2017-12-31 0000851968 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000851968 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000851968 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000851968 us-gaap:TreasuryStockMember 2018-03-31 0000851968 mhk:RedeemableNoncontrollingInterestMember 2017-12-31 0000851968 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000851968 us-gaap:NoncontrollingInterestMember 2018-03-31 0000851968 us-gaap:TreasuryStockMember 2018-01-01 2018-03-31 0000851968 mhk:RedeemableNoncontrollingInterestMember 2018-03-31 0000851968 us-gaap:RetainedEarningsMember 2018-12-31 0000851968 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-30 0000851968 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-30 0000851968 us-gaap:TreasuryStockMember 2018-12-31 0000851968 mhk:RedeemableNoncontrollingInterestMember 2019-03-30 0000851968 us-gaap:TreasuryStockMember 2019-03-30 0000851968 us-gaap:CommonStockMember 2019-01-01 2019-03-30 0000851968 us-gaap:CommonStockMember 2019-03-30 0000851968 us-gaap:NoncontrollingInterestMember 2019-03-30 0000851968 us-gaap:RetainedEarningsMember 2019-03-30 0000851968 us-gaap:CommonStockMember 2018-12-31 0000851968 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000851968 us-gaap:TreasuryStockMember 2019-01-01 2019-03-30 0000851968 mhk:RedeemableNoncontrollingInterestMember 2018-12-31 0000851968 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-30 0000851968 us-gaap:NoncontrollingInterestMember 2018-12-31 0000851968 us-gaap:AdditionalPaidInCapitalMember 2019-03-30 0000851968 2018-12-20 2018-12-20 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringNASegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:IntersegmentEliminationMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringROWSegmentMember 2018-01-01 2018-03-31 0000851968 us-gaap:IntersegmentEliminationMember 2019-01-01 2019-03-30 0000851968 mhk:CorporateAndEliminationsMember 2019-01-01 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:GlobalCeramicSegmentMember 2018-01-01 2018-03-31 0000851968 mhk:CorporateAndEliminationsMember 2018-01-01 2018-03-31 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringROWSegmentMember 2019-03-30 0000851968 mhk:CorporateAndEliminationsMember 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:GlobalCeramicSegmentMember 2019-03-30 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringNASegmentMember 2018-12-31 0000851968 us-gaap:OperatingSegmentsMember mhk:GlobalCeramicSegmentMember 2018-12-31 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringROWSegmentMember 2018-12-31 0000851968 us-gaap:OperatingSegmentsMember mhk:FlooringNASegmentMember 2019-03-30 0000851968 mhk:CorporateAndEliminationsMember 2018-12-31 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2014Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2006Member 2013-12-01 2013-12-31 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2010Member 2013-12-01 2013-12-31 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2009Member 2012-12-28 2012-12-28 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2008Member 2012-01-01 2012-01-31 0000851968 country:BE us-gaap:ForeignCountryMember mhk:TaxYear2005Member 2013-12-01 2013-12-31 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2012Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2016Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2013Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2017Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2015Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2011Member 2019-03-01 2019-03-30 0000851968 country:BE us-gaap:ForeignCountryMember us-gaap:TaxYear2007Member 2013-12-01 2013-12-31 0000851968 country:US us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-03-30 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember mhk:MonthlyLiborMember 2015-03-26 2015-03-26 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember 2015-03-26 0000851968 mhk:A2013SeniorSecuredCreditFacilityMember 2015-03-25 0000851968 country:US us-gaap:CommercialPaperMember 2014-02-28 2014-02-28 0000851968 srt:EuropeMember us-gaap:CommercialPaperMember 2015-07-31 2015-07-31 0000851968 mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2013-01-31 2013-01-31 0000851968 srt:MaximumMember mhk:A2015SeniorSecuredCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2015-03-26 2015-03-26 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember mhk:MonthlyLiborMember 