Revenue from Contracts with Customers

Revenue recognition and accounts receivable

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

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $42,938 and $29,124 as of June 30, 2018 and January 1, 2018, 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 and six months ended June 30, 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 $50,400 and $43,259 as of June 30, 2018 and January 1, 2018, respectively. Amortization expense recognized during the six months ended June 30, 2018 related to these capitalized costs was $35,869.

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 June 30, 2018 and July 1, 2017:



June 30, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	578,535	1,013,994	—	1,592,529
Europe	208,671		1,870	490,885	701,426
Russia	63,709		—	26,553	90,262
Other	78,382		41,706	72,709	192,797
	$	929,297	1,057,570	590,147	2,577,014

Product Categories
Ceramic & Stone	$	929,297	18,178	—	947,475
Carpet & Resilient	—		859,179	132,578	991,757
Laminate & Wood	—		180,213	216,754	396,967
Other ⁽¹⁾	—		—	240,815	240,815
	$	929,297	1,057,570	590,147	2,577,014



July 1, 2017	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	571,195	990,599	484	1,562,278
Europe	191,397		4,248	414,621	610,266
Russia	62,006		—	22,482	84,488
Other	78,072		45,452	72,482	196,006
	$	902,670	1,040,299	510,069	2,453,038

Product Categories
Ceramic & Stone	$	902,670	21,499	—	924,169
Carpet & Resilient	—		829,625	110,836	940,461
Laminate & Wood	—		189,175	201,258	390,433
Other ⁽¹⁾	—		—	197,975	197,975
	$	902,670	1,040,299	510,069	2,453,038

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

The following table presents the Company’s segment revenues disaggregated by the geographical location of customer sales and product categories for the six months ended June 30, 2018 and July 1, 2017:



June 30, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	1,134,722	1,922,116	—	3,056,838
Europe	398,906		3,520	985,528	1,387,954
Russia	115,131		—	45,982	161,113
Other	157,086		82,292	143,933	383,311
	$	1,805,845	2,007,928	1,175,443	4,989,216

Product Categories
Ceramic & Stone	$	1,805,845	35,721	—	1,841,566
Carpet & Resilient	—		1,614,725	261,589	1,876,314
Laminate & Wood	—		357,482	442,897	800,379
Other ⁽¹⁾	—		—	470,957	470,957
	$	1,805,845	2,007,928	1,175,443	4,989,216



July 1, 2017	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	1,116,211	1,883,204	1,187	3,000,602
Europe	323,018		8,283	826,816	1,158,117
Russia	106,264		—	40,621	146,885
Other	142,146		88,309	137,624	368,079
	$	1,687,639	1,979,796	1,006,248	4,673,683

Product Categories
Ceramic & Stone	$	1,687,639	42,847	—	1,730,486
Carpet & Resilient	—		1,562,878	210,959	1,773,837
Laminate & Wood	—		374,071	393,179	767,250
Other ⁽¹⁾	—		—	402,110	402,110
	$	1,687,639	1,979,796	1,006,248	4,673,683

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