10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[Mark One]

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

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

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ý    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act    Yes  ¨    No  ý

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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  ý    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  ý

The aggregate market value of the Common Stock of the Registrant held by non-affiliates (excludes beneficial owners of more than 10% of the Common Stock) of the Registrant (61,594,455 shares) on July 1, 2016 (the last business day of the Registrant’s most recently completed fiscal second quarter) was $11,664,141,943. The aggregate market value was computed by reference to the closing price of the Common Stock on such date.

Number of shares of Common Stock outstanding as of February 22, 2017: 74,184,572 shares of Common Stock, $.01 par value. 

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the 2017 Annual Meeting of Stockholders-Part III.

Table of Contents

		Page No.
Part I
Item 1.	Business	3
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	20
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 8.	Consolidated Financial Statements and Supplementary Data	37
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	72
Item 9A.	Controls and Procedures	72
Item 9B.	Other Information	73
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	74
Item 11.	Executive Compensation	74
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	74
Item 13.	Certain Relationships and Related Transactions, and Director Independence	74
Item 14.	Principal Accounting Fees and Services	74
Part IV
Item 15.	Exhibits, Financial Statement Schedules	75

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PART I

Item 1. Business

General

Mohawk Industries, Inc. (“Mohawk” or the “Company”) is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company's vertically integrated manufacturing and distribution processes provide competitive advantages in carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile ("LVT") and vinyl flooring. The Company's industry-leading innovation develops products and technologies that differentiate its brands in the marketplace and satisfy all flooring related remodeling and new construction requirements. The Company's brands are among the most recognized in the industry and include American Olean^®, Daltile^®, Durkan^®, IVC^®, Karastan^®, Marazzi^®, Mohawk^®, Pergo^®, Quick-Step^® and Unilin^®. The Company has transformed its business from an American carpet manufacturer into the world's largest flooring company with operations in Australia, Brazil,Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia and the United States. The Company had annual net sales in 2016 of $9.0 billion. Approximately 65% of this amount was generated by sales in the United States and approximately 35% was generated by sales outside the United States. The Company has three reporting segments, Global Ceramic, Flooring North America ("Flooring NA") and Flooring Rest of the World ("Flooring ROW") with net sales in 2016 of 36%, 43% and 21%, respectively. Selected financial information for the three segments, geographic net sales and the location of long-lived assets are set forth in Note 15-Segment Reporting.

The Global Ceramic segment designs, manufactures, sources, distributes and markets a broad line of ceramic tile, porcelain tile and natural stone products used in the residential and commercial markets for both remodeling and new construction. In addition, the Global Ceramic segment sources, and distributes other tile related products. The Global Ceramic segment markets and distributes its products under various brands, including the following brand names: American Olean, Daltile, KAI, Kerama Marazzi, Marazzi, and Ragno^® which it sells through independent distributors, home center, floor covering retailers, ceramic specialists, commercial contractors and commercial end users. The Global Ceramic segment operations are vertically integrated from the production of raw material for body and glaze preparation to the manufacturing and distribution of ceramic and porcelain tile.

The Flooring NA segment designs, manufactures, sources and distributes its floor covering product lines, in a broad range of colors, textures and patterns in the residential and commercial markets for both remodeling and new construction. The segment's product lines include carpets, rugs, carpet pad, hardwood, laminate, LVT and sheet vinyl. The Flooring NA segment markets and distributes its flooring products under various brands, including the following brand names: Aladdin^®, Columbia Flooring^®, Durkan, Horizon^®, IVC, Karastan, Mohawk, Pergo, Portico^®, Quick-Step and SmartStrand^® which it sells through floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users.

The Flooring ROW segment designs, manufactures, sources and distributes laminate, hardwood flooring, and vinyl flooring products, including LVT, roofing elements, insulation boards, medium-density fiberboard ("MDF"), and chipboards, used in the residential and commercial markets for both remodeling and new construction. In addition, the Flooring ROW segment licenses certain patents related to flooring manufacturers throughout the world. The Flooring ROW segment markets and distributes its flooring products under various brands, including the following brand names: IVC, Moduleo, Pergo, Quick-Step and Unilin, which it sells through retailers, wholesalers, independent distributors and home centers.

Business Strategy

Mohawk’s Business Strategy provides a consistent vision for the organization and focuses employees around the globe on delivering exceptional returns for shareholders. The strategy is cascaded down through the organization with an emphasis on five key points:

• 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

• Taking reasonable, well considered risks to grow the business

• Enhancing the communities in which the Company operates

The Mohawk Business Strategy provides continuity for the Company’s operating principles and ensures a focus on generating shareholder value and profitability through exceeding customer expectations.

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Strengths

Market Position

Mohawk’s fashionable and innovative products, successful participation in all sales channels, creative marketing programs and extensive sales resources have enabled the Company to build market leadership positions in multiple geographies, primarily North America, Europe and Russia, as well as exports products to more than 160 countries. In North America, Mohawk’s largest marketplace, the Company has leveraged its brands, breadth of offering and award-winning merchandising to build strong positions across all of its product categories. In Europe and Russia, similar advantages have supported market leadership in ceramic, premium laminate and sheet vinyl. The Company also has assumed a strong position in the fast-growing LVT market on both sides of the Atlantic following the 2015 acquisition of IVC and subsequent investments to expand production.

Product Innovation

Mohawk drives performance through product innovation and improvements across all categories. In ceramic, this includes proprietary Reveal Imaging^® printing that replicates the appearance of other surfaces, such as long planks with the visuals and texture of natural wood as well as tiles that mimic natural stone, cement and other alternatives. In carpet, exclusive fiber technologies include the unique bio-based SmartStrand^® and its brand extensions that represented the first super soft stain resistant products on the market and the patented Continuum process that adds bulk and softness to polyester fiber, differentiating the Company’s products in this fast growing component of the carpet market. These fiber advantages have been extended into the Company’s rug production as well, adding luxurious feel and performance enhancements to the Company’s design leadership. In laminate, the Company’s installation technology revolutionized the category, and the Company continues to deliver new innovations with more realistic visuals and surface embossing in register that precisely recreates the appearance of wood. In hardwood flooring, the Company is introducing longer and wider planks in increasingly popular engineered wood collections, as well as introducing more fashion-forward stains, finishes and surface protection. The Company’s vinyl offerings reflect significant investments in leading-edge technology that yield incredibly realistic reproductions of stone, wood and other materials with embossed finishes that accentuate the beauty of the products.

Operational Excellence

Mohawk’s highly efficient manufacturing and distribution assets serve as the foundation for successful growth. By leveraging continuous process improvement and automation, the Company’s operations drive innovation, quality and value. Through its commitment to sustainability practices, the Company has also optimized natural resources and raw materials. Since 2013, the Company has invested approximately $2 billion to expand capacity, introduce differentiated new products and improve efficiencies. In particular, the Company’s capital investments have improved recently acquired businesses by upgrading their product offerings, expanding their distribution and improving their productivity. For more than a decade, Mohawk's training and development programs have been ranked among the best in the country by Training magazine, and Forbes designated Mohawk as one of the Best Large U.S. Employers in 2016.

Sustainability

The Company believes that it is the industry leader in sustainable products and processes. The Company’s extensive use of recycled content in its products includes the annual use of over 5 billion plastic bottles to create polyester carpet fiber and more than 25 million pounds of tires to produce decorative crumb rubber mats. In all, the Company diverts more than 7 million pounds of waste from landfills each year, with 43 of the Company’s manufacturing sites internally certified as Zero Process Waste to Landfill facilities. The Company’s commitment to sustainability extends beyond its products to resource utilization, including a 100 million gallon reduction in water use since 2014 even as the Company grew, lower greenhouse gas emissions and increased energy efficiency, as well. The Company also produces energy through solar panels, windmills and a waste to energy program using scrap material. The Company’s commitment to safety and wellness helps to retain a talented workforce. The Company currently operates 11 on-site or near-site Healthy Life Centers to assist employees with management of chronic conditions as well as the treatment of acute illness. The Company’s annual sustainability report details these and other initiatives and may be accessed at mohawksustainability.com.

Sales and Distribution

Global Ceramic Segment

The Global Ceramic segment designs, markets, manufactures, distributes and sources a broad line of ceramic tile, porcelain tile and natural stone products. Products are distributed through various distribution channels including independent distributors,

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home centers, Company-operated service centers and stores, ceramic specialists, commercial contractors, and directly to commercial end users. The business is organized to address the specific customer needs of each distribution channel with dedicated sales forces that support the various channels.

The Company provides customers with one of the ceramic tile industry’s broadest product lines—a complete selection of glazed floor tile, glazed wall tile, mosaic tile, porcelain tile, quarry tile, stone products, and installation products. In addition to products manufactured by the Company’s ceramic tile business, the Company also sources products from other manufacturers to enhance its product offering.

The Global Ceramic segment markets its products under the American Olean, Dal-Tile, KAI, Kerama Marazzi, Marazzi and Ragno brand names. These brands are supported by a fully integrated marketing program, displays, merchandising boards, literature, catalogs and internet websites. Innovative design, quality and response to changes in customer preference enhances recognition in the marketplace. The Company is focused on sales growth opportunities through innovative products and programs in both the residential and commercial channels for both remodeling and new construction.

The Global Ceramic segment utilizes various distribution methods including regional distribution centers, service centers, direct shipping and customer pick-up from manufacturing facilities. The segment’s sales forces are organized by product type and sales channels in order to best serve each type of customer. The Company believes its distribution methods for the Global Ceramic segment provide high-quality customer service and enhance its ability to plan and manage inventory requirements.

Flooring NA Segment

Through its Flooring NA segment, the Company designs, markets, manufactures, distributes and sources carpet, laminate, carpet pad, rugs, hardwood, LVT and sheet vinyl in a broad range of colors, textures and patterns. The Flooring NA segment positions product lines in all price ranges and emphasizes quality, style, performance and service. The Flooring NA segment markets and distributes its product lines to independent distributors, floor covering retailers, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. Some products are also marketed through private labeling programs. Sales to residential customers represent a significant portion of the total industry and the majority of the segment's sales.

The Company has positioned its brand names across all price ranges. Aladdin, Mohawk, Horizon, IVC, Pergo, Portico, Quickstep, SmartStrand and Karastan are positioned to sell in the residential flooring markets. Aladdin Commercial and Karastan Contract are positioned to sell in the commercial market, which is made up of: corporate office space, education institutions, healthcare facilities, retail space and government facilities. The Company also sells into the commercial hospitality space for hotels and restaurants using its Durkan brand.

The segment’s sales forces are generally organized by product type and sales channels in order to best serve each type of customer. Product delivery to independent dealers is done predominantly on Mohawk trucks operating from strategically positioned warehouses and cross-docks that receive inbound product directly from the Company's manufacturing operations.

Flooring ROW Segment

The Flooring ROW segment designs, manufactures, markets, licenses, distributes and sources laminate, hardwood, LVT and sheet vinyl. It also designs and manufactures roofing elements, insulation boards, MDF and chipboards. Products are distributed through separate distribution channels consisting of retailers, independent distributors, wholesalers and home centers. The business is organized to address the specific customer needs of each distribution channel.

The Flooring ROW segment markets and sells laminate, hardwood and vinyl flooring products under the IVC, Moduleo, Quick-Step, Pergo and Magnum brands. The Flooring ROW segment also sells private label laminate, hardwood and vinyl flooring products. The Company believes Quick-Step and Pergo are leading brand names in the European flooring industry. In addition, the Flooring ROW segment markets and sells insulation boards, roof panels, MDF and chipboards in Europe under the Unilin and Xtratherm brands. The segment also licenses its intellectual property to flooring manufacturers throughout the world.

The Company uses regional distribution centers and direct shipping from manufacturing facilities to provide high-quality customer service and enhance the Company’s ability to plan and manage inventory requirements.

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Advertising and Promotion

The Company’s brands are among the best known and most widely distributed in the industry. The Company vigorously supports the value and name recognition of its brands through both traditional advertising channels -- including numerous trade publications and unique promotional events that highlight product design and performance -- and social media initiatives and Internet-based advertising. The Company has invested significantly in websites that educate consumers about the Company’s products, helping them to make informed decisions about purchases and identifying local retailers that offer the Company’s collections. In 2016, the Company introduced Omnify™, a new Internet platform that automatically syncs updated product and sales information between the Company and aligned retailer websites, ensuring that consumers have access to the most accurate and timely information.

The Company actively participates in cause marketing partnerships with such well known programs as Susan G. Komen® (breast cancer research), Habitat for Humanity® (housing for low income families) and Operation Finally Home® (housing for disabled veterans), which include both traditional media partnerships as well as promotional events generating national press coverage. The Company also sponsors a European cycling team to promote its Quick-Step brand through logo placements and use of the team in its advertising and point-of-sale displays.

The Company introduces new products, merchandising and marketing campaigns through participation in regional, national and international trade shows as well as exclusive dealer conventions. The Company supports sales with its retail customers through cooperative advertising programs that extend the reach of the Company’s promotion as well as with innovative merchandising displays that highlight the Company’s differentiated products and provide samples to consumers. The cost of providing merchandising displays, product samples, and point of sale promotional marketing, is recovered by the purchase of these items by the Company's customers.

Manufacturing and Operations

Global Ceramic Segment

The Company’s tile manufacturing operations are vertically integrated from the production of raw material for body and glaze preparation to the manufacturing and distribution of ceramic and porcelain tile. The Company believes that its manufacturing organization offers competitive advantages due to its ability to manufacture a differentiated product line consisting of one of the industry’s broadest product offerings of colors, textures and finishes and its ability to utilize the industry’s newest technology, as well as the industry’s largest offering of trim and decorative pieces. In addition, the Global Ceramic segment also sources a portion of its product to enhance its product offerings. The Global Ceramic segment continues to invest in equipment that utilizes the latest technologies, which supports the Company's efforts to increase manufacturing capacity, improve efficiency, meet the growing demand for its innovative products and develop new capabilities.

Flooring NA Segment

The Company’s carpet and rug manufacturing operations are vertically integrated and include the extrusion of triexta, nylon, polyester and polypropylene resins, as well as recycled post-consumer plastics into fiber. The Flooring NA segment is also vertically integrated in yarn processing, backing manufacturing, tufting, weaving, dyeing, coating and finishing.

The Company is also vertically integrated with significant manufacturing assets that produce laminate flooring, high density fiber board, engineered and pre-finished solid hardwood flooring, fiber-glass sheet vinyl, and luxury vinyl tile. The Flooring NA segment continues to invest in capital projects, such as the expansion of the Company's North American LVT manufacturing capacity. Other investments in state-of-the-art equipment support market growth, increase manufacturing efficiency and improve overall cost competitiveness.

Flooring ROW Segment

The Company’s laminate and vinyl flooring manufacturing operations in Europe are vertically integrated. The Company believes its Flooring ROW segment has advanced equipment that results in competitive manufacturing in terms of cost and flexibility. In addition, the Flooring ROW segment has significant manufacturing capability for engineered wood flooring, LVT and sheet vinyl. The Flooring ROW segment continues to invest in capital expenditures, such as the LVT expansion, including new plants utilizing the latest advances in technologies to increase manufacturing capacity, improve efficiency and develop new capabilities including state-of-the-art, fully integrated LVT production which will leverage the Company's proven track record of

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bringing innovative and high-quality products to the market. The manufacturing facilities for roofing elements, insulation boards, MDF and chipboards in the Flooring ROW segment are all configured for cost-efficient manufacturing and production flexibility and are competitive in the European market.

Inputs and Suppliers

Global Ceramic Segment

The principal raw materials used in the production of ceramic tile are clay, talc, industrial minerals and glazes. The Company has long-term clay mining rights in the U.S., Russia and Bulgaria that satisfy a portion of its clay requirements for producing tile. The Company also purchases a number of different grades of clay for the manufacture of its tile. The Company has entered into long-term supply agreements for a portion of its talc requirements. Glazes are used on a significant percentage of manufactured tiles. Glazes consist of frit (ground glass), zircon, stains and other materials, with frit being the largest ingredient. The Company manufactures a significant amount of its frit requirements. The Company believes that there is an adequate supply of all grades of clay, talc and industrial minerals that are readily available from a number of independent sources. If these suppliers were unable to satisfy the Company's requirements, the Company believes that alternative supply arrangements would be available.

Flooring NA Segment

The principal raw materials used in the production of carpet and rugs are nylon, triexta, polyester, polypropylene, recycled post-consumer plastics, synthetic backing materials, latex and various dyes and chemicals, the majority of which are petroleum based. The Company uses wood chips, wood veneers, lumber, and resins in its production of laminate and hardwood products. In its vinyl flooring operations, the Company uses plasticizers and pvc resins. Major raw materials used in the Company’s manufacturing process are available from independent sources and the Company obtains most of its raw materials from major suppliers providing inputs to each major product category. If these suppliers were unable to satisfy the requirements, the Company believes that alternative supply arrangements would be available. Although the market for raw materials is sensitive to temporary disruptions, the North American flooring industry has not experienced a significant shortage of raw materials in recent years.

Flooring ROW Segment

The principal raw materials used in the production of boards, laminate and hardwood flooring are wood, paper and resins. The wood suppliers provide a variety of wood species giving the Company a cost-effective and secure supply of raw material. In its vinyl flooring operations, the Company uses glass fiber, plasticizers and pvc resins. Major raw materials used in the Company’s manufacturing process are available from independent sources and the Company has long-standing relationships with a number of suppliers.

Industry and Competition

The Company is the largest flooring manufacturer in a fragmented industry composed of a wide variety of companies from small privately held firms to large multinationals. In 2015, the U.S. floor covering industry reported $23.1 billion in sales, up approximately 4.2% over 2014's sales of $22.2 billion. In 2015, the primary categories of flooring in the U.S., based on sales, were carpet and rug (46%), hardwood (16%), resilient (includes vinyl and LVT) and rubber (14%), ceramic tile (14%), stone (6%) and laminate (4%). In 2015, the primary categories of flooring in the U.S., based on square feet, were carpet and rug (53%), resilient (includes vinyl and LVT) and rubber (18%), ceramic tile (14%), hardwood (8%), laminate (5%) and stone (2%).  Each of these categories is influenced by the residential construction, commercial construction, and residential remodeling markets. These markets are influenced by many factors including changing consumer preferences, consumer confidence, spending for durable goods, interest rates, inflation, availability of credit, turnover in housing and the overall strength of the economy.

The principal methods of competition within the floor covering industry generally are product innovation, style, quality, price, performance technology and service. In each of the markets, price and market coverage are particularly important when there is limited differentiation among competing product lines. The Company actively seeks to differentiate its products in the marketplace by introducing innovative products with premium features that provide a superior value proposition. The Company’s investments in manufacturing technology, computer systems and distribution network, as well as the Company’s marketing strategies and resources, contribute to its ability to compete on the basis of performance, quality, style and service, rather than price.

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Global Ceramic Segment

Globally, the ceramic tile industry is significantly fragmented. Certain regions around the world have established sufficient capacity to allow them to meet domestic needs in addition to exporting product to other markets where their design and/or technical advantages may drive consumer preferences. Some mature markets have seen industry consolidation driven by mergers and acquisitions, however most markets are comprised of many relatively small manufacturers all working with similar technologies, raw materials and designs. During 2015, the estimated global capacity for ceramic tile was 131 billion square feet, with selling prices varying widely based on a variety of factors, including supply within the market, materials used, size, shape and design. While the Company operates ceramic manufacturing facilities in six countries, the Company has leveraged advantages in technology, design, brand recognition and marketing to extend exports of its products to approximately 160 countries. As a result of this global sales strategy, the Company faces competition in the ceramic tile market from a large number of foreign and domestic manufacturers, all of which compete for sales of ceramic tile to customers through multiple residential and commercial channels. The Company believes it is the largest manufacturer, distributor and marketer of ceramic tile in the world. The Company also believes it is the largest manufacturer, distributor and marketer of ceramic tile in specific markets, including the U.S., Europe and Russia. The Company has leveraged the advantages of its scale, product innovation and unique designs in these markets to solidify its leadership position, however the Company continues to face pressures in these markets from imported ceramic products as well as alternate flooring categories.

Flooring NA Segment

The North American flooring industry is highly competitive with an increasing variety of product categories, shifting consumer preferences and pressures from imported products, particularly in the rug and hard surface categories. Based on industry publications, the U.S. flooring industry for carpet and rug in 2015 had market sales in excess of $10.7 billion of the overall $23.1 billion market. The Company believes it is the largest producer of rugs and the second largest producer of carpet in the world based on its 2015 net sales. The Company differentiates its carpet and rug products in the market place through proprietary fiber systems, state-of-the-art manufacturing technologies and unique styling as well as leveraging the strength of some of the oldest and best known brands in the industry. The Company also believes it is the largest manufacturer and distributor of laminate flooring in the U.S. as well as one of the largest manufacturers and distributors of solid and engineered hardwood flooring.  The Company’s leading position in laminate flooring is driven by the strength of its premium brands as well as technical innovations such as realistic visuals, beveled edges, deeply embossed in register surfaces and patented installation technologies. The U.S. LVT and sheet vinyl industry is highly competitive and according to industry publications, grew over 30% in 2015. Based on industry publications, the U.S. flooring industry for LVT and sheet vinyl in 2015 had market sales of $2.9 billion of the $6.2 billion vinyl market. The Company believes that it is one of the largest manufacturers and distributors of LVT and sheet vinyl in the U.S. The Company’s sheet vinyl operations produce fiberglass backed products, which have proven more popular with consumers in the past several years.

Flooring ROW Segment

The Company faces competition in the non-U.S. laminate, hardwood, LVT and sheet vinyl flooring business from a large number of domestic manufacturers as well as pressures from imports. The Company believes it is one of the largest manufacturers and distributors of laminate flooring in the world, with a focus on high-end products, which the Company supplies under some of the best known and most widely marketed brands in the region. In addition, the Company believes it has a competitive advantage in the laminate flooring market as a result of the Company’s industry-leading visuals and embossed in register surfaces as well as patented installation technologies, all of which allow the Company to distinguish its products in the areas of design, quality, installation and assembly. In hardwood flooring, the Company has extended the strength of its well known laminate brands and its installation technology to add value to its wood collections. The Company faces competition in the non-U.S. vinyl flooring channel from a large number of domestic and foreign manufacturers, but believes it has a competitive advantage in the LVT and sheet vinyl market due to industry-leading design, patented technologies, brand recognition and vertical integration. The Company has elevated the performance of its sheet vinyl collections and is now aggressively placing the product in commercial applications. The Company has also extended the reach of its distribution by acquiring national distributors in the U.K., Australia and New Zealand. Through a 2015 acquisition, the Company has extended its insulation panel business to the U.K. and Ireland while expanding sales in its core Benelux Region.

Patents and Trademarks

Intellectual property is important to the Company’s business and the Company relies on a combination of patent, copyright, trademark and trade secret laws to protect its interests.

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The Company uses several trademarks that it considers important in the marketing of its products, including American Olean, Daltile, Durkan, IVC, Karastan, Marazzi, Mohawk, Pergo, Quick-Stepand Unilin. These trademarks represent innovations that highlight competitive advantages and provide differentiation from competing brands in the market.

The Flooring ROW segment owns a number of patent families in Europe and the U.S. some of which the Company licenses to manufacturers throughout the world. The most important of these patent families is the UNICLIC family, which include the snap, pretension and clearance patents. Most of the UNICLIC family of patents will expire in 2017. The licensing earnings from patents included in the Flooring ROW segment's results were approximately $148 million in 2016, only a portion of which will be retained following the UNICLIC expiration. While the Company continues to explore additional opportunities to generate revenue from its patent portfolio, only a portion of the licensing earnings will be retained following the expiration of the UNICLIC patents. The Company continues to explore additional opportunities to generate revenue from its patent portfolio. The licensing revenue from patents generated in the Flooring ROW segment's operations is partially offset by various expenses such as amortization, developing new technologies, filing new patents, supporting existing patents, defending patent lawsuits, collection and auditing of receivables, bad debt and other administrative activities. The Company expects its earnings from patents to range from $65 million to $70 million in 2017, with the amount declining to a $35 million annual run rate starting in June.

Sales Terms and Major Customers

The Company’s sales terms are substantially the same as those generally available throughout the industry. The Company generally permits its customers to return products purchased from it within specified time periods from the date of sale, if the customer is not satisfied with the quality of the product.

During 2016, no single customer accounted for more than 10% of total net sales and the top 10 customers accounted for less than 20% of the Company’s net sales. The Company believes the loss of one major customer would not have a material adverse effect on its business.

Employees

As of December 31, 2016, the Company employed approximately 37,800 persons consisting of approximately 21,200 in the United States, approximately 7,600 in Europe, approximately 3,900 in Mexico, approximately 3,800 in Russia, approximately 900 in Malaysia and approximately 400 in various other countries. The majority of the Company’s European and Mexican manufacturing employees are members of unions. Most of the Company’s U.S. employees are not a party to any collective bargaining agreement. Additionally, the Company has not experienced any major strikes or work stoppages in recent years. The Company believes that its relations with its employees are good.

Available Information

The Company’s Internet address is http://www.mohawkind.com. The Company makes the following reports filed by it available, free of charge, on its website under the heading “Investor Information”:

• annual reports on Form 10-K;

• quarterly reports on Form 10-Q;

• current reports on Form 8-K; and

• amendments to the foregoing reports.

The foregoing reports are made available on the Company’s website as soon as practicable after they are filed with, or furnished to, the Securities and Exchange Commission (“SEC”).

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Item 1A. Risk Factors

In addition to the other information provided in this Form 10-K, the following risk factors should be considered when evaluating an investment in shares of the Company’s Common Stock. If any of the events described in these risks were to occur, it could have a material adverse effect on the Company’s business, financial condition and results of operations.

The floor covering industry is sensitive to changes in general economic conditions, such as consumer confidence, income and spending, corporate and government spending, interest rate levels, availability of credit and demand for housing. Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s business.

Downturns in the U.S. and global economies, negatively impact the floor covering industry and the Company’s business. During times of economic uncertainty or decline, end consumers tend to spend less on remodeling their homes, which is how the Company derives a majority of its sales. Likewise new home construction - and the corresponding need for new flooring materials - tends to slow down during recessionary periods. Although the impact of a decline in new construction activity is typically accompanied by an increase in remodeling and replacement activity, these activities lagged in the most recent downturn. Although the difficult economic conditions have improved in the U.S., European and other markets have not recovered as quickly and there may be additional downturns that could cause the industry to deteriorate in the foreseeable future. A significant or prolonged decline in residential or commercial remodeling or new construction activity could have a material adverse effect on the Company’s business and results of operations.

The Company may be unable to predict customer preferences or demand accurately, or to respond to technological developments.

The Company operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design and technical features. Failure to quickly and effectively respond to changing customer demand or technological developments could have a material adverse effect on our business.

The Company faces intense competition in the flooring industry that could decrease demand for the Company’s products or force it to lower prices, which could have a material adverse effect on the Company’s business.

The floor covering industry is highly competitive. The Company faces competition from a number of manufacturers and independent distributors. Maintaining the Company’s competitive position may require substantial investments in the Company’s product development efforts, manufacturing facilities, distribution network and sales and marketing activities. Competitive pressures may also result in decreased demand for the Company’s products or force the Company to lower prices. Moreover, a strong U.S. dollar combined with lower fuel costs may contribute to more attractive pricing for imports that compete with the Company’s products, which may put pressure on the Company’s pricing.  Any of these factors could have a material adverse effect on the Company’s business.

Changes in the global economy could affect the Company’s overall availability and cost of credit.

Despite recent improvement in overall economic conditions in the U.S., continued weakness elsewhere in the world or changes in market conditions could impact the Company’s ability to obtain financing in the future, including any financing necessary to refinance existing indebtedness. The cost and availability of credit during uncertain economic times could have a material adverse effect on the Company’s financial condition.

Further, negative economic conditions may factor into the Company’s periodic credit ratings assessment by Moody’s Investors Service, Inc. ("Moody's"), Standard & Poor’s Financial Services, LLC ("S&P") and Fitch, Inc. Any future changes in the credit rating agencies’ methodology in assessing our credit strength and any downgrades in the Company’s credit ratings could increase the cost of its existing credit and could adversely affect the cost of and ability to obtain additional credit in the future. The Company can provide no assurances that downgrades will not occur.

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If the Company were unable to meet certain covenants contained in its existing credit facilities, it may be required to repay borrowings under the credit facilities prior to their maturity and may lose access to the credit facilities for additional borrowings that may be necessary to fund its operations and growth strategy.

On March 26, 2015, the Company entered into a $1,800 million, senior revolving credit facility (the "2015 Senior Credit Facility"). As of December 31, 2016, the amount utilized under the 2015 Senior Credit Facility, including the commercial paper issuance, was $881.9 million resulting in a total of $918.1 million available. The amount utilized included $820.3 million of commercial paper issued, $60.7 million of direct borrowings, and $0.9 million of standby letters of credit related to various insurance contracts and foreign vendor commitments. In addition, on December 19, 2012, the Company entered into an on-balance sheet U.S. trade accounts receivable securitization agreement (the "Securitization Facility") that after an amendment on September 11, 2014 allows the Company to borrow up to $500 million based on available accounts receivable and is secured by the Company's U.S. trade accounts receivable. At December 31, 2016, the amount utilized under the Securitization Facility was $500.0 million.

During the term of the credit facilities, if the Company’s cash flow is worse than expected or the U.S. trade accounts receivables are lower than expected, the Company may need to refinance all or a portion of its indebtedness through a public and/or private debt offering or a new bank facility and may not be able to do so on terms acceptable to it, or at all. If the Company is unable to access debt markets at competitive rates or in sufficient amounts due to credit rating downgrades, market volatility, market disruption, or weakness in the Company's businesses, the Company’s ability to finance its operations or repay existing debt obligations may be materially and adversely affected.

Additionally, the credit facilities include certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, payments and modifications of certain existing debt, future negative pledges, and changes in the nature of the Company’s business. In addition, the 2015 Senior Credit Facility requires the Company to maintain a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.0. A failure to comply with the obligations contained in our current or future credit facilities or indentures relating to our outstanding public debt could result in an event of default or an acceleration of debt under other instruments that may contain cross-acceleration or cross-default provisions. We cannot be certain that we would have, or be able to obtain, sufficient funds to make these accelerated payments.

Fluctuations in currency exchange rates may impact the Company’s financial condition and results of operations and may affect the comparability of results between the Company’s financial periods.

The results of the Company’s foreign subsidiaries are translated into U.S. dollars from the local currency for consolidated reporting. The exchange rates between some of these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the future. The Company may not be able to manage effectively the Company’s currency translation risks, and volatility in currency exchange rates may have a material adverse effect on the Company’s consolidated financial statements and affect comparability of the Company’s results between financial periods.

The Company has significant operations in emerging markets, including Bulgaria, Malaysia, Mexico and Russia, therefore, has exposure to doing business in potentially unstable areas of the world.

Operations in emerging markets are subject to greater risk than more developed markets, including in some cases significant legal, economic and political risks. Market conditions and the political structures that support them are subject to rapid change in these economies, and the Company may not be able to react quickly enough to protect its assets and business operations. In particular, developing markets in which the Company operates may be characterized by one or more of the following:

• 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 corruptions;

• immature legal and banking systems;

• uncertainty with respect to title to real and personal property;

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• 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.

Changes in any one or a combination of these factors could have a material adverse affect on the Company’s business.

In periods of rising costs, the Company may be unable to pass raw materials, labor, energy and fuel-related cost increases on to its customers, which could have a material adverse effect on the Company's business.

The prices of raw materials, labor, energy and fuel-related costs vary significantly with market conditions. While the Company is currently experiencing a low-cost environment with respect to energy and fuel related costs, the Company expects these costs to rise in the future. Although the Company generally attempts to pass on increases in raw material, labor, energy and fuel-related costs to its customers, the Company’s ability to do so is dependent upon the rate and magnitude of any increase, competitive pressures and market conditions for the Company’s products. There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be recovered. During such periods of time, the Company’s business may be materially adversely affected.

The Company may be unable to obtain raw materials or sourced product on a timely basis, which could have a material adverse effect on the Company's business.

The principal raw materials used in the Company’s manufacturing operations include triexta, nylon, polypropylene, and polyester resins and fibers, which are used in the Company’s carpet and rugs business; clay, talc, nepheline syenite and glazes, including frit (ground glass), zircon and stains, which are used in the Company’s ceramic tile business; wood, paper, and resins which are used in the Company’s wood and laminate flooring business; and glass fiber, plasticizers, and pvc resins, which are used in the Company’s vinyl and luxury vinyl tile business. In addition to raw materials, the Company sources finished goods. For certain raw materials and sourced products, the Company is dependent on one or a small number of suppliers. An adverse change in the Company’s relationship with such a supplier, the financial condition of such a supplier or such supplier’s ability to manufacture or deliver such raw materials or sourced products to the Company could lead to an interruption of supply or require the Company to purchase more expensive alternatives. An extended interruption in the supply of these or other raw materials or sourced products used in the Company’s business or in the supply of suitable substitute materials or products would disrupt the Company’s operations, which could have a material adverse effect on the Company’s business.

The Company relies on information systems in managing the Company’s operations and any system failure ordeficiencies of such systems may have an adverse effect on the Company’s business.

The Company’s businesses rely on sophisticated software applications to obtain, process, analyze and manage data. The Company relies on these systems to, among other things:

• 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.

We also rely on our computer hardware, software and network for the storage, delivery and transmission of data to our sales and distribution systems, and certain of our production processes are managed and conducted by computer.

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Any event that causes interruptions to the input, retrieval and transmission of data or increase in the service time, whether caused by human error, natural disasters, power loss, computer viruses, system conversion, cyber attacks including and not limited to hacking, intrusions, malware or otherwise, could disrupt our normal operations. There can be no assurance that we can effectively carry out our disaster recovery plan to handle the failure of our information systems, or that we will be able to restore our operational capacity within sufficient time to avoid material disruption to our business. The occurrence of any of these events could cause unanticipated disruptions in service, decreased customer service and customer satisfaction, harm to our reputation and loss or misappropriation of sensitive information, which could result in loss of customers, increased operating expenses and financial losses. Any such events could in turn have a material adverse effect on our business, financial condition, results of operations, and prospects.

The Company’s inability to maintain its patent licensing revenues in its laminate flooring business could have a material adverse effect on the Company’s business.

The profit margins of certain of the Company’s businesses, particularly the Company’s laminate flooring business, depend in part upon the Company’s ability to obtain, maintain and license proprietary technology used in the Company’s principal product families.

The Company has obtained a number of patents relating to the Company’s products and associated methods and has filed applications for additional patents, including the UNICLIC and Pergo family of patents, which protect its interlocking laminate flooring technology. The Company generated approximately $148 million of earnings from licensing these patents in 2016, the majority of which will expire in 2017. The Company continues to develop new sources of revenue that may partially offset the expiration of its revenue-producing patents. The failure to develop alternative revenues could have a material adverse effect on the Company's business.

The Company may experience certain risks associated with acquisitions, joint ventures and strategic investments.

The Company intends to grow its business through a combination of organic growth and acquisitions. Growth through acquisitions involves risks, many of which may continue to affect the Company after the acquisition. The Company cannot give assurance that an acquired company will achieve the levels of revenue, profitability and production that the Company expects. Acquisitions may require the issuance of additional securities or the incurrence of additional indebtedness, which may dilute the ownership interests of existing security holders or impose higher interest costs on the Company. Additional challenges related to the Company's acquisition strategy include:

• 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.

Failure to successfully manage and integrate an acquisition with the Company’s existing operations could lead to the potential loss of customers of the acquired business, the potential loss of employees who may be vital to the new operations, the potential loss of business opportunities or other adverse consequences that could have a material adverse effect on the Company’s business. Even if integration occurs successfully, failure of the acquisition to achieve levels of anticipated sales growth, profitability, or otherwise perform as expected, may result in goodwill or other asset impairments or otherwise have a material adverse effect on the Company’s business. Finally, acquisition targets may be subject to material liabilities that are not properly identified in due diligence and that are not covered by seller indemnification obligation or third party insurance. The unknown liabilities of the Company's acquisition targets may have a material adverse effect on the Company's business.

In addition, we have made certain investments, including through joint ventures, in which we have a minority equity interest and lack management and operational control. The controlling joint venture partner may have business interests, strategies or goals that are inconsistent with ours. Business decisions or other actions or omissions of the controlling joint venture partner, or the joint venture company, may result in harm to our reputation or adversely affect the value of our investment in the joint venture.

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A failure to identify suitable acquisition candidates or partners for strategic investments and to complete acquisitions could have a material adverse effect on the Company’s business.

As part of the Company’s business strategy, the Company intends to pursue a wide array of potential strategic transactions, including acquisitions of complementary businesses, as well as strategic investments and joint ventures. Although the Company regularly evaluates such opportunities, the Company may not be able to successfully identify suitable acquisition candidates or to obtain sufficient financing on acceptable terms to fund such strategic transactions, which may slow the Company's growth and have a material adverse effect on the Company's business.

The Company manufactures, sources and sells many products internationally and is exposed to risks associated with doing business globally.

The Company's international activities are significant to its manufacturing capacity, revenues and profits, and the Company is further expanding internationally. The Company sells products, operates plants and invests in companies around the world. Currently, the Company's Flooring ROW segment has significant operations in Europe, Russia, Malaysia, Australia and New Zealand, and the Company's Global Ceramic segment has significant operations in Europe, Russia and Mexico. In addition, the Company has invested in joint ventures in Brazil and India related to laminate flooring.

The business, regulatory and political environments in these countries differ from those in the U.S. The Company’s international sales, operations and investments are subject to risks and uncertainties, including:

• 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 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.

The Company cannot assure investors that it will succeed in developing and implementing policies and strategies to address the foregoing risks effectively in each location where the Company does business, and, therefore that the foregoing factors will not have a material adverse effect on the Company’s business.

Negative tax consequences could materially and adversely affect the Company's business.

The Company is subject to the tax laws of the many jurisdictions in which we operate. These tax laws are complex, and the manner in which they apply to our facts is sometimes open to interpretation. In calculating the provision for income taxes, we must make judgments about the application of these inherently complex tax laws. Our domestic and international tax liabilities are largely dependent upon the distribution of profit before tax among these many jurisdictions. However, it also includes estimates of additional tax which may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings of the Company that could impact the valuation of our deferred tax assets. Our future results of operations and tax liability could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in the overall profitability of the Company, changes in tax legislation and rates, changes in generally accepted accounting principles, changes in the valuation of deferred tax assets and liabilities, changes in the amount of earnings permanently reinvested offshore, the results of audits and examinations of previously filed tax returns, and ongoing assessments of our tax exposures.

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The Company has been, and in the future may be, subject to costs, liabilities and other obligations under existing or new laws and regulations, which could have a material adverse effect on the Company’s business.

The Company is subject to increasingly numerous and complex laws, regulations and licensing requirements in each of the jurisdictions in which the Company conducts business. The Company faces risks and uncertainties related to compliance with such laws and regulations. In addition, new laws and regulations may be enacted in the U.S. or abroad that may require the Company to incur additional personnel-related, environmental, or other costs on an ongoing basis, such as recently enacted healthcare legislation in the United States.

In particular, the Company’s operations are subject to various environmental, health and safety laws and regulations, including those governing air emissions, wastewater discharges, and the use, storage, treatment, recycling and disposal of materials and finished product. The applicable requirements under these laws are subject to amendment, to the imposition of new or additional requirements and to changing interpretations of agencies or courts. The Company could incur material expenditures to comply with new or existing regulations, including fines and penalties and increased costs of its operations. For example, our manufacturing facilities may become subject to further limitations on the emission of “greenhouse gases” due to public policy concerns regarding climate change issues or other environmental or health and safety concerns. While the form of any additional regulations cannot be predicted, a “cap-and-trade” system similar to the system that applies to our businesses in the European Union could be adopted in the United States. The Company’s manufacturing processes use a significant amount of energy, especially natural gas. Any such “cap-and-trade” system or other limitations imposed on the emission of “greenhouse gases” could require us to increase our capital expenditures, use our cash to acquire emission credits or restructure our manufacturing operations, which could have a material adverse effect on our business.

The Company’s business operations could suffer significant losses from natural disasters, catastrophes, fire or other unexpected events.

Many of the Company’s business activities involve substantial investments in manufacturing facilities and many products are produced at a limited number of locations. These facilities could be materially damaged by natural disasters, such as floods, tornados, hurricanes and earthquakes, or by fire or other unexpected events. The Company could incur uninsured losses and liabilities arising from such events, including damage to its reputation, and/or suffer material losses in operational capacity, which could have a material adverse impact on its business.

The Company may be exposed to litigation, claims and other legal proceedings relating to its products, which could have a material adverse effect on the Company’s business.