2019-01-01 2019-03-30 0000851968 mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2013-01-31 0000851968 mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember mhk:EuroInterbankOfferedRateEURIBORMember 2017-09-11 2017-09-11 0000851968 mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2015-06-09 2015-06-09 0000851968 mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember mhk:EuroInterbankOfferedRateEURIBORMember 2018-05-18 2018-05-18 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember 2019-03-30 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember us-gaap:BorrowingsMember 2019-03-30 0000851968 srt:MinimumMember mhk:A2015SeniorSecuredCreditFacilityMember mhk:MonthlyLiborMember 2015-03-26 2015-03-26 0000851968 srt:EuropeMember us-gaap:CommercialPaperMember 2019-03-30 0000851968 mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2017-09-11 0000851968 mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2018-05-18 2018-05-18 0000851968 mhk:A2015SeniorSecuredCreditFacilityAmendmentMaturingMarch262022Member 2017-12-31 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember mhk:StandbyLettersOfCreditRelatedToVariousInsuranceContractsAndForeignVendorCommitmentsMember 2019-03-30 0000851968 us-gaap:CommercialPaperMember 2019-03-30 0000851968 srt:MaximumMember mhk:A2015SeniorSecuredCreditFacilityMember mhk:MonthlyLiborMember 2015-03-26 2015-03-26 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember 2019-01-01 2019-03-30 0000851968 country:US us-gaap:CommercialPaperMember 2019-03-30 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember us-gaap:FederalFundsEffectiveSwapRateMember 2015-03-26 2015-03-26 0000851968 srt:MinimumMember mhk:A2015SeniorSecuredCreditFacilityMember 2015-03-26 2015-03-26 0000851968 srt:MinimumMember mhk:A2015SeniorSecuredCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2015-03-26 2015-03-26 0000851968 mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2018-05-18 0000851968 srt:MaximumMember mhk:A2015SeniorSecuredCreditFacilityMember 2015-03-26 2015-03-26 0000851968 mhk:A2015SeniorSecuredCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-01-01 2019-03-30 0000851968 country:US us-gaap:CommercialPaperMember 2015-03-26 0000851968 srt:EuropeMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-03-30 0000851968 mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2017-09-11 2017-09-11 0000851968 srt:EuropeMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000851968 srt:EuropeMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FiveYearSeniorSecuredCreditFacilityDueMarchTwentysixthTwoThousandTwentytwoMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2018-12-31 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2018-12-31 0000851968 country:US us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FloatingRateNotesDueMayEighteenthTwentyTwentyMember 2018-12-31 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FiveYearSeniorSecuredCreditFacilityDueMarchTwentysixthTwoThousandTwentytwoMember 2018-12-31 0000851968 country:US us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-30 0000851968 country:US us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2018-12-31 0000851968 srt:EuropeMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:FiveYearSeniorSecuredCreditFacilityDueMarchTwentysixthTwoThousandTwentytwoMember 2019-03-30 0000851968 us-gaap:EstimateOfFairValueFairValueDisclosureMember mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FiveYearSeniorSecuredCreditFacilityDueMarchTwentysixthTwoThousandTwentytwoMember 2018-12-31 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2018-12-31 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2019-03-30 0000851968 us-gaap:CarryingReportedAmountFairValueDisclosureMember mhk:FloatingRateNotesDueSeptemberEleventhTwentyNineteenMember 2018-12-31 0000851968 country:US us-gaap:CommercialPaperMember 2019-01-01 2019-03-30 0000851968 srt:EuropeMember us-gaap:CommercialPaperMember 2019-01-01 2019-03-30 0000851968 mhk:TwoPercentSeniorNotesDueJanuaryFourteenTwoThousandTwentyTwoMember 2019-03-30 0000851968 mhk:ThreePointEightFivePercentSeniorNotesDueFebruaryOneTwoThousandTwentyThreeMember 2019-03-30 iso4217:USD xbrli:shares mhk:business xbrli:shares mhk:segment xbrli:pure iso4217:USD iso4217:EUR
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
[Mark One]
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2019
OR 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to      

