Revenue from Contracts with Customers

Revenue recognition and accounts receivable

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

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $34,415 and $29,124 as of September 29, 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 nine months ended September 29, 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 $57,051 and $43,259 as of September 29, 2018 and January 1, 2018, respectively. Amortization expense recognized during the nine months ended September 29, 2018 related to these capitalized costs was $43,498.

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 market location of customer sales and product categories for the three months ended September 29, 2018 and September 30, 2017:



September 29, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	565,616	998,488	421	1,564,525
Europe	175,026		1,217	438,585	614,828
Russia	68,113		—	27,435	95,548
Other	77,018		47,835	146,046	270,899
	$	885,773	1,047,540	612,487	2,545,800

Product Categories
Ceramic & Stone	$	885,773	16,779	—	902,552
Carpet & Resilient	—		851,970	192,001	1,043,971
Laminate & Wood	—		178,791	200,499	379,290
Other ⁽¹⁾	—		—	219,987	219,987
	$	885,773	1,047,540	612,487	2,545,800



September 30, 2017	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	563,297	978,791	457	1,542,545
Europe	181,938		4,740	425,868	612,546
Russia	67,610		—	25,545	93,155
Other	80,554		48,242	71,468	200,264
	$	893,399	1,031,773	523,338	2,448,510

Product Categories
Ceramic & Stone	$	893,399	17,978	—	911,377
Carpet & Resilient	—		830,780	109,279	940,059
Laminate & Wood	—		183,015	209,294	392,309
Other ⁽¹⁾	—		—	204,765	204,765
	$	893,399	1,031,773	523,338	2,448,510

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

The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories for the nine months ended September 29, 2018 and September 30, 2017:



September 29, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	1,700,338	2,920,604	421	4,621,363
Europe	573,932		4,737	1,424,113	2,002,782
Russia	183,244		—	73,417	256,661
Other	234,104		130,127	289,979	654,210
	$	2,691,618	3,055,468	1,787,930	7,535,016

Product Categories
Ceramic & Stone	$	2,691,618	52,500	—	2,744,118
Carpet & Resilient	—		2,466,695	453,597	2,920,292
Laminate & Wood	—		536,273	643,389	1,179,662
Other ⁽¹⁾	—		—	690,944	690,944
	$	2,691,618	3,055,468	1,787,930	7,535,016



September 30, 2017	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	1,679,508	2,861,995	1,644	4,543,147
Europe	504,956		13,023	1,252,684	1,770,663
Russia	173,874		—	66,166	240,040
Other	222,700		136,550	209,093	568,343
	$	2,581,038	3,011,568	1,529,587	7,122,193

Product Categories
Ceramic & Stone	$	2,581,038	60,825	—	2,641,863
Carpet & Resilient	—		2,393,658	320,238	2,713,896
Laminate & Wood	—		557,085	602,472	1,159,557
Other ⁽¹⁾	—		—	606,877	606,877
	$	2,581,038	3,011,568	1,529,587	7,122,193

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