In the ordinary course of business, the Company is subject to a variety of product-related claims, lawsuits and legal proceedings, including those relating to product liability, product warranty, product recall, personal injury, and other matters. A very large claim or several similar claims asserted by a large class of plaintiffs could have a material adverse effect on the Company's business, if the Company is unable to successfully defend against or resolve these matters or if its insurance coverage is insufficient to satisfy any judgments against the Company or settlements relating to these matters. Although the Company has product liability insurance, the policies may not provide coverage for certain claims against the Company or may not be sufficient to cover all possible liabilities. Further, the Company may not be able to maintain insurance at commercially acceptable premium levels. Moreover, adverse publicity arising from claims made against the Company, even if the claims are not successful, could adversely affect the Company’s reputation or the reputation and sales of its products.

The Company's inability to protect its intellectual property rights could have a material adverse effect on the Company's business

The Company relies, in part, on the patent, trade secret and trademark laws of the U.S., countries in the European Union and elsewhere, as well as confidentiality agreements with some of the Company’s employees, to protect that technology. The Company cannot assure investors that any patents owned by or issued to it will provide the Company with competitive advantages, that third parties will not challenge these patents, or that the Company’s pending patent applications will be approved. The Company may be unable to prevent competitors and/or third parties from using the Company's technology without the Company's authorization, independently developing technology that is similar to that of the Company or designing around the Company's patents.

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Furthermore, despite the Company’s efforts, the Company may be unable to prevent competitors and/or third parties from using the Company’s technology without the Company’s authorization, independently developing technology that is similar to that of the Company or designing around the Company’s patents. The use of the Company’s technology or similar technology by others could reduce or eliminate any competitive advantage the Company has developed, cause the Company to lose sales or otherwise harm the Company’s business.

The Company has obtained and applied for numerous U.S. and foreign service marks and trademark registrations and will continue to evaluate the registration of additional service marks and trademarks, as appropriate. The Company cannot guarantee that any of the Company’s pending or future applications will be approved by the applicable governmental authorities. A failure to obtain trademark registrations in the U.S. and in other countries could limit the Company’s ability to protect the Company’s trademarks and impede the Company’s marketing efforts in those jurisdictions and could have a material effect on the Company’s business.

The Company generally requires third parties with access to the Company’s trade secrets to agree to keep such information confidential. While such measures are intended to protect the Company’s trade secrets, there can be no assurance that these agreements will not be breached, that the Company will have adequate remedies for any breach or that the Company’s confidential and proprietary information and technology will not be independently developed by or become otherwise known to third parties. In any of these circumstances, the Company’s competitiveness could be significantly impaired, which would limit the Company’s growth and future revenue.

Third parties may claim that the Company infringed their intellectual property or proprietary rights, which could cause it to incur significant expenses or prevent it from selling the Company’s products.

In the past, third parties have claimed that certain technologies incorporated in the Company’s products infringe their patent rights. The Company cannot be certain that the Company’s products do not and will not infringe issued patents or other intellectual property rights of others.

The Company might be required to pay substantial damages (including punitive damages and attorney’s fees), discontinue the use and sale of infringing products, expend significant resources to develop non-infringing technology or obtain licenses authorizing the use of infringing technology. There can be no assurance that licenses for disputed technology or intellectual property rights would be available on reasonable commercial terms, if at all. In the event of a successful claim against the Company along with failure to develop or license a substitute technology, the Company’s business would be materially and adversely affected.

The long-term performance of the Company’s business relies on its ability to attract, develop and retain talented management.

To be successful, the Company must attract, develop and retain qualified and talented personnel in management, sales, marketing, product design, and operations, and as it considers entering new international markets, skilled personnel familiar with those markets. The Company competes with multinational firms for these employees and invests resources in recruiting, developing, motivating and retaining them. The failure to attract, develop, motivate and retain key employees could negatively affect the Company’s competitive position and its operating results.

The Company is subject to changing regulation of corporate governance and public disclosure that have increased both costs and the risk of noncompliance.

The Company’s stock is publicly traded. As a result, the Company is subject to the rules and regulations of federal and state agencies and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, the Securities and Exchange Commission and the New York Stock Exchange, frequently issue new requirements and regulations. The Company’s efforts to comply with the regulations and interpretations have resulted in, and are likely to continue to result in, increased general and administrative costs and diversion of management’s time and attention from profit generating activities to compliance activities.

Declines in the Company’s business conditions may result in an impairment of the Company’s assets which could result in a material non-cash charge.

A significant or prolonged decrease in the Company’s market capitalization, including a decline in stock price, or a negative long-term performance outlook, could result in an impairment of its assets which results when the carrying value of the Company’s assets exceed their fair value.

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Forward-Looking Information

Certain of the statements in this Form 10-K, particularly those anticipating future performance, business prospects, growth and operating strategies, and similar matters, and those that include the words “could,” “should,” “believes,” “anticipates,” “expects” and “estimates” or similar expressions constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in raw material prices and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; tax, product and other claims; litigation; regulatory and political changes in the jurisdictions in which we do business; and other risks identified in Mohawk’s SEC reports and public announcements.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company owns and leases manufacturing and distribution facilities worldwide. The table below lists the primary owned and leased facilities at December 31, 2016. The Company owns its Corporate Headquarters in Calhoun, GA. The Company also owns and operates service centers and stores in the United States & Russia, none of which are individually material. The Company believes its existing facilities are suitable for its present needs.

The following is a list of the principal manufacturing and distribution facilities owned or leased by the Company:

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
Orel, Russia	Manufacturing & Distribution	Owned
Salamanca, Mexico	Manufacturing	Owned
Sassuolo, Italy	Manufacturing & Distribution	Owned
Shumen, Bulgaria	Manufacturing & Distribution	Owned
Sunnyvale, Texas	Manufacturing	Owned
Sunnyvale, Texas	Distribution	Leased

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Location	Function / Use	Owned / Leased
Flooring NA Segment:
Bennettsville, South Carolina	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
Holden, West Virginia	Manufacturing	Owned
Lyerly, Georgia	Manufacturing	Owned
Melbourne, Arkansas	Manufacturing	Owned
Milledgeville, Georgia	Manufacturing	Owned
Mt. Gilead, North Carolina	Manufacturing	Owned
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

The Company is involved in litigation from time to time in the regular course of its business. Except as noted below, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Gadsden, Alabama Litigation

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers and users of chemicals containing perfluorinated compounds, including the Company. On October 26, 2016, the defendants removed the case

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to the United States District Court for the Northern District of Alabama, Middle Division, alleging diversity of citizenship and fraudulent joinder.  The Water Board filed a motion to remand the case back to the state court and the defendants have opposed the Water Board’s motion.  The parties await a ruling from the federal court on the motion to remand. The Company has never manufactured perflourinated compounds, but purchased them for use in the manufacture of its carpets prior to 2007.  The Water Board is not alleging chemical levels in the Company’s wastewater discharge exceeded legal limits.  Instead, the Water Board is seeking lost profits based on allegations that its customers decreased water purchases, reimbursement for the cost of a filter and punitive damages.

The Company intends to pursue all available defenses related to this matter.  The Company does not believe that the ultimate outcome of this case will have a material adverse effect on its financial condition, but there can be no assurances at this stage that the outcome will not have a material adverse effect on the Company’s results of operations, liquidity or cash flows in a given period.  Furthermore, the Company cannot predict whether any additional civil or regulatory actions against it may arise from the allegations in this matter.

Polyurethane Foam Litigation

Beginning in August 2010, a series of civil lawsuits were initiated in several U.S. federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the Company’s carpet underlay division had engaged in price fixing in violation of U.S. antitrust laws. The Company was named as a defendant in a number of the individual cases, as well as in two consolidated amended class action complaints on behalf of a class of all direct purchasers of polyurethane foam products and on behalf of a class of indirect purchasers. In these actions, the plaintiffs, on behalf of themselves and/or a class of purchasers, sought damages allegedly suffered as a result of alleged overcharges in the price of polyurethane foam products from at least 1999 to the present. Any damages actually awarded at trial would have been subject to being tripled under US antitrust laws.

On March 23 and April 30, 2015, the Company entered into agreements to settle all claims brought by the class of direct and indirect purchasers, and the trial court entered orders granting approval of the settlements on November 19, 2015 and January 27, 2016. Certain individual members of the indirect purchaser class sought to overturn the approval through an appeal to the Sixth Circuit of Appeals. As of June 21, 2016, all of these appeals have been dismissed, provided that one request to reconsider remains pending. The Company has also entered into settlement agreements resolving all of the claims brought on behalf of all of the consolidated individual lawsuits.

In December 2011, the Company was named as a defendant in a Canadian Class action, which alleged similar claims against the Company as raised in the U.S. actions. On June 12, 2015, the Company entered into an agreement to settle all claims brought by the class of Canadian plaintiffs.

The Company denies all allegations of wrongdoing but settled to avoid the uncertainty, risk, expense and distraction of protracted litigation.

During the twelve months endedDecember 31, 2015 the Company recorded a $122.5 million charge within selling, general and administrative expenses for the settlement and defense of the antitrust cases. All of the antitrust cases have now been finally settled and with the exception of the single issue pending on appeal in the indirect purchaser class case, all consolidated cases have been dismissed. The Company does not believe that the ultimate outcome of the one remaining issue in the indirect purchaser case will have a material adverse effect on its financial condition.

Belgian Tax Matter

In January 2012, the Company received a €23.8 million assessment from the Belgian tax authority related to its year ended December 31, 2008, asserting that the Company had understated its Belgian taxable income for that year. The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authority's position. The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of €1.6 million earned on such deposits. However, on October 23, 2012, the Belgian tax authority notified the Company of its intent to increase the Company's taxable income for the year ended December 31, 2008 under a revised theory. On December 28, 2012, the Belgian tax authority issued assessments for the years ended December 31, 2005 and December 31, 2009, in the amounts of €46.1 million and €35.6 million, respectively, including penalties, but excluding interest. The Company filed a formal protest during the first quarter of 2013 relating to the new assessments. In September 2013, the Belgian tax authority denied the Company's protests, and the Company has brought these two years before the Court of First Appeal in Bruges. In December 2013, the Belgian tax authority issued additional assessments related to the years ended December 31, 2006, 2007, and 2010, in the amounts of €38.8 million, €39.6 million, and €43.1 million, respectively, including penalties, but excluding interest. The Company filed formal protests during the first quarter of 2014, refuting the Belgian tax authority's position for each of the years assessed. In the quarter ended

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June 28, 2014, the Company received a formal assessment for the year ended December 31, 2008, totaling €30.1 million, against which the Company also submitted its formal protest. All 4 additional years have been brought before the Court of First Appeal in November 2014. In January of 2015, the Company met with the Court of First Appeal in Bruges, Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009, and apply the ruling to all of the open years (to the extent there are no additional facts/procedural arguments in the other years).

On January 27, 2016, the Court of First Appeal in Bruges, Belgium ruled in favor of the Company with respect to the calendar years ending December 31, 2005 and December 31, 2009. On March 9, 2016, the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal.

The Company disagrees with the views of the Belgian tax authority on this matter and will persist in its vigorous defense. Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the Company's properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment. The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal. The lien does not interfere with the Company's operations at these properties.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and the Company is unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for the Common Stock

The Company’s common stock, $0.01 par value per share (the “Common Stock”), is quoted on the New York Stock Exchange (“NYSE”) under the symbol “MHK.” The table below shows the high and low sales prices per share of the Common Stock as reported on the NYSE Composite Tape, for each fiscal period indicated.

	Mohawk Common Stock
	High		Low
2015
First Quarter	$	188.29	151.15
Second Quarter	195.53		172.97
Third Quarter	212.16		174.49
Fourth Quarter	201.88		180.00
2016
First Quarter	192.43		151.78
Second Quarter	201.03		177.96
Third Quarter	216.22		186.19
Fourth Quarter	204.87		176.98

As of February 22, 2017, there were 240 holders of record of Common Stock. The Company has not paid or declared any cash dividends on shares of its Common Stock since completing its initial public offering. The Company’s policy is to retain all net earnings for the development of its business, and it does not anticipate paying cash dividends on the Common Stock in the foreseeable future. The payment of future cash dividends will be at the discretion of the Board of Directors and will depend upon

20

the Company’s profitability, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

The Company’s Board of Directors has authorized the repurchase of up to 15 million shares of the Company’s outstanding common stock. Since the inception of the program in 1999, a total of approximately 11.5 million shares have been repurchased at an aggregate cost of approximately $335.5 million. All of these repurchases have been financed through the Company’s operations and banking arrangements. The Company did not repurchase shares during the year ended December 31, 2016.

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Item 6. Selected Financial Data

The following table sets forth the selected financial data of the Company for the periods indicated which information is derived from the consolidated financial statements of the Company. The selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s consolidated financial statements and notes thereto included elsewhere herein.

	As of or for the Years Ended December 31,
	2016			2015(a)		2014	2013(b)		2012
	(In thousands, except per share data)
Statement of operations data:
Net sales	$	8,959,087		8,071,563		7,803,446	7,348,754		5,787,980
Cost of sales	6,146,262			5,660,877		5,649,254	5,427,945		4,297,922
Gross profit	2,812,825			2,410,686		2,154,192	1,920,809		1,490,058
Selling, general and administrative expenses	1,532,882			1,573,120		1,381,396	1,373,878		1,110,550
Operating income	1,279,943			837,566		772,796	546,931		379,508
Interest expense	40,547			71,086		98,207	92,246		74,713
Other expense (income), net	(1,729		)	17,619		10,698	9,114		303
Earnings from continuing operations before income taxes	1,241,125			748,861		663,891	445,571		304,492
Income tax expense	307,559			131,875		131,637	78,385		53,599
Earnings from continuing operations	933,566			616,986		532,254	367,186		250,893
Loss from discontinued operations, net of income tax benefit of $1,050	—			—		—	(17,895	)	—
Net earnings including noncontrolling interest	933,566			616,986		532,254	349,291		250,893
Less: Net earnings attributable to the noncontrolling interest	3,204			1,684		289	505		635
Net earnings attributable to Mohawk Industries, Inc.	$	930,362		615,302		531,965	348,786		250,258
Basic earnings from continuing operations per share	$	12.55		8.37		7.30	5.11		3.63
Basic earnings per share attributable to Mohawk Industries, Inc.	$	12.55		8.37		7.30	4.86		3.63
Diluted earnings from continuing operations per share	$	12.48		8.31		7.25	5.07		3.61
Diluted earnings per share attributable to Mohawk Industries, Inc.	$	12.48		8.31		7.25	4.82		3.61
Balance sheet data:
Working capital	$	753,192		(9,056	)	1,033,762	1,764,907		1,721,397
Total assets	10,230,596			9,934,400		8,285,544	8,494,177		6,303,684
Long-term debt (including current portion)	2,511,485			3,191,967		2,253,440	2,260,008		1,382,942
Total stockholders’ equity	5,783,487			4,860,863		4,422,813	4,470,306		3,719,617

(a) 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.

(b) During 2013, the Company acquired Pergo, Marazzi and Spano.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The Company has three reporting segments, Global Ceramic, Flooring North America ("Flooring NA") and Flooring Rest of the World ("Flooring ROW"). The Global Ceramic segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone and other products, which it distributes primarily in North America, Europe and Russia through various selling channels, which include company-owned stores, independent distributors and home centers. The segment’s product lines are sold through Company-operated service centers, independent distributors, home center retailers, tile and flooring retailers and contractors. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, hardwood, laminate and vinyl products, including LVT, which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks, common carrier or rail transportation. The segment’s product lines are sold through various selling channels, including independent floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. The Flooring ROW segment designs, manufactures, sources, licenses and markets laminate, hardwood flooring, roofing elements, insulation boards, medium-density fiberboard ("MDF"), chipboards, other wood products and vinyl products, including LVT, which it distributes primarily in Europe and Russia through various selling channels, which include retailers, independent distributors and home centers.

The Company is a significant participant in every major product category across the global flooring industry. In the industry, sales of tile, LVT, sheet vinyl, laminate and wood are growing faster than sales of carpet and rugs. Inside the soft surface category, sales of polyester carpets are increasing, which decreases the average selling price in the soft surface category. The Company believes that it is well positioned in all product types to satisfy these changes in customer trends.

A majority of the Company’s sales and long-lived assets are located in the United States and Europe. The Company expects continued strong performance in the United States market as residential housing starts and remodeling continue to improve. In Europe, the Company’s operations improved on a local basis despite a low-growth macro-economic environment. The Company also has operations in Mexico and Russia where the Company is growing market share, especially in its ceramic tile product lines. While the Company is performing well in the local markets where it operates, the Company expects that a strong U.S. dollar will continue to impact the translation of its foreign operating results.

Net earnings attributable to the Company were $930.4 million, or diluted EPS of $12.48 for 2016 compared to net earnings attributable to the Company of $615.3 million, or diluted EPS of $8.31 for 2015. The increase in EPS was primarily attributable to increased sales volumes, savings from capital investments and cost reduction initiatives, lower material costs, the absence of a non-recurring charge of approximately $122.5 million in 2015 related to the settlement and defense of the polyurethane foam litigation, and the receipt of $90.0 million related to a contract dispute, partially offset by costs associated with investments in new product development, sales personnel, and marketing and the $47.9 million write off of the Lees tradename.

For the year ended December 31, 2016, the Company generated $1,327.6 million of cash from operating activities. As of December 31, 2016, the Company had cash and cash equivalents of $121.7 million, of which $29.2 million was in the United States and $92.4 million was in foreign countries.

Recent Events

In January, the Company entered into an agreement to acquire a ceramic company in Italy. The Company anticipates product, sales and manufacturing synergies that will enhance its cost position and strengthen its combined brands and distribution.

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Results of Operations

Following are the results of operations for the last three years:

	For the Years Ended December 31,
	2016					2015					2014
	(In millions)
Statement of operations data:
Net sales	$	8,959.1		100.0	%	$	8,071.6		100.0	%	$	7,803.4	100.0	%
Cost of sales (1)	6,146.3			68.6	%	5,660.9			70.1	%	5,649.3		72.4	%
Gross profit	2,812.8			31.4	%	2,410.7			29.9	%	2,154.1		27.6	%
Selling, general and administrative expenses (2)	1,532.9			17.1	%	1,573.1			19.5	%	1,381.4		17.7	%
Operating income	1,279.9			14.3	%	837.6			10.4	%	772.7		9.9	%
Interest expense (3)	40.5			0.5	%	71.1			0.9	%	98.2		1.3	%
Other expense (4)	(1.7		)	0.0	%	17.6			0.2	%	10.7		0.1	%
Earnings before income taxes	1,241.1			13.9	%	748.9			9.3	%	663.8		8.5	%
Income tax expense (5)	307.6			3.4	%	131.9			1.6	%	131.6		1.7	%
Net earnings including noncontrolling interest	933.5			10.4	%	617.0			7.6	%	532.2		6.8	%
Less: Net earnings attributable to the noncontrolling interest	3.2			—	%	1.7			—	%	0.3		—	%
Net earnings attributable to Mohawk Industries, Inc.	$	930.3		10.4	%	$	615.3		7.6	%	$	531.9	6.8	%
(1)  Cost of sales includes:
Restructuring, acquisition and integration charges	$	38.3		0.4	%	$	45.6		0.6	%	$	31.2	0.4	%
Acquisition inventory step-up	—			—	%	13.3			0.2	%	—		—	%
(2)  Selling, general and administrative expenses include:
Restructuring, acquisition and integration-related charges	12.3			0.1	%	29.1			0.4	%	20.4		0.3	%
Legal settlement and reserve	(90.0		)	(1.0	)%	124.5			1.5	%	10.0		0.1	%
Tradename impairment	47.9			0.5	%	—			—	%	—		—	%
Other charges	9.9			0.1	%	—			—	%	—		—	%
(3)  Interest expense includes:
Debt extinguishment costs	—			—	%	—			—	%	18.9		0.2	%
Deferred loan cost write-off	—			—	%	0.7			—	%	1.1		—	%
(4)  Other expense (income) includes:
Loss on disposal of subsidiary	—			—	%	—			—	%	12.0		0.2	%
Reversal of uncertain tax position indemnification asset	5.4			0.1	%	11.2			0.1	%	—		—	%
(5) Income tax expense includes:
Reversal of uncertain tax position	(5.4		)	(0.1	)%	(11.2		)	(0.1	)%	—		—	%

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Year Ended December 31, 2016, as Compared with Year Ended December 31, 2015

Net sales

Net sales for 2016 were $8,959.1 million, reflecting an increase of $887.5 million, or 11.0%, from the $8,071.6 million reported for 2015. The increase was primarily attributable to higher sales volume of approximately $944 million, or 12%, which includes sales volumes attributable to acquisitions of approximately $509 million and legacy sales volumes of approximately $435 million, and the favorable net impact of price and product mix of approximately $11 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $69 million, or 1%.

Global Ceramic Segment—Net sales increased $161.8 million, or 5.4%, to $3,174.7 million for 2016, compared to $3,012.9 million for 2015. The increase was primarily attributable to higher sales volume of approximately $159 million, or 5%, which includes sales volume attributable to acquisitions of approximately $29 million and legacy sales volume of approximately $130 million, and the favorable net impact of price and product mix of approximately $45 million, or 2%, offset by the net impact of unfavorable foreign exchange rates of approximately $43 million, or 2%.

Flooring NA Segment—Net sales increased $263.6 million, or 7.3%, to $3,865.7 million for 2016, compared to $3,602.1 million for 2015. The increase was primarily attributable to higher sales volumes of approximately $305 million, or 8%, which includes sales volume attributable to acquisitions of approximately $76 million and legacy sales volume of approximately $229 million, partially offset by the unfavorable net impact of price and product mix of $42 million, or 1%

Flooring ROW Segment—Net sales increased $461.7 million, or 31.7%, to $1,918.6 million for 2016, compared to $1,456.9 million for 2015. The increase was primarily attributable to higher sales volume of approximately $481 million, or 33%, which includes sales volume attributable to acquisitions of approximately $405 million and legacy sales volume of approximately $76 million and the favorable net impact of price and product mix of approximately $7 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $26 million, or 2%.

Quarterly net sales and the percentage changes in net sales by quarter for 2016 versus 2015 were as follows (dollars in millions):

	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	$	8,959.0	8,071.6	11.0	%

Gross profit

Gross profit for 2016 was $2,812.8 million (31.4% of net sales), an increase of $402.1 million or 16.7%, compared to gross profit of $2,410.7 million (29.9% of net sales) for 2015. As a percentage of net sales, gross profit increased150 basis points. The increase in gross profit dollars was primarily attributable to higher sales volume of approximately $254 million, savings from capital investments and cost reduction initiatives of approximately $113 million, lower material costs of approximately $67 million and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $21 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $28 million, and the unfavorable net impact of price and product mix of approximately $11 million.

Selling, general and administrative expenses

Selling, general and administrative expenses for 2016 were $1,532.9 million (17.1% of net sales), a decrease of $40.2 million compared to $1,573.1 million (19.5% of net sales) for 2015. As a percentage of net sales, selling, general and administrative expenses decreased240 basis points. The decrease in selling, general and administrative expenses in dollars was primarily attributable savings from capital investments and cost reduction initiatives of $27 million, the net impact of favorable foreign exchange rates of approximately $9 million, and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $173 million, partially offset by approximately $94 million of costs due to higher sales volume, approximately $51 million of costs associated with investments in new product development, sales personnel, and marketing, and

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increased employee costs of approximately $18 million. Restructuring, acquisition and integration-related, and other costs were lower primarily due to the non-recurring 2015 charge of approximately $122 million related to the settlement and defense of the polyurethane foam litigation and the $90 million received in the third quarter of 2016 related to a contract dispute, partially offset by a charge for approximately $48 million related to the write-off of the Lees tradename.

Operating income

Operating income for 2016 was $1,279.9 million (14.3% of net sales) reflecting an increase of $442.4 million, or 52.8%, compared to operating income of $837.6 million (10.4% of net sales) for 2015. The increase in operating income was primarily attributable to increased sales volumes of approximately $160 million, savings from capital investments and cost reduction initiatives of approximately $140 million, lower material costs of approximately $67 million and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $194 million, partially offset by approximately $51 million of costs associated with investments in new product development, sales personnel, and marketing, the net impact of unfavorable foreign exchange rates of approximately $19 million, increased employee costs of approximately $18 million, and the unfavorable net impact of price and product mix of approximately $13 million. Restructuring, acquisition and integration-related, and other costs were lower primarily due to the non-recurring 2015 charge of approximately $122 million related to the settlement and defense of the polyurethane foam litigation and the $90 million received in the third quarter of 2016 related to a contract dispute, partially offset by a charge for approximately $48 million related to the write-off of the Lees tradename.

Global Ceramic Segment—Operating income was $478.4 million (15.1% of segment net sales) for 2016 reflecting an increase of $64.3 million, or 15.5%, compared to operating income of $414.2 million (13.7% of segment net sales) for 2015. The increase in operating income was primarily attributable to savings from capital investments and cost reduction initiatives of approximately $49 million, increased sales volumes of approximately $36 million, and the favorable impact of price and product mix of approximately $20 million, partially offset by costs associated with investments in new product development, sales personnel, and marketing of approximately $18 million, increased employee costs of approximately $9 million, increased material costs of approximately $6 million, and the net impact of unfavorable foreign exchange rates of approximately $3 million.

Flooring NA Segment—Operating income was $505.1 million (13.1% of segment net sales) for 2016 reflecting an increase of $240.8 million, or 91.1%, compared to operating income of $264.3 million (7.3% of segment net sales) for 2015. The increase in operating income was primarily attributable to savings from capital investments and cost reduction initiatives of approximately $64 million, lower material costs of approximately $49 million, increased sales volumes of approximately $46 million, and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $157 million, partially offset by approximately $27 million of costs associated with investments in new product development, sales personnel, and marketing, the unfavorable impact of price and product mix of approximately $27 million, costs associated with investments in expansion of production capacity of approximately $6 million and increased employee costs of $5 million. Restructuring, acquisition and integration-related, and other costs were lower primarily due to the non-recurring 2015 charge of approximately $122 million related to the settlement and defense of the polyurethane foam litigation and the $90 million received in the third quarter of 2016 related to a contract dispute, partially offset by a charge for approximately $48 million related to the write-off of the Lees tradename.

Flooring ROW Segment—Operating income was $333.1 million (17.4% of segment net sales) for 2016 reflecting an increase of $129.7 million, or 63.8%, compared to operating income of $203.4 million (14.0% of segment net sales) for 2015. The increase in operating income was primarily attributable to higher sales volumes of approximately $77 million, savings from capital investments and cost reduction initiatives of approximately $27 million, lower material costs of approximately $23 million, lower restructuring, acquisition and integration-related, and other costs of approximately $23 million, and the favorable impact of reduced costs from investments in expansion of production capacity of approximately $6 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $16 million, the unfavorable net impact of price and product mix of approximately $6 million and approximately $5 million of costs associated with investments in new product development, sales personnel, and marketing.

Most of the UNICLIC family of patents will expire in 2017. The licensing earnings from patents included in the Flooring ROW segment's results were approximately $148 million in 2016, only a portion of which will be retained following the UNICLIC expiration. While the Company continues to explore additional opportunities to generate revenue from its patent portfolio, only a portion of the licensing earnings will be retained following the expiration of the UNICLIC patents. The Company expects its earnings from patents to range from $65 million to $70 million in 2017, with the amount declining to a $35 million annual run rate starting in June.

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Interest expense

Interest expense was $40.5 million for 2016, reflecting a decrease of $30.5 million compared to interest expense of $71.1 million for 2015. The decrease was primarily attributable to the Company paying the remaining balance of its 6.125% senior notes in January 2016 utilizing cash on hand and lower interest rate commercial paper borrowings.

Other (income) expense

Other income was $1.7 million for 2016, reflecting a favorable change of $19.3 million compared to other expense of $17.6 million for 2015. The change was primarily due to the prior year release of an indemnification receivable related to the reversal of uncertain tax positions recorded with the IVC Group acquisition of approximately $11 million.

Income tax expense

For 2016, the Company recorded income tax expense of $307.6 million on earnings before income taxes of $1,241.1 million for an effective tax rate of 24.8%, as compared to an income tax expense of $131.9 million on earnings before income taxes of $748.9 million, resulting in an effective tax rate of 17.6% for 2015. The increase in effective tax rates was partially due to benefits recorded in 2015, that did not recur in 2016:  the expiration of the statute of limitations on European-related tax exposures of approximately $18 million and a favorable multi-year tax study yielding a benefit of approximately $8.5 million.  The balance of the year-over-year increase is the direct result of the geographic dispersion of the Company's earnings for 2016, which are up approximately 94% in the U.S. (partially due to the absence of the 2015 $122.5 million charge related to the settlement and defense of the polyurethane foam litigation) and almost 45% outside the U.S.  See Note 12-Income Taxes.

Year Ended December 31, 2015, as Compared with Year Ended December 31, 2014

Net sales

Net sales for 2015 were $8,071.6 million, reflecting an increase of $268.1 million, or 3.4%, from the $7,803.4 million reported for 2014. The increase was primarily attributable to higher sales volume of approximately $785 million, or 10%, which includes sales volumes attributable to acquisitions of approximately $396 million and legacy sales volume of approximately $389 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $490 million, or 6%, and the unfavorable net impact of price and product mix of approximately $28 million.

Global Ceramic Segment—Net sales decreased $2.4 million, or 0.1%, to $3,012.9 million for 2015, compared to $3,015.3 million for 2014. The decrease was primarily attributable to the net impact of unfavorable foreign exchange rates of approximately $252 million, or 8%, partially offset by higher sales volume of approximately $150 million, or 5%, which includes sales volume attributable to acquisitions of approximately $65 million and legacy sales volume of approximately $85 million, and the favorable net impact of price and product mix of approximately $99 million, or 3%.

Flooring NA Segment—Net sales increased $161.1 million, or 4.7%, to $3,602.1 million for 2015, compared to $3,441.0 million for 2014. The increase was primarily attributable to higher sales volume of approximately $275 million, or 8%, which includes sales volume attributable to acquisitions of approximately $77 million and legacy sales volume of approximately $198 million, partially offset by the unfavorable net impact of price and product mix of approximately $114 million, or 3%.

Flooring ROW Segment—Net sales increased $102.9 million, or 7.6%, to $1,456.9 million for 2015, compared to $1,354.0 million for 2014. The increase was primarily attributable to higher volume of approximately $354 million, or 26%, which includes sales volume attributable to acquisitions of approximately $254 million and legacy sales volume of approximately $100 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $238 million, or 18%, and the unfavorable net impact of price and product mix of approximately $13 million, or 1%.

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Quarterly net sales and the percentage changes in net sales by quarter for 2015 versus 2014 were as follows (dollars in millions):

	2015		2014	Change
First quarter	$	1,881.2	1,813.1	3.8	%
Second quarter	2,041.7		2,048.2	(0.3	)%
Third quarter	2,150.7		1,990.7	8.0	%
Fourth quarter	1,998.0		1,951.4	2.4	%
Total year	$	8,071.6	7,803.4	3.4	%

Gross profit

Gross profit for 2015 was $2,410.7 million (29.9% of net sales), an increase of $256.5 million or 11.9%, compared to gross profit of $2,154.2 million (27.6% of net sales) for 2014. As a percentage of net sales, gross profit increased 230 basis points. The increase in gross profit dollars was primarily attributable to higher sales volume of approximately $254 million, savings from capital investments and cost reduction initiatives of approximately $127 million, and lower input costs of approximately $101 million, including lower material costs of approximately $87 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $151 million, the unfavorable net impact of price and product mix of approximately $30 million, the unfavorable impact of higher restructuring, acquisition and integration-related costs of approximately $28 million, and costs associated with investments in expansion of production capacity of approximately $15 million.

Selling, general and administrative expenses

Selling, general and administrative expenses for 2015 were $1,573.1 million (19.5% of net sales), an increase of $191.7 million compared to $1,381.4 million (17.7% of net sales) for 2014. As a percentage of net sales, selling, general and administrative expenses increased 180 basis points. The increase in selling, general and administrative expenses in dollars was primarily attributable to a charge of approximately $122 million related to the settlement and further defense of the polyurethane foam litigation described in more detail herein, approximately $83 million of costs due to higher sales volume, approximately $44 million of costs associated with investments in new product development, sales personnel, and marketing, and increased employee costs of approximately $27 million, partially offset by the positive impact of foreign exchange rates of approximately $77 million and savings from capital investments and cost reduction initiatives of approximately $6 million.

Operating income

Operating income for 2015 was $837.6 million (10.4% of net sales) reflecting an increase of $64.8 million, or 8.4%, compared to operating income of $772.8 million (9.9% of net sales) for 2014. The increase in operating income was primarily attributable to higher sales volume of approximately $172 million, savings from capital investments and cost reduction initiatives of approximately $133 million, and lower input costs of approximately $101 million, including lower material costs of approximately $87 million, partially offset by a charge of approximately $122 million related to the settlement and defense of the polyurethane foam litigation described in more detail herein, the net impact of unfavorable foreign exchange rates of approximately $74 million, costs associated with investments in new product development, sales personnel and marketing of approximately $44 million, the unfavorable net impact of price and product mix of approximately $29 million, increased employee costs of approximately $27 million, the unfavorable impact of higher restructuring, acquisition and integration-related costs of approximately $30 million which includes approximately $13 million of costs related to acquisition inventory step-up, and costs associated with investments in expansion of production capacity of approximately $15 million.

Global Ceramic Segment—Operating income was $414.2 million (13.7% of segment net sales) for 2015 reflecting an increase of $63.0 million, or 18.0%, compared to operating income of $351.1 million (11.6% of segment net sales) for 2014. The increase in operating income was primarily attributable to sales volume increases of approximately $52 million, savings from capital investments and cost reduction initiatives of approximately $36 million, the favorable net impact of price and product mix of approximately $32 million, and lower input costs of approximately $12 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $35 million, costs associated with investments in new product development, sales personnel and marketing of approximately $22 million, and increased employee costs of approximately $11 million.

Flooring NA Segment—Operating income was $264.3 million (7.3% of segment net sales) for 2015 reflecting a decrease of $35.7 million, or 11.9%, compared to operating income of $300.0 million (8.7% of segment net sales) for 2014. The decrease in operating income was primarily attributable to a charge of approximately $122 million related to the settlement and defense of

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the polyurethane foam litigation described in more detail herein, the unfavorable net impact of price and product mix of approximately $53 million, the unfavorable impact of higher restructuring, acquisition and integration-related costs of approximately $21 million, costs associated with investments in new product development, sales personnel and marketing of approximately $13 million, and increased employee costs of approximately $9 million, partially offset by savings from capital investments and cost reduction initiatives of approximately $92 million, lower material costs of approximately $69 million, and sales volume increases of approximately $31 million.

Flooring ROW Segment—Operating income was $203.4 million (14.0% of segment net sales) for 2015 reflecting an increase of $51.8 million, or 34.2%, compared to operating income of $151.5 million (11.2% of segment net sales) for 2014. The increase in operating income was primarily attributable to higher sales volume of approximately $89 million, lower material costs of approximately $22 million, and savings from capital investments and cost reduction initiatives of approximately $6 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $40 million, costs associated with investments in new product development, sales personnel and marketing of approximately $9 million, costs associated with investments in expansion of production capacity of approximately $8 million, and the unfavorable net impact of price and product mix of approximately $8 million.

Interest expense

Interest expense was $71.1 million for 2015, reflecting a decrease of $27.1 million compared to interest expense of $98.2 million for 2014. The decrease was primarily attributable to the inclusion in the 2014 amount of $20 million of non-recurring premiums and fees due to the redemption of $254.4 million of the 6.125% Senior Notes due January 15, 2016, and the use of lower rate U.S. commercial paper to finance the aforementioned redemption, offset by an increase in debt resulting from the 2015 acquisitions.

Other (income) expense

Other expense was $17.6 million for 2015, reflecting an increase of $6.9 million compared to other expense of $10.7 million for 2014. The increase was primarily attributable to the release of an indemnification receivable related to the reversal of uncertain tax positions recorded with the IVC Group acquisition of approximately $11 million.

Income tax expense

For 2015, the Company recorded income tax expense of $131.9 million on earnings from continuing operations before income taxes of $748.9 million for an effective tax rate of 17.6%, as compared to an income tax expense of $131.6 million on earnings from continuing operations before income taxes of $663.9 million, resulting in an effective tax rate of 19.8% for 2014. The decrease in effective tax rates was primarily attributable to the expiration of the statute of limitations on European-related tax exposures, resulting in the reversal of uncertain tax positions of approximately $11 million, and the geographic dispersion of the Company's profits and losses for the year, including the $122 million charge related to the settlement and defense of the polyurethane foam litigation in the U.S., partially offset by the non-recurrence of the favorable court case in Italy of approximately $8 million occurring in 2014. See Note 12-Income Taxes.

Liquidity and Capital Resources

The Company’s primary capital requirements are for working capital, capital expenditures and acquisitions. The Company’s capital needs are met primarily through a combination of internally generated funds, commercial paper, bank credit lines, term and senior notes and credit terms from suppliers.

Net cash flows provided by operating activities for 2016 were $1,327.6 million compared to $911.9 millionprovided by operating activities for 2015. The increase in cash provided by operating activities for 2016 as compared to 2015 is primarily attributable to higher earnings driven by increased sales volumes during 2016 when compared to the prior year, the non-recurring 2015 $122.5 million charge related to the settlement and defense of the polyurethane foam litigation, and the $90 million related to the settlement of a contract dispute with a third party. The increase in earnings was partially offset by changes in working capital. These changes in working capital reflect normal fluctuations relative to the timing and nature of these transactions. The increase in cash provided by operating activities of $250 million for 2015 as compared to 2014 was primarily attributable to changes in working capital. Receivables, inventories and accounts payable used approximately $7 million of cash in 2015 compared to $224 million 2014.

Net cash used in investing activities for 2016 was $672.1 million compared to net cash used in investing activities of $1,874.2 million for 2015. The Company did not make any acquisitions in 2016, while in 2015 the Company spent $1,371 million

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on the IVC Group, the KAI Group, Xtratherm and other acquisitions. Capital expenditures increased by $168 million to $672 million in the current year. The increase in cash used in investing activities of $1,308 million for 2015 as compared to 2014 was primarily attributable to the 2015 acquisitions.

Net cash used in financing activities for 2016 was $623.9 million compared to net cash provided by financing activities of $964.1 million for 2015. The change in cash used in financing as compared to 2015 is primarily attributable to decreased borrowings in the current year. Net cash provided by financing activities for 2015 compared to net cash used in financing activities for 2014 changed primarily due to net proceeds from commercial paper of $302 million and $200 million in proceeds from asset securitization borrowings, partially offset by repayments of senior notes of $254 million and $165 million of net payments of the senior credit facility.

Senior Credit Facility

On September 25, 2013, the Company entered into a $1,000.0 million, 5-year, senior revolving credit facility (the "2013 Senior Credit Facility"). The 2013 Senior Credit Facility provided for a maximum of $1,000.0 million of revolving credit, including limited amounts of credit in the form of letters of credit and swingline loans. The Company paid financing costs of $1.8 million in connection with its 2013 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $11.4 million related to the Company’s previous credit facility, were amortized over the term of the 2013 Senior Credit Facility.

On March 26, 2015, the Company amended and restated the 2013 Senior Credit Facility increasing its size from $1,000.0 million to $1,800.0 million and extending the maturity from September 25, 2018 to March 26, 2020 (as amended and restated, the "2015 Senior Credit Facility"). The 2015 Senior Credit Facility eliminates certain provisions in the 2013 Senior Credit Facility, including those that: (a) accelerated the maturity date to 90 days prior to the maturity of senior notes due in January 2016 if certain specified liquidity levels were not met; and (b) required that certain subsidiaries guarantee the Company's obligations if the Company’s credit ratings fell below investment grade. The 2015 Senior Credit Facility also modified certain negative covenants to provide the Company with additional flexibility, including flexibility to make acquisitions and incur additional indebtedness. On March 1, 2016, the Company amended the 2015 Senior Credit Facility to, among other things, carve out from the general limitation on subsidiary indebtedness the issuance of Euro-denominated commercial paper notes by subsidiaries and to extend the maturity date from March 26, 2020 to March 26, 2021 with respect to all but $120.0 million of the total amount committed under the 2015 Senior Credit Facility. On October 17, 2016, the Company extended the maturity date for the remaining $120.0 million commitment to March 26, 2021.

At the Company's election, revolving loans under the 2015 Senior Credit Facility bear interest at annual rates equal to either (a) LIBOR for 1, 2, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.125% as of December 31, 2016), or (b) the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.5%, and a monthly LIBOR rate plus 1.0%, plus an applicable margin ranging between 0.00% and 0.75% (0.125% as of December 31, 2016). The Company also pays a commitment fee to the lenders under the 2015 Senior Credit Facility on the average amount by which the aggregate commitments of the lenders' under the 2015 Senior Credit Facility exceed utilization. The commitment fee ranges from 0.10% to 0.225% per annum (0.125% as of December 31, 2016). The applicable margins and the commitment fee are determined based on whichever of the Company's Consolidated Net Leverage Ratio or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

The obligations of the Company and its subsidiaries in respect of the 2015 Senior Credit Facility are unsecured.