Commission File Number 01-13697
 __________________________________________
MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
52-1604305
(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)
 
(Zip Code)
Registrant’s telephone number, including area code: (706) 629-7721
Former name, former address and former fiscal year, if changed since last report:
__________________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
  
Accelerated filer
¨
 
 
 
 
 
Non-accelerated filer
¨
  
Smaller reporting company
¨
 
 
 
 
 
 
 
 
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, $.01 par value
MHK
New York Stock Exchange
Floating Rate Notes due 2019
 
New York Stock Exchange
Floating Rate Notes due 2020
 
New York Stock Exchange
2.000% Senior Notes due 2022
 
New York Stock Exchange
The number of shares outstanding of the issuer’s common stock as of May 1, 2019, the latest practicable date, is as follows: 72,421,223 shares of common stock, $.01 par value.


Table of Contents

MOHAWK INDUSTRIES, INC.
INDEX
 
 
 
Page No
Part I.
 
 
 
 
Item 1.
 
 
 
 
 
Condensed Consolidated Balance Sheets as of March 30, 2019 and December 31, 2018
 
 
 
 
Condensed Consolidated Statements of Operations for the three months ended March 30, 3019 and March 31, 2018
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2019 and March 31, 2018
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Part II.
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.

2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data) (Unaudited) 
 
March 30,
2019
 
December 31,
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
105,668

 
119,050

Receivables, net
1,743,581

 
1,606,159

Inventories
2,338,125

 
2,287,615

Prepaid expenses
427,233

 
421,553

Other current assets
74,358

 
74,919

Total current assets
4,688,965

 
4,509,296

Property, plant and equipment
8,282,502

 
8,227,074

Less: accumulated depreciation
3,608,067

 
3,527,172

Property, plant and equipment, net
4,674,435

 
4,699,902

Right of use operating lease assets
320,800

 

Goodwill
2,548,997

 
2,520,966

Tradenames
702,774

 
707,380

Other intangible assets subject to amortization, net
247,790

 
254,430

Deferred income taxes and other non-current assets
421,314

 
407,149

 
$
13,605,075

 
13,099,123

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Short-term debt and current portion of long-term debt
$
1,763,332

 
1,742,373

Accounts payable and accrued expenses
1,571,273

 
1,523,866

Current operating lease liabilities
99,642

 

Total current liabilities
3,434,247

 
3,266,239

Deferred income taxes
422,772

 
413,740

Long-term debt, less current portion
1,497,975

 
1,515,601

Non-current operating lease liabilities
227,595

 

Other long-term liabilities
445,441

 
463,484

Total liabilities
6,028,030

 
5,659,064

Commitments and contingencies (Note 17)

 

Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value; 60 shares authorized; no shares issued

 

Common stock, $.01 par value; 150,000 shares authorized; 79,771 and 79,656 shares issued in 2019 and 2018, respectively
798

 
797

Additional paid-in capital
1,853,484

 
1,852,173

Retained earnings
6,709,782

 
6,588,197

Accumulated other comprehensive loss
(777,547
)
 
(791,608
)
 
7,786,517

 
7,649,559

Less: treasury stock at cost; 7,349 and 7,349 shares in 2019 and 2018, respectively
215,716

 
215,745

Total Mohawk Industries, Inc. stockholders’ equity
7,570,801

 
7,433,814

    Nonredeemable noncontrolling interest
6,244

 
6,245

          Total stockholders’ equity
7,577,045

 
7,440,059

 
$
13,605,075

 
13,099,123

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
 
March 30,
2019
 
March 31,
2018
Net sales
$
2,442,490

 
2,412,202

Cost of sales
1,817,563

 
1,707,510

Gross profit
624,927

 
704,692

Selling, general and administrative expenses
459,597

 
436,293

Operating income
165,330

 
268,399

Interest expense
10,473

 
7,528

Other expense (income), net
(3,736
)
 
3,998

Earnings before income taxes
158,593

 
256,873

Income tax expense
37,018

 
47,632

Net earnings including noncontrolling interests
121,575

 
209,241

Net (income) expense attributable to noncontrolling interests
(10
)
 
475

Net earnings attributable to Mohawk Industries, Inc.
$
121,585

 
208,766

 
 
 
 
Basic earnings per share attributable to Mohawk Industries, Inc.
 
 
 
Basic earnings per share attributable to Mohawk Industries, Inc.
$
1.68

 
2.80

Weighted-average common shares outstanding—basic
72,342

 
74,453

 
 
 
 
Diluted earnings per share attributable to Mohawk Industries, Inc.
 
 
 
Diluted earnings per share attributable to Mohawk Industries, Inc.
$
1.67

 
2.78

Weighted-average common shares outstanding—diluted
72,646

 
74,929

See accompanying notes to condensed consolidated financial statements.


4

Table of Contents

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 
 
Three Months Ended
 
March 30,
2019
 
March 31,
2018
Net earnings including noncontrolling interests
$
121,575

 
209,241

Other comprehensive income (loss):
 
 
 
Foreign currency translation adjustments
13,962

 
72,393

Pension prior service cost and actuarial gain (loss), net of tax
108

 
(135
)
Other comprehensive income
14,070

 
72,258

Comprehensive income
135,645

 
281,499

Comprehensive income (loss) attributable to noncontrolling interests
(1
)
 
1,374

Comprehensive income attributable to Mohawk Industries, Inc.
$
135,646

 
280,125

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) 
 
Three Months Ended
 
March 30, 2019
 
March 31, 2018
Cash flows from operating activities:
 
 
 
Net earnings
$
121,575

 
209,241

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
 
 
 
Restructuring
32,937

 
18,182

Depreciation and amortization
137,291

 
122,654

Deferred income taxes
9,903

 
19,401

(Gain) loss on disposal of property, plant and equipment
1,164

 
(1,277
)
Stock-based compensation expense
5,789

 
7,948

Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
Receivables, net
(142,518
)
 
(104,287
)
Inventories
(39,409
)
 
(74,499
)
Other assets and prepaid expenses
(2,474
)
 
(182
)
Accounts payable and accrued expenses
71,199

 
(14,250
)
Other liabilities
(25,320
)
 
