Revenue from Contracts with Customers

Revenue recognition and accounts receivable

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

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $35,958 and $29,124 as of March 31, 2018 and December 31, 2017, respectively.

Performance obligations

Substantially all of the Company’s revenue is recognized at a point-in-time when the product is either shipped or received from the Company's facilities and control of the product is transferred to the customer. Accordingly, in any period, the Company does not recognize a significant amount of revenue from performance obligations satisfied or partially satisfied in prior periods and the amount of such revenue recognized during the three months ended March 31, 2018 was immaterial.

Costs to obtain a contract

The Company historically incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying condensed consolidated balance sheets. Capitalized costs to obtain contracts were $46,224 and $43,259 as of March 31, 2018 and December 31, 2017, respectively. Amortization expense recognized during the three months ended March 31, 2018 related to these capitalized costs was $14,714.

Practical expedients and policy elections

The Company elected the following practical expedients and policy elections:


•	Incremental costs of obtaining a contract is recorded as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.


•	Shipping and handling activities performed after control has been transferred is accounted for as a fulfillment cost in cost of sales.

Revenue disaggregation

The following table presents the Company’s segment revenues disaggregated by the geographical location of customer sales and product categories for the three months ended March 31, 2018 and April 1, 2017:



March 31, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	556,187	908,122	—	1,464,309
Europe	190,235		1,650	494,644	686,529
Russia	51,422		—	19,428	70,850
Other	78,704		40,586	71,224	190,514
	$	876,548	950,358	585,296	2,412,202

Product Categories
Ceramic & Stone	$	876,548	17,544	—	894,092
Carpet & Resilient	—		755,545	129,011	884,556
Laminate & Wood	—		177,269	226,143	403,412
Other ⁽¹⁾	—		—	230,142	230,142
	$	876,548	950,358	585,296	2,412,202



April 1, 2017	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	545,016	892,605	703	1,438,324
Europe	131,621		4,035	412,195	547,851
Russia	44,258		—	18,138	62,396
Other	64,074		42,856	65,144	172,074
	$	784,969	939,496	496,180	2,220,645

Product Categories
Ceramic & Stone	$	784,969	21,347	—	806,316
Carpet & Resilient	—		733,254	100,124	833,378
Laminate & Wood	—		184,895	191,921	376,816
Other ⁽¹⁾	—		—	204,135	204,135
	$	784,969	939,496	496,180	2,220,645

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