The 2015 Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company's financial and business operations, including limitations on liens, subsidiary indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, future negative pledges, and changes in the nature of the Company's business. The Company is also required to maintain a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.0, each as of the last day of any fiscal quarter. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirements and is not otherwise in default.

The 2015 Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

Also on March 1, 2016, the Company entered into a three-year, senior, unsecured delayed-draw term loan facility (the “Term Loan Facility”) by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and each of the lenders party thereto. Subject to customary conditions precedent, the Company could borrow up to $200.0 million under the

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Term Loan Facility in no more than 2 borrowings between March 1, 2016 and September 1, 2016. The Company did not borrow under the Term Loan Facility, and it has since expired on its stated expiration date.

The Company paid financing costs of $0.5 million in connection with the amendment and extension of its 2015 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $8.8 million related to the Company’s 2013 Senior Credit Facility, are being amortized over the term of the 2015 Senior Credit Facility. The Company also paid financing costs of $0.6 million in connection with its Term Loan Facility.

As of December 31, 2016, amounts utilized under the 2015 Senior Credit Facility included $60.7 million of borrowings and $0.9 million of standby letters of credit related to various insurance contracts and foreign vendor commitments. The outstanding borrowings of $820.3 million under the Company's U.S. and European commercial paper programs as of December 31, 2016 reduce the availability of the 2015 Senior Credit Facility. Including commercial paper borrowings, the Company has utilized $881.9 million under the 2015 Senior Credit Facility resulting in a total of $918.1 million available under the 2015 Senior Credit Facility.

Commercial Paper

On February 28, 2014, the Company established a U.S. commercial paper program for the issuance of unsecured commercial paper in the United States capital markets. Under the commercial paper program, the Company issues commercial paper notes from time to time. The U.S. commercial paper notes have maturities ranging from one day to 397 days and may not be voluntarily prepaid or redeemed by the Company. The U.S. commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. As of December 31, 2016 there was $283.8 million outstanding under the U.S. commercial paper program.

On July 31, 2015, the Company established a European commercial paper program for the issuance of unsecured commercial paper in the Eurozone capital markets. The European commercial paper notes have maturities ranging from one day to 183 days and may not be voluntarily prepaid or redeemed by the Company. The European commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company. As of December 31, 2016, the euro equivalent of $536.5 million was outstanding under the European commercial paper program.

The Company uses its 2015 Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount due and payable under all of the Company's commercial paper programs may not exceed $1,800.0 million (less any amounts drawn on the 2015 Credit Facility) at any time.

The proceeds from the sale of commercial paper notes will be available for general corporate purposes. The Company used the initial proceeds from the sale of U.S. commercial paper notes to repay borrowings under its 2013 Senior Credit Facility and certain of its industrial revenue bonds. The Company used the initial proceeds from the sale of European commercial paper notes to repay euro-denominated borrowings under its 2015 Senior Credit Facility. As of December 31, 2016, the amount utilized under the commercial paper programs was $820.3 million with a weighted-average interest rate and maturity period of 0.98% and 15.62 days, respectively for the U.S. commercial paper program and (0.11)% and 28.92 days, respectively for the European commercial paper program. 

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Senior Notes

On June 9, 2015, the Company issued €500.0 million aggregate principal amount of 2.00% Senior Notes due January 14, 2022. The 2.00% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 2.00% Senior Notes is payable annually in cash on January 14 of each year, commencing on January 14, 2016. The Company paid financing costs of $4.2 million in connection with the 2.00% Senior Notes. These costs were deferred and are being amortized over the term of the 2.00% Senior Notes.

On January 31, 2013, the Company issued $600.0 million aggregate principal amount of 3.85% Senior Notes due February 1, 2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company's existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes is payable semi-annually in cash on February 1 and August 1 of each year. The Company paid financing costs of $6.0 million in connection with the 3.85% Senior Notes. These costs were deferred and are being amortized over the term of the 3.85% Senior Notes.

On January 17, 2006, the Company issued $900.0 million aggregate principal amount of 6.125% Senior Notes due January 15, 2016. During 2014, the Company purchased for cash approximately $254.4 million aggregate principal amount of its outstanding 6.125% senior notes due January 15, 2016. On January 15, 2016, the Company paid the remaining $645.6 million outstanding principal of its 6.125% Senior Notes (plus accrued but unpaid interest) utilizing cash on hand and borrowings under its U.S. commercial paper program.

Accounts Receivable Securitization

On December 19, 2012, the Company entered into a three-year on-balance sheet trade accounts receivable securitization agreement (the "Securitization Facility"). On September 11, 2014, the Company made certain modifications to its Securitization Facility, which modifications, among other things, increased the aggregate borrowings available under the facility from $300.0 million to $500.0 million and decreased the interest margins on certain borrowings. On December 10, 2015, the Company amended the terms of the Securitization Facility extending the termination date from December 19, 2015 to December 19, 2016. The Company further amended the terms of the Securitization Facility on December 13, 2016, extending the termination date to December 19, 2017. The Company paid financing costs of $0.3 million in connection with this extension. These costs were deferred and are being amortized over the remaining term of the Securitization Facility.

Under the terms of the Securitization Facility, certain subsidiaries of the Company sell at a discount certain of their trade accounts receivable (the “Receivables”) to Mohawk Factoring, LLC (“Factoring”) on a revolving basis. The Company has determined that Factoring is a bankruptcy remote subsidiary, meaning that Factoring is a separate legal entity whose assets are available to satisfy the claims of the creditors of Factoring only, not the creditors of the Company or the Company’s other subsidiaries. Factoring may borrow up to $500.0 million based on the amount of eligible Receivables owned by Factoring, and Factoring has granted a security interest in all of such Receivables to the third-party lending group as collateral for such borrowings.  Amounts loaned to Factoring under the Securitization Facility bear interest at LIBOR plus an applicable margin of 0.70% per annum. Factoring also pays a commitment fee at a per annum rate of 0.30% on the unused amount of each lender’s commitment. At December 31, 2016, the amount utilized under the Securitization Facility was $500.0 million.

The Company may continue, from time to time, to retire its outstanding debt through cash purchases in the open market, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The amount involved may be material.

As of December 31, 2016, the Company had cash of $121.7 million, of which $92.4 million was held outside the United States. While the Company plans to permanently reinvest the cash held outside the United States, the estimated cost of repatriation for the cash as of December 31, 2016 was approximately $32.3 million. The Company believes that its cash and cash equivalents on hand, cash generated from operations and availability under its 2015 Senior Credit Facility will be sufficient to meet its capital expenditure, working capital and debt servicing requirements over the next twelve months.

The Company’s Board of Directors has authorized the repurchase of up to 15 million shares of the Company’s outstanding common stock. Since the inception of the program in 1999, a total of approximately 11.5 million shares have been repurchased at an aggregate cost of approximately $335.5 million. All of these repurchases have been financed through the Company’s operations and banking arrangements. The Company did not repurchase shares during the year ended December 31, 2016.

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Contractual obligations

The following is a summary of the Company’s future minimum payments under contractual obligations as of December 31, 2016 (in millions):

	Total		2017	2018	2019	2020	2021	Thereafter
Recorded Contractual Obligations:
Long-term debt, including current maturities and capital leases	$	2,511.5	1,382.7	1.7	1.4	1.0	0.8	1,123.8
Unrecorded Contractual Obligations:
Interest payments on long-term debt and capital leases (1)	213.3		43.9	33.8	33.8	33.8	33.8	34.4
Operating leases	303.5		99.1	75.2	54.2	36.8	20.5	17.6
Purchase commitments (2)	637.5		217.8	69.9	40.2	29.1	25.5	255.0
Expected pension contributions (3)	2.6		2.6	—	—	—	—	—
Uncertain tax positions (4)	0.7		0.7	—	—	—	—	—
Guarantees (5)	18.0		18.0	—	—	—	—	—
	1,175.6		382.0	178.9	128.2	99.7	79.8	307.0
Total	$	3,687.1	1,764.7	180.6	129.6	100.7	80.6	1,430.8

(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, 2016 to these balances.

(2) Includes volume commitments for natural gas, electricity and raw material purchases.

(3) Includes the estimated pension contributions for 2017 only, as the Company is unable to estimate the pension contributions beyond 2017. The Company’s projected benefit obligation and plan assets as of December 31, 2016 were $48.1 million and $40.6 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 $35.0 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.

Critical Accounting Policies

In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles, the Company must make decisions which impact the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. Such decisions include the selection of appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, the Company applies judgment based on its understanding and analysis of the relevant circumstances and historical experience. Actual amounts could differ from those estimated at the time the consolidated financial statements are prepared.

The Company’s significant accounting policies are described in Note 1 to the Consolidated Financial Statements included elsewhere in this report. Some of those significant accounting policies require the Company to make subjective or complex judgments or estimates. Critical accounting policies are defined as those that are both most important to the portrayal of a company’s financial condition and results and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

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The Company believes the following accounting policies require it to use judgments and estimates in preparing its consolidated financial statements and represent critical accounting policies.

• 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 assured. The Company provides allowances for expected cash discounts, sales allowances, returns, claims and doubtful accounts based upon historical bad debt and claims experience and 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. A 10% change in the Company’s allowance for discounts, returns, claims and doubtful accounts would have affected net earnings by approximately $5 million for the year ended December 31, 2016.

• 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 $7 million for the year ended December 31, 2016.

• 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 during 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 28% increase in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment.

The impairment test for intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. These judgments and assumptions are subject to the variability discussed above.

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The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted during the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things.

The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

The Company conducted its annual assessment of goodwill and indefinite lived intangibles in the fourth quarter and no impairment was indicated for 2016.

• 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. The Company had valuation allowances of $289.1 million in 2016, $287.6 million in 2015 and $300.5 million in 2014. For further information regarding the Company’s valuation allowances, see Note 12-Income Taxes.

In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information, as required by the provisions of the Financial Accounting Standards Board (“FASB”) FASB Accounting Standards Codification Topic ("ASC") 740-10. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements. As of December 31, 2016, the Company has $46.4 million accrued for uncertain tax positions. For further information regarding the Company’s uncertain tax positions, 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.

Recent Accounting Pronouncements

See Note 1(v), “Summary of Significant Accounting Policies", of our accompanying audited consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a description of recent accounting pronouncements including the dates, or expected dates of adoption, and effects, or expected effects, on our disclosures, results of operations, and financial condition.

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Impact of Inflation

Inflation affects the Company’s manufacturing costs, distribution costs and operating expenses. The Company expects raw material prices, many of which are petroleum based, to fluctuate based upon worldwide supply and demand of commodities utilized in the Company’s production processes. Although the Company attempts to pass on increases in raw material, energy and fuel-related costs to its customers, the Company’s ability to do so is dependent upon the rate and magnitude of any increase, competitive pressures and market conditions for the Company’s products. There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be fully recovered. In the past, the Company has often been able to enhance productivity and develop new product innovations to help offset increases in costs resulting from inflation in its operations.

Seasonality

The Company is a calendar year-end company. With respect to its Flooring NA and Global Ceramic segments, its results of operations for the first quarter tend to be the weakest followed by the fourth quarter. The second and third quarters typically produce higher net sales and operating income in these segments. These results are primarily due to consumer residential spending patterns which have historically decreased during the holiday season and the first two months following. The Flooring ROW segment’s second quarter typically produces the highest net sales and earnings followed by a moderate first and fourth quarter and a weaker third quarter.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Company’s market risk is impacted by changes in foreign currency exchange rates, interest rates and certain commodity prices. Financial exposures to these risks are monitored as an integral part of the Company’s risk management program, which seeks to reduce the potentially adverse effect that the volatility of these markets may have on its operating results. The Company does not regularly engage in speculative transactions, nor does it regularly hold or issue financial instruments for trading purposes. Excluding the hedge of net investment discussed in Note 1(o) "Hedges of Net Investments in Non-U.S. Operations", of our accompanying consolidated financial statements and supplementary data in Item 8 of this Annual Report on Form 10-K, the Company did not have any derivative contracts outstanding as of December 31, 2016 and 2015.

Interest Rate Risk

As of December 31, 2016, approximately 45% of the Company’s debt portfolio was comprised of fixed-rate debt and 55% was floating-rate debt. The Company believes that probable near-term changes in interest rates would not materially affect its financial condition, results of operations or cash flows. The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of our variable rate debt as of December 31, 2016 would be approximately $14 million or $0.12 to diluted EPS.

Foreign Exchange Risk

As a result of being a global enterprise, there is exposure to market risks from changes in foreign currency exchange rates, which may adversely affect the operating results and financial condition of the Company. Principal foreign currency exposures relate primarily to the euro and to a lesser extent the Russian ruble, the Mexican peso, the Canadian dollar, the Australian dollar, the British pound and the Malaysian ringgit.

The Company’s objective is to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. The Company enters into cross border transactions through importing and exporting goods to and from different countries and locations. These transactions generate foreign exchange risk as they create assets, liabilities and cash flows in currencies other than their functional currency. This also applies to services provided and other cross border agreements among subsidiaries.

The Company takes steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities. The Company does not enter into any speculative positions with regard to derivative instruments.

Based on financial results for the year ended December 31, 2016, a hypothetical overall 10 percent change in the U.S. dollar against the euro would have resulted in a translational adjustment of approximately $42 million.

36

Item 8. Consolidated Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm	38
Consolidated Balance Sheets as of December 31, 2016 and 2015	40
Consolidated Statements of Operations for the Years ended December 31, 2016, 2015, and 2014	41
Consolidated Statements of Comprehensive Income (Loss) for the Years ended December 31, 2016, 2015 and 2014	42
Consolidated Statements of Stockholders’ Equity for the Years ended December  31, 2016, 2015 and 2014	43
Consolidated Statements of Cash Flows for the Years ended December 31, 2016, 2015 and 2014	44
Notes to Consolidated Financial Statements	45

37

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Mohawk Industries, Inc.:

We have audited the accompanying consolidated balance sheets of Mohawk Industries, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2016. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mohawk Industries, Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Mohawk Industries, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2017 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Atlanta, Georgia

February 27, 2017

38

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Mohawk Industries, Inc.:

We have audited Mohawk Industries, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Mohawk Industries, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, as set forth in Item 9A. of Mohawk Industries, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Mohawk Industries, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Mohawk Industries, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and our report dated February 27, 2017 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Atlanta, Georgia

February 27, 2017

39

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2016 and 2015

	2016			2015
	(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	121,665		81,692
Receivables, net	1,376,151			1,257,505
Inventories	1,675,751			1,607,256
Prepaid expenses	267,724			258,633
Other current assets	30,221			44,886
Total current assets	3,471,512			3,249,972
Property, plant and equipment, net	3,370,348			3,147,118
Goodwill	2,274,426			2,293,365
Tradenames	580,147			632,349
Other intangible assets, net	254,459			304,192
Deferred income taxes and other non-current assets	279,704			307,404
	$	10,230,596		9,934,400
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	1,382,738		2,003,003
Accounts payable and accrued expenses	1,335,582			1,256,025
Total current liabilities	2,718,320			3,259,028
Deferred income taxes	361,416			388,130
Long-term debt, less current portion	1,128,747			1,188,964
Other long-term liabilities	214,930			215,463
Total liabilities	4,423,413			5,051,585
Commitments and contingencies (Note 13)
Redeemable noncontrolling interest	23,696			21,952
Stockholders’ equity:
Preferred stock, $.01 par value; 60 shares authorized; no shares issued	—			—
Common stock, $.01 par value; 150,000 shares authorized; 81,519 and 81,280 shares issued in 2016 and 2015, respectively	815			813
Additional paid-in capital	1,791,540			1,760,016
Retained earnings	5,032,914			4,102,707
Accumulated other comprehensive loss	(833,027		)	(793,568	)
	5,992,242			5,069,968
Less treasury stock at cost; 7,351 shares in 2016 and 2015	215,791			215,795
Total Mohawk Industries, Inc. stockholders’ equity	5,776,451			4,854,173
Noncontrolling interest	7,036			6,690
Total stockholders' equity	5,783,487			4,860,863
	$	10,230,596		9,934,400

See accompanying notes to consolidated financial statements.

40

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Years Ended December 31, 2016, 2015 and 2014

	2016			2015	2014
	(In thousands, except per share data)
Net sales	$	8,959,087		8,071,563	7,803,446
Cost of sales	6,146,262			5,660,877	5,649,254
Gross profit	2,812,825			2,410,686	2,154,192
Selling, general and administrative expenses	1,532,882			1,573,120	1,381,396
Operating income	1,279,943			837,566	772,796
Interest expense	40,547			71,086	98,207
Other (income) expense	(1,729		)	17,619	10,698
Earnings before income taxes	1,241,125			748,861	663,891
Income tax expense	307,559			131,875	131,637
Net earnings including noncontrolling interest	933,566			616,986	532,254
Net earnings attributable to noncontrolling interest	3,204			1,684	289
Net earnings attributable to Mohawk Industries, Inc.	$	930,362		615,302	531,965
Basic earnings per share attributable to Mohawk Industries, Inc.
Basic earnings per share attributable to Mohawk Industries, Inc.	$	12.55		8.37	7.30
Weighted-average common shares outstanding—basic	74,104			73,516	72,837
Diluted earnings per share attributable to Mohawk Industries, Inc.
Diluted earnings per share attributable to Mohawk Industries, Inc.	$	12.48		8.31	7.25
Weighted-average common shares outstanding—diluted	74,568			74,043	73,363

See accompanying notes to consolidated financial statements.

41

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

Years Ended December 31, 2016, 2015 and 2014

	2016			2015		2014
	(in thousands)
Net earnings including noncontrolling interest	$	933,566		616,986		532,254
Other comprehensive (loss) income:
Foreign currency translation adjustments	(36,702		)	(360,147	)	(607,351	)
Prior pension and post-retirement benefit service cost and actuarial (loss) gain	(2,757		)	(4,100	)	(659	)
Other comprehensive (loss) income	(39,459		)	(364,247	)	(608,010	)
Comprehensive income (loss)	894,107			252,739		(75,756	)
Comprehensive income attributable to the non-controlling interest	3,204			1,684		289
Comprehensive income attributable to Mohawk Industries, Inc.	$	890,903		251,055		(76,045	)

See accompanying notes to consolidated financial statements.

42

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2016, 2015 and 2014

				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, 2013	$	—		80,841	$	808	$	1,566,985		$	2,953,809		$	178,689		(8,155	)	$	(239,234	)	$	9,249		$	4,470,306
Shares issued under employee and director stock plans	—			229	3		(1,113		)	—			—			(2	)	(216		)	—			(1,326		)
Stock-based compensation expense	—			—	—		27,961			—			—			—		—			—			27,961
Tax benefit from stock-based compensation	—			—	—		5,054			—			—			—		—			—			5,054
Distribution to noncontrolling interest, net of adjustments	—			—	—		—			—			—			—		—			(1,087		)	(1,087		)
Noncontrolling earnings	—			—	—		—			—			—			—		—			289			289
Currency translation adjustment on noncontrolling interests	—			—	—		—			—			—			—		—			(2,339		)	(2,339		)
Acquisition of noncontrolling interest	—			—	—		—			1,305			—			—		—			(1,305		)	—
Currency translation adjustment	—			—	—		—			—			(607,351		)	—		—			—			(607,351		)
Pension prior service cost and actuarial gain	—			—	—		—			—			(659		)	—		—			—			(659		)
Net income	—			—	—		—			531,965			—			—		—			—			531,965
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 non-controlling 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 loss	—			—	—		—			—			(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 tax				—	—		—			(32		)	—			—		—			32			—
Currency translation adjustment	—			—	—		—			—			(36,702		)	—		—			—			(36,702		)
Prior pension and post-retirement benefit service cost and actuarial loss	—			—	—		—			—			(2,757		)	—		—			—			(2,757		)
Net income	—			—	—		—			930,362			—			—		—			—			930,362
Balances as of 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

See accompanying notes to consolidated financial statements.

43

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31, 2016, 2015 and 2014

	2016			2015		2014
	(In thousands)
Cash flows from operating activities:
Net earnings	$	933,566		616,986		532,254
Adjustments to reconcile net earnings to net cash provided by operating activities:
Restructuring	38,463			33,085		16,497
Intangible asset impairment	47,905			—		—
Loss on sale of subsidiary	—			—		11,954
Depreciation and amortization	409,467			362,647		345,570
Deferred income taxes	(34,009		)	(28,883	)	(24,026	)
Loss on extinguishment of debt	—			—		20,001
Loss on disposal of property, plant and equipment	3,932			3,007		2,153
Stock-based compensation expense	35,059			32,552		27,961
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	(158,888		)	(14,383	)	(107,705	)
Inventories	(81,923		)	6,400		(67,016	)
Accounts payable and accrued expenses	80,875			783		(49,204	)
Other assets and prepaid expenses	54,267			(75,813	)	(30,376	)
Other liabilities	(1,161		)	(24,508	)	(15,875	)
Net cash provided by operating activities	1,327,553			911,873		662,188
Cash flows from investing activities:
Additions to property, plant and equipment	(672,125		)	(503,657	)	(561,804	)
Acquisitions, net of cash acquired	—			(1,370,567	)	19
Net change in cash from sale of subsidiary	—			—		(3,867	)
Net cash used in investing activities	(672,125		)	(1,874,224	)	(565,652	)
Cash flows from financing activities:
Payments on Senior Credit Facilities	(707,129		)	(1,376,082	)	(1,613,484	)
Proceeds from Senior Credit Facilities	631,807			1,315,930		1,448,191
Payments on Commercial Paper	(20,210,585		)	(15,934,767	)	(7,424,751	)
Proceeds from Commercial Paper	20,301,372			16,402,507		7,726,351
Repayment of senior notes	(645,555		)	—		(254,445	)
Proceeds from asset securitization borrowings	—			—		200,000
Proceeds from senior note issuance	—			564,653		—
Payments on other debt	—			—		(55,358	)
Payments on acquired debt and other financings	—			(9,530	)	(42,954	)
Debt issuance costs	(1,336		)	(7,109	)	—
Debt extinguishment costs	—			—		(18,921	)
Distribution to non-controlling interest	—			—		(1,087	)
Change in outstanding checks in excess of cash	(1,754		)	(2,052	)	(1,920	)
Proceeds and net tax benefit from stock transactions	9,280			10,533		12,828
Net cash (used in) provided by financing activities	(623,900		)	964,083		(25,550	)
Effect of exchange rate changes on cash and cash equivalents	8,445			(17,917	)	(27,175	)
Net change in cash and cash equivalents	39,973			(16,185	)	43,811
Cash and cash equivalents, beginning of year	81,692			97,877		54,066
Cash and cash equivalents, end of year	$	121,665		81,692		97,877

See accompanying notes to consolidated financial statements.

44

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2016, 2015 and 2014

(In thousands, except per share data)

(1) Summary of Significant Accounting Policies

(a) Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company's vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile ("LVT") and vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(b) Segment Realignment

During the second quarter of 2015, the Company realigned its reportable segments to reflect how the Company’s results will be reported by management. The Company has reorganized its business into three segments - Global Ceramic, Flooring North America ("Flooring NA") and Flooring Rest of the World ("Flooring ROW"). In order to leverage its relationship and distribution capabilities, the Company organized its carpet, wood, laminate, LVT and vinyl operations by geography into the Flooring NA segment and Flooring ROW segment. The Company did not make changes to the Global Ceramic segment, which includes our ceramic tile and stone operations. Previously reported segment results have been reclassified to conform to the current period presentation.

This new segment structure is consistent with the strategic objective that management now applies to manage the growth and profitability of the Company’s business. The Global Ceramic segment includes all worldwide tile and natural stone operations. The Flooring NA segment includes North American operations in all product categories except tile and natural stone. The new segment combines the former Carpet segment with the North American operations of the former Laminate and Wood segment and the North American operations of the Company’s newly acquired LVT and vinyl flooring businesses. The Flooring ROW segment includes operations outside of North America in all product categories except tile and natural stone. The new segment combines the European and Rest of the World operations of the former Laminate and Wood segment and the European and Rest of the World operations of the Company’s newly acquired LVT and vinyl flooring businesses.

(c) Cash and Cash Equivalents

The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2016, the Company had cash of $121,665 of which $92,419 was held outside the United States. As of December 31, 2015, the Company had cash of $81,692 of which $61,173 was held outside the United States.

(d) Accounts Receivable and Revenue Recognition

The Company sells carpet, rugs, ceramic tile, natural stone, hardwood, sheet vinyl, LVT and laminate flooring products in the U.S. and to a lesser extent, Mexico, Europe and Russia principally for residential and commercial use. The Company grants credit to customers, most of whom are retail-flooring dealers, home centers and commercial end users, under credit terms that the Company believes are customary in the industry.

Revenues, which are recorded net of taxes collected from customers, 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 assured. The Company provides allowances for expected cash discounts, returns, claims, sales allowances and doubtful accounts based upon historical bad debt and claims experience and periodic evaluations of specific customer accounts and the aging of accounts receivable. Licensing revenues received from third parties for patents are recognized based on contractual agreements.

45

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(e) Inventories

The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or market (net realizable value). Cost has been determined using the FIFO method. 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.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 25-40 years for buildings and improvements, 5-15 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

(g) Accounting for Business Combinations

The Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations.

(h) Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic ("ASC") 350, “Intangibles-Goodwill and Other,” the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis in the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). 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’s 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted during the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The first step of the impairment tests for our indefinite lived intangible assets is a thorough assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts. If the qualitative test indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative assessment is not required. If a quantitative test is necessary, the second step of our impairment test involves comparing the estimated fair value of a reporting unit to its carrying amount. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

(i) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(j) Financial Instruments

The Company’s financial instruments consist primarily of receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

(k) Advertising Costs and Vendor Consideration

Advertising and promotion expenses are charged to earnings during the period in which they are incurred. Advertising and promotion expenses included in selling, general, and administrative expenses were $122,148 in 2016, $100,012 in 2015 and $93,050 in 2014.

Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising. Co-op advertising is classified as a selling, general and administrative expense in accordance with ASC 605-50. Co-op advertising expenses, a component of advertising and promotion expenses, were $11,132 in 2016, $9,417 in 2015 and $10,064 in 2014.

(l) Product Warranties

The Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

(m) Impairment of Long-Lived Assets

The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(n) Foreign Currency Translation

The Company’s subsidiaries that operate outside the United States use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

(o) 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 €500,0002.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the year ended December 31, 2016, the change in the U.S. dollar value of the Company's euro denominated debt was $20,644 ($12,902 net of taxes), which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase 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.

(p) Earnings per Share (“EPS”)

Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method. There were no common stock options and unvested restricted shares (units) that were not included in the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2016, 2015 and 2014.

Computations of basic and diluted earnings per share are presented in the following table:

	2016			2015		2014
Earnings attributable to Mohawk Industries, Inc.	$	930,362		615,302		531,965
Accretion of redeemable noncontrolling interest (a)	(123		)	(194	)	—
Net earnings available to common stockholders	$	930,239		615,108		531,965
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding - basic	74,104			73,516		72,837
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net	464			527		526
Weighted-average common shares outstanding-diluted	74,568			74,043		73,363
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	12.55		8.37		7.30
Diluted	$	12.48		8.31		7.25

(a) Represents the accretion of the Company's redeemable noncontrolling interest to redemption value. See Note 2 - Acquisitions for further information.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(q) 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 ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards' estimated lives for fixed awards with ratable vesting provisions.

(r) Employee Benefit Plans

The Company has a 401(k) retirement savings plan (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 90 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $50,542 and $21,002 in 2016, $45,279 and $18,882 in 2015 and $42,681 and $17,654 in 2014, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans. As of December 31, 2016, the funded status of the Non-U.S. Plans was a liability of $7,517 of which $3,803 was recorded in accumulated other comprehensive income, for a net liability of $3,714 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2015, the funded status of the Non-U.S. Plans was a liability of $3,224 of which $1,075 was recorded in accumulated other comprehensive income (loss), for a net liability of $2,149 recorded in other long-term liabilities within the consolidated balance sheets.

(s) Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested.

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2016, 2015 and 2014 are as follows:

	Foreign currency translation adjustments			Pensions and post-retirement benefits		Total
Balance as of December 31, 2013	$	178,846		(157	)	178,689
Current period other comprehensive income (loss) before reclassifications	(607,351		)	(659	)	(608,010	)
Amounts reclassified from accumulated other comprehensive loss	—			—		—
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 income	—			—		—
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 (loss)	—			—		—
Balance as of December 31, 2016	$	(825,354	)	(7,673	)	(833,027	)

(t) Self-Insurance Reserves

The Company is self-insured in the U.S. for various levels of general liability, auto liability, workers’ compensation and employee medical coverage. Insurance reserves, excluding workers' compensation, are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

differences in actual settlements and claims could have an adverse effect on the Company's results of operations and financial condition.

(u) Fiscal Year

The Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

(v) Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. GAAP and International Financial Reporting Standards ("IFRS") and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period and early application is not permitted. On July 9, 2015, the FASB decided to defer the effective date of ASC 606 for one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The Company currently plans to adopt the provisions of this new accounting standard at the beginning of fiscal year 2018, using the cumulative effect method, and continues to evaluate the impact of the adoption of ASC 606 on its consolidated financial statements. The Company expects to complete its assessment of the impact of adoption of ASC 606 during the first half of 2017.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. This topic converges the guidance within U.S. GAAP and IFRS. The new standard intends to simplify the presentation of debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, versus recording the costs as a prepaid expense in other assets that is amortized. The new standard will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30) to address the measurement of debt issuance costs associated with line-of-credit arrangements. ASU 2015-15 states that an entity can defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless if there are outstanding borrowings on the line-of-credit arrangement. The Company adopted the provisions of this new accounting standard effective January 1, 2016 retrospectively. Accordingly, unamortized debt issuance costs of $7,964 were reclassified from other non-current assets to long-term debt in the December 31, 2015 consolidated balance sheet.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update changes the measurement principle for inventory for entities using FIFO or average cost from the lower of cost or market to lower of cost and net realizable value. Entities that measure inventory using LIFO or the retail inventory method are not affected. This update will more closely align the accounting for inventory under U.S. GAAP with IFRS. The new guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is permitted. The Company currently accounts for inventory using the FIFO method. Accordingly, the Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under this ASU, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The Company adopted the provisions of this update effectively January 1, 2016 prospectively. This update did not have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The amendments in this Update create Topic 842, Leases, and supersede the requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The guidance in this update is effective for annual reporting

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

periods beginning after December 15, 2018 including interim periods within that reporting period and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2019, and is currently assessing the impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance in this update is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of credit losses on financial instruments. Topic 326 amends guidance on reporting credit losses by replacing the current incurred loss model with a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2020, and is currently assessing the impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. Additionally, the FASB issued ASU 2016-18 in November 2016 to address the classification and presentation of changes in restricted cash on the statement of cash flows. The guidance in these updates should be applied retrospectively and are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company plans to adopt the provisions of these updates at the beginning of fiscal year 2018 and is currently assessing the impact on its consolidated statement of cash flows.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(2) Acquisitions

IVC Group

On January 13, 2015, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with Enterhold S.A., a Luxembourg societe anonyme (the “Seller”), to acquire all of the outstanding shares of International Flooring Systems S.A., a Luxembourg societe anonyme, and its subsidiaries (collectively, the “IVC Group”). The IVC Group is a global manufacturer, distributor and marketer of luxury vinyl tile ("LVT") and sheet vinyl. On June 12, 2015, pursuant to the terms of the Share Purchase Agreement, the Company completed the acquisition of IVC Group for  $1,146,437. The results of the IVC Group's operations have been included in the consolidated financial statements since that date in the Flooring NA and the Flooring ROW segments. The IVC Group acquisition will position the Company as a major participant in both the fast growing LVT category and the expanding fiberglass sheet vinyl business.

Pursuant to the terms of the Share Purchase Agreement, the Seller will indemnify the Company for uncertain tax positions and tax liabilities that were incurred by the Seller. The Company has recorded these tax liabilities and related indemnification asset in the amount of $34,781 as of the acquisition date in other long-term liabilities and other long-term assets, respectively.

The equity value of IVC Group was paid to the Seller in cash and in shares of the Company's common stock (the “Shares”). Pursuant to the Share Purchase Agreement, the Company (i) acquired the entire issued share capital of IVC Group and (ii) acquired $17,122 of indebtedness of the IVC Group, in exchange for a net cash payment of $732,189, debt paid of $261,152, and 806 issued treasury shares for a value of $153,096.

The Company funded the cash portion of the IVC Group acquisition through a combination of proceeds from the 2.00% Senior Notes (as discussed in Note 9 - Long-Term Debt), cash on hand and borrowings under the 2015 Senior Credit Facility (as discussed in Note 8 - Long-Term Debt).

KAI Group

On May 12, 2015, the Company purchased approximately 90% of all outstanding shares of Advent KAI Luxembourg Holdings S.a r.l., a Luxembourg societe a respsonsabilite limitee, and its subsidiaries(collectively, the "KAI Group"), an eastern European ceramic tile floor manufacturer. The Company completed the acquisition of the KAI Group for $194,613. The results of the KAI Group's operations have been included in the consolidated financial statements since the date of acquisition in the Global Ceramic segment. The KAI Group has a low cost position in the Bulgarian and Romanian markets. The combination with the Company will present opportunities to enhance the group's product offering, upgrade its technology and expand its exports to other countries. The remaining 10% ownership interest in the KAI Group is controlled by a third party. The 10% interest is subject to redemption provisions that are not solely within the Company’s control and therefore is recorded as a redeemable noncontrolling interest in the mezzanine section of the balance sheet for $23,696 as of December 31, 2016. Pursuant to the share purchase agreement, the Company (i) acquired approximately 90% of the issued share capital of the KAI Group and (ii) acquired $24 of indebtedness of the KAI Group, in exchange for a net cash payment of $169,540 and debt paid of $25,073.

The Company accounted for the acquisitions of the IVC Group and the KAI Group (the “Acquisitions”) using the acquisition method of accounting, with the Company as the acquirer of the IVC Group and the KAI Group. The preliminary estimated combined consideration transferred of $1,341,050, including debt paid and shares issued, was determined in accordance with the respective share purchase agreements. The preliminary consideration transferred is allocated to tangible and intangible assets and liabilities based upon their respective fair values.

The following table summarizes the preliminary acquisition-date fair value of the consideration transferred for the Acquisitions and the estimated fair value of the consideration transferred to assets acquired and liabilities assumed as of the date of the Acquisitions, and the allocation of the aggregate purchase price of the IVC Group and the KAI Group acquisitions to the estimated fair values of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands):

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Fair value of assets, net of cash acquired	$	1,382,356
Noncontrolling interests in assets acquired	(24,160		)
Assumed indebtedness	(17,146		)
Consideration transferred	$	1,341,050
Working capital	140,606
Property, plant and equipment	363,570
Tradenames	48,563
Customer relationships	224,326
Goodwill	740,140
Other long-term assets	50,236
Long-term debt, including current portion	(17,146		)
Other long-term liabilities	(57,832		)
Deferred tax liabilities	(127,253		)
Noncontrolling interest	(24,160		)
Consideration transferred	$	1,341,050

Intangible assets subject to amortization of $224,326 related to customer relationships have estimated lives of 12 to 14 years. In addition to the amortizable intangible assets, there is an additional $48,563 in indefinite-lived tradename intangible assets. The goodwill of $740,140 was allocated to the Company's segments as disclosed in Note 6, Goodwill and Other Intangible Assets. The factors contributing to the recognition of the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized from the Acquisitions. These benefits include the opportunities to improve the Company's performance by leveraging best practices, operational expertise, product innovation and manufacturing assets. The recognized goodwill from the Acquisitions is not expected to be deductible for tax purposes.

The results of operations for the Acquisitions were not significant to the Company's consolidated results of operations and, accordingly, the Company has not provided pro forma information relating to the Acquisitions.

Xtratherm

On December 7, 2015, the Company completed its purchase of Xtratherm Limited, an Irish company, and certain of its affiliates (collectively, "Xtratherm"), a manufacturer of insulation boards in Ireland, the UK and Belgium. The total value of the acquisition was $158,851. The Xtratherm acquisition will expand the Company's existing insulation board footprint to include Ireland, the UK and Belgium while capitalizing on expanded product offerings in Belgium. The acquisition's results and purchase price allocation have been included in the consolidated financial statements since the date of the acquisition. The Company's acquisition of Xtratherm resulted in a preliminary goodwill allocation of $33,307, indefinite-lived trademark intangible assets of $4,681 and intangible assets subject to amortization of $39,784. The goodwill is not expected to be deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include the opportunity to optimize the assets of Xtratherm with the Company's existing insulation assets. The Xtratherm results are reflected in the Flooring ROW segment.

Other Acquisitions

During the first quarter of 2015, the Company acquired certain assets of a distribution business in the Flooring ROW segment for $2,822, resulting in a preliminary goodwill allocation of $2,659.

During the third quarter of 2015, the Company acquired certain assets of a ceramic business in the Global Ceramic segment for $20,423, resulting in a preliminary goodwill allocation of $269.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(3) 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 including accelerated depreciation and workforce reductions.

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2016, 2015 and 2014, respectively (in thousands):

	2016		2015	2014
Cost of sales
Restructuring costs(a)	$	33,582	35,956	19,795
Acquisition integration-related costs	4,722		9,597	11,426
Restructuring and integration-related costs	$	38,304	45,553	31,221
Selling, general and administrative expenses
Restructuring costs(a)	$	4,881	5,779	5,684
Acquisition transaction-related costs	—		9,502	—
Acquisition integration-related costs	7,438		13,770	14,697
Restructuring, acquisition and integration-related costs	$	12,319	29,051	20,381

(a) The restructuring costs for 2016, 2015 and 2014 primarily relate to the Company's actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as the Company adjusted to changing economic conditions as well as actions related to the Company's recent acquisitions. In 2015 and 2014 restructuring costs included accelerated depreciation of $8,650 and $8,982, respectively.

The restructuring activity for the twelve months endedDecember 31, 2016 and 2015, respectively is as follows (in thousands):

	Lease impairments			Asset write-downs		Severance		Other restructuring costs		Total
Balance as of December 31, 2014	$	1,741		—		3,037		100		4,878
Provision - Global Ceramic segment	—			2,318		3,227		(1,180	)	4,365
Provision - Flooring NA segment	1,877			4,279		4,600		8,688		19,444
Provision - Flooring ROW segment	—			8,789		5,366		3,771		17,926
Cash payments	(3,618		)	—		(7,265	)	(11,494	)	(22,377	)
Non-cash items	—			(15,386	)	—		1,180		(14,206	)
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

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

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(4) Receivables

	December 31, 2016		December 31, 2015
Customers, trade	$	1,386,306	1,243,533
Income tax receivable	8,616		21,835
Other	59,564		71,084
	1,454,486		1,336,452
Less allowance for discounts, returns, claims and doubtful accounts	78,335		78,947
Receivables, net	$	1,376,151	1,257,505

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to costs and expenses	Deductions(1)	Balance at end of year
2014	$	77,037	—	252,982	257,416	72,603
2015	72,603		7,750	272,329	273,735	78,947
2016	78,947		—	296,419	297,031	78,335

(1) Represents charge-offs, net of recoveries.

(5) Inventories

The components of inventories are as follows:

	December 31, 2016		December 31, 2015
Finished goods	$	1,127,573	1,083,012
Work in process	137,310		137,186
Raw materials	410,868		387,058
Total inventories	$	1,675,751	1,607,256

55

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(6) Goodwill and Other Intangible Assets

The Company conducted its annual impairment assessment in the fourth quarter of 2016 and determined the fair values of its reporting units and trademarks exceeded their carrying values. As a result, no impairment was indicated.

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic			Flooring NA		Flooring ROW		Total
Balances as of December 31, 2014
Goodwill	$	1,395,132		538,515		998,130		2,931,777
Accumulated impairments losses	(531,930		)	(343,054	)	(452,441	)	(1,327,425	)
	863,202			195,461		545,689		1,604,352
Goodwill recognized during the year	99,848			329,401		345,905		775,154
Currency translation during the year	(22,223		)	—		(63,918	)	(86,141	)
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

Intangible assets:

During the third quarter of 2016, the Company determined that it needed to simplify the branding strategy in the Flooring NA segment by consolidating products under the Mohawk Group brands and discontinuing the Lees brand. This resulted in the Company writing off the full value of the Lees tradename and recording an impairment charge of $47,905 in selling, general and administrative expenses in the consolidated statements of operations.