297

Net cash provided by operating activities
170,137

 
183,228

Cash flows from investing activities:
 
 
 
Additions to property, plant and equipment
(136,948
)
 
(250,936
)
Acquisitions, net of cash acquired
(76,847
)
 
(24,410
)
Purchases of short-term investments
(154,000
)
 
(246,096
)
Redemption of short-term investments
156,000

 
280,000

Net cash used in investing activities
(211,795
)
 
(241,442
)
Cash flows from financing activities:
 
 
 
Payments on Senior Credit Facilities
(132,030
)
 
(365,889
)
Proceeds from Senior Credit Facilities
94,539

 
355,252

Payments on Commercial Paper
(3,815,406
)
 
(3,976,712
)
Proceeds from Commercial Paper
3,895,455

 
4,089,996

Payments of other debt and financing costs
(125
)
 

Change in outstanding checks in excess of cash
(10,965
)
 
(6,905
)
Shares redeemed for taxes
(4,669
)
 
(9,144
)
Proceeds from stock transactions
1

 
1

Net cash provided by financing activities
26,800

 
86,599

Effect of exchange rate changes on cash and cash equivalents
1,476

 
1,574

Net change in cash and cash equivalents
(13,382
)
 
29,959

Cash and cash equivalents, beginning of period
119,050

 
84,884

Cash and cash equivalents, end of period
$
105,668

 
114,843

 
 
 
 

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(Unaudited)

1. General

Interim Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the consolidated financial statements and notes thereto, and the Company’s description of critical accounting policies, included in the Company’s 2018 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. Results for interim periods are not necessarily indicative of the results for the year.

Hedges of Net Investments in Non-U.S. Operations

The Company has numerous investments outside the United States. The net assets of these subsidiaries are exposed to changes and volatility in currency exchange rates. The Company uses foreign currency denominated debt to hedge its non-U.S. net investments against adverse movements in exchange rates. The gains and losses on the Company’s net investments in its non-U.S. operations are economically offset by losses and gains on its foreign currency borrowings. The Company designated its 500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the three months ended March 30, 2019 and March 31, 2018, the change in the U.S. dollar value of the Company’s euro denominated debt was a decrease of $11,233 ($8,532 net of taxes) and an increase of $16,047 ($13,043 net of taxes), respectively, which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The change in the U.S. dollar value of the Company’s debt partially offsets the euro-to-dollar translation of the Company’s net investment in its European operations.

Recent Accounting Pronouncements - Recently Adopted

In February 2016, the FASB issued a new standard ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases). ASC 842 was issued to increase transparency and comparability among organizations by requiring the recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The adoption of ASC 842 had a material impact on the Company’s condensed consolidated balance sheets, but did not have a material impact on our condensed consolidated statements of operations or cashflow. The most significant impact was the recognition of ROU assets of $328,169 and lease liabilities for operating leases of $332,286, based on the present value of the future minimum rental payments for existing operating leases. The difference in the balances is due to deferred rent, tenant incentive allowances and prepaid amounts taken into account for adoption. Our accounting for finance leases remained substantially unchanged, See Note 10 - Leases.

On January 1, 2019, the Company adopted the new accounting standard, ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. The effect of adopting the new standard was not material.

7

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


On January 1, 2018, the Company adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers and all the related amendments (“ASC 606”) and applied the provisions of the standard to all contracts using the modified retrospective method. The cumulative effect of adopting the new revenue standard was immaterial and no adjustment has been recorded to the opening balance of retained earnings. Prior year information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Substantially all of the Company’s revenue continues to be recognized at a point in time when the product is either shipped or received from the Company’s facilities and control of the product is transferred to the customer. The Company reviewed all of its revenue product categories under ASC 606 and the only changes identified were that an immaterial amount of revenue from intellectual property (“IP”) contracts results in earlier recognition of revenue, new controls and processes designed to meet the requirements of the standard were implemented, and the required new disclosures are presented in Note 3, Revenue from Contracts with Customers. The adoption of ASC 606 did not have a material impact on the amounts reported in the Company’s consolidated financial position, results of operations or cash flows.

On January 1, 2018, the Company adopted the new accounting standard, ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The effect of adopting the new standard was not material.

On January 1, 2018, the Company adopted the new accounting standard, ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The effect of adopting the new standard was not material.

Recent Accounting Pronouncements - Effective in Future Years

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350): Simplifying the test for goodwill impairment. The amendments remove the second step of the current goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This guidance is effective for impairment tests in fiscal years beginning after December 15, 2019.
    
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and in November 2018 issued ASU 2018-19, which amended the standard. The standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. This standard is effective for the Company on January 1, 2020. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing the impact.

2. Acquisitions

2019 Acquisitions

On January 31, 2019, the Company acquired a hard surface flooring distribution company based in the Netherlands for $72,001, resulting in a preliminary goodwill allocation of $45,931. The results have been included in the Flooring Rest of the World (“Flooring ROW”) segment and are not material to the Company’s consolidated results of operations.

2018 Acquisitions

On November 16, 2018, the Company completed its purchase of Eliane S/A Revestimentos Ceramicos (“Eliane”), one of the largest ceramic tile companies in Brazil. Pursuant to the purchase agreement, the Company (i) acquired the entire issued share capital of Eliane and (ii) acquired $99,037 of net indebtedness of Eliane, with total cash consideration paid of $148,741. The Company’s acquisition of Eliane resulted in preliminary allocations of goodwill of $16,932, indefinite-lived tradename intangible assets of $32,238 and intangible assets subject to amortization of $5,818. The goodwill is expected to be deductible for tax purposes. The purchase price allocation is preliminary until the Company obtains final information regarding these fair values. Eliane’s results of operations have been included in the consolidated financial statements since the date of acquisition in the Global Ceramic reporting segment.


8

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On July 2, 2018, the Company completed its acquisition of Godfrey Hirst Group, the leading flooring company in Australia and New Zealand, further extending Mohawk’s global position. The total value of the acquisition was $400,894. The Company’s acquisition of Godfrey Hirst Group resulted in allocations of goodwill of $87,043, indefinite-lived tradename intangible assets of $58,671 and intangible assets subject to amortization of $43,635. The goodwill is not expected to be deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include product, sales and manufacturing synergies. The Godfrey Hirst Group’s results have been included in the condensed consolidated financial statements since the date of acquisition in the Flooring NA and Flooring ROW segments.

During the first quarter of 2018, the Company completed the acquisition of three businesses in the Flooring ROW segment for $24,610, resulting in a goodwill allocation of $12,874 and intangibles subject to amortization of $7.

2017 Acquisitions

On April 4, 2017, the Company completed its purchase of Emilceramica S.r.l (“Emil”), a ceramic company in Italy. The total value of the acquisition was $186,099. The Emil acquisition will enhance the Company’s cost position and strengthen its combined brand and distribution in Europe. The acquisition’s results and purchase price allocation have been included in the condensed consolidated financial statements since the date of the acquisition. The Company’s acquisition of Emil resulted in a goodwill allocation of $59,491, indefinite-lived tradename intangible asset of $16,196 and an intangible asset subject to amortization of $2,348. The goodwill is not expected to be deductible for tax purposes. The Emil results are reflected in the Global Ceramic segment and the results of Emil’s operations are not material to the Company’s consolidated results of operations.

During the second quarter of 2017, the Company completed the acquisition of two businesses in the Global Ceramic segment for $37,250, resulting in a goodwill allocation of $1,002. The Company also completed the acquisition of a business in the Flooring NA segment for $26,623.

During the first quarter of 2017, the Company acquired certain assets of a distribution business in the Flooring ROW segment for $1,407, resulting in intangible assets subject to amortization of $827.



9

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Revenue from Contracts with Customers
    
Revenue recognition and accounts receivable

The Company recognizes revenues when it satisfies performance obligations as evidenced by the transfer of control of the promised goods to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. The nature of the promised goods are ceramic, stone, carpet, resilient, laminate, wood and other flooring products. Payment is typically received 90 days or less from the invoice date. The Company adjusts the amounts of revenue for expected cash discounts, sales allowances, returns, and claims, based upon historical experience. The Company adjusts accounts receivable for doubtful account allowances based upon historical bad debt, claims experience, periodic evaluation of specific customer accounts, and the aging of accounts receivable. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $34,665 and $34,486 as of March 30, 2019 and January 1, 2019, respectively.

Performance obligations

Substantially all of the Company’s revenue is recognized at a point in time when the product is either shipped or received from the Company’s facilities and control of the product is transferred to the customer.  Accordingly, in any period, the Company does not recognize a significant amount of revenue from performance obligations satisfied or partially satisfied in prior periods and the amount of such revenue recognized during the three months ended March 30, 2019 was immaterial.

Costs to obtain a contract

The Company historically incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying condensed consolidated balance sheets. Capitalized costs to obtain contracts were $59,034 and $57,840 as of March 30, 2019 and January 1, 2019, respectively. Amortization expense recognized during the three months ended March 30, 2019 related to these capitalized costs was $11,048.

Practical expedients and policy elections

The Company elected the following practical expedients and policy elections:

Incremental costs of obtaining a contract is recorded as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.
Shipping and handling activities performed after control has been transferred is accounted for as a fulfillment cost in cost of sales.