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2014	$	622,691
Intangible assets acquired during the year	53,244
Currency translation during the year	(43,586		)
Balance as of December 31, 2015	632,349
Intangible assets acquired during the year	—
Intangible assets impaired during the year	(47,905		)
Currency translation during the year	(4,297		)
Balance as of December 31, 2016	$	580,147

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

	Customer relationships			Patents		Other		Total
Intangible assets subject to amortization:
Balances as of December 31, 2014	$	33,917		44,591		810		79,318
Intangible assets acquired during the year	258,875			—		5,290		264,165
Amortization during the year	(16,567		)	(13,331	)	(11	)	(29,909	)
Currency translation during the year	(5,102		)	(4,275	)	(5	)	(9,382	)
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

	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

	December 31, 2015
	Cost		Acquisitions	Currency translation		Accumulated amortization	Net Value
Customer Relationships	$	354,768	258,875	(24,927	)	317,593	271,123
Patents	270,466		—	(27,208	)	216,273	26,985
Other	1,479		5,290	21		706	6,084
Total	$	626,713	264,165	(52,114	)	534,572	304,192

	Years Ended December 31,
	2016		2015	2014
Amortization expense	$	39,545	29,909	24,724

Estimated amortization expense for the years ending December 31 are as follows:

2017	$	34,302
2018	26,013
2019	22,967
2020	22,967
2021	22,936

57

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(7) Property, Plant and Equipment

Following is a summary of property, plant and equipment:

	December 31, 2016		December 31, 2015
Land	$	288,633	305,943
Buildings and improvements	1,189,408		1,120,193
Machinery and equipment	3,979,349		3,750,787
Furniture and fixtures	236,183		133,857
Leasehold improvements	77,976		68,977
Construction in progress	472,226		403,500
	6,243,775		5,783,257
Less accumulated depreciation and amortization	2,873,427		2,636,139
Net property, plant and equipment	$	3,370,348	3,147,118

Additions to property, plant and equipment included capitalized interest of $5,608, $7,091 and $9,202 in 2016, 2015 and 2014, respectively. Depreciation expense was $366,233, $328,486 and $315,840 for 2016, 2015 and 2014, respectively. Included in the property, plant and equipment are capital leases with a cost of $7,986 and $8,233 and accumulated depreciation of $4,436 and $4,431 as of December 31, 2016 and 2015, respectively.

(8) Long-Term Debt

Senior Credit Facility

On September 25, 2013, the Company entered into a $1,000,000, 5-year, senior revolving credit facility (the "2013 Senior Credit Facility"). The 2013 Senior Credit Facility provided for a maximum of $1,000,000 of revolving credit, including limited amounts of credit in the form of letters of credit and swingline loans. The Company paid financing costs of $1,836 in connection with its 2013 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $11,440 related to the Company’s previous credit facility, were amortized over the term of the 2013 Senior Credit Facility.

On March 26, 2015, the Company amended and restated the 2013 Senior Credit Facility increasing its size from $1,000,000 to $1,800,000 and extending the maturity from September 25, 2018 to March 26, 2020 (as amended and restated, the "2015 Senior Credit Facility"). The 2015 Senior Credit Facility eliminates certain provisions in the 2013 Senior Credit Facility, including those that: (a) accelerated the maturity date to 90 days prior to the maturity of senior notes due in January 2016 if certain specified liquidity levels were not met; and (b) required that certain subsidiaries guarantee the Company's obligations if the Company’s credit ratings fell below investment grade. The 2015 Senior Credit Facility also modified certain negative covenants to provide the Company with additional flexibility, including flexibility to make acquisitions and incur additional indebtedness. On March 1, 2016, the Company amended the 2015 Senior Credit Facility to, among other things, carve out from the general limitation on subsidiary indebtedness the issuance of Euro-denominated commercial paper notes by subsidiaries and to extend the maturity date from March 26, 2020 to March 26, 2021 with respect to all but $120,000 of the total amount committed under the 2015 Senior Credit Facility. On October 17, 2016, the Company extended the maturity date for the remaining $120,000 commitment to March 26, 2021.

At the Company's election, revolving loans under the 2015 Senior Credit Facility bear interest at annual rates equal to either (a) LIBOR for 1, 2, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.125% as of December 31, 2016), or (b) the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.5%, and a monthly LIBOR rate plus 1.0%, plus an applicable margin ranging between 0.00% and 0.75% (0.125% as of December 31, 2016). The Company also pays a commitment fee to the lenders under the 2015 Senior Credit Facility on the average amount by which the aggregate commitments of the lenders' under the 2015 Senior Credit Facility exceed utilization. The commitment fee ranges from 0.10% to 0.225% per annum (0.125% as of December 31, 2016). The applicable margins and the commitment fee are determined based on whichever of the Company's Consolidated Net Leverage Ratio or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

58

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The obligations of the Company and its subsidiaries in respect of the 2015 Senior Credit Facility are unsecured.

The 2015 Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company's financial and business operations, including limitations on liens, subsidiary indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, future negative pledges, and changes in the nature of the Company's business. The Company is also required to maintain a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.0, each as of the last day of any fiscal quarter. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirements and is not otherwise in default.

The 2015 Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

Also on March 1, 2016, the Company entered into a three-year, senior, unsecured delayed-draw term loan facility (the “Term Loan Facility”) by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and each of the lenders party thereto. Subject to customary conditions precedent, the Company could borrow up to $200,000 under the Term Loan Facility in no more than 2 borrowings between March 1, 2016 and September 1, 2016. The Company did not borrow under the Term Loan Facility, and it has since expired on its stated expiration date.

The Company paid financing costs of $532 in connection with the amendment and extension of its 2015 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $8,785 related to the Company’s 2013 Senior Credit Facility, are being amortized over the term of the 2015 Senior Credit Facility. The Company also paid financing costs of $553 in connection with its Term Loan Facility.

As of December 31, 2016, amounts utilized under the 2015 Senior Credit Facility included $60,672 of borrowings and $941 of standby letters of credit related to various insurance contracts and foreign vendor commitments. The outstanding borrowings of $820,303 under the Company's U.S. and European commercial paper programs as of December 31, 2016 reduce the availability of the 2015 Senior Credit Facility. Including commercial paper borrowings, the Company has utilized $881,916 under the 2015 Senior Credit Facility resulting in a total of $918,084 available under the 2015 Senior Credit Facility.

Commercial Paper

On February 28, 2014, the Company established a U.S. commercial paper program for the issuance of unsecured commercial paper in the United States capital markets. Under the commercial paper program, the Company issues commercial paper notes from time to time. The U.S. commercial paper notes have maturities ranging from one day to 397 days and may not be voluntarily prepaid or redeemed by the Company. The U.S. commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. As of December 31, 2016 there was $283,800 outstanding under the U.S. commercial paper program.

On July 31, 2015, the Company established a European commercial paper program for the issuance of unsecured commercial paper in the Eurozone capital markets. The European commercial paper notes have maturities ranging from one day to 183 days and may not be voluntarily prepaid or redeemed by the Company. The European commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company. As of December 31, 2016, the euro equivalent of $536,503 was outstanding under the European commercial paper program.

The Company uses its 2015 Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount due and payable under all of the Company's commercial paper programs may not exceed $1,800,000 (less any amounts drawn on the 2015 Credit Facility) at any time.

The proceeds from the sale of commercial paper notes will be available for general corporate purposes. The Company used the initial proceeds from the sale of U.S. commercial paper notes to repay borrowings under its 2013 Senior Credit Facility and certain of its industrial revenue bonds. The Company used the initial proceeds from the sale of European commercial paper notes to repay euro-denominated borrowings under its 2015 Senior Credit Facility. As of December 31, 2016, the amount utilized

59

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

under the commercial paper programs was $820,303 with a weighted-average interest rate and maturity period of 0.98% and 15.62 days, respectively for the U.S. commercial paper program and (0.11)% and 28.92 days, respectively for the European commercial paper program. 

Senior Notes

On June 9, 2015, the Company issued €500,000 aggregate principal amount of 2.00% Senior Notes due January 14, 2022. The 2.00% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 2.00% Senior Notes is payable annually in cash on January 14 of each year, commencing on January 14, 2016. The Company paid financing costs of $4,218 in connection with the 2.00% Senior Notes. These costs were deferred and are being amortized over the term of the 2.00% Senior Notes.

On January 31, 2013, the Company issued $600,000 aggregate principal amount of 3.85% Senior Notes due February 1, 2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company's existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes is payable semi-annually in cash on February 1 and August 1 of each year. The Company paid financing costs of $6,000 in connection with the 3.85% Senior Notes. These costs were deferred and are being amortized over the term of the 3.85% Senior Notes.

On January 17, 2006, the Company issued $900,000 aggregate principal amount of 6.125% Senior Notes due January 15, 2016. During 2014, the Company purchased for cash approximately $254,445 aggregate principal amount of its outstanding 6.125% senior notes due January 15, 2016. On January 15, 2016, the Company paid the remaining $645,555 outstanding principal of its 6.125% Senior Notes (plus accrued but unpaid interest) utilizing cash on hand and borrowings under its U.S. commercial paper program.

Accounts Receivable Securitization

On December 19, 2012, the Company entered into a three-year on-balance sheet trade accounts receivable securitization agreement (the "Securitization Facility"). On September 11, 2014, the Company made certain modifications to its Securitization Facility, which modifications, among other things, increased the aggregate borrowings available under the facility from $300,000 to $500,000 and decreased the interest margins on certain borrowings. On December 10, 2015, the Company amended the terms of the Securitization Facility extending the termination date from December 19, 2015 to December 19, 2016. The Company further amended the terms of the Securitization Facility on December 13, 2016, extending the termination date to December 19, 2017. The Company paid financing costs of $250 in connection with this extension. These costs were deferred and are being amortized over the remaining term of the Securitization Facility.

Under the terms of the Securitization Facility, certain subsidiaries of the Company sell at a discount certain of their trade accounts receivable (the “Receivables”) to Mohawk Factoring, LLC (“Factoring”) on a revolving basis. The Company has determined that Factoring is a bankruptcy remote subsidiary, meaning that Factoring is a separate legal entity whose assets are available to satisfy the claims of the creditors of Factoring only, not the creditors of the Company or the Company’s other subsidiaries. Factoring may borrow up to $500,000 based on the amount of eligible Receivables owned by Factoring, and Factoring has granted a security interest in all of such Receivables to the third-party lending group as collateral for such borrowings.  Amounts loaned to Factoring under the Securitization Facility bear interest at LIBOR plus an applicable margin of 0.70% per annum. Factoring also pays a commitment fee at a per annum rate of 0.30% on the unused amount of each lender’s commitment. At December 31, 2016, the amount utilized under the Securitization Facility was $500,000.

60

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The fair values and carrying values of our debt instruments are detailed as follows:

	December 31, 2016					December 31, 2015
	Fair Value			Carrying Value		Fair Value		Carrying Value
3.85% senior notes, payable February 1, 2023; interest payable semiannually	$	615,006		600,000		584,730		600,000
6.125% notes, payable January 15, 2016; interest payable semiannually	—			—		646,130		645,555
2.00% senior notes, payable January 14, 2022; interest payable annually	556,460			525,984		554,209		546,627
U.S. commercial paper	283,800			283,800		284,800		284,800
European commercial paper	536,503			536,503		472,067		472,067
Five-year senior secured credit facility, due March 26, 2021	60,672			60,672		134,075		134,075
Securitization facility	500,000			500,000		500,000		500,000
Capital leases and other	11,643			11,643		16,805		16,807
Unamortized debt issuance costs	(7,117		)	(7,117	)	(7,964	)	(7,964	)
Total debt	2,556,967			2,511,485		3,184,852		3,191,967
Less current portion of long term debt and commercial paper	1,382,738			1,382,738		2,003,578		2,003,003
Long-term debt, less current portion	$	1,174,229		1,128,747		1,181,274		1,188,964

The fair values of the Company’s debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

The aggregate maturities of long-term debt as of December 31, 2016 are as follows:

2017	$	1,382,738
2018	1,694
2019	1,441
2020	961
2021	824
Thereafter	1,123,827
	$	2,511,485

61

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(9) Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2016		December 31, 2015
Outstanding checks in excess of cash	$	12,269	14,023
Accounts payable, trade	729,415		696,974
Accrued expenses	333,942		293,867
Product warranties	46,347		35,516
Accrued interest	20,396		34,623
Accrued compensation and benefits	193,213		181,022
Total accounts payable and accrued expenses	$	1,335,582	1,256,025

(10) Stock-Based Compensation

The Company recognizes compensation expense for all share-based payments granted for the years ended December 31, 2016, 2015 and 2014 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.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company's principal stock compensation plan as of May 9, 2012, the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through December 31, 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. Restricted stock and RSUs are granted with a price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

Stock Option Plans

Additional information relating to the Company’s stock option plans follows:

	2016			2015		2014
Options outstanding at beginning of year	169			298		425
Options exercised	(78		)	(66	)	(108	)
Options forfeited and expired	—			(63	)	(19	)
Options outstanding at end of year	91			169		298
Options exercisable at end of year	90			164		257
Option prices per share:
Options exercised during the year	$ 28.37-93.65			28.37-93.65		28.37-93.65
Options forfeited and expired during the year	$	—		28.37-88.33		46.80-93.65
Options outstanding at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65
Options exercisable at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65

During 2016, 2015 and 2014, a total of 1, 1 and 0 shares, respectively, were awarded to the non-employee directors in lieu of cash for their annual retainers.

The Company’s Board of Directors has authorized the repurchase of up to 15,000 shares of the Company’s outstanding common stock. For the years ended December 31, 2016 and December 31, 2015, the Company did not repurchase any shares. The Company purchased common stock for the year ended December 31, 2014, of 2 shares. Since the inception of the program, a total of approximately 11,521 shares have been repurchased at an aggregate cost of approximately $335,455. All of these repurchases have been financed through the Company’s operations and banking arrangements.

62

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

A summary of the Company’s options under the 2002, 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Options outstanding, December 31, 2015	169		$	61.73
Granted	—		—
Exercised	(78	)	59.24
Forfeited and expired	—		—
Options outstanding, December 31, 2016	91		$	63.84	4.9	$	12,360
Vested and expected to vest as of December 31, 2016	91		$	63.84	4.9	$	12,360
Exercisable as of December 31, 2016	90		$	63.82	4.9	$	12,227

The Company has not granted options since the year ended December 31, 2012. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014 was $10,571, $7,252 and 6,613, respectively. Total compensation expense recognized for the years ended December 31, 2016, 2015 and 2014 was $40 ($24, net of tax), $209 ($131, net of tax) and $865 ($548, net of tax), respectively, which was allocated to selling, general and administrative expenses. The remaining unamortized expense for non-vested compensation expense as of December 31, 2016 was $4 with a weighted average remaining life of 0.15 years.

The following table summarizes information about the Company’s stock options outstanding as of December 31, 2016:

	Outstanding				Exercisable
Exercise price range	Number of shares	Average life	Average price		Number of shares	Average price
$57.34-$57.34	23,735	4.1	57.34		23,735	57.34
$66.14-$66.14	67,258	5.1	66.14		66,258	66.14
Total	90,993	4.9	$	63.84	89,993	$	63.82

Restricted Stock Plans

A summary of the Company’s RSUs under the 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2015	750		$	84.67
Granted	187		184.88
Released	(226	)	78.94
Forfeited	(16	)	84.20
Restricted Stock Units outstanding, December 31, 2016	695		$	113.51	1.4	$	127,856
Expected to vest as of December 31, 2016	682				1.4	$	125,203

The Company recognized stock-based compensation costs related to the issuance of RSUs of $35,019 ($21,250, net of taxes), $32,343 ($20,832, net of taxes) and $27,016 (10,735, net of taxes) for the years ended December 31, 2016, 2015 and 2014, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense

63

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

for unvested RSUs granted to employees, net of estimated forfeitures, was $27,917 as of December 31, 2016, and will be recognized as expense over a weighted-average period of approximately 1.61 years.

Additional information relating to the Company’s RSUs under the 2007 and 2012 Plans is as follows:

	2016		2015		2014
Restricted Stock Units outstanding, January 1	750		725		733
Granted	187		248		189
Released	(226	)	(212	)	(189	)
Forfeited	(16	)	(11	)	(8	)
Restricted Stock Units outstanding, December 31	695		750		725
Expected to vest as of December 31	682		731		691

(11) Other (Income) Expense

Following is a summary of other expense (income):

	2016			2015		2014
Foreign currency losses (gains)	$	1,099		9,295		6,869
Release of indemnification asset	5,371			11,180		—
All other, net	(8,199		)	(2,856	)	3,829
Total other expense	$	(1,729	)	17,619		10,698

(12) Income Taxes

Following is a summary of earnings from continuing operations before income taxes for United States and foreign operations:

	2016		2015	2014
United States	$	627,567	324,210	331,553
Foreign	613,558		424,651	332,338
Earnings before income taxes	$	1,241,125	748,861	663,891

Income tax expense (benefit) from continuing operations for the years ended December 31, 2016, 2015 and 2014 consists of the following:

	2016			2015		2014
Current income taxes:
U.S. federal	$	247,917		117,602		100,826
State and local	31,939			11,175		13,686
Foreign	61,712			31,981		41,151
Total current	341,568			160,758		155,663
Deferred income taxes:
U.S. federal	(16,167		)	4,165		31,052
State and local	(22,115		)	(3,983	)	(3,473	)
Foreign	4,273			(29,065	)	(51,605	)
Total deferred	(34,009		)	(28,883	)	(24,026	)
Total	$	307,559		131,875		131,637

The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. Approximately 51% of the Company’s current year earnings from continuing operations before income taxes was generated in

64

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

the United States at a combined federal and state effective tax rate that is higher than the Company’s overall effective tax rate. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, Russia and Spain. The effective tax rates that the Company accrues in these jurisdictions vary widely, but they are generally lower than the Company’s overall effective tax rate. The Company’s domestic effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 38.5%, 39.8%, and 42.8%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 10.8%, 0.7%, and (3.1)%, respectively. The difference in rates applicable in foreign jurisdictions results from a number of factors, including lower statutory rates, historical loss carry-forwards, financing arrangements, and other factors. The Company’s effective tax rate has been and will continue to be impacted by the geographical dispersion of the Company’s earnings and losses. To the extent that domestic earnings increase while the foreign earnings remain flat or decrease, or increase at a lower rate, the Company’s effective tax rate will increase.

Income tax expense (benefit) attributable to earnings from continuing operations before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings from continuing operations before income taxes as follows:

	2016			2015		2014
Income taxes at statutory rate	$	434,394		262,102		232,362
State and local income taxes, net of federal income tax benefit	6,298			4,951		9,239
Foreign income taxes(a)	(111,217		)	(95,198	)	(89,385	)
Change in valuation allowance	(21,106		)	(14,237	)	(6,482	)
Tax contingencies and audit settlements(b)	2,496			(23,032	)	(7,882	)
Other, net	(3,306		)	(2,711	)	(6,215	)
	$	307,559		131,875		131,637

(a) Foreign income taxes includes statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) 2016 and 2015 include reversals of uncertain tax positions of $5,371 and $11,180, respectively.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below:

	2016			2015
Deferred tax assets:
Accounts receivable	$	23,521		11,134
Inventories	48,673			42,558
Employee benefits	76,143			70,989
Accrued expenses and other	72,258			54,652
Deductible state tax and interest benefit	5,186			491
Intangibles	12,874			34,003
Federal, foreign and state net operating losses and credits	456,130			458,743
Gross deferred tax assets	694,785			672,570
Valuation allowance	(289,078		)	(287,580	)
Net deferred tax assets	405,707			384,990
Deferred tax liabilities:
Inventories	(13,099		)	(8,663	)
Plant and equipment	(426,087		)	(429,258	)
Intangibles	(243,339		)	(267,571	)
Other liabilities	(50,041		)	(30,256	)
Gross deferred tax liabilities	(732,566		)	(735,748	)
Net deferred tax liability	$	(326,859	)	(350,758	)

The Company evaluates its ability to realize the tax benefits associated with deferred tax assets by analyzing its forecasted taxable income using both historic and projected future operating results, the reversal of existing temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The valuation allowance as of December 31, 2016, and 2015 is $289,078 and $287,580 , respectively. The valuation allowance as of December 31, 2016 relates to the net deferred tax assets of certain of the Company’s foreign subsidiaries as well as certain state net operating losses and tax credits. The total change in the 2016 valuation allowance was an increase of $1,498 which includes ($9,364) related to foreign currency translation. The total change in the 2015 valuation allowance was a decrease of $12,892, which includes $(24,718) related to foreign currency translation.

Management believes it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances, based upon the expected reversal of deferred tax liabilities and the level of historic and forecasted taxable income over periods in which the deferred tax assets are deductible.

As of December 31, 2016, the Company has state net operating loss carry forwards and state tax credits with potential tax benefits of $53,874, net of federal income tax benefit; these carry forwards expire over various periods based on taxing jurisdiction. A valuation allowance totaling $26,992 has been recorded against these state deferred tax assets as of December 31, 2016. In addition, as of December 31, 2016, the Company has net operating loss carry forwards in various foreign jurisdictions with potential tax benefits of $402,255. A valuation allowance totaling $249,529 has been recorded against these deferred tax assets as of December 31, 2016.

The Company does not provide for U.S. federal and state income taxes on the cumulative undistributed earnings of its foreign subsidiaries because such earnings are deemed to be permanently reinvested. As of December 31, 2016, the Company had not provided federal income taxes on earnings of approximately $1,400,000 from its foreign subsidiaries. Should these earnings be distributed in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes and withholding taxes in various foreign jurisdictions. These taxes may be partially offset by U.S. foreign tax credits. Determination of the amount of the unrecognized deferred U.S. tax liability is not practical because of the complexities associated with this hypothetical calculation.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Tax Uncertainties

In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing jurisdictions. Accordingly, the Company accrues liabilities when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with ASC 740-10. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest and penalties in income tax expense (benefit). Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to the Company’s consolidated results of operations or cash flow in any given quarter or annual period.

As of December 31, 2016, the Company’s gross amount of unrecognized tax benefits is $46,434, excluding interest and penalties. If the Company were to prevail on all uncertain tax positions, $28,489 of the unrecognized tax benefits would affect the Company’s effective tax rate, exclusive of any benefits related to interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2016			2015
Balance as of January 1	$	51,037		49,599
Additions based on tax positions related to the current year	2,221			684
Additions for tax positions of acquired companies	—			27,455
Additions for tax positions of prior years	6,412			2,330
Reductions resulting from the lapse of the statute of limitations	(6,294		)	(13,471	)
Settlements with taxing authorities	(6,555		)	(11,693	)
Effects of foreign currency translation	(387		)	(3,867	)
Balance as of December 31	$	46,434		51,037

The Company will continue to recognize interest and penalties related to unrecognized tax benefits as a component of its income tax provision. As of December 31, 2016 and 2015, the Company has $8,020 and $5,394, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable. During the years ending December 31, 2016 , 2015 and 2014, the Company accrued interest and penalties through the consolidated statements of operations of $2,170, $(5,635) and $(3,579), respectively.

The Company believes that its unrecognized tax benefits could decrease by $10,336 within the next twelve months. The Company has effectively settled all Federal income tax matters related to years prior to 2010. Various other state and foreign income tax returns are open to examination for various years.

Belgian Tax Matter

In January 2012, the Company received a €23,789 assessment from the Belgian tax authority related to its year ended December 31, 2008, asserting that the Company had understated its Belgian taxable income for that year. The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authority's position. The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of €1,583 earned on such deposits. However, on October 23, 2012, the Belgian tax authority notified the Company of its intent to increase the Company's taxable income for the year ended December 31, 2008 under a revised theory. On December 28, 2012, the Belgian tax authority issued assessments for the years ended December 31, 2005 and December 31, 2009, in the amounts of €46,135 and €35,567, respectively, including penalties, but excluding interest. The Company filed a formal protest during the first quarter of 2013 relating to the new assessments. In September 2013, the Belgian tax authority denied the Company's protests, and the Company has brought these two years before the Court of First Appeal in Bruges. In December 2013, the Belgian tax authority issued additional assessments related to the years ended December 31, 2006, 2007, and 2010, in the amounts of €38,817, €39,635, and €43,117, respectively, including penalties, but excluding interest. The Company filed formal protests during the first quarter of 2014, refuting the Belgian tax authority's position for each of the years assessed. In the quarter ended June 28, 2014, the Company received a formal assessment for the year ended December 31, 2008, totaling €30,131, against which the Company also submitted its formal protest. All 4

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

additional years have been brought before the Court of First Appeal in November 2014. In January of 2015, the Company met with the Court of First Appeal in Bruges, Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009, and apply the ruling to all of the open years (to the extent there are no additional facts/procedural arguments in the other years).

On January 27, 2016, the Court of First Appeal in Bruges, Belgium ruled in favor of the Company with respect to the calendar years ending December 31, 2005 and December 31, 2009. On March 9, 2016, the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal.

The Company disagrees with the views of the Belgian tax authority on this matter and will persist in its vigorous defense. Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the Company's properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment. The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal. The lien does not interfere with the Company's operations at these properties.

(13) Commitments and Contingencies

The Company is obligated under various operating leases for office and manufacturing space, machinery, and equipment. Future minimum lease payments under non-cancelable capital and operating leases (with initial or remaining lease terms in excess of one year) as of December 31:

	Capital		Operating	Total Future Payments
2017	$	1,463	99,091	100,554
2018	1,158		75,238	76,396
2019	869		54,187	55,056
2020	531		36,811	37,342
2021	523		20,535	21,058
Thereafter	3,983		17,612	21,595
Total payments	8,527		303,474	312,001
Less amount representing interest	1,506
Present value of capitalized lease payments	$	7,021

Rental expense under operating leases was $125,103, $116,663 and $120,677 in 2016, 2015 and 2014, respectively.

The Company had approximately $941 and $1,381 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2016 and 2015, respectively that expire within two years.

The Company is involved in litigation from time to time in the regular course of its business. Except as noted below and in Note 12-Income Taxes Belgian Tax Matter, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Gadsden, Alabama Litigation

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers and users of chemicals containing perfluorinated compounds, including the Company. On October 26, 2016, the defendants removed the case to the United States District Court for the Northern District of Alabama, Middle Division, alleging diversity of citizenship and fraudulent joinder.  The Water Board filed a motion to remand the case back to the state court and the defendants have opposed the Water Board’s motion.  The parties await a ruling from the federal court on the motion to remand. The Company has never manufactured perfluorinated compounds, but purchased them for use in the manufacture of its carpets prior to 2007.  The Water Board is not alleging that chemical levels in the Company’s wastewater discharge exceeded legal limits.  Instead, the Water Board

68

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

is seeking lost profits based on allegations that its customers decreased water purchases, reimbursement for the cost of a filter and punitive damages.

The Company intends to pursue all available defenses related to this matter.  The Company does not believe that the ultimate outcome of this case will have a material adverse effect on its financial condition, but there can be no assurances at this stage that the outcome will not have a material adverse effect on the Company’s results of operations, liquidity or cash flows in a given period.  Furthermore, the Company cannot predict whether any additional civil or regulatory actions against it may arise from the allegations in this matter.

Polyurethane Foam Litigation

Beginning in August 2010, a series of civil lawsuits were initiated in several U.S. federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the Company’s carpet underlay division had engaged in price fixing in violation of U.S. antitrust laws. The Company was named as a defendant in a number of the individual cases, as well as in two consolidated amended class action complaints on behalf of a class of all direct purchasers of polyurethane foam products and on behalf of a class of indirect purchasers. In these actions, the plaintiffs, on behalf of themselves and/or a class of purchasers, sought damages allegedly suffered as a result of alleged overcharges in the price of polyurethane foam products from at least 1999 to the present. Any damages actually awarded at trial would have been subject to being tripled under US antitrust laws.

On March 23 and April 30, 2015, the Company entered into agreements to settle all claims brought by the class of direct and indirect purchasers, and the trial court entered orders granting approval of the settlements on November 19, 2015 and January 27, 2016. Certain individual members of the indirect purchaser class sought to overturn the approval through an appeal to the Sixth Circuit of Appeals. As of June 21, 2016, all of these appeals have been dismissed, provided that one request to reconsider remains pending. The Company has also entered into settlement agreements resolving all of the claims brought on behalf of all of the consolidated individual lawsuits.

In December 2011, the Company was named as a defendant in a Canadian Class action, which alleged similar claims against the Company as raised in the U.S. actions. On June 12, 2015, the Company entered into an agreement to settle all claims brought by the class of Canadian plaintiffs.

The Company denies all allegations of wrongdoing but settled to avoid the uncertainty, risk, expense and distraction of protracted litigation.

During the twelve months ended December 31, 2015 the Company recorded a $122,480 charge within selling, general and administrative expenses for the settlement and defense of the antitrust cases. All of the antitrust cases have now been finally settled and with the exception of the single issue pending on appeal in the indirect purchaser class case, all consolidated cases have been dismissed. The Company does not believe that the ultimate outcome of the one remaining issue in the indirect purchaser case will have a material adverse effect on its financial condition.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and we are unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

The Company is subject to various federal, state, local and foreign environmental health and safety laws and regulations, including those governing air emissions, wastewater discharges, the use, storage, treatment, recycling and disposal of solid and hazardous materials and finished product, and the cleanup of contamination associated therewith. Because of the nature of the Company’s business, the Company has incurred, and will continue to incur, costs relating to compliance with such laws and regulations. The Company is involved in various proceedings relating to environmental matters and is currently engaged in environmental investigation, remediation and post-closure care programs at certain sites. The Company has provided accruals for such activities that it has determined to be both probable and reasonably estimable. The Company does not expect that the ultimate liability with respect to such activities will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(14) Consolidated Statements of Cash Flows Information

Supplemental disclosures of cash flow information are as follows:

	2016		2015		2014
Net cash paid (received) during the years for:
Interest	$	57,269	67,974		109,451
Income taxes	$	276,789	133,283		148,991
Supplemental schedule of non-cash investing and financing activities:
Fair value of net assets acquired in acquisition	—		1,564,970		7,267
Noncontrolling interest of assets acquired	—		(24,160	)	—
Liabilities assumed in acquisition	—		(17,147	)	(7,286	)
Shares issued for acquisitions	—		(153,096	)	—
	$	—	1,370,567		(19	)

(15) Segment Reporting

The Company has three reporting segments: the Global Ceramic segment, the Flooring NA segment and the Flooring ROW segment. The Global Ceramic segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone and other products, which it distributes primarily in North America, Europe and Russia through its network of regional distribution centers and Company-operated service centers using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through Company-operated service centers, independent distributors, home center retailers, tile and flooring retailers and contractors. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, hardwood, laminate and vinyl products, including luxury vinyl tile ("LVT"), which it distributes through its network of regional distribution centers and satellite warehouses using company-operated trucks, common carrier or rail transportation. The segment’s product lines are sold through various selling channels, including independent floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. The Flooring ROW segment designs, manufactures, sources, licenses and markets laminate, hardwood flooring, roofing elements, insulation boards, medium-density fiberboard ("MDF"), chipboards, other wood products, sheet vinyl and LVT, which it distributes primarily in Europe and Russia through various selling channels, which include retailers, independent distributors and home centers.

The accounting policies for each operating segment are consistent with the Company’s policies for the consolidated financial statements. Amounts disclosed for each segment are prior to any elimination or consolidation entries. Corporate general and administrative expenses attributable to each segment are estimated and allocated accordingly. Segment performance is evaluated based on operating income. Previously reported segment results have been reclassified to conform to the current period presentation. No single customer accounted for more than 10% of net sales for the years ended December 31, 2016, 2015 or 2014.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Segment information is as follows:

	2016			2015		2014
Net sales:
Global Ceramic	$	3,174,706		3,012,859		3,015,279
Flooring NA	3,865,746			3,602,112		3,441,018
Flooring ROW	1,918,635			1,456,898		1,354,018
Intersegment sales	—			(306	)	(6,869	)
	$	8,959,087		8,071,563		7,803,446
Operating income (loss):
Global Ceramic	$	478,448		414,154		351,113
Flooring NA	505,115			264,271		299,992
Flooring ROW	333,091			203,370		151,528
Corporate and intersegment eliminations	(36,711		)	(44,229	)	(29,837	)
	$	1,279,943		837,566		772,796
Depreciation and amortization:
Global Ceramic	$	135,370		118,801		120,121
Flooring NA	148,067			137,064		122,677
Flooring ROW	116,048			97,239		92,090
Corporate	9,982			9,543		10,682
	$	409,467		362,647		345,570
Capital expenditures (excluding acquisitions):
Global Ceramic	$	263,401		247,829		192,642
Flooring NA	248,843			148,598		258,987
Flooring ROW	144,207			95,447		100,899
Corporate	15,674			11,783		9,276
	$	672,125		503,657		561,804
Assets:
Global Ceramic	$	4,024,859		3,846,133		3,542,594
Flooring NA	3,410,856			3,164,525		2,587,151
Flooring ROW	2,689,592			2,805,246		1,909,487
Corporate and intersegment eliminations	105,289			118,496		246,312
	$	10,230,596		9,934,400		8,285,544
Geographic net sales:
United States	$	5,842,683		5,399,561		5,233,796
All other countries	3,116,404			2,672,002		2,569,650
	$	8,959,087		8,071,563		7,803,446
Long-lived assets (1):
United States	$	3,092,902		2,945,783		2,381,843
Belgium	1,371,397			1,377,533		949,169
All other countries	1,180,475			1,117,167		976,550
	$	5,644,774		5,440,483		4,307,562
Net sales by product categories (2):
Soft surface	$	3,414,956		3,056,946		2,764,370
Tile	3,258,136			3,094,389		3,087,895
Laminate and wood	2,285,995			1,920,228		1,951,181
	$	8,959,087		8,071,563		7,803,446

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(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, with most of the UNICLIC family of patents expiring in 2017.

(16) Quarterly Financial Data (Unaudited)

The supplemental quarterly financial data are as follows:

	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

	Quarters Ended
	April 4, 2015		July 4, 2015	October 3, 2015	December 31, 2015
Net sales	$	1,881,177	2,041,733	2,150,656	1,997,997
Gross profit	511,943		615,129	661,404	622,210
Net earnings	22,346		186,492	214,905	191,559
Basic earnings per share	0.31		2.54	2.91	2.59
Diluted earnings per share	0.30		2.53	2.89	2.57

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), which have been designed to provide reasonable assurance that such controls and procedures will meet their objectives, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures were effective at a reasonable assurance level for the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). The Company maintains internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, internal control over financial reporting determined to be effective provides only reasonable assurance regarding the reliability of

72

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of management, including the Company's Principal Executive Officer and Principal Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of the Company's internal control over financial reporting as of December 31, 2016.  In conducting this evaluation, the Company used the framework set forth in the report titled “Internal Control – Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on the results of this evaluation, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2016. 

The effectiveness of the Company's internal control over financial reporting as of December 31, 2016 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

Remediation of Material Weakness in Internal Control over Financial Reporting

As of December 31, 2016, the Company has remediated the previously reported material weakness in its internal control over financial reporting related to the design, operation and documentation of internal controls related to the monitoring of inventory cycle counts and the valuation of obsolete inventory at two of the Company's divisions. The remediation was accomplished by updating policies that require specific monitoring activities occur at defined levels and management's conduct of monitoring activities for the inventory cycle counts and the valuation of obsolete inventory in these divisions be evidenced upon completion.

The Company has completed the documentation, implementation and testing of the effectiveness of the design and operation of the remediation actions described above and, as of December 31, 2016, has concluded that the steps taken have remediated the material weakness.

Changes in Internal Control Over Financial Reporting

The Company integrated recent acquisitions (referenced in Note 2 in the Notes to Consolidated Financial Statements of this Form 10-K) into its system of internal control. As a result, the Company's internal control over financial reporting now includes appropriate controls, procedures and supporting systems with respect to transactions and account balances of the acquisitions, which are reflected in the Company's consolidated financial statements.

There were no other changes identified in the Company’s internal control over financial reporting during the quarter that materially affected, or are likely to materially affect, the Company’s internal control over financial reporting, other than the completed remediation actions described above and the integration of the recent acquisitions.

Limitations on the Effectiveness of Controls

The Company’s management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders under the following headings: “Election of Directors—Director, Director Nominee and Executive Officer Information,” “—Nominees for Director,” “—Continuing Directors,” “—Executive Officers,” “—Meetings and Committees of the Board of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Audit Committee” and “Corporate Governance.” The Company has adopted the Mohawk Industries, Inc. Standards of Conduct and Ethics, which applies to all of its directors, officers and employees. The standards of conduct and ethics are publicly available on the Company’s website at http://www.mohawkind.com and will be made available in print to any stockholder who requests them without charge. If the Company makes any substantive amendments to the standards of conduct and ethics, or grants any waiver, including any implicit waiver, from a provision of the standards required by regulations of the Commission to apply to the Company’s chief executive officer, chief financial officer or chief accounting officer, the Company will disclose the nature of the amendment or waiver on its website. The Company may elect to also disclose the amendment or waiver in a report on Form 8-K filed with the SEC. The Company has adopted the Mohawk Industries, Inc. Board of Directors Corporate Governance Guidelines, which are publicly available on the Company’s website and will be made available to any stockholder who requests it.

Item 11. Executive Compensation

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders under the following headings: “Compensation, Discussion and Analysis,” “Executive Compensation and Other Information—Summary Compensation Table,” “—Grants of Plan Based Awards,” “—Outstanding Equity Awards at Fiscal Year End,” “—Option Exercises and Stock Vested,” “—Nonqualified Deferred Compensation,” “—Certain Relationships and Related Transactions,” “—Compensation Committee Interlocks and Insider Participation,” “—Compensation Committee Report” and “Director Compensation.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders under the following headings: “Executive Compensation and Other Information—Equity Compensation Plan Information,” and “—Principal Stockholders of the Company.”

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders under the following heading: “Election of Directors—Meetings and Committees of the Board of Directors,” and “Executive Compensation and Other Information—Certain Relationships and Related Transactions.”

Item 14. Principal Accounting Fees and Services

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders under the following heading: “Audit Committee—Principal Accountant Fees and Services” and “Election of Directors—Meetings and Committees of the Board of Directors.”

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) 1. Consolidated Financial Statements

The Consolidated Financial Statements of Mohawk Industries, Inc. and subsidiaries listed in Item 8 of Part II are incorporated by reference into this item.

2. Consolidated Financial Statement Schedules

Schedules not listed above have been omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

3. Exhibits

The exhibit number for the exhibit as originally filed is included in parentheses at the end of the description.

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	Restated Bylaws of Mohawk. (Incorporated herein by reference to Exhibit 3.1 in the Company's Report on Form 8-K dated February 19, 2016.)
*4.6	Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated January 31, 2013.)
*4.7	First Supplemental Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated January 31, 2013.)
*4.8	Second Supplemental Indenture, dated as of June 9, 2015, by and among Mohawk Industries, Inc., as Issuer, U.S. Bank National Association, as Trustee, Elavon Financial Services Limited, UK Branch, as initial Paying Agent and Elavon Financial Services Limited, as initial Registrar (Incorporated herein by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K dated June 9, 2015.)
*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	Credit and Security Agreement, dated as of December 19, 2012, by and among Mohawk Factoring, LLC, as borrower, Mohawk Servicing, LLC, as servicer, the lenders from time to time party thereto, the liquidity banks from time to time party thereto, the co-agents from time to time party thereto and SunTrust Bank, as administrative agent (Incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated December 21, 2012.)
*10.4	First Amendment to Credit and Security Agreement, dated as of January 22, 2013, by and among Mohawk Factoring, LLC, as borrower, Mohawk Servicing, LLC, as servicer, the lenders from time to time party thereto, the liquidity banks from time to time party thereto, the co-agents from time to time party thereto and SunTrust Bank, as administrative agent. (Incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 2012.)

75

*10.5	Amendment No. 2 to Credit and Security Agreement and Waiver, dated as of April 11, 2014, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2014).
*10.6	Amendment No. 3 to Credit and Security Agreement and Omnibus Amendment, dated as of September 11, 2014, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2014).
*10.7	Amendment No. 4 to Credit and Security Agreement, dated as of January 5, 2015, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent (Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended April 4, 2015).
*10.8	Amendment No. 5 to Credit and Security Agreement, dated as of December 10, 2015, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent. (Incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015).
10.9	Amendment No. 6 to Credit and Security Agreement, dated as of December 13, 2016, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent.
10.10	Amendment No. 7 to Credit and Security Agreement, dated as of January __, 2017, by and among Mohawk Factoring, LLC, Mohawk Servicing, LLC, the lenders party hereto, the liquidity banks party hereto, the co-agents party hereto and SunTrust Bank, as administrative agent.
*10.11	Receivables Purchase and Sale Agreement, dated December 19, 2012, by and among Mohawk Carpet Distribution, Inc., and Dal-Tile Distribution, Inc., as originators, and Mohawk Factoring, LLC, as buyer (Incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated December 21, 2012.)
*10.12	Amended and Restated Credit Facility, dated March 26, 2015, by and among the Company and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, swing line lender, and an L/C issuer, and the other lenders party thereto. (Incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated March 26, 2015.)
*10.13	Share Purchase Agreement, dated January 13, 2015, by and among Mohawk Industries, Inc., Unilin BVBA, Enterhold S.A., International Flooring Systems S.A. and, for certain limited purposes, Filiep Balcaen, an individual resident of Belgium (Incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated January 16, 2015).
Exhibits Related to Executive Compensation Plans, Contracts and other Arrangements:
*10.14	Service Agreement dated February 24, 2009, by and between Unilin Industries BVBA and BVBA “F. De Cock Management” (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 24, 2009.)
*10.15	Service Agreement dated February 9, 2009, by and between Unilin Industries BVBA and Comm. V. “Bernard Thiers” (Incorporated herein by reference to Exhibit 10.7 in the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 2009.)
*10.16	Second Amended and Restated Employment Agreement, dated as of November 4, 2009, by and between the Company and W. Christopher Wellborn (Incorporated by reference to the Company’s Current Report on Form 8-K dated November 4, 2009.)
*10.17	Amendment No. 1 to Second Amended and Restated Employment Agreement, dated as of December 20, 2012, by and between the Company and W. Christopher Wellborn (Incorporated herein by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 2012.).
*10.18	Mohawk Carpet Corporation Supplemental Executive Retirement Plan, as amended. (Incorporated herein by reference to Exhibit 10.2 of the Company's Registration Statement on Form S-1, Registration No. 33-45418.)

76

*10.19	The Mohawk Industries, Inc. Senior Management Deferred Compensation Plan, as amended and restated as of January 1, 2015. (Incorporated herein by reference to Exhibit 10.19 in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2015.)
*10.20	Mohawk Industries, Inc. 1997 Non-Employee Director Stock Compensation Plan (Amended and Restated as of January 1, 2009) (Incorporated herein by reference to Exhibit 10.32 in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008.)
*10.21	Mohawk Industries, Inc. 2012 Non-Employee Director Stock Compensation Plan (Incorporated herein by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q dated August 3, 2012.)
*10.22	Mohawk Industries, Inc. 2012 Non-Employee Director Stock Compensation Plan Amendment, approved October 23, 2013 (Incorporated herein by reference to Exhibit 10.18 in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2013.)
*10.23	2002 Long-Term Incentive Plan. (Incorporated herein by reference to Appendix A in the 2002 Mohawk Industries, Inc. Proxy Statement dated March 29, 2002.)
*10.24	Mohawk Industries, Inc. 2007 Incentive Plan (Incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-13697) filed with the Securities and Exchange Commission on April 9, 2007.)
*10.25	Mohawk Industries, Inc. 2012 Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-13697) filed with the Securities and Exchange Commission on April 3, 2012.)
21	Subsidiaries of the Registrant.
23.1	Consent of Independent Registered Public Accounting Firm (KPMG LLP).
31.1	Certification Pursuant to Rule 13a-14(a).
31.2	Certification Pursuant to Rule 13a-14(a).
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Indicates exhibit incorporated by reference.

77

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Mohawk Industries, Inc.
	By:	/s/    JEFFREY S. LORBERBAUM
February 27, 2017		Jeffrey S. Lorberbaum,
		Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

February 27, 2017	/s/    JEFFREY S. LORBERBAUM
	Jeffrey S. Lorberbaum,
	Chairman and Chief Executive Officer (principal executive officer)

February 27, 2017	/s/    FRANK H. BOYKIN
	Frank H. Boykin,
	Chief Financial Officer and Vice President-Finance (principal financial officer)

February 27, 2017	/s/    JAMES F. BRUNK
	James F. Brunk,
	Vice President and Corporate Controller (principal accounting officer)

February 27, 2017	/s/    FILIP BALCAEN
	Filip Balcaen, Director

February 27, 2017	/s/    BRUCE C. BRUCKMANN
	Bruce C. Bruckmann, Director

February 27, 2017	/s/    FRANS DE COCK
	Frans De Cock, Director

February 27, 2017	/s/    RICHARD C. ILL
	Richard C. Ill, Director

February 27, 2017	/s/  JOSEPH A. ONORATO
	Joseph A. Onorato, Director

February 27, 2017	/s/    WILLIAM H. RUNGE III
	William Henry Runge III Director

February 27, 2017	/s/    KAREN A. SMITH BOGART
	Karen A. Smith Bogart, Director

February 27, 2017	/s/    W. CHRISTOPHER WELLBORN
	W. Christopher Wellborn, Director

78

EX-10.9

Amendment No. 6 to

Credit and Security Agreement

This Amendment No. 6 to Credit and Security Agreement (this “Amendment”), dated as of December 13, 2016, is made by and among Mohawk Factoring, LLC, a Delaware limited liability company (the “Borrower”), Mohawk Servicing, LLC, a Delaware limited liability company (the “Servicer”) the Lenders party hereto, the Liquidity Banks party hereto, the Co-Agents party hereto and SunTrust Bank, a Georgia banking corporation, as administrative agent (in such capacity, the “Administrative Agent”).

WITNESSETH:

Whereas, the Borrower, the Servicer, the Lenders, the Liquidity Banks, the Co-Agents and the Administrative Agent previously entered into that certain Credit and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit and Security Agreement”), dated as of December 19, 2012; and

Whereas, the Borrower and the Servicer have requested that the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents extend the Facility Termination Date and make certain other amendments to the Credit and Security Agreement, and the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents are willing to do so under the terms of this Amendment;

Now, Therefore, in consideration of the mutual agreements herein contained and other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

Section 1.Definitions. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Credit and Security Agreement.

Section 2.Amendment to the Credit and Security Agreement.

2.1.Section 12.4 of the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended shall read as follows:

Section 12.4.Substitution of Lenders. In the event (a) any Lender is then a Defaulting Lender, (b) a Lender or Agent hereunder is also a lender under the Parent Credit Agreement and such Lender or Agent fails to consent to an amendment or waiver requested under the Parent Credit Agreement at a time when the Required Lenders have approved such amendment or waiver, (c) any Lender requests compensation under Section 10.2, (d) the Borrower is required to pay amount under Section 10.3 to a Lender, (e) any Conduit is then a Downgraded Conduit, or (f) a Lender that is a Non‑Conduit Lender or a Liquidity Bank provides a notice to the Administrative Agent under Section 4.3 (any such Lender referred to in any of clauses (a) through (f) above being hereinafter, together with its related Agent and its related Conduit in its Group (if any) referred to as an “Affected Lender Group”), the Borrower may, in addition to any other rights the Borrower may have hereunder or under applicable law, require, at its expense, any such Affected Lender Group to assign, at par, without recourse, all of its interest, rights, and obligations

hereunder (including all of its Commitments and the Loans and other amounts at any time owing to the members of such Affected Lender Group hereunder and the other Transaction Documents) to an Eligible Replacement Lender specified by the Borrower, provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other Governmental Authority, (ii) the Borrower shall have paid to the members of such Affected Lender Group all monies (together with any Broken Funding Costs computed as if the Loans owing to it were prepaid rather than assigned) other than such principal owing to it hereunder, and (iii) the assignment is entered into in accordance with, and subject to the consents required by, Section 12.1 hereof (provided any assignment fees and reimbursable expenses due thereunder shall be paid by the Borrower).

2.2.The defined terms “Applicable Margin” and “Facility Termination Date”, appearing in Exhibit I to the Credit and Security Agreement are hereby amended and restated in their entirety and as so amended shall read as follows:

“Applicable Margin” shall mean 0.70% per annum.

“Facility Termination Date” means the earlier of (i) December 19, 2017 (or such later date as the parties hereto may agree to from time to time) and (ii) the Amortization Date.

2.3.The defined term “Change of Control” appearing in Exhibit I to the Credit and Security Agreement is hereby amended by deleting the parenthetical contained in clause (b) thereof.

2.4.The last sentence appearing in the defined term “Obligor Concentration Limit” appearing in Exhibit I to the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended shall read as follows:

The Special Concentration Limit shall mean (i) with respect to The Home Depot, Inc. and its Affiliates, 19.0% and (ii) with respect to Lowe’s Companies, Inc. and its Affiliates, 14.0%.

2.5.Schedule D to the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended and restated shall read as set forth on Schedule D attached hereto.

Section 3.No Fundings by Conduits. Notwithstanding anything to the contrary contained in the Credit and Security Agreement or any of the other Transactions Documents, upon and after December 20, 2016:

(a)No Conduit shall make any Loan;

(b)Each Conduit shall be deemed to have elected not to make any Loan which such Conduit otherwise had the option to make and each Liquidity Bank for such Conduit shall make such Liquidity Bank’s Pro Rata Share of its Group’s Percentage of such Loan; and

(c)No CP Costs shall be payable in respect of any Loan.

Section 4.Representations of the Borrower. The Borrower hereby represents and warrants to the parties hereto that as of the date hereof each of the representations and warranties contained in the Credit and Security Agreement is true and correct as of the date hereof and after giving effect to this Amendment (except to the extent that such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date); provided, that with respect to those contained in Section 5.1(a), (e), (f), (l), (u) and (w) of the Credit and Security Agreement, the determination of whether any Material Adverse Effect has occurred as set forth therein shall be made solely by the Borrower, in its reasonable, good faith judgment.

Section 5.Conditions Precedent. The effectiveness of this Amendment, including without limitation, Section 3 above, is subject to the satisfaction of all of the following conditions precedent:

(a)Administrative Agent shall have received a fully executed counterpart of this Amendment, including the Performance Guarantor’s Acknowledgment and Consent;

(b)Administrative Agent shall have received a fully executed counterpart of the Second Amended and Restated Fee Letter;

(c)each representation and warranty of the Borrower contained herein shall be true and correct; and

(d)no Amortization Event shall have occurred and be continuing.

Section 6.Amendment. The parties hereto hereby agree that the provisions and effectiveness of this Amendment shall apply to the Credit and Security Agreement as of the date hereof. Except as amended by this Amendment, the Credit and Security Agreement remains unchanged and in full force and effect. This Amendment is a Transaction Document.

Section 7.Counterparts. This Amendment may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 8.Captions. The headings of the Sections of this Amendment are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions of this Amendment.

Section 9.Successors and Assigns. The terms of this Amendment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 10.Severability. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 11.Governing Law and Jurisdiction. The provisions of the Credit and Security Agreement with respect to governing law and consent to jurisdiction are incorporated in this Amendment by reference as if such provisions were set forth herein.

[Signatures appear on following page.]

Amendment No. 6 to Credit and Security Agreement

IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be duly executed by their respective duly authorized officers as of the day and year first above written.

Mohawk Factoring, LLC, as Borrower

By: /s/ John J Koach            

Name:John J Koach        

Title:Secretary        

Mohawk Servicing, LLC, as Servicer

By: /s/ Shailesh Bettadapur        

Name:Shailesh Bettadapur    

Title:VP & Treasurer        

SunTrust Bank, as a Non-Conduit Lender

By: /s/ David Hufnagel        

Name:David Hufnagel        

Title:Vice President        

SunTrust Bank, as Co-Agent and Administrative Agent

By: /s/ David Hufnagel        

Name:David Hufnagel        

Title:Vice President        

The Bank of Tokyo‑Mitsubishi UFJ, Ltd., New York Branch, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Richard Gregory Hurst        

Name:Richard Gregory Hurst    

Title:Managing Director    

Mizuho Bank, Ltd., as a Non-Conduit Lender and as Co‑Agent

By: /s/ Donna DeMagistris        

Name:Donna DeMagistris    

Title:Authorized Signatory    

PNC Bank, National Association, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Eric Bruno            

Name:Eric Bruno        

Title:Senior Vice President    

Wells Fargo Bank, National Association, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Isaac Washington        

Name:Isaac Washington        

Title:Vice President        

Performance Guarantor’s Acknowledgment and Consent

The undersigned, Mohawk Industries, Inc., has heretofore executed and delivered the Performance Undertaking dated as of December 19, 2012 (the “Performance Undertaking”) and hereby consents to the Amendment No. 6 to the Credit and Security Agreement as set forth above and confirms that the Performance Undertaking and all of the undersigned’s obligations thereunder remain in full force and effect. The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit and Security Agreement shall not be required as a result of this consent having been obtained, except to the extent, if any, required by the Performance Undertaking referred to above.

Mohawk Industries, Inc.

By: /s/ Shailesh Bettadapur        

Name: Shailesh Bettadpur        

Title: VP & Treasurer        

Schedule D

Monthly Reporting Dates

Fiscal Month End	Monthly Reporting Date
December 2016	January 17, 2017
January 2017	February 21, 2017
February 2017	March 21, 2017
March 2017	April 18, 2017
April 2017	May 23, 2017
May 2017	June 20, 2017
June 2017	July 18, 2017
July 2017	August 22, 2017
August 2017	September 19, 2017
September 2017	October 17, 2017
October 2017	November 21, 2017
November 2017	December 19, 2017

EX-10.10

Amendment No. 7 to

Credit and Security Agreement

This Amendment No. 7 to Credit and Security Agreement (this “Amendment”), dated as of January 26, 2017, but effective as of December 31, 2016, is made by and among Mohawk Factoring, LLC, a Delaware limited liability company (the “Borrower”), Mohawk Servicing, LLC, a Delaware limited liability company (the “Servicer”) the Lenders party hereto, the Liquidity Banks party hereto, the Co-Agents party hereto and SunTrust Bank, a Georgia banking corporation, as administrative agent (in such capacity, the “Administrative Agent”).

WITNESSETH:

Whereas, the Borrower, the Servicer, the Lenders, the Liquidity Banks, the Co-Agents and the Administrative Agent previously entered into that certain Credit and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit and Security Agreement”), dated as of December 19, 2012; and

Whereas, the Borrower and the Servicer have requested that the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents make certain amendments to the Credit and Security Agreement, and the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents are willing to do so under the terms of this Amendment;

Now, Therefore, in consideration of the mutual agreements herein contained and other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

Section 1.Definitions. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Credit and Security Agreement.

Section 2.Amendment to the Credit and Security Agreement.

2.1.Effective as of December 31, 2016, the defined terms “Delinquency Ratio” and “Borrowing Base” appearing in Exhibit I to the Credit and Security Agreement are hereby amended and restated in their entirety and as so amended shall read as follows:

“Borrowing Base” means, on any date of determination, the Net Pool Balance as of the last day of the period covered by the most recent Monthly Report, minus the Required Reserve as of the last day of the period covered by the most recent Monthly Report, and minus Deemed Collections that have occurred since the most recent Cut‑Off Date to the extent that such Deemed Collections exceed the Dilution Reserve. Notwithstanding the foregoing, for the period beginning December 31, 2016 up to and including February 4, 2017, for purposes of calculating the Borrowing Base, the Net Pool Balance shall not include any Receivables originated by Dal‑Tile Distribution, Inc.

“Delinquency Ratio” means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent

Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time. Notwithstanding the foregoing, for the period beginning December 31, 2016 up to and including February 4, 2017, the calculation of the Delinquency Ratio shall not include any Receivables originated by Dal‑Tile Distribution, Inc. in the numerator or denominator of such calculation.

Section 3.Representations of the Borrower. The Borrower hereby represents and warrants to the parties hereto that as of the date hereof each of the representations and warranties contained in the Credit and Security Agreement is true and correct as of the date hereof and after giving effect to this Amendment (except to the extent that such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date); provided, that with respect to those contained in Section 5.1(a), (e), (f), (l), (u) and (w) of the Credit and Security Agreement, the determination of whether any Material Adverse Effect has occurred as set forth therein shall be made solely by the Borrower, in its reasonable, good faith judgment.

Section 4.Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

(a)Administrative Agent shall have received a fully executed counterpart of this Amendment, including the Performance Guarantor’s Acknowledgment and Consent;

(b)each representation and warranty of the Borrower contained herein shall be true and correct; and

(c)no Amortization Event shall have occurred and be continuing.

Section 5.Amendment. The parties hereto hereby agree that the provisions and effectiveness of this Amendment shall apply to the Credit and Security Agreement as of the date hereof. Except as amended by this Amendment, the Credit and Security Agreement remains unchanged and in full force and effect. This Amendment is a Transaction Document.

Section 6.Counterparts. This Amendment may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 7.Captions. The headings of the Sections of this Amendment are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions of this Amendment.

Section 8.Successors and Assigns. The terms of this Amendment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 9.Severability. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 10.Governing Law and Jurisdiction. The provisions of the Credit and Security Agreement with respect to governing law and consent to jurisdiction are incorporated in this Amendment by reference as if such provisions were set forth herein.

[Signatures appear on following page.]

IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be duly executed by their respective duly authorized officers as of the day and year first above written.

Mohawk Factoring, LLC, as Borrower

By: /s/ John J Koach            

Name:John J Koach        

Title:Secretary        

Mohawk Servicing, LLC, as Servicer

By: /s/ Shailesh Bettadapur        

Name:Shailesh Bettadapur    

Title:VP & Treasurer        

SunTrust Bank, as a Non-Conduit Lender

By: /s/ David Hufnagel        

Name:David Hufnagel        

Title:Vice President        

SunTrust Bank, as Co-Agent and Administrative Agent

By: /s/ David Hufnagel        

Name:David Hufnagel        

Title:Vice President        

The Bank of Tokyo‑Mitsubishi UFJ, Ltd., New York Branch, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Richard Gregory Hurst        

Name:Richard Gregory Hurst    

Title:Managing Director    

Mizuho Bank, Ltd., as a Non-Conduit Lender and as Co‑Agent

By: /s/ Donna DeMagistris        

Name:Donna DeMagistris    

Title:Authorized Signatory    

PNC Bank, National Association, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Eric Bruno            

Name:Eric Bruno        

Title:Senior Vice President    

Wells Fargo Bank, National Association, as a Non-Conduit Lender and as Co‑Agent

By: /s/ Isaac Washington        

Name:Isaac Washington        

Title:Vice President        

Performance Guarantor’s Acknowledgment and Consent

The undersigned, Mohawk Industries, Inc., has heretofore executed and delivered the Performance Undertaking dated as of December 19, 2012 (the “Performance Undertaking”) and hereby consents to the Amendment No. 7 to the Credit and Security Agreement as set forth above and confirms that the Performance Undertaking and all of the undersigned’s obligations thereunder remain in full force and effect. The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit and Security Agreement shall not be required as a result of this consent having been obtained, except to the extent, if any, required by the Performance Undertaking referred to above.

Mohawk Industries, Inc.

By: /s/ Shailesh Bettadapur        

Name: Shailesh Bettadpur        

Title: VP & Treasurer        

EX-21

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

Aladdin Manufacturing Corporation	Delaware
Alsace Logistique S.A.	France
Altaj Kerama OOO	Russian Federation
Avelgem Green Power CVBA	Belgium
B&M NV	Belgium
Balterio US, Inc.	Georgia
Baltkerama (LLC)	Russian Federation
Bienes Raices y Materiales del Centro, S. de R.L. de C.V.	Mexico
C.F. Marazzi S.A.	Luxembourg
Cevotrans BV	Netherland
Dal Italia LLC	Delaware
Dal-Elit, LLC	Texas
Dal-Tile Chile Comercial Limitada	Chile
Dal-Tile Corporation	Pennsylvania
Dal-Tile Distribution, Inc.	Delaware
Dal-Tile Group Inc.	Delaware
Dal-Tile I, LLC	Delaware
Dal-Tile Industrias, S. de R.L. de C.V.	Mexico
Dal-Tile International Inc.	Delaware
Dal-Tile Mexico, S. de R.L. de C.V.	Mexico
Dal-Tile of Canada ULC	British Columbia, Canada
Dal-Tile Operaciones Mexico S. De R.L. De C.V.	Mexico
Dal-Tile Puerto Rico, Inc.	Puerto Rico
Dal-Tile Services, Inc.	Delaware
Dal-Tile Shared Services, Inc.	Delaware
Dal-Tile Tennessee, LLC	Delaware
Dekaply NV	Belgium
Don-Kerama (CJSC) Company	Russian Federation
DT Mex Holdings, LLC	Delaware
DTM/CM Holdings, LLC	Delaware
Dynea NV	Belgium
Explorer S.r.l.	Italy
F.I.L.S. Investments Ltd.	Ireland
Flooring Industries Limited S.à r.l.	Luxembourg
Flooring XL B.V.	Netherlands
Floorscape Limited	New Zealand
Hytherm Ltd	Northern Ireland
Hytherm Ireland Ltd	Ireland
Hytherm Sales Ltd	Ireland
International Flooring Systems S.à r.l.	Luxembourg
International Vinyl Company - Vostok OOO	Russian Federation
Irkutsk-Kerama (CJSC)	Russian Federation
IVC BVBA	Belgium
IVC Far-East Trading (Shanghai) Co. Ltd.	China
IVC France S.à r.l.	France
IVC Green Power NV	Belgium
IVC Luxembourg S.a.r.l.	Luxembourg
IVC US, Inc.	Georgia

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

KAI Keramica Ltd	Greece
KAI Mining EOOD	Bulgaria
Kerama Baltics OOO	Latvia
Kerama Center (CJSC)	Russian Federation
Kerama Krym (LLC)	Russian Federation
Kerama Ekaterinburg OOO	Russian Federation
Kerama Export (LLC)	Russian Federation
Kerama Golden Ring (LLC)	Russian Federation
Kerama Marazzi (LLC)	Russian Federation
Kerama Nizhny Novgorod OOO	Russian Federation
Kerama Omsk OOO	Russian Federation
Kerama Perm OOO	Russian Federation
Kerama Sochi OOO	Russian Federation
Kerama Spb, LLC	Russian Federation
Kerama-KMV, LLC	Russian Federation
Kerama-Volgograd	Russian Federation
Kerampromservis (LLC)	Ukraine
Khan Asparuh - Transport EOOD	Bulgaria
Khan Asparuh AD	Bulgaria
Khan Omurtag AD	Bulgaria
Management Co EAD	Bulgaria
Marazzi Acquisition S.r.l.	Italy
Marazzi Canada, Inc.	Canada
Marazzi Deutschland G.m.b.H.	Germany
Marazzi Engineering S.r.l.	Italy
Marazzi France Trading S.A.S.	France
Marazzi Group F.Z.E.	UAE
Marazzi Group S.r.l.	Italy
Marazzi Group Trading (Shanghai) Co. Ltd.	China
Marazzi Iberia S.L.U.	Spain
Marazzi Japan Co., Ltd.	Japan
Marazzi Schweiz S.A.G.L.	Switzerland
Marazzi UK Ltd.	United Kingdom
MG China Trading Ltd.	Hong Kong
Moduleo GmbH	Germany
Moduleo Limited	United Kingdom
Mohawk Australia Pty Ltd	Australia
Mohawk Canada Corporation	Nova Scotia, Canada
Mohawk Capital Luxembourg S.A.	Luxembourg
Mohawk Carpet Distribution, Inc.	Delaware
Mohawk Carpet Transportation of Georgia, LLC	Delaware
Mohawk Carpet, LLC	Delaware
Mohawk Commercial, Inc.	Delaware
Mohawk ESV, Inc	Delaware
Mohawk Europe BVBA	Belgium
Mohawk Factoring II, Inc.	Delaware
Mohawk Factoring, LLC	Delaware
Mohawk Finance S.à r.l.	Luxembourg

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

Mohawk Foreign Acquisitions S.a.r.l.	Luxembourg
Mohawk Foreign Funding S.a.r.l	Luxembourg
Mohawk Foreign Holdings S.a.r.l.	Luxembourg
Mohawk Global Investments S.à r.l.	Luxembourg
Mohawk Holdings International B.V.	Netherlands
Mohawk International (Europe) S.a.r.l.	Luxembourg
Mohawk International (Hong Kong) Limited	Hong Kong
Mohawk International Financing S.a.r.l	Luxembourg
Mohawk International Holdings (DE) Corporation	Delaware
Mohawk International Holdings S.à r.l.	Luxembourg
Mohawk International Luxembourg S.à r.l.	Luxembourg
Mohawk International Services BVBA	Belgium
Mohawk KAI Luxembourg Holding S.à r.l.	Luxembourg
Mohawk KAI Luxembourg S.à r.l.	Luxembourg
Mohawk Luxembourg Financing S.à r.l.	Luxembourg
Mohawk Luxembourg Holdings S.à r.l.	Luxembourg
Mohawk Marazzi International BV	Netherlands
Mohawk Marazzi Russia BV	Netherlands
Mohawk New Zealand Limited	New Zealand
Mohawk Operaciones Mexicali S. de R.L. de C.V.	Mexico
Mohawk Operations Luxembourg S.à r.l.	Luxembourg
Mohawk Resources, LLC	Delaware
Mohawk Servicing, LLC	Delaware
Mohawk Singapore Private Limited	Republic of Singapore
Mohawk Trading (Shanghai) Co., Ltd	China
Mohawk Unilin Luxembourg S.à r.l.	Luxembourg
Mohawk United Finance B.V.	Netherlands
Mohawk United International B.V.	Netherlands
Mohawk Vinyl Financing S.à r.l.	Luxembourg
Monarch Ceramic Tile, Inc.	Texas
MUD (Holding) Brazil Ltda.	Brazil
Oka Kerama (LLC)	Russian Federation
Orelshtamp OOO	Russian Federation
Pergo (Europe) AB	Sweden
Pergo Holding BV	Netherlands
PJSC "Kraj Kerama"	Ukraine
PJSC Budagromekhzaptchastyna	Ukraine
Premium Floors Australia Pty Limited	Australia
RR Apex, LLC	Delaware
S.C. KAI Ceramics SRL	Romania
Sibir Kerama ZAO	Russian Federation
SimpleSolutionsUSA LLC	Delaware
Spanin NV	Belgium
Spano Invest BVBA	Belgium
Spano NV	Belgium
Spanolux OOO	Russian Federation
Spanolux SPRL	Belgium
Stroytrans Orelstroy, CJSC	Russian Federation

EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

Tiles Co OOD	Bulgaria
Ufa-Kerama (LLC)	Russian Federation
Unilin (Malaysia) Sdn. Bhd.	Malaysia
Unilin ApS	Denmark
Unilin Beheer BV	Netherlands
Unilin BVBA	Belgium
Unilin Distribution Ukraine LLC	Ukraine
Unilin Distribution, Ltd.	United Kingdom
Unilin Finland OY	Finland
Unilin Flooring India Private Limited	India
Unilin Flooring SAS	France
Unilin GmbH	Germany
Unilin Holding BVBA	Belgium
Unilin Holding SAS	France
Unilin Insulation BV	Netherlands
Unilin Insulation SAS	France
Unilin Insulation Sury SAS	France
Unilin North America, LLC	Delaware
Unilin Norway AS	Norway
Unilin OOO	Russian Federation
Unilin Poland Sp.Z.o.o.	Poland
Unilin s.r.o.	Czech Republic
Unilin SAS	France
Unilin Spain SL	Spain
Volga Kerama	Russian Federation
World International, Inc.	Barbados
Xtratherm Ltd	Ireland
Xtratherm SA	Belgium
Xtratherm Sales SPRL	Belgium
Xtratherm UK Ltd	United Kindgom
Yenisei-Kerama (LLC) LLC YY	Russian Federation
Yugra Kerama (CJSC)	Russian Federation

EX-23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Mohawk Industries, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-202351) on Form S-3 and (No. 333-23577, No. 333-91908, No. 333-143370, No. 333-181363 and No. 333-213078) on Form S-8, of Mohawk Industries, Inc. of our reports dated February 27, 2017, with respect to the consolidated balance sheets of Mohawk Industries, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2016, and the effectiveness of internal control over financial reporting as of December 31, 2016 which reports appear in the annual report on Form 10-K of Mohawk Industries, Inc.

/s/ KPMG LLP

Atlanta, Georgia

February 27, 2017

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey S. Lorberbaum, certify that:

1.		I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.		The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.		The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 27, 2017

/s/ Jeffrey S. Lorberbaum

Jeffrey S. Lorberbaum

Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Frank H. Boykin, certify that:

1.		I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.		The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.		The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 27, 2017

/s/ Frank H. Boykin

Frank H. Boykin

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Statement of Chief Executive Officer of

MOHAWK INDUSTRIES, INC.

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

§ 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of Mohawk Industries, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey S. Lorberbaum, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeffrey S. Lorberbaum

Jeffrey S. Lorberbaum

Chairman and Chief Executive Officer

February 27, 2017

EX-32.2

EXHIBIT 32.2

Statement of Chief Financial Officer of

MOHAWK INDUSTRIES, INC.

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

§ 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of Mohawk Industries, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank H. Boykin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Frank H. Boykin

Frank H. Boykin

Chief Financial Officer

February 27, 2017

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 22, 2017	Jul. 01, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	MOHAWK INDUSTRIES INC
Entity Central Index Key	0000851968
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		74,184,572
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 11,664,141,943

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 121,665	$ 81,692
Receivables, net	1,376,151	1,257,505
Inventories	1,675,751	1,607,256
Prepaid expenses	267,724	258,633
Other current assets	30,221	44,886
Total current assets	3,471,512	3,249,972
Property, plant and equipment, net	3,370,348	3,147,118
Goodwill	2,274,426	2,293,365
Tradenames	580,147	632,349
Other intangible assets, net	254,459	304,192
Deferred income taxes and other non-current assets	279,704	307,404
Total assets	10,230,596	9,934,400
Current liabilities:
Current portion of long-term debt	1,382,738	2,003,003
Accounts payable and accrued expenses	1,335,582	1,256,025
Total current liabilities	2,718,320	3,259,028
Deferred income taxes	361,416	388,130
Long-term debt, less current portion	1,128,747	1,188,964
Other long-term liabilities	214,930	215,463
Total liabilities	4,423,413	5,051,585
Commitments and contingencies (Note 13)
Redeemable noncontrolling interest	23,696	21,952
Stockholders’ equity:
Preferred stock, $.01 par value; 60 shares authorized; no shares issued	0	0
Common stock, $.01 par value; 150,000 shares authorized; 81,519 and 81,280 shares issued in 2016 and 2015, respectively	815	813
Additional paid-in capital	1,791,540	1,760,016
Retained earnings	5,032,914	4,102,707
Accumulated other comprehensive loss	(833,027)	(793,568)
Shareholder's equity before treasury stock	5,992,242	5,069,968
Less treasury stock at cost; 7,351 shares in 2016 and 2015	215,791	215,795
Total Mohawk Industries, Inc. stockholders’ equity	5,776,451	4,854,173
Noncontrolling interest	7,036	6,690
Total stockholders' equity	5,783,487	4,860,863
Total liabilities and shareholders' equity	$ 10,230,596	$ 9,934,400

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Stockholders’ equity:
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	60,000	60,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, shares issues (in shares)	81,519,000	81,280,000
Treasury stock, shares (in shares)	7,351,000	7,351,000

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Statement [Abstract]
Net sales	$ 8,959,087	$ 8,071,563	$ 7,803,446
Cost of sales	6,146,262	5,660,877	5,649,254
Gross profit	2,812,825	2,410,686	2,154,192
Selling, general and administrative expenses	1,532,882	1,573,120	1,381,396
Operating income	1,279,943	837,566	772,796
Interest expense	40,547	71,086	98,207
Other (income) expense	(1,729)	17,619	10,698
Earnings before income taxes	1,241,125	748,861	663,891
Income tax expense	307,559	131,875	131,637
Net earnings including noncontrolling interest	933,566	616,986	532,254
Net earnings attributable to noncontrolling interest	3,204	1,684	289
Net earnings attributable to Mohawk Industries, Inc.	$ 930,362	$ 615,302	$ 531,965
Basic earnings per share attributable to Mohawk Industries, Inc.
Basic earnings per share attributable to Mohawk Industries, Inc. (usd per share)	$ 12.55	$ 8.37	$ 7.30
Weighted-average common shares outstanding—basic (in shares)	74,104	73,516	72,837
Diluted earnings per share attributable to Mohawk Industries, Inc.
Diluted earnings per share attributable to Mohawk Industries, Inc. (usd per share)	$ 12.48	$ 8.31	$ 7.25
Weighted-average common shares outstanding—diluted (in shares)	74,568	74,043	73,363

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of Comprehensive Income [Abstract]
Net earnings including noncontrolling interest	$ 933,566	$ 616,986	$ 532,254
Other comprehensive (loss) income:
Foreign currency translation adjustments	(36,702)	(360,147)	(607,351)
Prior pension and post-retirement benefit service cost and actuarial (loss) gain	(2,757)	(4,100)	(659)
Other comprehensive (loss) income	(39,459)	(364,247)	(608,010)
Comprehensive income (loss)	894,107	252,739	(75,756)
Comprehensive income attributable to the non-controlling interest	3,204	1,684	289
Comprehensive income attributable to Mohawk Industries, Inc.	$ 890,903	$ 251,055	$ (76,045)

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Redeemable Noncontrolling Interest	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Noncontrolling Interest
Beginning balance at Dec. 31, 2013	$ 4,470,306	$ 0	$ 808	$ 1,566,985	$ 2,953,809	$ 178,689	$ (239,234)	$ 9,249
Beginning balance (in shares) at Dec. 31, 2013			80,841,000				(8,155,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee and director stock plans	(1,326)		$ 3	(1,113)			$ (216)
Shares issued under employee and director stock plans (in shares)			229,000				(2,000)
Stock-based compensation expense	27,961			27,961
Tax benefit from stock-based compensation	5,054			5,054
Distribution to noncontrolling interest, net of adjustments	(1,087)							(1,087)
Noncontrolling earnings	289							289
Currency translation adjustment on non-controlling interests	(2,339)							(2,339)
Acquisition of noncontrolling interest, net of taxes	0				1,305			(1,305)
Currency translation adjustment	(607,351)					(607,351)
Pension prior service cost and actuarial gain (loss)	(659)					(659)
Net income	531,965				531,965
Ending balance at Dec. 31, 2014	4,422,813	0	$ 811	1,598,887	3,487,079	(429,321)	$ (239,450)	4,807
Ending balance (in shares) at Dec. 31, 2014			81,070,000				(8,157,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
IVC Group acquisition	153,096			129,445			$ 23,651
IVC Group acquisition (in shares)							806,000
Shares issued under employee and director stock plans	(6,530)		$ 2	(6,536)			$ 4
Shares issued under employee and director stock plans (in shares)			210,000
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 and redeemable noncontrolling interest	256	1,428						256
Noncontrolling earnings	1,684
Currency translation adjustment on non-controlling interests	(970)	(713)						(970)
Acquisition of noncontrolling interest, net of taxes	3,117	21,043			520			2,597
Currency translation adjustment	(360,147)					(360,147)
Pension prior service cost and actuarial gain (loss)	(4,100)					(4,100)
Net income	615,302				615,302
Ending balance at Dec. 31, 2015	4,860,863	21,952	$ 813	1,760,016	4,102,707	(793,568)	$ (215,795)	6,690
Ending balance (in shares) at Dec. 31, 2015			81,280,000				(7,351,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee and director stock plans	(8,226)		$ 2	(8,232)			$ 4
Shares issued under employee and director stock plans (in shares)			239,000
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 and redeemable noncontrolling interest	340	2,864						340
Noncontrolling earnings	3,204
Currency translation adjustment on non-controlling interests	(26)	(1,243)						(26)
Acquisition of noncontrolling interest, net of taxes	0				(32)			32
Currency translation adjustment	(36,702)					(36,702)
Pension prior service cost and actuarial gain (loss)	(2,757)					(2,757)
Net income	930,362				930,362
Ending balance at Dec. 31, 2016	$ 5,783,487	$ 23,696	$ 815	$ 1,791,540	$ 5,032,914	$ (833,027)	$ (215,791)	$ 7,036
Ending balance (in shares) at Dec. 31, 2016			81,519,000				(7,351,000)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net earnings	$ 933,566	$ 616,986	$ 532,254
Adjustments to reconcile net earnings to net cash provided by operating activities:
Restructuring	38,463	33,085	16,497
Intangible asset impairment	47,905	0	0
Loss on sale of subsidiary	0	0	11,954
Depreciation and amortization	409,467	362,647	345,570
Deferred income taxes	(34,009)	(28,883)	(24,026)
Loss on extinguishment of debt	0	0	20,001
Loss on disposal of property, plant and equipment	3,932	3,007	2,153
Stock-based compensation expense	35,059	32,552	27,961
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	(158,888)	(14,383)	(107,705)
Inventories	(81,923)	6,400	(67,016)
Accounts payable and accrued expenses	80,875	783	(49,204)
Other assets and prepaid expenses	54,267	(75,813)	(30,376)
Other liabilities	(1,161)	(24,508)	(15,875)
Net cash provided by operating activities	1,327,553	911,873	662,188
Cash flows from investing activities:
Additions to property, plant and equipment	(672,125)	(503,657)	(561,804)
Acquisitions, net of cash acquired	0	(1,370,567)	19
Net change in cash from sale of subsidiary	0	0	(3,867)
Net cash used in investing activities	(672,125)	(1,874,224)	(565,652)
Cash flows from financing activities:
Payments on Senior Credit Facilities	(707,129)	(1,376,082)	(1,613,484)
Proceeds from Senior Credit Facilities	631,807	1,315,930	1,448,191
Payments on Commercial Paper	(20,210,585)	(15,934,767)	(7,424,751)
Proceeds from Commercial Paper	20,301,372	16,402,507	7,726,351
Repayment of senior notes	(645,555)	0	(254,445)
Proceeds from asset securitization borrowings	0	0	200,000
Proceeds from senior note issuance	0	564,653	0
Payments on other debt	0	0	(55,358)
Payments on acquired debt and other financings	0	(9,530)	(42,954)
Debt issuance costs	(1,336)	(7,109)	0
Debt extinguishment costs	0	0	(18,921)
Distribution to non-controlling interest	0	0	(1,087)
Change in outstanding checks in excess of cash	(1,754)	(2,052)	(1,920)
Proceeds and net tax benefit from stock transactions	9,280	10,533	12,828
Net cash (used in) provided by financing activities	(623,900)	964,083	(25,550)
Effect of exchange rate changes on cash and cash equivalents	8,445	(17,917)	(27,175)
Net change in cash and cash equivalents	39,973	(16,185)	43,811
Cash and cash equivalents, beginning of year	81,692	97,877	54,066
Cash and cash equivalents, end of year	$ 121,665	$ 81,692	$ 97,877

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a) Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company's vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile ("LVT") and vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(b) Segment Realignment

During the second quarter of 2015, the Company realigned its reportable segments to reflect how the Company’s results will be reported by management. The Company has reorganized its business into three segments - Global Ceramic, Flooring North America ("Flooring NA") and Flooring Rest of the World ("Flooring ROW"). In order to leverage its relationship and distribution capabilities, the Company organized its carpet, wood, laminate, LVT and vinyl operations by geography into the Flooring NA segment and Flooring ROW segment. The Company did not make changes to the Global Ceramic segment, which includes our ceramic tile and stone operations. Previously reported segment results have been reclassified to conform to the current period presentation.

This new segment structure is consistent with the strategic objective that management now applies to manage the growth and profitability of the Company’s business. The Global Ceramic segment includes all worldwide tile and natural stone operations. The Flooring NA segment includes North American operations in all product categories except tile and natural stone. The new segment combines the former Carpet segment with the North American operations of the former Laminate and Wood segment and the North American operations of the Company’s newly acquired LVT and vinyl flooring businesses. The Flooring ROW segment includes operations outside of North America in all product categories except tile and natural stone. The new segment combines the European and Rest of the World operations of the former Laminate and Wood segment and the European and Rest of the World operations of the Company’s newly acquired LVT and vinyl flooring businesses.

(c) Cash and Cash Equivalents

The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2016, the Company had cash of $121,665 of which $92,419 was held outside the United States. As of December 31, 2015, the Company had cash of $81,692 of which $61,173 was held outside the United States.

(d) Accounts Receivable and Revenue Recognition

The Company sells carpet, rugs, ceramic tile, natural stone, hardwood, sheet vinyl, LVT and laminate flooring products in the U.S. and to a lesser extent, Mexico, Europe and Russia principally for residential and commercial use. The Company grants credit to customers, most of whom are retail-flooring dealers, home centers and commercial end users, under credit terms that the Company believes are customary in the industry.

Revenues, which are recorded net of taxes collected from customers, 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 assured. The Company provides allowances for expected cash discounts, returns, claims, sales allowances and doubtful accounts based upon historical bad debt and claims experience and periodic evaluations of specific customer accounts and the aging of accounts receivable. Licensing revenues received from third parties for patents are recognized based on contractual agreements.

(e) Inventories

The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or market (net realizable value). Cost has been determined using the FIFO method. 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.

(f) Property, Plant and Equipment

Property, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 25-40 years for buildings and improvements, 5-15 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

(g) Accounting for Business Combinations

The Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations.