10

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenue disaggregation

The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories for the three months ended March 30, 2019 and March 31, 2018:

March 30, 2019
Global Ceramic segment
 
Flooring NA segment
 
Flooring ROW segment
 
Total
Geographical Markets
 
 
 
 
 
 
 
United States
$
541,826

 
883,242

 
68

 
1,425,136

Europe
179,310

 
1,837

 
469,916

 
651,063

Russia
51,915

 
29

 
23,615

 
75,559

Other
125,301

 
36,872

 
128,559

 
290,732

 
$
898,352

 
921,980

 
622,158

 
2,442,490

 
 
 
 
 
 
 
 
Product Categories
 
 
 
 
 
 
 
Ceramic & Stone
$
898,352

 
14,443

 

 
912,795

Carpet & Resilient

 
735,424

 
190,929

 
926,353

Laminate & Wood

 
172,113

 
210,201

 
382,314

Other (1)

 

 
221,028

 
221,028

 
$
898,352

 
921,980

 
622,158

 
2,442,490



March 31, 2018
Global Ceramic segment
 
Flooring NA segment
 
Flooring ROW segment
 
Total
Geographical Markets
 
 
 
 
 
 
 
United States
$
556,187

 
908,122

 

 
1,464,309

Europe
190,235

 
1,650

 
494,644

 
686,529

Russia
51,422

 

 
19,428

 
70,850

Other
78,704

 
40,586

 
71,224

 
190,514

 
$
876,548

 
950,358

 
585,296

 
2,412,202

 
 
 
 
 
 
 
 
Product Categories
 
 
 
 
 
 
 
Ceramic & Stone
$
876,548

 
17,544

 

 
894,092

Carpet & Resilient

 
755,545

 
129,011

 
884,556

Laminate & Wood

 
177,269

 
226,143

 
403,412

Other (1)

 

 
230,142

 
230,142

 
$
876,548

 
950,358

 
585,296

 
2,412,202


(1) Other includes roofing elements, insulation boards, chipboards and IP contracts.

        


11

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Restructuring, acquisition and integration-related costs

The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost-reduction/productivity initiatives. For example:

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 and workforce reductions.

Restructuring, acquisition transaction and integration-related costs consisted of the following during the three months ended March 30, 2019 and March 31, 2018:

 
Three Months Ended
 
March 30, 2019
 
March 31, 2018
Cost of sales
 
 
 
Restructuring costs (1)
$
31,535

 
14,090

Acquisition integration-related costs
1,067

 
408

  Restructuring and acquisition integration-related costs
$
32,602

 
14,498

 
 
 
 
Selling, general and administrative expenses
 
 
 
Restructuring costs (1)
$
1,402

 
4,092

Acquisition transaction-related costs
280

 

Acquisition integration-related costs
1,419

 
3,514

  Restructuring, acquisition transaction and integration-related costs
$
3,101

 
7,606



(1) The restructuring costs for 2019 and 2018 primarily relate to the Company’s actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as well as actions related to the Company’s recent acquisitions.

The restructuring activity for the three months ended March 30, 2019 is as follows:
 
Lease
impairments
 
Asset write-downs
 
Severance
 
Other
restructuring
costs
 
Total
Balance as of December 31, 2018
$
397

 

 
7,866

 
250

 
8,513

Provision - Global Ceramic segment

 

 
4,879

 

 
4,879

Provision - Flooring NA segment

 
23,688

 
598

 
3,313

 
27,599

Provision - Flooring ROW segment

 

 
459

 

 
459

Cash payments
(145
)
 

 
(2,733
)
 
(3,313
)
 
(6,191
)
Non-cash items

 
(23,688
)
 
(17
)
 

 
(23,705
)
Balance as of March 30, 2019
$
252

 

 
11,052

 
250

 
11,554



The Company expects the remaining severance and other restructuring costs to be paid over the next 12 months.    

12

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


5. Receivables, net

Receivables, net are as follows:
 
March 30,
2019
 
December 31,
2018
Customers, trade
$
1,716,927

 
1,562,284

Income tax receivable
10,735

 
17,217

Other
88,227

 
101,376

 
1,815,889

 
1,680,877

Less: allowance for discounts, claims and doubtful accounts
72,308

 
74,718

Receivables, net
$
1,743,581

 
1,606,159



6. Inventories

The components of inventories are as follows:
 
March 30,
2019
 
December 31,
2018
Finished goods
$
1,625,685

 
1,582,112

Work in process
166,753

 
165,616

Raw materials
545,687

 
539,887

Total inventories
$
2,338,125

 
2,287,615



7. Goodwill and intangible assets

The components of goodwill and other intangible assets are as follows:

Goodwill:
 
Global Ceramic segment
 
Flooring NA segment
 
Flooring ROW segment
 
Total
Balance as of December 31, 2018
 
 
 
 
 
 
 
Goodwill
$
1,564,987

 
874,198

 
1,409,206

 
3,848,391

Accumulated impairment losses
(531,930
)
 
(343,054
)
 
(452,441
)
 
(1,327,425
)
 
1,033,057

 
531,144

 
956,765

 
2,520,966

 
 
 
 
 
 
 
 
Goodwill recognized during the period
(2,889
)
 

 
45,931

 
43,042

Currency translation during the period
1,752

 

 
(16,763
)
 
(15,011
)
 
 
 
 
 
 
 
 
Balance as of March 30, 2019
 
 
 
 
 
 
 
Goodwill
1,563,850

 
874,198

 
1,438,374

 
3,876,422

Accumulated impairment losses
(531,930
)
 
(343,054
)
 
(452,441
)
 
(1,327,425
)
 
$
1,031,920

 
531,144

 
985,933

 
2,548,997



Intangible assets not subject to amortization:
    
 
Tradenames
Balance as of December 31, 2018
$
707,380

Intangible assets acquired during the period
(874
)
Currency translation during the period
(3,732
)
Balance as of March 30, 2019
$
702,774


 

13

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Intangible assets subject to amortization:

Gross carrying amounts:
Customer
relationships
 
Patents
 
Other
 
Total
Balance as of December 31, 2018
$
651,012

 
254,483

 
6,535

 
912,030

Intangible assets recognized during the period
2,092

 

 

 
2,092

Currency translation during the period
(6,758
)
 
(5,015
)
 
74

 
(11,699
)
Balance as of March 30, 2019
$
646,346

 
249,468

 
6,609

 
902,423

 
 
 
 
 
 
 
 
Accumulated amortization:
Customer
relationships
 
Patents
 
Other
 
Total
Balance as of December 31, 2018
$
406,386

 
249,988

 
1,227

 
657,601

Amortization during the period
6,194

 
533

 
2

 
6,729

Currency translation during the period
(4,772
)
 
(4,920
)
 
(5
)
 
(9,697
)
Balance as of March 30, 2019
$
407,808

 
245,601

 
1,224

 
654,633

 
 
 
 
 
 
 
 
Intangible assets subject to amortization, net
$
238,538

 
3,867

 
5,385

 
247,790


 
Three Months Ended
 
March 30,
2019
 
March 31,
2018
Amortization expense
$
6,729

 
7,567




8. Accounts payable and accrued expenses

Accounts payable and accrued expenses are as follows:
 
March 30,
2019
 
December 31,
2018
Outstanding checks in excess of cash
$
3,626

 
14,624

Accounts payable, trade
914,205

 
811,879

Accrued expenses
407,386

 
430,431

Product warranties
46,129

 
47,511

Accrued interest
7,197

 
21,908

Accrued compensation and benefits
192,730

 
197,513

Total accounts payable and accrued expenses
$
1,571,273

 
1,523,866



9. Accumulated other comprehensive income (loss)

The changes in accumulated other comprehensive income (loss) by component, for the three months ended March 30, 2019 are as follows:
 
Foreign currency translation adjustments
 
Pensions, net of tax
 
Total
Balance as of December 31, 2018
$
(782,102
)
 
(9,506
)
 
(791,608
)
Current period other comprehensive income
13,953

 
108

 
14,061

Balance as of March 30, 2019
$
(768,149
)
 
(9,398
)
 
(777,547
)



14

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. Leases

Effective January 1, 2019 the Company adopted ASC 842, which requires recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet, based on the present value of the future minimum rental payments for existing operating leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The Company measures the ROU assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost.

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 8 years.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of our leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Certain of our leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of our leases contain residual value guarantees and none of our agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage.

We rent or sublease certain real estate to third parties. Our sublease portfolio consists mainly of operating leases.

















15

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)



The components of lease costs are as follows:
Three Months Ended March 30, 2019
Cost of Goods Sold
 
Selling, General and Administrative
 
Total
Operating lease costs
 
 
 
 
 
Fixed
$
7,688

 
24,455

 
32,143

Short-term
1,439

 
2,909

 
4,348

Variable
2,278

 
5,200

 
7,478

Sub-leases
(84
)
 
(133
)
 
(217
)
 
11,321

 
32,431

 
43,752

Finance lease costs
 
 
 
 
 
Amortization of leased assets

 
432

 
432

Interest on lease liabilities

 
31

 
31

 

 
463

 
463

Net lease costs
$
11,321

 
32,894

 
44,215




Supplemental balance sheet information related to leases is as follows:
 