(h) Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic ("ASC") 350, “Intangibles-Goodwill and Other,” the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis in the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). 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’s 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted during the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The first step of the impairment tests for our indefinite lived intangible assets is a thorough assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts. If the qualitative test indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative assessment is not required. If a quantitative test is necessary, the second step of our impairment test involves comparing the estimated fair value of a reporting unit to its carrying amount. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

(i) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(j) Financial Instruments

The Company’s financial instruments consist primarily of receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

(k) Advertising Costs and Vendor Consideration

Advertising and promotion expenses are charged to earnings during the period in which they are incurred. Advertising and promotion expenses included in selling, general, and administrative expenses were $122,148 in 2016, $100,012 in 2015 and $93,050 in 2014.

Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising. Co-op advertising is classified as a selling, general and administrative expense in accordance with ASC 605-50. Co-op advertising expenses, a component of advertising and promotion expenses, were $11,132 in 2016, $9,417 in 2015 and $10,064 in 2014.

(l) Product Warranties

The Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

(m) Impairment of Long-Lived Assets

The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

(n) Foreign Currency Translation

The Company’s subsidiaries that operate outside the United States use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

(o) 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 €500,0002.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the year ended December 31, 2016, the change in the U.S. dollar value of the Company's euro denominated debt was $20,644 ($12,902 net of taxes), which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase 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.

(p) Earnings per Share (“EPS”)

Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method. There were no common stock options and unvested restricted shares (units) that were not included in the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2016, 2015 and 2014.

Computations of basic and diluted earnings per share are presented in the following table:

	2016			2015		2014
Earnings attributable to Mohawk Industries, Inc.	$	930,362		615,302		531,965
Accretion of redeemable noncontrolling interest (a)	(123		)	(194	)	—
Net earnings available to common stockholders	$	930,239		615,108		531,965
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding - basic	74,104			73,516		72,837
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net	464			527		526
Weighted-average common shares outstanding-diluted	74,568			74,043		73,363
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	12.55		8.37		7.30
Diluted	$	12.48		8.31		7.25

(a) Represents the accretion of the Company's redeemable noncontrolling interest to redemption value. See Note 2 - Acquisitions for further information.

(q) 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 ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards' estimated lives for fixed awards with ratable vesting provisions.

(r) Employee Benefit Plans

The Company has a 401(k) retirement savings plan (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 90 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $50,542 and $21,002 in 2016, $45,279 and $18,882 in 2015 and $42,681 and $17,654 in 2014, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans. As of December 31, 2016, the funded status of the Non-U.S. Plans was a liability of $7,517 of which $3,803 was recorded in accumulated other comprehensive income, for a net liability of $3,714 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2015, the funded status of the Non-U.S. Plans was a liability of $3,224 of which $1,075 was recorded in accumulated other comprehensive income (loss), for a net liability of $2,149 recorded in other long-term liabilities within the consolidated balance sheets.

(s) Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested.

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2016, 2015 and 2014 are as follows:

	Foreign currency translation adjustments			Pensions and post-retirement benefits		Total
Balance as of December 31, 2013	$	178,846		(157	)	178,689
Current period other comprehensive income (loss) before reclassifications	(607,351		)	(659	)	(608,010	)
Amounts reclassified from accumulated other comprehensive loss	—			—		—
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 income	—			—		—
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 (loss)	—			—		—
Balance as of December 31, 2016	$	(825,354	)	(7,673	)	(833,027	)

(t) Self-Insurance Reserves

The Company is self-insured in the U.S. for various levels of general liability, auto liability, workers’ compensation and employee medical coverage. Insurance reserves, excluding workers' compensation, are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on the Company's results of operations and financial condition.

(u) Fiscal Year

The Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

(v) Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. GAAP and International Financial Reporting Standards ("IFRS") and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period and early application is not permitted. On July 9, 2015, the FASB decided to defer the effective date of ASC 606 for one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The Company currently plans to adopt the provisions of this new accounting standard at the beginning of fiscal year 2018, using the cumulative effect method, and continues to evaluate the impact of the adoption of ASC 606 on its consolidated financial statements. The Company expects to complete its assessment of the impact of adoption of ASC 606 during the first half of 2017.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. This topic converges the guidance within U.S. GAAP and IFRS. The new standard intends to simplify the presentation of debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, versus recording the costs as a prepaid expense in other assets that is amortized. The new standard will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30) to address the measurement of debt issuance costs associated with line-of-credit arrangements. ASU 2015-15 states that an entity can defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless if there are outstanding borrowings on the line-of-credit arrangement. The Company adopted the provisions of this new accounting standard effective January 1, 2016 retrospectively. Accordingly, unamortized debt issuance costs of $7,964 were reclassified from other non-current assets to long-term debt in the December 31, 2015 consolidated balance sheet.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update changes the measurement principle for inventory for entities using FIFO or average cost from the lower of cost or market to lower of cost and net realizable value. Entities that measure inventory using LIFO or the retail inventory method are not affected. This update will more closely align the accounting for inventory under U.S. GAAP with IFRS. The new guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is permitted. The Company currently accounts for inventory using the FIFO method. Accordingly, the Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under this ASU, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The Company adopted the provisions of this update effectively January 1, 2016 prospectively. This update did not have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The amendments in this Update create Topic 842, Leases, and supersede the requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The guidance in this update is effective for annual reporting periods beginning after December 15, 2018 including interim periods within that reporting period and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2019, and is currently assessing the impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance in this update is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of credit losses on financial instruments. Topic 326 amends guidance on reporting credit losses by replacing the current incurred loss model with a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2020, and is currently assessing the impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. Additionally, the FASB issued ASU 2016-18 in November 2016 to address the classification and presentation of changes in restricted cash on the statement of cash flows. The guidance in these updates should be applied retrospectively and are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company plans to adopt the provisions of these updates at the beginning of fiscal year 2018 and is currently assessing the impact on its consolidated statement of cash flows.

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Acquisitions

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Acquisitions

Acquisitions

IVC Group

On January 13, 2015, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with Enterhold S.A., a Luxembourg societe anonyme (the “Seller”), to acquire all of the outstanding shares of International Flooring Systems S.A., a Luxembourg societe anonyme, and its subsidiaries (collectively, the “IVC Group”). The IVC Group is a global manufacturer, distributor and marketer of luxury vinyl tile ("LVT") and sheet vinyl. On June 12, 2015, pursuant to the terms of the Share Purchase Agreement, the Company completed the acquisition of IVC Group for  $1,146,437. The results of the IVC Group's operations have been included in the consolidated financial statements since that date in the Flooring NA and the Flooring ROW segments. The IVC Group acquisition will position the Company as a major participant in both the fast growing LVT category and the expanding fiberglass sheet vinyl business.

Pursuant to the terms of the Share Purchase Agreement, the Seller will indemnify the Company for uncertain tax positions and tax liabilities that were incurred by the Seller. The Company has recorded these tax liabilities and related indemnification asset in the amount of $34,781 as of the acquisition date in other long-term liabilities and other long-term assets, respectively.

The equity value of IVC Group was paid to the Seller in cash and in shares of the Company's common stock (the “Shares”). Pursuant to the Share Purchase Agreement, the Company (i) acquired the entire issued share capital of IVC Group and (ii) acquired $17,122 of indebtedness of the IVC Group, in exchange for a net cash payment of $732,189, debt paid of $261,152, and 806 issued treasury shares for a value of $153,096.

The Company funded the cash portion of the IVC Group acquisition through a combination of proceeds from the 2.00% Senior Notes (as discussed in Note 9 - Long-Term Debt), cash on hand and borrowings under the 2015 Senior Credit Facility (as discussed in Note 8 - Long-Term Debt).

KAI Group

On May 12, 2015, the Company purchased approximately 90% of all outstanding shares of Advent KAI Luxembourg Holdings S.a r.l., a Luxembourg societe a respsonsabilite limitee, and its subsidiaries(collectively, the "KAI Group"), an eastern European ceramic tile floor manufacturer. The Company completed the acquisition of the KAI Group for $194,613. The results of the KAI Group's operations have been included in the consolidated financial statements since the date of acquisition in the Global Ceramic segment. The KAI Group has a low cost position in the Bulgarian and Romanian markets. The combination with the Company will present opportunities to enhance the group's product offering, upgrade its technology and expand its exports to other countries. The remaining 10% ownership interest in the KAI Group is controlled by a third party. The 10% interest is subject to redemption provisions that are not solely within the Company’s control and therefore is recorded as a redeemable noncontrolling interest in the mezzanine section of the balance sheet for $23,696 as of December 31, 2016. Pursuant to the share purchase agreement, the Company (i) acquired approximately 90% of the issued share capital of the KAI Group and (ii) acquired $24 of indebtedness of the KAI Group, in exchange for a net cash payment of $169,540 and debt paid of $25,073.

The Company accounted for the acquisitions of the IVC Group and the KAI Group (the “Acquisitions”) using the acquisition method of accounting, with the Company as the acquirer of the IVC Group and the KAI Group. The preliminary estimated combined consideration transferred of $1,341,050, including debt paid and shares issued, was determined in accordance with the respective share purchase agreements. The preliminary consideration transferred is allocated to tangible and intangible assets and liabilities based upon their respective fair values.

The following table summarizes the preliminary acquisition-date fair value of the consideration transferred for the Acquisitions and the estimated fair value of the consideration transferred to assets acquired and liabilities assumed as of the date of the Acquisitions, and the allocation of the aggregate purchase price of the IVC Group and the KAI Group acquisitions to the estimated fair values of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands):

Fair value of assets, net of cash acquired	$	1,382,356
Noncontrolling interests in assets acquired	(24,160		)
Assumed indebtedness	(17,146		)
Consideration transferred	$	1,341,050
Working capital	140,606
Property, plant and equipment	363,570
Tradenames	48,563
Customer relationships	224,326
Goodwill	740,140
Other long-term assets	50,236
Long-term debt, including current portion	(17,146		)
Other long-term liabilities	(57,832		)
Deferred tax liabilities	(127,253		)
Noncontrolling interest	(24,160		)
Consideration transferred	$	1,341,050

Intangible assets subject to amortization of $224,326 related to customer relationships have estimated lives of 12 to 14 years. In addition to the amortizable intangible assets, there is an additional $48,563 in indefinite-lived tradename intangible assets. The goodwill of $740,140 was allocated to the Company's segments as disclosed in Note 6, Goodwill and Other Intangible Assets. The factors contributing to the recognition of the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized from the Acquisitions. These benefits include the opportunities to improve the Company's performance by leveraging best practices, operational expertise, product innovation and manufacturing assets. The recognized goodwill from the Acquisitions is not expected to be deductible for tax purposes.

The results of operations for the Acquisitions were not significant to the Company's consolidated results of operations and, accordingly, the Company has not provided pro forma information relating to the Acquisitions.

Xtratherm

On December 7, 2015, the Company completed its purchase of Xtratherm Limited, an Irish company, and certain of its affiliates (collectively, "Xtratherm"), a manufacturer of insulation boards in Ireland, the UK and Belgium. The total value of the acquisition was $158,851. The Xtratherm acquisition will expand the Company's existing insulation board footprint to include Ireland, the UK and Belgium while capitalizing on expanded product offerings in Belgium. The acquisition's results and purchase price allocation have been included in the consolidated financial statements since the date of the acquisition. The Company's acquisition of Xtratherm resulted in a preliminary goodwill allocation of $33,307, indefinite-lived trademark intangible assets of $4,681 and intangible assets subject to amortization of $39,784. The goodwill is not expected to be deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include the opportunity to optimize the assets of Xtratherm with the Company's existing insulation assets. The Xtratherm results are reflected in the Flooring ROW segment.

Other Acquisitions

During the first quarter of 2015, the Company acquired certain assets of a distribution business in the Flooring ROW segment for $2,822, resulting in a preliminary goodwill allocation of $2,659.

During the third quarter of 2015, the Company acquired certain assets of a ceramic business in the Global Ceramic segment for $20,423, resulting in a preliminary goodwill allocation of $269.

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Restructuring, Acquisition, and Integration-Related Costs

12 Months Ended

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring, Acquisition, and Integration-Related Costs

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 including accelerated depreciation and workforce reductions.

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2016, 2015 and 2014, respectively (in thousands):

	2016		2015	2014
Cost of sales
Restructuring costs(a)	$	33,582	35,956	19,795
Acquisition integration-related costs	4,722		9,597	11,426
Restructuring and integration-related costs	$	38,304	45,553	31,221
Selling, general and administrative expenses
Restructuring costs(a)	$	4,881	5,779	5,684
Acquisition transaction-related costs	—		9,502	—
Acquisition integration-related costs	7,438		13,770	14,697
Restructuring, acquisition and integration-related costs	$	12,319	29,051	20,381

(a) The restructuring costs for 2016, 2015 and 2014 primarily relate to the Company's actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as the Company adjusted to changing economic conditions as well as actions related to the Company's recent acquisitions. In 2015 and 2014 restructuring costs included accelerated depreciation of $8,650 and $8,982, respectively.

The restructuring activity for the twelve months endedDecember 31, 2016 and 2015, respectively is as follows (in thousands):

	Lease impairments			Asset write-downs		Severance		Other restructuring costs		Total
Balance as of December 31, 2014	$	1,741		—		3,037		100		4,878
Provision - Global Ceramic segment	—			2,318		3,227		(1,180	)	4,365
Provision - Flooring NA segment	1,877			4,279		4,600		8,688		19,444
Provision - Flooring ROW segment	—			8,789		5,366		3,771		17,926
Cash payments	(3,618		)	—		(7,265	)	(11,494	)	(22,377	)
Non-cash items	—			(15,386	)	—		1,180		(14,206	)
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

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

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Receivables

12 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Receivables

Receivables

	December 31, 2016		December 31, 2015
Customers, trade	$	1,386,306	1,243,533
Income tax receivable	8,616		21,835
Other	59,564		71,084
	1,454,486		1,336,452
Less allowance for discounts, returns, claims and doubtful accounts	78,335		78,947
Receivables, net	$	1,376,151	1,257,505

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to costs and expenses	Deductions(1)	Balance at end of year
2014	$	77,037	—	252,982	257,416	72,603
2015	72,603		7,750	272,329	273,735	78,947
2016	78,947		—	296,419	297,031	78,335

(1) Represents charge-offs, net of recoveries.

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Inventories

12 Months Ended

Dec. 31, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories

The components of inventories are as follows:

	December 31, 2016		December 31, 2015
Finished goods	$	1,127,573	1,083,012
Work in process	137,310		137,186
Raw materials	410,868		387,058
Total inventories	$	1,675,751	1,607,256

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Company conducted its annual impairment assessment in the fourth quarter of 2016 and determined the fair values of its reporting units and trademarks exceeded their carrying values. As a result, no impairment was indicated.

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic			Flooring NA		Flooring ROW		Total
Balances as of December 31, 2014
Goodwill	$	1,395,132		538,515		998,130		2,931,777
Accumulated impairments losses	(531,930		)	(343,054	)	(452,441	)	(1,327,425	)
	863,202			195,461		545,689		1,604,352
Goodwill recognized during the year	99,848			329,401		345,905		775,154
Currency translation during the year	(22,223		)	—		(63,918	)	(86,141	)
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

Intangible assets:

During the third quarter of 2016, the Company determined that it needed to simplify the branding strategy in the Flooring NA segment by consolidating products under the Mohawk Group brands and discontinuing the Lees brand. This resulted in the Company writing off the full value of the Lees tradename and recording an impairment charge of $47,905 in selling, general and administrative expenses in the consolidated statements of operations.

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2014	$	622,691
Intangible assets acquired during the year	53,244
Currency translation during the year	(43,586		)
Balance as of December 31, 2015	632,349
Intangible assets acquired during the year	—
Intangible assets impaired during the year	(47,905		)
Currency translation during the year	(4,297		)
Balance as of December 31, 2016	$	580,147

	Customer relationships			Patents		Other		Total
Intangible assets subject to amortization:
Balances as of December 31, 2014	$	33,917		44,591		810		79,318
Intangible assets acquired during the year	258,875			—		5,290		264,165
Amortization during the year	(16,567		)	(13,331	)	(11	)	(29,909	)
Currency translation during the year	(5,102		)	(4,275	)	(5	)	(9,382	)
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

	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

	December 31, 2015
	Cost		Acquisitions	Currency translation		Accumulated amortization	Net Value
Customer Relationships	$	354,768	258,875	(24,927	)	317,593	271,123
Patents	270,466		—	(27,208	)	216,273	26,985
Other	1,479		5,290	21		706	6,084
Total	$	626,713	264,165	(52,114	)	534,572	304,192

	Years Ended December 31,
	2016		2015	2014
Amortization expense	$	39,545	29,909	24,724

Estimated amortization expense for the years ending December 31 are as follows:

2017	$	34,302
2018	26,013
2019	22,967
2020	22,967
2021	22,936

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Following is a summary of property, plant and equipment:

	December 31, 2016		December 31, 2015
Land	$	288,633	305,943
Buildings and improvements	1,189,408		1,120,193
Machinery and equipment	3,979,349		3,750,787
Furniture and fixtures	236,183		133,857
Leasehold improvements	77,976		68,977
Construction in progress	472,226		403,500
	6,243,775		5,783,257
Less accumulated depreciation and amortization	2,873,427		2,636,139
Net property, plant and equipment	$	3,370,348	3,147,118

Additions to property, plant and equipment included capitalized interest of $5,608, $7,091 and $9,202 in 2016, 2015 and 2014, respectively. Depreciation expense was $366,233, $328,486 and $315,840 for 2016, 2015 and 2014, respectively. Included in the property, plant and equipment are capital leases with a cost of $7,986 and $8,233 and accumulated depreciation of $4,436 and $4,431 as of December 31, 2016 and 2015, respectively.

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Long-Term Debt

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Senior Credit Facility

On September 25, 2013, the Company entered into a $1,000,000, 5-year, senior revolving credit facility (the "2013 Senior Credit Facility"). The 2013 Senior Credit Facility provided for a maximum of $1,000,000 of revolving credit, including limited amounts of credit in the form of letters of credit and swingline loans. The Company paid financing costs of $1,836 in connection with its 2013 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $11,440 related to the Company’s previous credit facility, were amortized over the term of the 2013 Senior Credit Facility.

On March 26, 2015, the Company amended and restated the 2013 Senior Credit Facility increasing its size from $1,000,000 to $1,800,000 and extending the maturity from September 25, 2018 to March 26, 2020 (as amended and restated, the "2015 Senior Credit Facility"). The 2015 Senior Credit Facility eliminates certain provisions in the 2013 Senior Credit Facility, including those that: (a) accelerated the maturity date to 90 days prior to the maturity of senior notes due in January 2016 if certain specified liquidity levels were not met; and (b) required that certain subsidiaries guarantee the Company's obligations if the Company’s credit ratings fell below investment grade. The 2015 Senior Credit Facility also modified certain negative covenants to provide the Company with additional flexibility, including flexibility to make acquisitions and incur additional indebtedness. On March 1, 2016, the Company amended the 2015 Senior Credit Facility to, among other things, carve out from the general limitation on subsidiary indebtedness the issuance of Euro-denominated commercial paper notes by subsidiaries and to extend the maturity date from March 26, 2020 to March 26, 2021 with respect to all but $120,000 of the total amount committed under the 2015 Senior Credit Facility. On October 17, 2016, the Company extended the maturity date for the remaining $120,000 commitment to March 26, 2021.

At the Company's election, revolving loans under the 2015 Senior Credit Facility bear interest at annual rates equal to either (a) LIBOR for 1, 2, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.125% as of December 31, 2016), or (b) the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.5%, and a monthly LIBOR rate plus 1.0%, plus an applicable margin ranging between 0.00% and 0.75% (0.125% as of December 31, 2016). The Company also pays a commitment fee to the lenders under the 2015 Senior Credit Facility on the average amount by which the aggregate commitments of the lenders' under the 2015 Senior Credit Facility exceed utilization. The commitment fee ranges from 0.10% to 0.225% per annum (0.125% as of December 31, 2016). The applicable margins and the commitment fee are determined based on whichever of the Company's Consolidated Net Leverage Ratio or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

The obligations of the Company and its subsidiaries in respect of the 2015 Senior Credit Facility are unsecured.

The 2015 Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company's financial and business operations, including limitations on liens, subsidiary indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, future negative pledges, and changes in the nature of the Company's business. The Company is also required to maintain a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.0, each as of the last day of any fiscal quarter. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirements and is not otherwise in default.

The 2015 Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

Also on March 1, 2016, the Company entered into a three-year, senior, unsecured delayed-draw term loan facility (the “Term Loan Facility”) by and among the Company, Wells Fargo Bank, National Association, as administrative agent, and each of the lenders party thereto. Subject to customary conditions precedent, the Company could borrow up to $200,000 under the Term Loan Facility in no more than 2 borrowings between March 1, 2016 and September 1, 2016. The Company did not borrow under the Term Loan Facility, and it has since expired on its stated expiration date.

The Company paid financing costs of $532 in connection with the amendment and extension of its 2015 Senior Credit Facility. These costs were deferred and, along with unamortized costs of $8,785 related to the Company’s 2013 Senior Credit Facility, are being amortized over the term of the 2015 Senior Credit Facility. The Company also paid financing costs of $553 in connection with its Term Loan Facility.

As of December 31, 2016, amounts utilized under the 2015 Senior Credit Facility included $60,672 of borrowings and $941 of standby letters of credit related to various insurance contracts and foreign vendor commitments. The outstanding borrowings of $820,303 under the Company's U.S. and European commercial paper programs as of December 31, 2016 reduce the availability of the 2015 Senior Credit Facility. Including commercial paper borrowings, the Company has utilized $881,916 under the 2015 Senior Credit Facility resulting in a total of $918,084 available under the 2015 Senior Credit Facility.

Commercial Paper

On February 28, 2014, the Company established a U.S. commercial paper program for the issuance of unsecured commercial paper in the United States capital markets. Under the commercial paper program, the Company issues commercial paper notes from time to time. The U.S. commercial paper notes have maturities ranging from one day to 397 days and may not be voluntarily prepaid or redeemed by the Company. The U.S. commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. As of December 31, 2016 there was $283,800 outstanding under the U.S. commercial paper program.

On July 31, 2015, the Company established a European commercial paper program for the issuance of unsecured commercial paper in the Eurozone capital markets. The European commercial paper notes have maturities ranging from one day to 183 days and may not be voluntarily prepaid or redeemed by the Company. The European commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company. As of December 31, 2016, the euro equivalent of $536,503 was outstanding under the European commercial paper program.

The Company uses its 2015 Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount due and payable under all of the Company's commercial paper programs may not exceed $1,800,000 (less any amounts drawn on the 2015 Credit Facility) at any time.

The proceeds from the sale of commercial paper notes will be available for general corporate purposes. The Company used the initial proceeds from the sale of U.S. commercial paper notes to repay borrowings under its 2013 Senior Credit Facility and certain of its industrial revenue bonds. The Company used the initial proceeds from the sale of European commercial paper notes to repay euro-denominated borrowings under its 2015 Senior Credit Facility. As of December 31, 2016, the amount utilized under the commercial paper programs was $820,303 with a weighted-average interest rate and maturity period of 0.98% and 15.62 days, respectively for the U.S. commercial paper program and (0.11)% and 28.92 days, respectively for the European commercial paper program. 

Senior Notes

On June 9, 2015, the Company issued €500,000 aggregate principal amount of 2.00% Senior Notes due January 14, 2022. The 2.00% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 2.00% Senior Notes is payable annually in cash on January 14 of each year, commencing on January 14, 2016. The Company paid financing costs of $4,218 in connection with the 2.00% Senior Notes. These costs were deferred and are being amortized over the term of the 2.00% Senior Notes.

On January 31, 2013, the Company issued $600,000 aggregate principal amount of 3.85% Senior Notes due February 1, 2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company's existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes is payable semi-annually in cash on February 1 and August 1 of each year. The Company paid financing costs of $6,000 in connection with the 3.85% Senior Notes. These costs were deferred and are being amortized over the term of the 3.85% Senior Notes.

On January 17, 2006, the Company issued $900,000 aggregate principal amount of 6.125% Senior Notes due January 15, 2016. During 2014, the Company purchased for cash approximately $254,445 aggregate principal amount of its outstanding 6.125% senior notes due January 15, 2016. On January 15, 2016, the Company paid the remaining $645,555 outstanding principal of its 6.125% Senior Notes (plus accrued but unpaid interest) utilizing cash on hand and borrowings under its U.S. commercial paper program.

Accounts Receivable Securitization

On December 19, 2012, the Company entered into a three-year on-balance sheet trade accounts receivable securitization agreement (the "Securitization Facility"). On September 11, 2014, the Company made certain modifications to its Securitization Facility, which modifications, among other things, increased the aggregate borrowings available under the facility from $300,000 to $500,000 and decreased the interest margins on certain borrowings. On December 10, 2015, the Company amended the terms of the Securitization Facility extending the termination date from December 19, 2015 to December 19, 2016. The Company further amended the terms of the Securitization Facility on December 13, 2016, extending the termination date to December 19, 2017. The Company paid financing costs of $250 in connection with this extension. These costs were deferred and are being amortized over the remaining term of the Securitization Facility.

Under the terms of the Securitization Facility, certain subsidiaries of the Company sell at a discount certain of their trade accounts receivable (the “Receivables”) to Mohawk Factoring, LLC (“Factoring”) on a revolving basis. The Company has determined that Factoring is a bankruptcy remote subsidiary, meaning that Factoring is a separate legal entity whose assets are available to satisfy the claims of the creditors of Factoring only, not the creditors of the Company or the Company’s other subsidiaries. Factoring may borrow up to $500,000 based on the amount of eligible Receivables owned by Factoring, and Factoring has granted a security interest in all of such Receivables to the third-party lending group as collateral for such borrowings.  Amounts loaned to Factoring under the Securitization Facility bear interest at LIBOR plus an applicable margin of 0.70% per annum. Factoring also pays a commitment fee at a per annum rate of 0.30% on the unused amount of each lender’s commitment. At December 31, 2016, the amount utilized under the Securitization Facility was $500,000.

The fair values and carrying values of our debt instruments are detailed as follows:

	December 31, 2016					December 31, 2015
	Fair Value			Carrying Value		Fair Value		Carrying Value
3.85% senior notes, payable February 1, 2023; interest payable semiannually	$	615,006		600,000		584,730		600,000
6.125% notes, payable January 15, 2016; interest payable semiannually	—			—		646,130		645,555
2.00% senior notes, payable January 14, 2022; interest payable annually	556,460			525,984		554,209		546,627
U.S. commercial paper	283,800			283,800		284,800		284,800
European commercial paper	536,503			536,503		472,067		472,067
Five-year senior secured credit facility, due March 26, 2021	60,672			60,672		134,075		134,075
Securitization facility	500,000			500,000		500,000		500,000
Capital leases and other	11,643			11,643		16,805		16,807
Unamortized debt issuance costs	(7,117		)	(7,117	)	(7,964	)	(7,964	)
Total debt	2,556,967			2,511,485		3,184,852		3,191,967
Less current portion of long term debt and commercial paper	1,382,738			1,382,738		2,003,578		2,003,003
Long-term debt, less current portion	$	1,174,229		1,128,747		1,181,274		1,188,964

The fair values of the Company’s debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

The aggregate maturities of long-term debt as of December 31, 2016 are as follows:

2017	$	1,382,738
2018	1,694
2019	1,441
2020	961
2021	824
Thereafter	1,123,827
	$	2,511,485

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Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2016		December 31, 2015
Outstanding checks in excess of cash	$	12,269	14,023
Accounts payable, trade	729,415		696,974
Accrued expenses	333,942		293,867
Product warranties	46,347		35,516
Accrued interest	20,396		34,623
Accrued compensation and benefits	193,213		181,022
Total accounts payable and accrued expenses	$	1,335,582	1,256,025

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2016

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes compensation expense for all share-based payments granted for the years ended December 31, 2016, 2015 and 2014 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.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company's principal stock compensation plan as of May 9, 2012, the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through December 31, 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. Restricted stock and RSUs are granted with a price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

Stock Option Plans

Additional information relating to the Company’s stock option plans follows:

	2016			2015		2014
Options outstanding at beginning of year	169			298		425
Options exercised	(78		)	(66	)	(108	)
Options forfeited and expired	—			(63	)	(19	)
Options outstanding at end of year	91			169		298
Options exercisable at end of year	90			164		257
Option prices per share:
Options exercised during the year	$ 28.37-93.65			28.37-93.65		28.37-93.65
Options forfeited and expired during the year	$	—		28.37-88.33		46.80-93.65
Options outstanding at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65
Options exercisable at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65

During 2016, 2015 and 2014, a total of 1, 1 and 0 shares, respectively, were awarded to the non-employee directors in lieu of cash for their annual retainers.

The Company’s Board of Directors has authorized the repurchase of up to 15,000 shares of the Company’s outstanding common stock. For the years ended December 31, 2016 and December 31, 2015, the Company did not repurchase any shares. The Company purchased common stock for the year ended December 31, 2014, of 2 shares. Since the inception of the program, a total of approximately 11,521 shares have been repurchased at an aggregate cost of approximately $335,455. All of these repurchases have been financed through the Company’s operations and banking arrangements.

A summary of the Company’s options under the 2002, 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Options outstanding, December 31, 2015	169		$	61.73
Granted	—		—
Exercised	(78	)	59.24
Forfeited and expired	—		—
Options outstanding, December 31, 2016	91		$	63.84	4.9	$	12,360
Vested and expected to vest as of December 31, 2016	91		$	63.84	4.9	$	12,360
Exercisable as of December 31, 2016	90		$	63.82	4.9	$	12,227

The Company has not granted options since the year ended December 31, 2012. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014 was $10,571, $7,252 and 6,613, respectively. Total compensation expense recognized for the years ended December 31, 2016, 2015 and 2014 was $40 ($24, net of tax), $209 ($131, net of tax) and $865 ($548, net of tax), respectively, which was allocated to selling, general and administrative expenses. The remaining unamortized expense for non-vested compensation expense as of December 31, 2016 was $4 with a weighted average remaining life of 0.15 years.

The following table summarizes information about the Company’s stock options outstanding as of December 31, 2016:

	Outstanding				Exercisable
Exercise price range	Number of shares	Average life	Average price		Number of shares	Average price
$57.34-$57.34	23,735	4.1	57.34		23,735	57.34
$66.14-$66.14	67,258	5.1	66.14		66,258	66.14
Total	90,993	4.9	$	63.84	89,993	$	63.82

Restricted Stock Plans

A summary of the Company’s RSUs under the 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2015	750		$	84.67
Granted	187		184.88
Released	(226	)	78.94
Forfeited	(16	)	84.20
Restricted Stock Units outstanding, December 31, 2016	695		$	113.51	1.4	$	127,856
Expected to vest as of December 31, 2016	682				1.4	$	125,203

The Company recognized stock-based compensation costs related to the issuance of RSUs of $35,019 ($21,250, net of taxes), $32,343 ($20,832, net of taxes) and $27,016 (10,735, net of taxes) for the years ended December 31, 2016, 2015 and 2014, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $27,917 as of December 31, 2016, and will be recognized as expense over a weighted-average period of approximately 1.61 years.

Additional information relating to the Company’s RSUs under the 2007 and 2012 Plans is as follows:

	2016		2015		2014
Restricted Stock Units outstanding, January 1	750		725		733
Granted	187		248		189
Released	(226	)	(212	)	(189	)
Forfeited	(16	)	(11	)	(8	)
Restricted Stock Units outstanding, December 31	695		750		725
Expected to vest as of December 31	682		731		691

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Other Expense (Income)

12 Months Ended

Dec. 31, 2016

Other Nonoperating Income (Expense) [Abstract]

Other (Income) Expense

Other (Income) Expense

Following is a summary of other expense (income):

	2016			2015		2014
Foreign currency losses (gains)	$	1,099		9,295		6,869
Release of indemnification asset	5,371			11,180		—
All other, net	(8,199		)	(2,856	)	3,829
Total other expense	$	(1,729	)	17,619		10,698

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Following is a summary of earnings from continuing operations before income taxes for United States and foreign operations:

	2016		2015	2014
United States	$	627,567	324,210	331,553
Foreign	613,558		424,651	332,338
Earnings before income taxes	$	1,241,125	748,861	663,891

Income tax expense (benefit) from continuing operations for the years ended December 31, 2016, 2015 and 2014 consists of the following:

	2016			2015		2014
Current income taxes:
U.S. federal	$	247,917		117,602		100,826
State and local	31,939			11,175		13,686
Foreign	61,712			31,981		41,151
Total current	341,568			160,758		155,663
Deferred income taxes:
U.S. federal	(16,167		)	4,165		31,052
State and local	(22,115		)	(3,983	)	(3,473	)
Foreign	4,273			(29,065	)	(51,605	)
Total deferred	(34,009		)	(28,883	)	(24,026	)
Total	$	307,559		131,875		131,637

The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. Approximately 51% of the Company’s current year earnings from continuing operations before income taxes was generated in the United States at a combined federal and state effective tax rate that is higher than the Company’s overall effective tax rate. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, Russia and Spain. The effective tax rates that the Company accrues in these jurisdictions vary widely, but they are generally lower than the Company’s overall effective tax rate. The Company’s domestic effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 38.5%, 39.8%, and 42.8%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 10.8%, 0.7%, and (3.1)%, respectively. The difference in rates applicable in foreign jurisdictions results from a number of factors, including lower statutory rates, historical loss carry-forwards, financing arrangements, and other factors. The Company’s effective tax rate has been and will continue to be impacted by the geographical dispersion of the Company’s earnings and losses. To the extent that domestic earnings increase while the foreign earnings remain flat or decrease, or increase at a lower rate, the Company’s effective tax rate will increase.

Income tax expense (benefit) attributable to earnings from continuing operations before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings from continuing operations before income taxes as follows:

	2016			2015		2014
Income taxes at statutory rate	$	434,394		262,102		232,362
State and local income taxes, net of federal income tax benefit	6,298			4,951		9,239
Foreign income taxes(a)	(111,217		)	(95,198	)	(89,385	)
Change in valuation allowance	(21,106		)	(14,237	)	(6,482	)
Tax contingencies and audit settlements(b)	2,496			(23,032	)	(7,882	)
Other, net	(3,306		)	(2,711	)	(6,215	)
	$	307,559		131,875		131,637

(a) Foreign income taxes includes statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) 2016 and 2015 include reversals of uncertain tax positions of $5,371 and $11,180, respectively.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below:

	2016			2015
Deferred tax assets:
Accounts receivable	$	23,521		11,134
Inventories	48,673			42,558
Employee benefits	76,143			70,989
Accrued expenses and other	72,258			54,652
Deductible state tax and interest benefit	5,186			491
Intangibles	12,874			34,003
Federal, foreign and state net operating losses and credits	456,130			458,743
Gross deferred tax assets	694,785			672,570
Valuation allowance	(289,078		)	(287,580	)
Net deferred tax assets	405,707			384,990
Deferred tax liabilities:
Inventories	(13,099		)	(8,663	)
Plant and equipment	(426,087		)	(429,258	)
Intangibles	(243,339		)	(267,571	)
Other liabilities	(50,041		)	(30,256	)
Gross deferred tax liabilities	(732,566		)	(735,748	)
Net deferred tax liability	$	(326,859	)	(350,758	)

The Company evaluates its ability to realize the tax benefits associated with deferred tax assets by analyzing its forecasted taxable income using both historic and projected future operating results, the reversal of existing temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The valuation allowance as of December 31, 2016, and 2015 is $289,078 and $287,580 , respectively. The valuation allowance as of December 31, 2016 relates to the net deferred tax assets of certain of the Company’s foreign subsidiaries as well as certain state net operating losses and tax credits. The total change in the 2016 valuation allowance was an increase of $1,498 which includes ($9,364) related to foreign currency translation. The total change in the 2015 valuation allowance was a decrease of $12,892, which includes $(24,718) related to foreign currency translation.

Management believes it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances, based upon the expected reversal of deferred tax liabilities and the level of historic and forecasted taxable income over periods in which the deferred tax assets are deductible.

As of December 31, 2016, the Company has state net operating loss carry forwards and state tax credits with potential tax benefits of $53,874, net of federal income tax benefit; these carry forwards expire over various periods based on taxing jurisdiction. A valuation allowance totaling $26,992 has been recorded against these state deferred tax assets as of December 31, 2016. In addition, as of December 31, 2016, the Company has net operating loss carry forwards in various foreign jurisdictions with potential tax benefits of $402,255. A valuation allowance totaling $249,529 has been recorded against these deferred tax assets as of December 31, 2016.

The Company does not provide for U.S. federal and state income taxes on the cumulative undistributed earnings of its foreign subsidiaries because such earnings are deemed to be permanently reinvested. As of December 31, 2016, the Company had not provided federal income taxes on earnings of approximately $1,400,000 from its foreign subsidiaries. Should these earnings be distributed in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes and withholding taxes in various foreign jurisdictions. These taxes may be partially offset by U.S. foreign tax credits. Determination of the amount of the unrecognized deferred U.S. tax liability is not practical because of the complexities associated with this hypothetical calculation.

Tax Uncertainties

In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing jurisdictions. Accordingly, the Company accrues liabilities when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with ASC 740-10. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest and penalties in income tax expense (benefit). Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to the Company’s consolidated results of operations or cash flow in any given quarter or annual period.

As of December 31, 2016, the Company’s gross amount of unrecognized tax benefits is $46,434, excluding interest and penalties. If the Company were to prevail on all uncertain tax positions, $28,489 of the unrecognized tax benefits would affect the Company’s effective tax rate, exclusive of any benefits related to interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2016			2015
Balance as of January 1	$	51,037		49,599
Additions based on tax positions related to the current year	2,221			684
Additions for tax positions of acquired companies	—			27,455
Additions for tax positions of prior years	6,412			2,330
Reductions resulting from the lapse of the statute of limitations	(6,294		)	(13,471	)
Settlements with taxing authorities	(6,555		)	(11,693	)
Effects of foreign currency translation	(387		)	(3,867	)
Balance as of December 31	$	46,434		51,037

The Company will continue to recognize interest and penalties related to unrecognized tax benefits as a component of its income tax provision. As of December 31, 2016 and 2015, the Company has $8,020 and $5,394, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable. During the years ending December 31, 2016 , 2015 and 2014, the Company accrued interest and penalties through the consolidated statements of operations of $2,170, $(5,635) and $(3,579), respectively.

The Company believes that its unrecognized tax benefits could decrease by $10,336 within the next twelve months. The Company has effectively settled all Federal income tax matters related to years prior to 2010. Various other state and foreign income tax returns are open to examination for various years.

Belgian Tax Matter

In January 2012, the Company received a €23,789 assessment from the Belgian tax authority related to its year ended December 31, 2008, asserting that the Company had understated its Belgian taxable income for that year. The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authority's position. The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of €1,583 earned on such deposits. However, on October 23, 2012, the Belgian tax authority notified the Company of its intent to increase the Company's taxable income for the year ended December 31, 2008 under a revised theory. On December 28, 2012, the Belgian tax authority issued assessments for the years ended December 31, 2005 and December 31, 2009, in the amounts of €46,135 and €35,567, respectively, including penalties, but excluding interest. The Company filed a formal protest during the first quarter of 2013 relating to the new assessments. In September 2013, the Belgian tax authority denied the Company's protests, and the Company has brought these two years before the Court of First Appeal in Bruges. In December 2013, the Belgian tax authority issued additional assessments related to the years ended December 31, 2006, 2007, and 2010, in the amounts of €38,817, €39,635, and €43,117, respectively, including penalties, but excluding interest. The Company filed formal protests during the first quarter of 2014, refuting the Belgian tax authority's position for each of the years assessed. In the quarter ended June 28, 2014, the Company received a formal assessment for the year ended December 31, 2008, totaling €30,131, against which the Company also submitted its formal protest. All 4 additional years have been brought before the Court of First Appeal in November 2014. In January of 2015, the Company met with the Court of First Appeal in Bruges, Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009, and apply the ruling to all of the open years (to the extent there are no additional facts/procedural arguments in the other years).

On January 27, 2016, the Court of First Appeal in Bruges, Belgium ruled in favor of the Company with respect to the calendar years ending December 31, 2005 and December 31, 2009. On March 9, 2016, the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal.

The Company disagrees with the views of the Belgian tax authority on this matter and will persist in its vigorous defense. Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the Company's properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment. The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal. The lien does not interfere with the Company's operations at these properties.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is obligated under various operating leases for office and manufacturing space, machinery, and equipment. Future minimum lease payments under non-cancelable capital and operating leases (with initial or remaining lease terms in excess of one year) as of December 31:

	Capital		Operating	Total Future Payments
2017	$	1,463	99,091	100,554
2018	1,158		75,238	76,396
2019	869		54,187	55,056
2020	531		36,811	37,342
2021	523		20,535	21,058
Thereafter	3,983		17,612	21,595
Total payments	8,527		303,474	312,001
Less amount representing interest	1,506
Present value of capitalized lease payments	$	7,021

Rental expense under operating leases was $125,103, $116,663 and $120,677 in 2016, 2015 and 2014, respectively.

The Company had approximately $941 and $1,381 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2016 and 2015, respectively that expire within two years.

The Company is involved in litigation from time to time in the regular course of its business. Except as noted below and in Note 12-Income Taxes Belgian Tax Matter, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Gadsden, Alabama Litigation

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers and users of chemicals containing perfluorinated compounds, including the Company. On October 26, 2016, the defendants removed the case to the United States District Court for the Northern District of Alabama, Middle Division, alleging diversity of citizenship and fraudulent joinder.  The Water Board filed a motion to remand the case back to the state court and the defendants have opposed the Water Board’s motion.  The parties await a ruling from the federal court on the motion to remand. The Company has never manufactured perfluorinated compounds, but purchased them for use in the manufacture of its carpets prior to 2007.  The Water Board is not alleging that chemical levels in the Company’s wastewater discharge exceeded legal limits.  Instead, the Water Board is seeking lost profits based on allegations that its customers decreased water purchases, reimbursement for the cost of a filter and punitive damages.

The Company intends to pursue all available defenses related to this matter.  The Company does not believe that the ultimate outcome of this case will have a material adverse effect on its financial condition, but there can be no assurances at this stage that the outcome will not have a material adverse effect on the Company’s results of operations, liquidity or cash flows in a given period.  Furthermore, the Company cannot predict whether any additional civil or regulatory actions against it may arise from the allegations in this matter.

Polyurethane Foam Litigation

Beginning in August 2010, a series of civil lawsuits were initiated in several U.S. federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the Company’s carpet underlay division had engaged in price fixing in violation of U.S. antitrust laws. The Company was named as a defendant in a number of the individual cases, as well as in two consolidated amended class action complaints on behalf of a class of all direct purchasers of polyurethane foam products and on behalf of a class of indirect purchasers. In these actions, the plaintiffs, on behalf of themselves and/or a class of purchasers, sought damages allegedly suffered as a result of alleged overcharges in the price of polyurethane foam products from at least 1999 to the present. Any damages actually awarded at trial would have been subject to being tripled under US antitrust laws.

On March 23 and April 30, 2015, the Company entered into agreements to settle all claims brought by the class of direct and indirect purchasers, and the trial court entered orders granting approval of the settlements on November 19, 2015 and January 27, 2016. Certain individual members of the indirect purchaser class sought to overturn the approval through an appeal to the Sixth Circuit of Appeals. As of June 21, 2016, all of these appeals have been dismissed, provided that one request to reconsider remains pending. The Company has also entered into settlement agreements resolving all of the claims brought on behalf of all of the consolidated individual lawsuits.

In December 2011, the Company was named as a defendant in a Canadian Class action, which alleged similar claims against the Company as raised in the U.S. actions. On June 12, 2015, the Company entered into an agreement to settle all claims brought by the class of Canadian plaintiffs.

The Company denies all allegations of wrongdoing but settled to avoid the uncertainty, risk, expense and distraction of protracted litigation.

During the twelve months ended December 31, 2015 the Company recorded a $122,480 charge within selling, general and administrative expenses for the settlement and defense of the antitrust cases. All of the antitrust cases have now been finally settled and with the exception of the single issue pending on appeal in the indirect purchaser class case, all consolidated cases have been dismissed. The Company does not believe that the ultimate outcome of the one remaining issue in the indirect purchaser case will have a material adverse effect on its financial condition.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and we are unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

The Company is subject to various federal, state, local and foreign environmental health and safety laws and regulations, including those governing air emissions, wastewater discharges, the use, storage, treatment, recycling and disposal of solid and hazardous materials and finished product, and the cleanup of contamination associated therewith. Because of the nature of the Company’s business, the Company has incurred, and will continue to incur, costs relating to compliance with such laws and regulations. The Company is involved in various proceedings relating to environmental matters and is currently engaged in environmental investigation, remediation and post-closure care programs at certain sites. The Company has provided accruals for such activities that it has determined to be both probable and reasonably estimable. The Company does not expect that the ultimate liability with respect to such activities will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

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Consolidated Statements of Cash Flows Information

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Information [Abstract]

Consolidated Statements of Cash Flows Information

Consolidated Statements of Cash Flows Information

Supplemental disclosures of cash flow information are as follows:

	2016		2015		2014
Net cash paid (received) during the years for:
Interest	$	57,269	67,974		109,451
Income taxes	$	276,789	133,283		148,991
Supplemental schedule of non-cash investing and financing activities:
Fair value of net assets acquired in acquisition	—		1,564,970		7,267
Noncontrolling interest of assets acquired	—		(24,160	)	—
Liabilities assumed in acquisition	—		(17,147	)	(7,286	)
Shares issued for acquisitions	—		(153,096	)	—
	$	—	1,370,567		(19	)

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Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has three reporting segments: the Global Ceramic segment, the Flooring NA segment and the Flooring ROW segment. The Global Ceramic segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone and other products, which it distributes primarily in North America, Europe and Russia through its network of regional distribution centers and Company-operated service centers using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through Company-operated service centers, independent distributors, home center retailers, tile and flooring retailers and contractors. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, hardwood, laminate and vinyl products, including luxury vinyl tile ("LVT"), which it distributes through its network of regional distribution centers and satellite warehouses using company-operated trucks, common carrier or rail transportation. The segment’s product lines are sold through various selling channels, including independent floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. The Flooring ROW segment designs, manufactures, sources, licenses and markets laminate, hardwood flooring, roofing elements, insulation boards, medium-density fiberboard ("MDF"), chipboards, other wood products, sheet vinyl and LVT, which it distributes primarily in Europe and Russia through various selling channels, which include retailers, independent distributors and home centers.

The accounting policies for each operating segment are consistent with the Company’s policies for the consolidated financial statements. Amounts disclosed for each segment are prior to any elimination or consolidation entries. Corporate general and administrative expenses attributable to each segment are estimated and allocated accordingly. Segment performance is evaluated based on operating income. Previously reported segment results have been reclassified to conform to the current period presentation. No single customer accounted for more than 10% of net sales for the years ended December 31, 2016, 2015 or 2014.

Segment information is as follows:

	2016			2015		2014
Net sales:
Global Ceramic	$	3,174,706		3,012,859		3,015,279
Flooring NA	3,865,746			3,602,112		3,441,018
Flooring ROW	1,918,635			1,456,898		1,354,018
Intersegment sales	—			(306	)	(6,869	)
	$	8,959,087		8,071,563		7,803,446
Operating income (loss):
Global Ceramic	$	478,448		414,154		351,113
Flooring NA	505,115			264,271		299,992
Flooring ROW	333,091			203,370		151,528
Corporate and intersegment eliminations	(36,711		)	(44,229	)	(29,837	)
	$	1,279,943		837,566		772,796
Depreciation and amortization:
Global Ceramic	$	135,370		118,801		120,121
Flooring NA	148,067			137,064		122,677
Flooring ROW	116,048			97,239		92,090
Corporate	9,982			9,543		10,682
	$	409,467		362,647		345,570
Capital expenditures (excluding acquisitions):
Global Ceramic	$	263,401		247,829		192,642
Flooring NA	248,843			148,598		258,987
Flooring ROW	144,207			95,447		100,899
Corporate	15,674			11,783		9,276
	$	672,125		503,657		561,804
Assets:
Global Ceramic	$	4,024,859		3,846,133		3,542,594
Flooring NA	3,410,856			3,164,525		2,587,151
Flooring ROW	2,689,592			2,805,246		1,909,487
Corporate and intersegment eliminations	105,289			118,496		246,312
	$	10,230,596		9,934,400		8,285,544
Geographic net sales:
United States	$	5,842,683		5,399,561		5,233,796
All other countries	3,116,404			2,672,002		2,569,650
	$	8,959,087		8,071,563		7,803,446
Long-lived assets (1):
United States	$	3,092,902		2,945,783		2,381,843
Belgium	1,371,397			1,377,533		949,169
All other countries	1,180,475			1,117,167		976,550
	$	5,644,774		5,440,483		4,307,562
Net sales by product categories (2):
Soft surface	$	3,414,956		3,056,946		2,764,370
Tile	3,258,136			3,094,389		3,087,895
Laminate and wood	2,285,995			1,920,228		1,951,181
	$	8,959,087		8,071,563		7,803,446

(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, with most of the UNICLIC family of patents expiring in 2017.

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

The supplemental quarterly financial data are as follows:

	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

	Quarters Ended
	April 4, 2015		July 4, 2015	October 3, 2015	December 31, 2015
Net sales	$	1,881,177	2,041,733	2,150,656	1,997,997
Gross profit	511,943		615,129	661,404	622,210
Net earnings	22,346		186,492	214,905	191,559
Basic earnings per share	0.31		2.54	2.91	2.59
Diluted earnings per share	0.30		2.53	2.89	2.57

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Summary of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company's vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile ("LVT") and vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segment Realignment

Segment Realignment

During the second quarter of 2015, the Company realigned its reportable segments to reflect how the Company’s results will be reported by management. The Company has reorganized its business into three segments - Global Ceramic, Flooring North America ("Flooring NA") and Flooring Rest of the World ("Flooring ROW"). In order to leverage its relationship and distribution capabilities, the Company organized its carpet, wood, laminate, LVT and vinyl operations by geography into the Flooring NA segment and Flooring ROW segment. The Company did not make changes to the Global Ceramic segment, which includes our ceramic tile and stone operations. Previously reported segment results have been reclassified to conform to the current period presentation.

This new segment structure is consistent with the strategic objective that management now applies to manage the growth and profitability of the Company’s business. The Global Ceramic segment includes all worldwide tile and natural stone operations. The Flooring NA segment includes North American operations in all product categories except tile and natural stone. The new segment combines the former Carpet segment with the North American operations of the former Laminate and Wood segment and the North American operations of the Company’s newly acquired LVT and vinyl flooring businesses. The Flooring ROW segment includes operations outside of North America in all product categories except tile and natural stone. The new segment combines the European and Rest of the World operations of the former Laminate and Wood segment and the European and Rest of the World operations of the Company’s newly acquired LVT and vinyl flooring businesses.

Cash And Cash Equivalents

Cash and Cash Equivalents

The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Revenue Recognition

Accounts Receivable and Revenue Recognition

The Company sells carpet, rugs, ceramic tile, natural stone, hardwood, sheet vinyl, LVT and laminate flooring products in the U.S. and to a lesser extent, Mexico, Europe and Russia principally for residential and commercial use. The Company grants credit to customers, most of whom are retail-flooring dealers, home centers and commercial end users, under credit terms that the Company believes are customary in the industry.

Revenues, which are recorded net of taxes collected from customers, 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 assured. The Company provides allowances for expected cash discounts, returns, claims, sales allowances and doubtful accounts based upon historical bad debt and claims experience and periodic evaluations of specific customer accounts and the aging of accounts receivable. Licensing revenues received from third parties for patents are recognized based on contractual agreements.

Inventories

Inventories

The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or market (net realizable value). Cost has been determined using the FIFO method. 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.

Property, Plant And Equipment

Property, Plant and Equipment

Property, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 25-40 years for buildings and improvements, 5-15 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

Accounting for Business Combinations

Accounting for Business Combinations

The Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic ("ASC") 350, “Intangibles-Goodwill and Other,” the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis in the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). 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’s 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted during the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The first step of the impairment tests for our indefinite lived intangible assets is a thorough assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts. If the qualitative test indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative assessment is not required. If a quantitative test is necessary, the second step of our impairment test involves comparing the estimated fair value of a reporting unit to its carrying amount. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

Financial Instruments

Financial Instruments

The Company’s financial instruments consist primarily of receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

Advertising Costs and Vendor Consideration

Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising. Co-op advertising is classified as a selling, general and administrative expense in accordance with ASC 605-50.

Advertising Costs and Vendor Consideration

Advertising and promotion expenses are charged to earnings during the period in which they are incurred.

Product Warranties

Product Warranties

The Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

Foreign Currency Translation

Foreign Currency Translation

The Company’s subsidiaries that operate outside the United States use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

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

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 €500,0002.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the year ended December 31, 2016, the change in the U.S. dollar value of the Company's euro denominated debt was $20,644 ($12,902 net of taxes), which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase 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.

Earnings Per Share ("EPS")

Earnings per Share (“EPS”)

Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method.

Stock-Based Compensation

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 ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards' estimated lives for fixed awards with ratable vesting provisions.

Employee Benefit Plans

Employee Benefit Plans

The Company has a 401(k) retirement savings plan (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 90 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $50,542 and $21,002 in 2016, $45,279 and $18,882 in 2015 and $42,681 and $17,654 in 2014, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans. As of December 31, 2016, the funded status of the Non-U.S. Plans was a liability of $7,517 of which $3,803 was recorded in accumulated other comprehensive income, for a net liability of $3,714 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2015, the funded status of the Non-U.S. Plans was a liability of $3,224 of which $1,075 was recorded in accumulated other comprehensive income (loss), for a net liability of $2,149 recorded in other long-term liabilities within the consolidated balance sheets.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested.

Self-Insurance Reserves

Self-Insurance Reserves

The Company is self-insured in the U.S. for various levels of general liability, auto liability, workers’ compensation and employee medical coverage. Insurance reserves, excluding workers' compensation, are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on the Company's results of operations and financial condition.

Fiscal Year

Fiscal Year

The Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. GAAP and International Financial Reporting Standards ("IFRS") and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period and early application is not permitted. On July 9, 2015, the FASB decided to defer the effective date of ASC 606 for one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The Company currently plans to adopt the provisions of this new accounting standard at the beginning of fiscal year 2018, using the cumulative effect method, and continues to evaluate the impact of the adoption of ASC 606 on its consolidated financial statements. The Company expects to complete its assessment of the impact of adoption of ASC 606 during the first half of 2017.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. This topic converges the guidance within U.S. GAAP and IFRS. The new standard intends to simplify the presentation of debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, versus recording the costs as a prepaid expense in other assets that is amortized. The new standard will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS. In August 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest (Subtopic 835-30) to address the measurement of debt issuance costs associated with line-of-credit arrangements. ASU 2015-15 states that an entity can defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless if there are outstanding borrowings on the line-of-credit arrangement. The Company adopted the provisions of this new accounting standard effective January 1, 2016 retrospectively. Accordingly, unamortized debt issuance costs of $7,964 were reclassified from other non-current assets to long-term debt in the December 31, 2015 consolidated balance sheet.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update changes the measurement principle for inventory for entities using FIFO or average cost from the lower of cost or market to lower of cost and net realizable value. Entities that measure inventory using LIFO or the retail inventory method are not affected. This update will more closely align the accounting for inventory under U.S. GAAP with IFRS. The new guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is permitted. The Company currently accounts for inventory using the FIFO method. Accordingly, the Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under this ASU, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The Company adopted the provisions of this update effectively January 1, 2016 prospectively. This update did not have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. The amendments in this Update create Topic 842, Leases, and supersede the requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The guidance in this update is effective for annual reporting periods beginning after December 15, 2018 including interim periods within that reporting period and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2019, and is currently assessing the impact on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This update simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance in this update is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods and early adoption is permitted. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2017. This update is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of credit losses on financial instruments. Topic 326 amends guidance on reporting credit losses by replacing the current incurred loss model with a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income. ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2020, and is currently assessing the impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. Additionally, the FASB issued ASU 2016-18 in November 2016 to address the classification and presentation of changes in restricted cash on the statement of cash flows. The guidance in these updates should be applied retrospectively and are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company plans to adopt the provisions of these updates at the beginning of fiscal year 2018 and is currently assessing the impact on its consolidated statement of cash flows.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Computations of Basic and Diluted Earnings (Loss) Per Share

Computations of basic and diluted earnings per share are presented in the following table:

	2016			2015		2014
Earnings attributable to Mohawk Industries, Inc.	$	930,362		615,302		531,965
Accretion of redeemable noncontrolling interest (a)	(123		)	(194	)	—
Net earnings available to common stockholders	$	930,239		615,108		531,965
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding - basic	74,104			73,516		72,837
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net	464			527		526
Weighted-average common shares outstanding-diluted	74,568			74,043		73,363
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	12.55		8.37		7.30
Diluted	$	12.48		8.31		7.25

(a) Represents the accretion of the Company's redeemable noncontrolling interest to redemption value. See Note 2 - Acquisitions for further information.

Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2016, 2015 and 2014 are as follows:

	Foreign currency translation adjustments			Pensions and post-retirement benefits		Total
Balance as of December 31, 2013	$	178,846		(157	)	178,689
Current period other comprehensive income (loss) before reclassifications	(607,351		)	(659	)	(608,010	)
Amounts reclassified from accumulated other comprehensive loss	—			—		—
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 income	—			—		—
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 (loss)	—			—		—
Balance as of December 31, 2016	$	(825,354	)	(7,673	)	(833,027	)

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Schedule of recognized identified assets acquired and liabilities assumed

The following table summarizes the preliminary acquisition-date fair value of the consideration transferred for the Acquisitions and the estimated fair value of the consideration transferred to assets acquired and liabilities assumed as of the date of the Acquisitions, and the allocation of the aggregate purchase price of the IVC Group and the KAI Group acquisitions to the estimated fair values of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands):

Fair value of assets, net of cash acquired	$	1,382,356
Noncontrolling interests in assets acquired	(24,160		)
Assumed indebtedness	(17,146		)
Consideration transferred	$	1,341,050
Working capital	140,606
Property, plant and equipment	363,570
Tradenames	48,563
Customer relationships	224,326
Goodwill	740,140
Other long-term assets	50,236
Long-term debt, including current portion	(17,146		)
Other long-term liabilities	(57,832		)
Deferred tax liabilities	(127,253		)
Noncontrolling interest	(24,160		)
Consideration transferred	$	1,341,050

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Restructuring, Acquisition, and Integration-Related Costs (Tables)

12 Months Ended

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2016, 2015 and 2014, respectively (in thousands):

	2016		2015	2014
Cost of sales
Restructuring costs(a)	$	33,582	35,956	19,795
Acquisition integration-related costs	4,722		9,597	11,426
Restructuring and integration-related costs	$	38,304	45,553	31,221
Selling, general and administrative expenses
Restructuring costs(a)	$	4,881	5,779	5,684
Acquisition transaction-related costs	—		9,502	—
Acquisition integration-related costs	7,438		13,770	14,697
Restructuring, acquisition and integration-related costs	$	12,319	29,051	20,381

(a) The restructuring costs for 2016, 2015 and 2014 primarily relate to the Company's actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as the Company adjusted to changing economic conditions as well as actions related to the Company's recent acquisitions. In 2015 and 2014 restructuring costs included accelerated depreciation of $8,650 and $8,982, respectively.

Schedule of Restructuring and Related Costs

The restructuring activity for the twelve months endedDecember 31, 2016 and 2015, respectively is as follows (in thousands):

	Lease impairments			Asset write-downs		Severance		Other restructuring costs		Total
Balance as of December 31, 2014	$	1,741		—		3,037		100		4,878
Provision - Global Ceramic segment	—			2,318		3,227		(1,180	)	4,365
Provision - Flooring NA segment	1,877			4,279		4,600		8,688		19,444
Provision - Flooring ROW segment	—			8,789		5,366		3,771		17,926
Cash payments	(3,618		)	—		(7,265	)	(11,494	)	(22,377	)
Non-cash items	—			(15,386	)	—		1,180		(14,206	)
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

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Receivables (Tables)

12 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Net Components Of Receivables

	December 31, 2016		December 31, 2015
Customers, trade	$	1,386,306	1,243,533
Income tax receivable	8,616		21,835
Other	59,564		71,084
	1,454,486		1,336,452
Less allowance for discounts, returns, claims and doubtful accounts	78,335		78,947
Receivables, net	$	1,376,151	1,257,505

Allowances For Discounts, Returns, Claims And Doubtful Accounts

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to costs and expenses	Deductions(1)	Balance at end of year
2014	$	77,037	—	252,982	257,416	72,603
2015	72,603		7,750	272,329	273,735	78,947
2016	78,947		—	296,419	297,031	78,335

(1) Represents charge-offs, net of recoveries.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2016

Inventory Disclosure [Abstract]

Net components of inventories

The components of inventories are as follows:

	December 31, 2016		December 31, 2015
Finished goods	$	1,127,573	1,083,012
Work in process	137,310		137,186
Raw materials	410,868		387,058
Total inventories	$	1,675,751	1,607,256

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic			Flooring NA		Flooring ROW		Total
Balances as of December 31, 2014
Goodwill	$	1,395,132		538,515		998,130		2,931,777
Accumulated impairments losses	(531,930		)	(343,054	)	(452,441	)	(1,327,425	)
	863,202			195,461		545,689		1,604,352
Goodwill recognized during the year	99,848			329,401		345,905		775,154
Currency translation during the year	(22,223		)	—		(63,918	)	(86,141	)
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

Schedule of indefinite life assets not subject to amortization

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2014	$	622,691
Intangible assets acquired during the year	53,244
Currency translation during the year	(43,586		)
Balance as of December 31, 2015	632,349
Intangible assets acquired during the year	—
Intangible assets impaired during the year	(47,905		)
Currency translation during the year	(4,297		)
Balance as of December 31, 2016	$	580,147

Schedule of intangible assets subject to amortization

	Customer relationships			Patents		Other		Total
Intangible assets subject to amortization:
Balances as of December 31, 2014	$	33,917		44,591		810		79,318
Intangible assets acquired during the year	258,875			—		5,290		264,165
Amortization during the year	(16,567		)	(13,331	)	(11	)	(29,909	)
Currency translation during the year	(5,102		)	(4,275	)	(5	)	(9,382	)
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

	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

	December 31, 2015
	Cost		Acquisitions	Currency translation		Accumulated amortization	Net Value
Customer Relationships	$	354,768	258,875	(24,927	)	317,593	271,123
Patents	270,466		—	(27,208	)	216,273	26,985
Other	1,479		5,290	21		706	6,084
Total	$	626,713	264,165	(52,114	)	534,572	304,192

Schedule of intangible assets amortization expense

	Years Ended December 31,
	2016		2015	2014
Amortization expense	$	39,545	29,909	24,724

Schedule of expected amortization expense

Estimated amortization expense for the years ending December 31 are as follows:

2017	$	34,302
2018	26,013
2019	22,967
2020	22,967
2021	22,936

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Summary of property, plant and equipment

Following is a summary of property, plant and equipment:

	December 31, 2016		December 31, 2015
Land	$	288,633	305,943
Buildings and improvements	1,189,408		1,120,193
Machinery and equipment	3,979,349		3,750,787
Furniture and fixtures	236,183		133,857
Leasehold improvements	77,976		68,977
Construction in progress	472,226		403,500
	6,243,775		5,783,257
Less accumulated depreciation and amortization	2,873,427		2,636,139
Net property, plant and equipment	$	3,370,348	3,147,118

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Schedule of carrying values and estimated fair values of debt instruments

The fair values and carrying values of our debt instruments are detailed as follows:

	December 31, 2016					December 31, 2015
	Fair Value			Carrying Value		Fair Value		Carrying Value
3.85% senior notes, payable February 1, 2023; interest payable semiannually	$	615,006		600,000		584,730		600,000
6.125% notes, payable January 15, 2016; interest payable semiannually	—			—		646,130		645,555
2.00% senior notes, payable January 14, 2022; interest payable annually	556,460			525,984		554,209		546,627
U.S. commercial paper	283,800			283,800		284,800		284,800
European commercial paper	536,503			536,503		472,067		472,067
Five-year senior secured credit facility, due March 26, 2021	60,672			60,672		134,075		134,075
Securitization facility	500,000			500,000		500,000		500,000
Capital leases and other	11,643			11,643		16,805		16,807
Unamortized debt issuance costs	(7,117		)	(7,117	)	(7,964	)	(7,964	)
Total debt	2,556,967			2,511,485		3,184,852		3,191,967
Less current portion of long term debt and commercial paper	1,382,738			1,382,738		2,003,578		2,003,003
Long-term debt, less current portion	$	1,174,229		1,128,747		1,181,274		1,188,964

Schedule of maturities of long-term debt

The aggregate maturities of long-term debt as of December 31, 2016 are as follows:

2017	$	1,382,738
2018	1,694
2019	1,441
2020	961
2021	824
Thereafter	1,123,827
	$	2,511,485

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Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

Components of accounts payable and accrued expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2016		December 31, 2015
Outstanding checks in excess of cash	$	12,269	14,023
Accounts payable, trade	729,415		696,974
Accrued expenses	333,942		293,867
Product warranties	46,347		35,516
Accrued interest	20,396		34,623
Accrued compensation and benefits	193,213		181,022
Total accounts payable and accrued expenses	$	1,335,582	1,256,025

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Share-based Compensation [Abstract]

Schedule of stock option plans activity

Additional information relating to the Company’s stock option plans follows:

	2016			2015		2014
Options outstanding at beginning of year	169			298		425
Options exercised	(78		)	(66	)	(108	)
Options forfeited and expired	—			(63	)	(19	)
Options outstanding at end of year	91			169		298
Options exercisable at end of year	90			164		257
Option prices per share:
Options exercised during the year	$ 28.37-93.65			28.37-93.65		28.37-93.65
Options forfeited and expired during the year	$	—		28.37-88.33		46.80-93.65
Options outstanding at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65
Options exercisable at end of year	$ 57.34-66.14			28.37-93.65		28.37-93.65

Summary of the stock options under the 2002, 2007 and 2012 plans

A summary of the Company’s options under the 2002, 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Options outstanding, December 31, 2015	169		$	61.73
Granted	—		—
Exercised	(78	)	59.24
Forfeited and expired	—		—
Options outstanding, December 31, 2016	91		$	63.84	4.9	$	12,360
Vested and expected to vest as of December 31, 2016	91		$	63.84	4.9	$	12,360
Exercisable as of December 31, 2016	90		$	63.82	4.9	$	12,227

Summary of stock options outstanding

The following table summarizes information about the Company’s stock options outstanding as of December 31, 2016:

	Outstanding				Exercisable
Exercise price range	Number of shares	Average life	Average price		Number of shares	Average price
$57.34-$57.34	23,735	4.1	57.34		23,735	57.34
$66.14-$66.14	67,258	5.1	66.14		66,258	66.14
Total	90,993	4.9	$	63.84	89,993	$	63.82

Summary of RSUs under the 2007 and 2012 plans

A summary of the Company’s RSUs under the 2007 and 2012 Plans as of December 31, 2016, and changes during the year then ended is presented as follows:

	Shares		Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2015	750		$	84.67
Granted	187		184.88
Released	(226	)	78.94
Forfeited	(16	)	84.20
Restricted Stock Units outstanding, December 31, 2016	695		$	113.51	1.4	$	127,856
Expected to vest as of December 31, 2016	682				1.4	$	125,203

Additional information for RSUs under the 2007 and 2012 plans

Additional information relating to the Company’s RSUs under the 2007 and 2012 Plans is as follows:

	2016		2015		2014
Restricted Stock Units outstanding, January 1	750		725		733
Granted	187		248		189
Released	(226	)	(212	)	(189	)
Forfeited	(16	)	(11	)	(8	)
Restricted Stock Units outstanding, December 31	695		750		725
Expected to vest as of December 31	682		731		691

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Other (Income) Expense (Tables)

12 Months Ended

Dec. 31, 2016

Other Nonoperating Income (Expense) [Abstract]

Summary of other expense (income)

Following is a summary of other expense (income):

	2016			2015		2014
Foreign currency losses (gains)	$	1,099		9,295		6,869
Release of indemnification asset	5,371			11,180		—
All other, net	(8,199		)	(2,856	)	3,829
Total other expense	$	(1,729	)	17,619		10,698

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Earnings (loss) from continuing operations before income taxes

Following is a summary of earnings from continuing operations before income taxes for United States and foreign operations:

	2016		2015	2014
United States	$	627,567	324,210	331,553
Foreign	613,558		424,651	332,338
Earnings before income taxes	$	1,241,125	748,861	663,891

Income tax expense (benefit)

Income tax expense (benefit) from continuing operations for the years ended December 31, 2016, 2015 and 2014 consists of the following:

	2016			2015		2014
Current income taxes:
U.S. federal	$	247,917		117,602		100,826
State and local	31,939			11,175		13,686
Foreign	61,712			31,981		41,151
Total current	341,568			160,758		155,663
Deferred income taxes:
U.S. federal	(16,167		)	4,165		31,052
State and local	(22,115		)	(3,983	)	(3,473	)
Foreign	4,273			(29,065	)	(51,605	)
Total deferred	(34,009		)	(28,883	)	(24,026	)
Total	$	307,559		131,875		131,637

Reconciliation of income tax expense (benefit)

Income tax expense (benefit) attributable to earnings from continuing operations before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings from continuing operations before income taxes as follows:

	2016			2015		2014
Income taxes at statutory rate	$	434,394		262,102		232,362
State and local income taxes, net of federal income tax benefit	6,298			4,951		9,239
Foreign income taxes(a)	(111,217		)	(95,198	)	(89,385	)
Change in valuation allowance	(21,106		)	(14,237	)	(6,482	)
Tax contingencies and audit settlements(b)	2,496			(23,032	)	(7,882	)
Other, net	(3,306		)	(2,711	)	(6,215	)
	$	307,559		131,875		131,637

(a) Foreign income taxes includes statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) 2016 and 2015 include reversals of uncertain tax positions of $5,371 and $11,180, respectively.

Deferred tax assets and deferred tax liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below:

	2016			2015
Deferred tax assets:
Accounts receivable	$	23,521		11,134
Inventories	48,673			42,558
Employee benefits	76,143			70,989
Accrued expenses and other	72,258			54,652
Deductible state tax and interest benefit	5,186			491
Intangibles	12,874			34,003
Federal, foreign and state net operating losses and credits	456,130			458,743
Gross deferred tax assets	694,785			672,570
Valuation allowance	(289,078		)	(287,580	)
Net deferred tax assets	405,707			384,990
Deferred tax liabilities:
Inventories	(13,099		)	(8,663	)
Plant and equipment	(426,087		)	(429,258	)
Intangibles	(243,339		)	(267,571	)
Other liabilities	(50,041		)	(30,256	)
Gross deferred tax liabilities	(732,566		)	(735,748	)
Net deferred tax liability	$	(326,859	)	(350,758	)

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2016			2015
Balance as of January 1	$	51,037		49,599
Additions based on tax positions related to the current year	2,221			684
Additions for tax positions of acquired companies	—			27,455
Additions for tax positions of prior years	6,412			2,330
Reductions resulting from the lapse of the statute of limitations	(6,294		)	(13,471	)
Settlements with taxing authorities	(6,555		)	(11,693	)
Effects of foreign currency translation	(387		)	(3,867	)
Balance as of December 31	$	46,434		51,037

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum lease payments for capital and operating leases

Future minimum lease payments under non-cancelable capital and operating leases (with initial or remaining lease terms in excess of one year) as of December 31:

	Capital		Operating	Total Future Payments
2017	$	1,463	99,091	100,554
2018	1,158		75,238	76,396
2019	869		54,187	55,056
2020	531		36,811	37,342
2021	523		20,535	21,058
Thereafter	3,983		17,612	21,595
Total payments	8,527		303,474	312,001
Less amount representing interest	1,506
Present value of capitalized lease payments	$	7,021

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Consolidated Statements of Cash Flows Information (Tables)

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Information [Abstract]

Schedule of supplemental disclosures of cash flow information

Supplemental disclosures of cash flow information are as follows:

	2016		2015		2014
Net cash paid (received) during the years for:
Interest	$	57,269	67,974		109,451
Income taxes	$	276,789	133,283		148,991
Supplemental schedule of non-cash investing and financing activities:
Fair value of net assets acquired in acquisition	—		1,564,970		7,267
Noncontrolling interest of assets acquired	—		(24,160	)	—
Liabilities assumed in acquisition	—		(17,147	)	(7,286	)
Shares issued for acquisitions	—		(153,096	)	—
	$	—	1,370,567		(19	)

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Summary of segment information

Segment information is as follows:

	2016			2015		2014
Net sales:
Global Ceramic	$	3,174,706		3,012,859		3,015,279
Flooring NA	3,865,746			3,602,112		3,441,018
Flooring ROW	1,918,635			1,456,898		1,354,018
Intersegment sales	—			(306	)	(6,869	)
	$	8,959,087		8,071,563		7,803,446
Operating income (loss):
Global Ceramic	$	478,448		414,154		351,113
Flooring NA	505,115			264,271		299,992
Flooring ROW	333,091			203,370		151,528
Corporate and intersegment eliminations	(36,711		)	(44,229	)	(29,837	)
	$	1,279,943		837,566		772,796
Depreciation and amortization:
Global Ceramic	$	135,370		118,801		120,121
Flooring NA	148,067			137,064		122,677
Flooring ROW	116,048			97,239		92,090
Corporate	9,982			9,543		10,682
	$	409,467		362,647		345,570
Capital expenditures (excluding acquisitions):
Global Ceramic	$	263,401		247,829		192,642
Flooring NA	248,843			148,598		258,987
Flooring ROW	144,207			95,447		100,899
Corporate	15,674			11,783		9,276
	$	672,125		503,657		561,804
Assets:
Global Ceramic	$	4,024,859		3,846,133		3,542,594
Flooring NA	3,410,856			3,164,525		2,587,151
Flooring ROW	2,689,592			2,805,246		1,909,487
Corporate and intersegment eliminations	105,289			118,496		246,312
	$	10,230,596		9,934,400		8,285,544
Geographic net sales:
United States	$	5,842,683		5,399,561		5,233,796
All other countries	3,116,404			2,672,002		2,569,650
	$	8,959,087		8,071,563		7,803,446
Long-lived assets (1):
United States	$	3,092,902		2,945,783		2,381,843
Belgium	1,371,397			1,377,533		949,169
All other countries	1,180,475			1,117,167		976,550
	$	5,644,774		5,440,483		4,307,562
Net sales by product categories (2):
Soft surface	$	3,414,956		3,056,946		2,764,370
Tile	3,258,136			3,094,389		3,087,895
Laminate and wood	2,285,995			1,920,228		1,951,181
	$	8,959,087		8,071,563		7,803,446

(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, with most of the UNICLIC family of patents expiring in 2017.

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Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of supplemental quarterly financial data

The supplemental quarterly financial data are as follows:

	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

	Quarters Ended
	April 4, 2015		July 4, 2015	October 3, 2015	December 31, 2015
Net sales	$	1,881,177	2,041,733	2,150,656	1,997,997
Gross profit	511,943		615,129	661,404	622,210
Net earnings	22,346		186,492	214,905	191,559
Basic earnings per share	0.31		2.54	2.91	2.59
Diluted earnings per share	0.30		2.53	2.89	2.57

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Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 09, 2015 EUR (€)	Dec. 31, 2013 USD ($)
Significant Accounting Policies [Line Items]
Number of operating segments | segment	3
Cash and cash equivalents	$ 121,665	$ 81,692	$ 97,877		$ 54,066
Advertising and promotion expenses	122,148	100,012	93,050
Co-op advertising expenses	$ 11,132	9,417	10,064
Minimum eligible service period (days)	90 days
Employer matching contribution, percent of match	50.00%
Maximum percentage of employee salary company matches at disclosed ratio	6.00%
Employee contributions	$ 50,542	45,279	42,681
Employer contributions to employee benefit plan	21,002	18,882	$ 17,654
2.00% senior notes, payable January 14, 2022; interest payable annually
Significant Accounting Policies [Line Items]
Aggregate principal amount of debts | €				€ 500,000,000
Interest rate percentage				2.00%
Change in U.S. dollar value of euro denominated debt	20,644
Change in U.S. dollar value of euro denominated debt, net of tax	$ 12,902
Minimum
Significant Accounting Policies [Line Items]
Finite intangible assets useful life, minimum (years)	7 years
Minimum | Buildings and improvements
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	25 years
Minimum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	5 years
Minimum | Furniture and fixtures
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	3 years
Maximum
Significant Accounting Policies [Line Items]
Finite intangible assets useful life, minimum (years)	16 years
Maximum | Buildings and improvements
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	40 years
Maximum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	15 years
Maximum | Furniture and fixtures
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	7 years
Non-US
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 92,419	61,173
Foreign pension plan
Significant Accounting Policies [Line Items]
Funded status of plan	7,517	3,224
Foreign pension plan | Accumulated other comprehensive income (loss)
Significant Accounting Policies [Line Items]
Funded status of plan	3,803	1,075
Foreign pension plan | Other noncurrent liabilities
Significant Accounting Policies [Line Items]
Funded status of plan	$ 3,714	2,149
Accounting Standards Update 2015-03 | Long-term debt
Significant Accounting Policies [Line Items]
Debt issuance costs, net		7,964
Accounting Standards Update 2015-03 | Other noncurrent assets
Significant Accounting Policies [Line Items]
Debt issuance costs, net		$ (7,964)

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Summary of Significant Accounting Policies (Computations Of Basic And Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Oct. 01, 2016	Jul. 02, 2016	Apr. 02, 2016	Dec. 31, 2015	Oct. 03, 2015	Jul. 04, 2015	Apr. 04, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounting Policies [Abstract]
Net income	$ 233,748	$ 269,878	$ 255,188	$ 171,548	$ 191,559	$ 214,905	$ 186,492	$ 22,346	$ 930,362	$ 615,302	$ 531,965
Accretion of redeemable noncontrolling interest									(123)	(194)	0
Net earnings available to common stockholders									$ 930,239	$ 615,108	$ 531,965
Weighted-average common shares outstanding-basic (in shares)									74,104	73,516	72,837
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net (in shares)									464	527	526
Weighted-average common shares outstanding-diluted (in shares)									74,568	74,043	73,363
Basic earnings per share (usd per share)	$ 3.15	$ 3.64	$ 3.44	$ 2.32	$ 2.59	$ 2.91	$ 2.54	$ 0.31	$ 12.55	$ 8.37	$ 7.30
Diluted earnings per share (usd per share)	$ 3.13	$ 3.62	$ 3.42	$ 2.30	$ 2.57	$ 2.89	$ 2.53	$ 0.30	$ 12.48	$ 8.31	$ 7.25

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Summary of Significant Accounting Policies (Schedule of Change in Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 4,860,863	$ 4,422,813	$ 4,470,306
Ending balance	5,783,487	4,860,863	4,422,813
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(788,652)	(428,505)	178,846
Current period other comprehensive income (loss) before reclassifications	(36,702)	(360,147)	(607,351)
Amounts reclassified from accumulated other comprehensive loss	0	0	0
Ending balance	(825,354)	(788,652)	(428,505)
Pensions and post-retirement benefits
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(4,916)	(816)	(157)
Current period other comprehensive income (loss) before reclassifications	(2,757)	(4,100)	(659)
Amounts reclassified from accumulated other comprehensive loss	0	0	0
Ending balance	(7,673)	(4,916)	(816)
AOCI including portion attributable to noncontrolling interest
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(793,568)	(429,321)	178,689
Current period other comprehensive income (loss) before reclassifications	(39,459)	(364,247)	(608,010)
Amounts reclassified from accumulated other comprehensive loss	0	0	0
Ending balance	$ (833,027)	$ (793,568)	$ (429,321)

XML

Acquisitions (Narrative) (Details) - USD ($)				1 Months Ended	3 Months Ended		12 Months Ended
	Dec. 07, 2015	Jun. 12, 2015	May 12, 2015	Jun. 12, 2015	Oct. 03, 2015	Apr. 04, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 09, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Redeemable noncontrolling interest							$ 23,696,000	$ 21,952,000
Goodwill							2,274,426,000	$ 2,293,365,000		$ 1,604,352,000
IVC group and KAI group
Business Acquisition [Line Items]
Enterprise value				$ 1,341,050,000
Assumed indebtedness				17,146,000
Goodwill		$ 740,140,000		740,140,000
IVC group
Business Acquisition [Line Items]
Enterprise value		1,146,437,000
Tax liabilities and indemnification assets assumed		34,781,000		34,781,000
Assumed indebtedness		17,122,000
Cash payments to acquire entity		732,189,000
Debt paid		261,152,000
KAI group
Business Acquisition [Line Items]
Enterprise value			$ 194,613,000
Assumed indebtedness			24,000
Cash payments to acquire entity			169,540,000
Debt paid			$ 25,073,000
Percentage of voting interests acquired			90.00%
Ownership interest controlled by a third party			10.00%
Redeemable noncontrolling interest							$ 23,696,000
Xtratherm
Business Acquisition [Line Items]
Enterprise value	$ 158,851,000
Intangible assets subject to amortization	39,784,000
Business acquisition, Goodwill, Expected tax deductible amount	0
Goodwill	33,307,000
Minimum | IVC group and KAI group
Business Acquisition [Line Items]
Intangible assets subject to amortization, useful life							12 years
Maximum | IVC group and KAI group
Business Acquisition [Line Items]
Intangible assets subject to amortization, useful life							14 years
Customer relationships | IVC group and KAI group
Business Acquisition [Line Items]
Tradenames		48,563,000		48,563,000
Customer relationships | Xtratherm
Business Acquisition [Line Items]
Tradenames	$ 4,681,000
Customer relationships | IVC group and KAI group
Business Acquisition [Line Items]
Intangible assets subject to amortization		$ 224,326,000		$ 224,326,000
Flooring ROW | Unidentified wood business
Business Acquisition [Line Items]
Enterprise value						$ 2,822,000
Goodwill						$ 2,659,000
Global Ceramic | Unidentified ceramic business
Business Acquisition [Line Items]
Enterprise value					$ 20,423,000
Goodwill					$ 269,000
2.00% senior notes, payable January 14, 2022; interest payable annually
Business Acquisition [Line Items]
Interest rate percentage									2.00%
Treasury stock | IVC group
Business Acquisition [Line Items]
Shares issued for acquisition (in shares)		806,000
Shares issued for acquisition, value		$ 153,096,000