Classification
 
March 30,
2019
Assets
 
 
 
Operating Leases
 
 
 
Right of use operating lease assets
Right of use operating lease assets
 
$
320,800

Finance Leases
 
 
 
Property, plant and equipment, gross
Property, plant and equipment
 
9,086

Accumulated depreciation
Accumulated depreciation
 
(2,817
)
Property, plant and equipment, net
Property, plant and equipment, net
 
6,269

Total lease assets
 
 
$
327,069

 
 
 
 
Liabilities
 
 
 
Operating Leases
 
 
 
Other current
Current operating lease liabilities
 
$
99,642

Non-current
Non-current operating lease liabilities
 
227,595

Total operating liabilities
 
 
327,237

Finance Leases
 
 
 
Short-term debt
Short-term debt and current portion of long-term debt
 
1,179

Long-term debt
Long-term debt, less current portion
 
5,130

Total finance liabilities
 
 
6,309

Total lease liabilities
 
 
$
333,546

 
 
 
 












16

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Maturities of lease liabilities are as follows:
Year ending December 31,
Finance
Leases
 
Operating
Leases
 
Total
2019 (excluding the three months ended March 30, 2019)
$
932

 
81,796

 
82,728

2020
1,028

 
100,986

 
102,014

2021
608

 
72,184

 
72,792

2022
412

 
46,168

 
46,580

2023
412

 
23,123

 
23,535

Thereafter
3,388

 
30,289

 
33,677

Total lease payments
6,780

 
354,546

 
361,326

Less imputed interest
471

 
27,309

 
 
Present value, Total
$
6,309

 
327,237

 
 


The Company had approximately $5,000 of leases that commenced after March 30, 2019 that created rights and obligations to the Company. These leases are not included in the above maturity schedule.

For additional information regarding the Company’s Commitments and Contingencies as of December 31, 2018 as disclosed for capital and operating leases, see Note 14 in its 2018 Annual Report filed on Form 10-K.


Lease term and discount rate are as follows:
 
March 30,
2019
Weighted Average Remaining Lease Term
 
Operating Leases
4.16 years

Finance Leases
8.89 years

 
 
Weighted Average Discount Rate
 
Operating Leases
3.3
%
Finance Leases
2.1
%



Supplemental cash flow information related to leases was as follows:
 
Three Months Ended
 
March 30,
2019
Cash paid for amounts included in measurement of lease liabilities:
 
Operating cash flows from operating leases
$
31,557

Operating cash flows from finance leases
31

Financing cash flows from finance leases
371

Right-of-use assets obtained in exchange for lease obligations:
 
Operating Leases
22,243

Finance Leases

Amortization:
 
Amortization of Right of use operating lease assets (1)
28,641


(1) Amortization of Right of use operating lease assets during the period is reflected in Other assets and prepaid expenses on the Condensed Consolidated Statements of Cash Flows.


17

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Stock-based compensation

The Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the options’ or other awards’ estimated lives for fixed awards with ratable vesting provisions.

The Company granted 169 restricted stock units (“RSUs”) at a weighted average grant-date fair value of $137.71 per unit for the three months ended March 30, 2019. The Company granted 123 at a weighted average grant-date fair value of $239.04 per unit for the three months ended March 31, 2018. The Company recognized stock-based compensation costs related to the issuance of RSUs of $5,789 ($4,283 net of taxes) and $7,948 ($5,882 net of taxes) for the three months ended March 30, 2019 and March 31, 2018, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $18,759 as of March 30, 2019, and will be recognized as expense over a weighted-average period of approximately 1.85 years. The Company did not recognize any stock-based compensation costs related to stock options for the three months ended March 30, 2019 and March 31, 2018, respectively.


12. Other expense (income), net

Other expense (income), net is as follows:
 
Three Months Ended
 
March 30,
2019
 
March 31,
2018
Foreign currency losses (gains), net
$
(1,110
)
 
1,405

Release of indemnification asset

 
1,749

All other, net
(2,626
)
 
844

Total other expense, net
$
(3,736
)
 
3,998




13. Income Taxes

For the quarter ended March 30, 2019, the Company recorded income tax expense of $37,018 on earnings before income taxes of $158,593 for an effective tax rate of 23.3%, as compared to an income tax expense of $47,632 on earnings before income taxes of $256,873, for an effective tax rate of 18.5% for the quarter ended March 31, 2018. The difference in the effective tax rates for the comparative periods was caused by the geographic dispersion of profits and losses for the respective periods; the elimination of an annual tax benefit in Italy; and a discrete stock expense.




18

Table of Contents
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Stockholders’ Equity

The following tables reflect the changes in stockholders’ equity for the three months ended March 30, 2019 and March 31, 2018 (in thousands).