XML

Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	1 Months Ended
	Jun. 12, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Goodwill		$ 2,274,426	$ 2,293,365	$ 1,604,352
IVC group and KAI group
Business Acquisition [Line Items]
Fair value of assets, net of cash acquired	$ 1,382,356
Noncontrolling interests in assets acquired	(24,160)
Assumed indebtedness	(17,146)
Consideration transferred	1,341,050
Working capital	140,606
Property, plant and equipment	363,570
Goodwill	740,140
Other long-term assets	50,236
Long-term debt, including current portion	(17,146)
Other long-term liabilities	(57,832)
Deferred tax liabilities	(127,253)
Noncontrolling interest	(24,160)
Consideration transferred	1,341,050
IVC group and KAI group | Customer relationships
Business Acquisition [Line Items]
Customer relationships	224,326
IVC group and KAI group | Customer relationships
Business Acquisition [Line Items]
Tradenames	$ 48,563

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Restructuring, Acquisition, and Integration-Related Costs (Related Costs by Type of Cost) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Restructuring Cost and Reserve [Line Items]
Accelerated depreciation included in restructuring costs		$ 8,650	$ 8,982
Cost of sales
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 33,582	35,956	19,795
Acquisition integration-related costs	4,722	9,597	11,426
Restructuring and integration-related costs, including accelerated depreciation	38,304	45,553	31,221
Selling, general and administrative expenses
Restructuring Cost and Reserve [Line Items]
Restructuring costs	4,881	5,779	5,684
Acquisition transaction-related costs	0	9,502	0
Acquisition integration-related costs	7,438	13,770	14,697
Restructuring and integration-related costs, including accelerated depreciation	$ 12,319	$ 29,051	$ 20,381

XML

Restructuring, Acquisition, and Integration-Related Costs (Related Costs Restructuring Reserve) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Restructuring Reserve [Roll Forward]
Beginning balance	$ 10,030	$ 4,878
Provision	38,463	33,085	$ 16,497
Cash payments	(20,940)	(22,377)
Non-cash items	16,127	14,206
Ending balance	11,426	10,030	4,878
Lease impairments
Restructuring Reserve [Roll Forward]
Beginning balance	0	1,741
Cash payments	0	(3,618)
Non-cash items	0	0
Ending balance	0	0	1,741
Asset write-downs
Restructuring Reserve [Roll Forward]
Beginning balance	0	0
Cash payments	0	0
Non-cash items	11,027	15,386
Ending balance	0	0	0
Severance
Restructuring Reserve [Roll Forward]
Beginning balance	8,965	3,037
Cash payments	(10,958)	(7,265)
Non-cash items	2	0
Ending balance	5,183	8,965	3,037
Other restructuring costs
Restructuring Reserve [Roll Forward]
Beginning balance	1,065	100
Cash payments	(9,982)	(11,494)
Non-cash items	5,098	(1,180)
Ending balance	6,243	1,065	$ 100
Operating segments | Global Ceramic
Restructuring Reserve [Roll Forward]
Provision	2,270	4,365
Operating segments | Global Ceramic | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	0	0
Operating segments | Global Ceramic | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	10,048	2,318
Operating segments | Global Ceramic | Severance
Restructuring Reserve [Roll Forward]
Provision	3,850	3,227
Operating segments | Global Ceramic | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	18,170	(1,180)
Operating segments | Flooring NA
Restructuring Reserve [Roll Forward]
Provision	32,068	19,444
Operating segments | Flooring NA | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	0	1,877
Operating segments | Flooring NA | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	795	4,279
Operating segments | Flooring NA | Severance
Restructuring Reserve [Roll Forward]
Provision	1,396	4,600
Operating segments | Flooring NA | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	79	8,688
Operating segments | Flooring ROW
Restructuring Reserve [Roll Forward]
Provision	4,125	17,926
Operating segments | Flooring ROW | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	0	0
Operating segments | Flooring ROW | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	184	8,789
Operating segments | Flooring ROW | Severance
Restructuring Reserve [Roll Forward]
Provision	1,932	5,366
Operating segments | Flooring ROW | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	$ 2,009	$ 3,771

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Receivables (Net Components Of Receivables) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Receivables [Abstract]
Customers, trade	$ 1,386,306	$ 1,243,533
Income tax receivable	8,616	21,835
Other	59,564	71,084
Receivables, gross	1,454,486	1,336,452
Less allowance for discounts, returns, claims and doubtful accounts	78,335	78,947
Receivables, net	$ 1,376,151	$ 1,257,505

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Receivables (Allowances For Discounts, Returns, Claims And Doubtful Accounts) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at beginning of year	$ 78,947	$ 72,603	$ 77,037
Acquisitions	0	7,750	0
Additions charged to costs and expenses	296,419	272,329	252,982
Deductions	297,031	273,735	257,416
Balance at end of year	$ 78,335	$ 78,947	$ 72,603

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Inventories (Net components of inventories) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Finished goods	$ 1,127,573	$ 1,083,012
Work in process	137,310	137,186
Raw materials	410,868	387,058
Total inventories	$ 1,675,751	$ 1,607,256

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Goodwill and Other Intangible Assets (Schedule of goodwill) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill [Line Items]
Goodwill, impairment loss	$ 0
Goodwill [Roll Forward]
Goodwill, beginning balance	3,620,790,000	$ 2,931,777,000
Accumulated impairments losses, beginning balance	(1,327,425,000)	(1,327,425,000)
Goodwill	2,274,426,000	2,293,365,000	$ 1,604,352,000
Goodwill recognized during the year	3,006,000	775,154,000
Currency translation during the year	(21,945,000)	(86,141,000)
Goodwill, ending balance	3,601,851,000	3,620,790,000
Accumulated impairments losses, ending balance	(1,327,425,000)	(1,327,425,000)
Goodwill, net, ending balance	2,274,426,000	2,293,365,000	1,604,352,000
Operating segments | Global Ceramic
Goodwill [Roll Forward]
Goodwill, beginning balance	1,472,757,000	1,395,132,000
Accumulated impairments losses, beginning balance	(531,930,000)	(531,930,000)
Goodwill	950,296,000	940,827,000	863,202,000
Goodwill recognized during the year	0	99,848,000
Currency translation during the year	9,469,000	(22,223,000)
Goodwill, ending balance	1,482,226,000	1,472,757,000
Accumulated impairments losses, ending balance	(531,930,000)	(531,930,000)
Goodwill, net, ending balance	950,296,000	940,827,000	863,202,000
Operating segments | Flooring NA
Goodwill [Roll Forward]
Goodwill, beginning balance	867,916,000	538,515,000
Accumulated impairments losses, beginning balance	(343,054,000)	(343,054,000)
Goodwill	526,710,000	524,862,000	195,461,000
Goodwill recognized during the year	1,848,000	329,401,000
Currency translation during the year	0	0
Goodwill, ending balance	869,764,000	867,916,000
Accumulated impairments losses, ending balance	(343,054,000)	(343,054,000)
Goodwill, net, ending balance	526,710,000	524,862,000	195,461,000
Operating segments | Flooring ROW
Goodwill [Roll Forward]
Goodwill, beginning balance	1,280,117,000	998,130,000
Accumulated impairments losses, beginning balance	(452,441,000)	(452,441,000)
Goodwill	797,420,000	827,676,000	545,689,000
Goodwill recognized during the year	1,158,000	345,905,000
Currency translation during the year	(31,414,000)	(63,918,000)
Goodwill, ending balance	1,249,861,000	1,280,117,000
Accumulated impairments losses, ending balance	(452,441,000)	(452,441,000)
Goodwill, net, ending balance	$ 797,420,000	$ 827,676,000	$ 545,689,000

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Goodwill and Other Intangible Assets (Schedule of indefinite life assets not subject to amortization) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Oct. 01, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Indefinite-lived Intangible Assets [Roll Forward]
Intangible assets impaired during the year		$ (47,905)	$ 0	$ 0
Tradenames
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite life assets not subject to amortization, beginning balance		632,349	622,691
Intangible assets acquired during the year		0	53,244
Intangible assets impaired during the year		(47,905)
Currency translation during the year		(4,297)	(43,586)
Indefinite life assets not subject to amortization, ending balance		$ 580,147	$ 632,349	$ 622,691
Selling, general and administrative expenses | Tradenames
Indefinite-lived Intangible Assets [Roll Forward]
Intangible assets impaired during the year	$ (47,905)

XML

Goodwill and Other Intangible Assets (Schedule of intangible assets subject to amortization) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	$ 304,192	$ 79,318
Intangible assets acquired during the year	0	264,165
Amortization during the year	(39,545)	(29,909)	$ (24,724)
Currency translation during the year	(10,188)	(9,382)
Intangible assets subject to amortization, ending balance	254,459	304,192	79,318
Customer relationships
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	271,123	33,917
Intangible assets acquired during the year	0	258,875
Amortization during the year	(25,778)	(16,567)
Currency translation during the year	(9,641)	(5,102)
Intangible assets subject to amortization, ending balance	235,704	271,123	33,917
Patents
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	26,985	44,591
Intangible assets acquired during the year	0	0
Amortization during the year	(13,141)	(13,331)
Currency translation during the year	(420)	(4,275)
Intangible assets subject to amortization, ending balance	13,424	26,985	44,591
Other
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	6,084	810
Intangible assets acquired during the year	0	5,290
Amortization during the year	(626)	(11)
Currency translation during the year	(127)	(5)
Intangible assets subject to amortization, ending balance	$ 5,331	$ 6,084	$ 810

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Goodwill and Other Intangible Assets (Net intangible assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Intangible Assets, Net:
Cost	$ 838,764	$ 626,713
Acquisitions	0	264,165
Currency translation	(28,432)	(52,114)
Accumulated amortization	555,873	534,572
Net Value	254,459	304,192	$ 79,318
Customer relationships
Intangible Assets, Net:
Cost	588,716	354,768
Acquisitions	0	258,875
Currency translation	(18,736)	(24,927)
Accumulated amortization	334,276	317,593
Net Value	235,704	271,123	33,917
Patents
Intangible Assets, Net:
Cost	243,258	270,466
Acquisitions	0	0
Currency translation	(9,236)	(27,208)
Accumulated amortization	220,598	216,273
Net Value	13,424	26,985	$ 44,591
Other
Intangible Assets, Net:
Cost	6,790	1,479
Acquisitions	0	5,290
Currency translation	(460)	21
Accumulated amortization	999	706
Net Value	$ 5,331	$ 6,084

XML

Goodwill and Other Intangible Assets (Schedule of intangible assets amortization expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 39,545	$ 29,909	$ 24,724

XML

Goodwill and Other Intangible Assets (Schedule of estimated amortization expense) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2017	$ 34,302
2018	26,013
2019	22,967
2020	22,967
2021	$ 22,936

XML

Property, Plant and Equipment (Summary Of Property, Plant And Equipment) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	$ 6,243,775	$ 5,783,257
Less accumulated depreciation and amortization	2,873,427	2,636,139
Net property, plant and equipment	3,370,348	3,147,118
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	288,633	305,943
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	1,189,408	1,120,193
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	3,979,349	3,750,787
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	236,183	133,857
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	77,976	68,977
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	$ 472,226	$ 403,500

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Property, Plant and Equipment (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Capitalized interest included in property, plant and equipment	$ 5,608	$ 7,091	$ 9,202
Depreciation expense	366,233	328,486	$ 315,840
Capital leases included in the property, plant and equipment, cost	7,986	8,233
Capital leases included in the property, plant and equipment, accumulated depreciation	$ 4,436	$ 4,431

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Long-Term Debt (Senior Credit Facility) (Details)					9 Months Ended	12 Months Ended
	Mar. 01, 2016 USD ($)	Mar. 26, 2015 USD ($)	Sep. 25, 2013 USD ($)	Sep. 25, 2013 USD ($)	Oct. 01, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Senior secured credit facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility		$ 1,800,000,000	$ 1,000,000,000	$ 1,000,000,000
Term of line of credit (years)				5 years
Payment of financing costs			1,836,000
Unamortized financing costs			$ 11,440,000	$ 11,440,000
Commitment fee percentage						0.125%
Utilized borrowings under credit facility						$ 881,916,000
Available amount under credit facility						918,084,000
Senior secured credit facility | Minimum
Line of Credit Facility [Line Items]
Commitment fee percentage		0.10%
Consolidated interest coverage ratio		3.0
Senior secured credit facility | Maximum
Line of Credit Facility [Line Items]
Commitment fee percentage		0.225%
Consolidated interest coverage ratio		3.75
Senior secured credit facility | Borrowings
Line of Credit Facility [Line Items]
Utilized borrowings under credit facility						60,672,000
Senior secured credit facility | Standby letters of credit related to various insurance contracts and foreign vendor commitments
Line of Credit Facility [Line Items]
Standby letters of credit for various insurance contracts and commitments to foreign vendors						$ 941,000	$ 1,381,000
Senior secured credit facility | Libor
Line of Credit Facility [Line Items]
Basis spread on debt instrument						1.125%
Senior secured credit facility | Libor | Minimum
Line of Credit Facility [Line Items]
Basis spread on debt instrument		1.00%
Senior secured credit facility | Libor | Maximum
Line of Credit Facility [Line Items]
Basis spread on debt instrument		1.75%
Senior secured credit facility | Federal funds
Line of Credit Facility [Line Items]
Basis spread on debt instrument		0.50%
Senior secured credit facility | Monthly libor
Line of Credit Facility [Line Items]
Basis spread on debt instrument		1.00%				0.125%
Senior secured credit facility | Monthly libor | Minimum
Line of Credit Facility [Line Items]
Basis spread on debt instrument		0.00%
Senior secured credit facility | Monthly libor | Maximum
Line of Credit Facility [Line Items]
Basis spread on debt instrument		0.75%
Commercial paper
Line of Credit Facility [Line Items]
Utilized borrowings under credit facility						$ 820,303,000
2015 Senior secured credit facility
Line of Credit Facility [Line Items]
Unamortized financing costs					$ 532,000
2013 Senior secured credit facility
Line of Credit Facility [Line Items]
Unamortized financing costs					8,785,000
Senior secured credit facility maturing March 26 2020 | Senior secured credit facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility	$ 120,000,000
Term loan facility | Line of credit | Unsecured debt
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility	$ 200,000,000
Payment of financing costs					$ 553,000
Maturity period of debt	3 years

XML

Long-Term Debt (Commercial Paper) (Details) - USD ($)			12 Months Ended
	Jul. 31, 2015	Feb. 28, 2014	Dec. 31, 2016	Dec. 31, 2015	May 21, 2015
Commercial paper
Line of Credit Facility [Line Items]
Utilized borrowings under credit facility			$ 820,303,000
United States | Commercial paper
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility					$ 1,800,000,000
Maturity period of debt			15 years 7 months 13 days
Weighted average interest rate on debt			(0.98%)
United States | Minimum | Commercial paper
Line of Credit Facility [Line Items]
Maturity period of debt		1 day
United States | Maximum | Commercial paper
Line of Credit Facility [Line Items]
Maturity period of debt		397 days
Europe | Commercial paper
Line of Credit Facility [Line Items]
Maturity period of debt			28 years 11 months 1 day
Weighted average interest rate on debt			(0.11%)
Europe | Minimum | Commercial paper
Line of Credit Facility [Line Items]
Maturity period of debt	1 day
Europe | Maximum | Commercial paper
Line of Credit Facility [Line Items]
Maturity period of debt	183 days
Carrying Value | United States
Line of Credit Facility [Line Items]
U.S. commercial paper			$ 283,800,000	$ 284,800,000
Carrying Value | Senior secured credit facility due July 8 2016
Line of Credit Facility [Line Items]
Notes payable			$ 536,503,000	$ 472,067,000

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Long-Term Debt (Senior Notes) (Details)	Jan. 15, 2016 USD ($)	Jun. 09, 2015 USD ($)	Sep. 25, 2013 USD ($)	Sep. 25, 2013	Jan. 31, 2013 USD ($)	Jun. 09, 2015 EUR (€)	Dec. 31, 2014 USD ($)	Jan. 17, 2006 USD ($)
2.00% senior notes, payable January 14, 2022; interest payable annually
Debt Instrument [Line Items]
Aggregate principal amount of debts | €						€ 500,000,000
Interest rate percentage						2.00%
Payment of financing costs		$ 4,218,000
3.85% senior notes, payable February 1, 2023; interest payable semiannually
Debt Instrument [Line Items]
Aggregate principal amount of debts					$ 600,000,000
Interest rate percentage					3.85%
Payment of financing costs					$ 6,000,000
6.125% notes, payable January 15, 2016; interest payable semiannually
Debt Instrument [Line Items]
Aggregate principal amount of debts								$ 900,000,000
Interest rate percentage								6.125%
Amount of debt repurchased							$ 254,445,000
Remaining principal paid in period	$ 645,555,000
Senior secured credit facility
Debt Instrument [Line Items]
Payment of financing costs			$ 1,836,000
Term of line of credit (years)				5 years

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Long-Term Debt (Accounts Receivable Securitization) (Details) - Securitization facility - USD ($)	Dec. 10, 2015	Sep. 11, 2014	Dec. 19, 2012	Dec. 31, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Maturity period of debt			3 years
Securitization agreement, maximum borrowing capacity		$ 500,000,000	$ 300,000,000
Payment of financing costs	$ 250,000
Basis spread on securitization agreement		0.70%
Commitment fee percentage on unused amount of each lender's commitment		0.30%
Carrying Value
Line of Credit Facility [Line Items]
Securitization facility				$ 500,000,000	$ 500,000,000

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Long-Term Debt (Fair Value and Carrying Value of Debt Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Less current portion of long term debt and commercial paper	$ 1,382,738	$ 2,003,003
Long-term debt, less current portion	2,511,485
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Capital leases and other	11,643	16,805
Unamortized debt issuance costs	(7,117)	(7,964)
Total debt	2,556,967	3,184,852
Less current portion of long term debt and commercial paper	1,382,738	2,003,578
Long-term debt, less current portion	1,174,229	1,181,274
Fair Value | Securitization facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securitization facility	500,000	500,000
Fair Value | 3.85% senior notes, payable February 1, 2023; interest payable semiannually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	615,006	584,730
Fair Value | 6.125% notes, payable January 15, 2016; interest payable semiannually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0	646,130
Fair Value | 2.00% senior notes, payable January 14, 2022; interest payable annually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	556,460	554,209
Fair Value | Senior secured credit facility due July 8 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	536,503	472,067
Fair Value | Five-year senior secured credit facility, due March 26, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	60,672	134,075
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Capital leases and other	11,643	16,807
Unamortized debt issuance costs	(7,117)	(7,964)
Total debt	2,511,485	3,191,967
Less current portion of long term debt and commercial paper	1,382,738	2,003,003
Long-term debt, less current portion	1,128,747	1,188,964
Carrying Value | Securitization facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securitization facility	500,000	500,000
Carrying Value | 3.85% senior notes, payable February 1, 2023; interest payable semiannually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	600,000	600,000
Carrying Value | 6.125% notes, payable January 15, 2016; interest payable semiannually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0	645,555
Carrying Value | 2.00% senior notes, payable January 14, 2022; interest payable annually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	525,984	546,627
Carrying Value | Senior secured credit facility due July 8 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	536,503	472,067
Carrying Value | Five-year senior secured credit facility, due March 26, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	60,672	134,075
United States | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. commercial paper	283,800	284,800
United States | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
U.S. commercial paper	$ 283,800	$ 284,800

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Long-Term Debt (Aggregate Maturities Of Long-Term Debt) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Debt Disclosure [Abstract]
2017	$ 1,382,738
2018	1,694
2019	1,441
2020	961
2021	824
Thereafter	1,123,827
Aggregate maturities of long-term debt	$ 2,511,485

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Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Outstanding checks in excess of cash	$ 12,269	$ 14,023
Accounts payable, trade	729,415	696,974
Accrued expenses	333,942	293,867
Product warranties	46,347	35,516
Accrued interest	20,396	34,623
Accrued compensation and benefits	193,213	181,022
Total accounts payable and accrued expenses	$ 1,335,582	$ 1,256,025

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended			56 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	May 09, 2012
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Options granted (in shares)	0
Stock repurchase program authorized share amount (in shares)	15,000,000			15,000,000
Common stock repurchased (in shares)		2,000		11,521,000
Common stock repurchased, value				$ 335,455
Total intrinsic value of options exercised	$ 10,571	$ 7,252	$ 6,613
Weighted average remaining life	4 years 10 months 17 days
Stock options plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Recognized stock-based compensation costs	$ 40	209	865
Recognized stock-based compensation costs, net of tax	24	131	548
Pre-tax unrecognized compensation expense	$ 4			4
Weighted average remaining life	1 month 24 days
Restricted stock units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Recognized stock-based compensation costs	$ 35,019	32,343	27,016
Recognized stock-based compensation costs, net of tax	21,250	$ 20,832	$ 10,735
Pre-tax unrecognized compensation expense	$ 27,917			$ 27,917
Recognized expense over a weighted-average period, years	1 year 7 months 9 days
2012 long-term incentive plan
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Common stock reserved for issuance (in shares)					3,200,000
Expiration year	Dec. 31, 2022
2012 long-term incentive plan | Stock options plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Option awards contractual term (years)	10 years
2012 long-term incentive plan | Maximum | Stock options plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	5 years
2012 long-term incentive plan | Maximum | Restricted stock units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	5 years
2012 long-term incentive plan | Minimum | Stock options plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	3 years
2012 long-term incentive plan | Minimum | Restricted stock units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	3 years
Non-employee director
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Options granted (in shares)	1,000	1,000	0

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Stock-Based Compensation (Schedule Of Stock Option Plans Activity) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Shares
Options outstanding at beginning of year (in shares)	169,000
Options exercised (in shares)	(78,000)
Options forfeited and expired (in shares)	0
Options outstanding at end of year (in shares)	91,000	169,000
Options exercisable at end of year (in shares)	90,000
Weighted average exercise price
Options exercised during the year (usd per share)	$ 59.24
Options outstanding at the end of year (usd per share)	63.84	$ 61.73
Options exercisable at end of year (usd per share)	$ 63.82
Stock options plans
Shares
Options outstanding at beginning of year (in shares)	169,000	298,000	425,000
Options exercised (in shares)	(78,000)	(66,000)	(108,000)
Options forfeited and expired (in shares)	0	(63,000)	(19,000)
Options outstanding at end of year (in shares)	91,000	169,000	298,000
Options exercisable at end of year (in shares)	90,000	164,000	257,000
Minimum
Weighted average exercise price
Options exercised during the year (usd per share)	$ 28.37	$ 28.37	$ 28.37
Options forfeited and expired during the year (usd per share)	0.00	28.37	46.80
Options outstanding at the end of year (usd per share)	57.34	28.37	28.37
Options exercisable at end of year (usd per share)	57.34	28.37	28.37
Maximum
Weighted average exercise price
Options exercised during the year (usd per share)	93.65	93.65	93.65
Options forfeited and expired during the year (usd per share)	0.00	88.33	93.65
Options outstanding at the end of year (usd per share)	66.14	93.65	93.65
Options exercisable at end of year (usd per share)	$ 66.14	$ 93.65	$ 93.65

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Stock-Based Compensation (Summary Of Stock Options Under The 2007 Plan) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Shares
Options outstanding at beginning of year (in shares)	169,000
Granted (in shares)	0
Exercised (in shares)	(78,000)
Forfeited and expired (in share)	0
Options outstanding at end of year (in shares)	91,000	169,000
Vested and expected to vest at end of year, (in shares)	91,000
Exercisable at end of year (in shares)	90,000
Weighted average exercise price
Options outstanding at the end of year (usd per share)	$ 63.84	$ 61.73
Options granted during the year (usd per share)	0.00
Options exercised during the year (usd per share)	59.24
Forfeited and expired (usd per share)	0.00
Vested and expected to vest, weighted average exercise price (usd per share)	63.84
Exercisable, weighted average exercise price (usd per share)	$ 63.82
Additional Disclosures
Weighted average remaining life	4 years 10 months 17 days
Vested and expected to vest, weighted average remaining contractual term (years)	4 years 10 months 17 days
Exercisable, weighted average remaining contractual term (years)	4 years 10 months 17 days
Options outstanding at end of year, aggregate intrinsic value	$ 12,360
Vested and expected to vest, aggregate intrinsic value	12,360
Exercisable, aggregate intrinsic value	$ 12,227

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Stock-Based Compensation (Summary Of Stock Options By Exercise Price Range) (Details)	12 Months Ended
	Dec. 31, 2016 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding, number of shares | shares	90,993,000
Outstanding, average life	4 years 10 months 17 days
Outstanding, average price (usd per share)	$ 63.84
Exercisable, number of shares | shares	89,993,000
Exercisable, average price (usd per share)	$ 63.82
$57.34-$57.34
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, lower limit	57.34
Exercise price range, upper limit	$ 57.34
Outstanding, number of shares | shares	23,735,000
Outstanding, average life	4 years 1 month 24 days
Outstanding, average price (usd per share)	$ 57.34
Exercisable, number of shares | shares	23,735,000
Exercisable, average price (usd per share)	$ 57.34
$66.14-$66.14
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, lower limit	66.14
Exercise price range, upper limit	$ 66.14
Outstanding, number of shares | shares	67,258,000
Outstanding, average life	5 years 1 month 20 days
Outstanding, average price (usd per share)	$ 66.14
Exercisable, number of shares | shares	66,258,000
Exercisable, average price (usd per share)	$ 66.14

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Stock-Based Compensation (Summary Of RSUs Under The 2007 Plan) (Details) - 2007 and 2012 Incentive plan - Restricted stock units (RSUs) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of Shares [Roll Forward]
RSUs outstanding, beginning balance (in shares)	750,000	725,000	733,000
Granted (in shares)	187,000	248,000	189,000
Released (in shares)	(226,000)	(212,000)	(189,000)
Forfeited (in shares)	(16,000)	(11,000)	(8,000)
RSUs outstanding, ending balance (in shares)	695,000	750,000	725,000
Expected to vest (in shares)	682,000	731,000	691,000
Weighted Average Price [Roll Forward]
Beginning balance (usd per share)	$ 84.67
Granted (usd per share)	184.88
Released (usd per share)	78.94
Forfeited (usd per share)	84.20
Ending balance (usd per share)	$ 113.51	$ 84.67
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Ending balance, weighted average remaining contractual term (years)	1 year 5 months 12 days
Expected to Vest, weighted average remaining contractual term (years)	1 year 5 months 4 days
Ending balance, aggregate intrinsic value	$ 127,856
Expected to Vest, aggregate intrinsic value	$ 125,203

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Stock-Based Compensation (Additional Information For RSU's Under The 2007 Plan) (Details) - 2007 and 2012 Incentive plan - Restricted stock units (RSUs) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of Shares [Roll Forward]
RSUs outstanding, beginning balance (in shares)	750,000	725,000	733,000
Granted (in shares)	187,000	248,000	189,000
Released (in shares)	(226,000)	(212,000)	(189,000)
Forfeited (in shares)	(16,000)	(11,000)	(8,000)
RSUs outstanding, ending balance (in shares)	695,000	750,000	725,000
Expected to vest (in shares)	682,000	731,000	691,000

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Other (Income) Expense (Summary of other expense (income)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Nonoperating Income (Expense) [Abstract]
Foreign currency losses (gains)	$ 1,099	$ 9,295	$ 6,869
Release of indemnification asset	5,371	11,180	0
All other, net	(8,199)	(2,856)	3,829
Total other expense	$ 1,729	$ (17,619)	$ (10,698)

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Income Taxes (Earnings (Loss) From Continuing Operations Before Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
United States	$ 627,567	$ 324,210	$ 331,553
Foreign	613,558	424,651	332,338
Earnings before income taxes	$ 1,241,125	$ 748,861	$ 663,891

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Income Taxes (Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current income taxes:
Current income taxes: U.S. federal	$ 247,917	$ 117,602	$ 100,826
Current income taxes: State and local	31,939	11,175	13,686
Current income taxes: Foreign	61,712	31,981	41,151
Total current income taxes	341,568	160,758	155,663
Deferred income taxes:
Deferred income taxes: U.S. federal	(16,167)	4,165	31,052
Deferred income taxes: State and local	(22,115)	(3,983)	(3,473)
Deferred income taxes: Foreign	4,273	(29,065)	(51,605)
Total deferred income taxes	(34,009)	(28,883)	(24,026)
Income tax expense (benefit)	$ 307,559	$ 131,875	$ 131,637

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Income Taxes (Narrative) (Details) € in Thousands, $ in Thousands		1 Months Ended		3 Months Ended		12 Months Ended
	Dec. 28, 2012 EUR (€)	Dec. 31, 2013 EUR (€)	Jan. 31, 2012 EUR (€)	Jun. 28, 2014 EUR (€)	Sep. 29, 2012 EUR (€)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Income Taxes [Line Items]
Percentage of earnings from continuing operations before income taxes attributable to the United States						51.00%
Reversal of uncertain tax positions						$ 6,294	$ 13,471
Valuation allowance against deferred tax asset						289,078	287,580
Increase (decrease) in the valuation allowance						1,498	(12,892)
Net operating loss carryforwards and tax credit						456,130	458,743
Net operating loss carryforwards in various foreign jurisdictions						402,255
Federal income taxes on earnings						1,400,000
Gross unrecognized tax benefits						46,434	51,037	$ 49,599
Unrecognized tax benefits that would impact effective tax rate						28,489
Interest and penalties						8,020	5,394
Accrued/(reversed) interest and penalties						(2,170)	$ 5,635		$ 3,579
Expected decrease in unrecognized tax benefits within next twelve months						$ 10,336
Domestic tax authority
Income Taxes [Line Items]
Effective income tax rate						38.50%	39.80%	42.80%
State
Income Taxes [Line Items]
Net operating loss carryforwards and tax credit						$ 53,874
Foreign tax authority
Income Taxes [Line Items]
Effective income tax rate						10.80%	0.70%	(3.10%)
Foreign tax authority | Belgium
Income Taxes [Line Items]
Interest income related to interest tax examination refund | €					€ 1,583
Foreign tax authority | Tax year 2008 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €			€ 23,789	€ 30,131
Foreign tax authority | Tax year 2005 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €	€ 46,135
Foreign tax authority | Tax year 2009 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €	€ 35,567
Foreign tax authority | Tax year 2006 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €		€ 38,817
Foreign tax authority | Tax year 2007 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €		39,635
Foreign tax authority | Tax year 2010 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €		€ 43,117
Foreign subsidiary and state net operating losses and tax credits
Income Taxes [Line Items]
Increase (decrease) in the valuation allowance						$ (9,364)	$ (24,718)
State deferred tax assets
Income Taxes [Line Items]
Valuation allowance against deferred tax asset						26,992
Operating loss carryforward, foreign jurisdiction
Income Taxes [Line Items]
Valuation allowance against deferred tax asset						249,529
IVC group
Income Taxes [Line Items]
Reversal of uncertain tax positions						$ 5,371	$ 11,180

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Income Taxes (Reconciliation Of Income Tax Expense (Benefit))(Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income taxes at statutory rate	$ 434,394	$ 262,102	$ 232,362
State and local income taxes, net of federal income tax benefit	6,298	4,951	9,239
Foreign income taxes	(111,217)	(95,198)	(89,385)
Change in valuation allowance	(21,106)	(14,237)	(6,482)
Tax contingencies and audit settlements	2,496	(23,032)	(7,882)
Other, net	(3,306)	(2,711)	(6,215)
Income tax expense (benefit)	$ 307,559	$ 131,875	$ 131,637

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Income Taxes (Deferred Tax Assets And Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Accounts receivable	$ 23,521	$ 11,134
Inventories	48,673	42,558
Employee benefits	76,143	70,989
Accrued expenses and other	72,258	54,652
Deductible state tax and interest benefit	5,186	491
Intangibles	12,874	34,003
Federal, foreign and state net operating losses and credits	456,130	458,743
Gross deferred tax assets	694,785	672,570
Valuation allowance	(289,078)	(287,580)
Net deferred tax assets	405,707	384,990
Inventories	(13,099)	(8,663)
Plant and equipment	(426,087)	(429,258)
Intangibles	(243,339)	(267,571)
Other liabilities	(50,041)	(30,256)
Gross deferred tax liabilities	(732,566)	(735,748)
Net deferred tax liability	$ (326,859)	$ (350,758)

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Income Taxes (Reconciliation Of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
Balance as of January 1	$ 51,037	$ 49,599
Additions based on tax positions related to the current year	2,221	684
Additions for tax positions of acquired companies	0	27,455
Additions for tax positions of prior years	6,412	2,330
Reductions resulting from the lapse of the statute of limitations	(6,294)	(13,471)
Settlements with taxing authorities	(6,555)	(11,693)
Effects of foreign currency translation	(387)	(3,867)
Balance as of December 31	$ 46,434	$ 51,037

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Commitments and Contingencies (Summary of Future Lease Payments Under Non-Cancelable Capital and Operating Leases (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Capital
2017	$ 1,463
2018	1,158
2019	869
2020	531
2021	523
Thereafter	3,983
Total payments	8,527
Less amount representing interest	1,506
Present value of capitalized lease payments	7,021
Operating
2017	99,091
2018	75,238
2019	54,187
2020	36,811
2021	20,535
Thereafter	17,612
Total payments	303,474
Total Future Payments
2017	100,554
2018	76,396
2019	55,056
2020	37,342
2021	21,058
Thereafter	21,595
Total payments	$ 312,001

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Commitments and Contingencies (Narrative) (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 21, 2011 claim	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Commitments And Contingencies [Line Items]
Rent expense under operating leases		$ 125,103	$ 116,663	$ 120,677
Polyurethane foam antitrust litigation
Commitments And Contingencies [Line Items]
Number of claims filed | claim	2
Polyurethane foam antitrust litigation | Selling, general and administrative expenses
Commitments And Contingencies [Line Items]
Charge for the settlement and defense of antitrust cases		122,480
Standby letters of credit related to various insurance contracts and foreign vendor commitments | Senior secured credit facility
Commitments And Contingencies [Line Items]
Standby letters of credit for various insurance contracts and commitments to foreign vendors		$ 941	$ 1,381
Standby letters of credit related to various insurance contracts and foreign vendor commitments | Senior secured credit facility | Maximum
Commitments And Contingencies [Line Items]
Expiration period for standby letters of credit		2 years

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Consolidated Statements of Cash Flows Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Supplemental Cash Flow Information [Abstract]
Interest	$ 57,269	$ 67,974	$ 109,451
Income taxes	276,789	133,283	148,991
Fair value of net assets acquired in acquisition	0	1,564,970	7,267
Noncontrolling interest of assets acquired	0	(24,160)	0
Liabilities assumed in acquisition	0	(17,147)	(7,286)
Shares issued for acquisitions	0	(153,096)	0
Noncash investing and financing activities, total	$ 0	$ 1,370,567	$ (19)

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Segment Reporting (Summary of segment information) (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016 USD ($)	Oct. 01, 2016 USD ($)	Jul. 02, 2016 USD ($)	Apr. 02, 2016 USD ($)	Dec. 31, 2015 USD ($)	Oct. 03, 2015 USD ($)	Jul. 04, 2015 USD ($)	Apr. 04, 2015 USD ($)	Dec. 31, 2016 USD ($) segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Segment Reporting Information [Line Items]
Number of reporting segments | segment									3
Net sales	$ 2,182,566	$ 2,294,139	$ 2,310,336	$ 2,172,046	$ 1,997,997	$ 2,150,656	$ 2,041,733	$ 1,881,177	$ 8,959,087	$ 8,071,563	$ 7,803,446
Operating income (loss)									1,279,943	837,566	772,796
Depreciation and amortization									409,467	362,647	345,570
Capital expenditures (excluding acquisitions)									672,125	503,657	561,804
Assets	10,230,596				9,934,400				10,230,596	9,934,400	8,285,544
Long-lived assets	5,644,774				5,440,483				5,644,774	5,440,483	4,307,562
Soft surface
Segment Reporting Information [Line Items]
Net sales									3,414,956	3,056,946	2,764,370
Tile
Segment Reporting Information [Line Items]
Net sales									3,258,136	3,094,389	3,087,895
Laminate and wood
Segment Reporting Information [Line Items]
Net sales									2,285,995	1,920,228	1,951,181
United States
Segment Reporting Information [Line Items]
Net sales									5,842,683	5,399,561	5,233,796
Long-lived assets	3,092,902				2,945,783				3,092,902	2,945,783	2,381,843
Belgium
Segment Reporting Information [Line Items]
Long-lived assets	1,371,397				1,377,533				1,371,397	1,377,533	949,169
All other countries
Segment Reporting Information [Line Items]
Net sales									3,116,404	2,672,002	2,569,650
Long-lived assets	1,180,475				1,117,167				1,180,475	1,117,167	976,550
Operating segments | Global Ceramic
Segment Reporting Information [Line Items]
Net sales									3,174,706	3,012,859	3,015,279
Operating income (loss)									478,448	414,154	351,113
Depreciation and amortization									135,370	118,801	120,121
Capital expenditures (excluding acquisitions)									263,401	247,829	192,642
Assets	4,024,859				3,846,133				4,024,859	3,846,133	3,542,594
Operating segments | Flooring NA
Segment Reporting Information [Line Items]
Net sales									3,865,746	3,602,112	3,441,018
Operating income (loss)									505,115	264,271	299,992
Depreciation and amortization									148,067	137,064	122,677
Capital expenditures (excluding acquisitions)									248,843	148,598	258,987
Assets	3,410,856				3,164,525				3,410,856	3,164,525	2,587,151
Operating segments | Flooring ROW
Segment Reporting Information [Line Items]
Net sales									1,918,635	1,456,898	1,354,018
Operating income (loss)									333,091	203,370	151,528
Depreciation and amortization									116,048	97,239	92,090
Capital expenditures (excluding acquisitions)									144,207	95,447	100,899
Assets	2,689,592				2,805,246				2,689,592	2,805,246	1,909,487
Corporate and intersegment eliminations
Segment Reporting Information [Line Items]
Operating income (loss)									(36,711)	(44,229)	(29,837)
Assets	$ 105,289				$ 118,496				105,289	118,496	246,312
Intersegment sales
Segment Reporting Information [Line Items]
Net sales									0	(306)	(6,869)
Corporate
Segment Reporting Information [Line Items]
Depreciation and amortization									9,982	9,543	10,682
Capital expenditures (excluding acquisitions)									$ 15,674	$ 11,783	$ 9,276

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Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Oct. 01, 2016	Jul. 02, 2016	Apr. 02, 2016	Dec. 31, 2015	Oct. 03, 2015	Jul. 04, 2015	Apr. 04, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 2,182,566	$ 2,294,139	$ 2,310,336	$ 2,172,046	$ 1,997,997	$ 2,150,656	$ 2,041,733	$ 1,881,177	$ 8,959,087	$ 8,071,563	$ 7,803,446
Gross profit	690,999	726,559	755,588	639,679	622,210	661,404	615,129	511,943	2,812,825	2,410,686	2,154,192
Net income	$ 233,748	$ 269,878	$ 255,188	$ 171,548	$ 191,559	$ 214,905	$ 186,492	$ 22,346	$ 930,362	$ 615,302	$ 531,965
Basic earnings per share (usd per share)	$ 3.15	$ 3.64	$ 3.44	$ 2.32	$ 2.59	$ 2.91	$ 2.54	$ 0.31	$ 12.55	$ 8.37	$ 7.30
Diluted earnings per share (usd per share)	$ 3.13	$ 3.62	$ 3.42	$ 2.30	$ 2.57	$ 2.89	$ 2.53	$ 0.30	$ 12.48	$ 8.31	$ 7.25