ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
ý | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page No. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Item 9C. | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
Item 15. | ||||||||
Item 16. |
Segment and Property Use | North America | Europe and Russia | Other | Total | ||||||||||||||||||||||
Global Ceramic | ||||||||||||||||||||||||||
Manufacturing | 8 | 11 | 3 | 22 | ||||||||||||||||||||||
Distribution / Warehouse | 9 | 7 | 3 | 19 | ||||||||||||||||||||||
Flooring North America | ||||||||||||||||||||||||||
Manufacturing | 22 | — | — | 22 | ||||||||||||||||||||||
Distribution / Warehouse | 12 | — | — | 12 | ||||||||||||||||||||||
Flooring Rest of the World | ||||||||||||||||||||||||||
Manufacturing | — | 21 | 5 | 26 | ||||||||||||||||||||||
Distribution / Warehouse | — | 4 | — | 4 | ||||||||||||||||||||||
Total | ||||||||||||||||||||||||||
Manufacturing | 30 | 32 | 8 | 70 | ||||||||||||||||||||||
Distribution / Warehouse | 21 | 11 | 3 | 35 | ||||||||||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||
October 2 through November 5, 2022 | — | $ | — | — | $ | 229.2 | ||||||||||||||||||||
November 6 through December 3, 2022 | — | $ | — | — | $ | 229.2 | ||||||||||||||||||||
December 4 through December 31, 2022 | — | $ | — | — | $ | 229.2 | ||||||||||||||||||||
Total | — | $ | — | — |
For the Years Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Statement of operations data: | |||||||||||||||||||||||
Net sales | $ | 11,737.1 | 100.0 | % | 11,200.6 | 100.0 | % | ||||||||||||||||
Cost of sales (1) | 8,793.6 | 74.9 | % | 7,931.9 | 70.8 | % | |||||||||||||||||
Gross profit | 2,943.4 | 25.1 | % | 3,268.7 | 29.2 | % | |||||||||||||||||
Selling, general and administrative expenses (2) | 2,003.4 | 17.1 | % | 1,933.7 | 17.3 | % | |||||||||||||||||
Impairment of goodwill and indefinite-lived intangibles | 695.8 | 5.9 | % | — | — | % | |||||||||||||||||
Operating income | 244.2 | 2.1 | % | 1,335.0 | 11.9 | % | |||||||||||||||||
Interest expense | 51.9 | 0.4 | % | 57.3 | 0.5 | % | |||||||||||||||||
Other expense (income) (3) | 8.4 | 0.1 | % | (12.2) | (0.1) | % | |||||||||||||||||
Earnings before income taxes | 183.9 | 1.6 | % | 1,290.0 | 11.5 | % | |||||||||||||||||
Income tax expense (4) | 158.1 | 1.3 | % | 256.4 | 2.3 | % | |||||||||||||||||
Net earnings including noncontrolling interests | 25.8 | 0.2 | % | 1,033.5 | 9.2 | % | |||||||||||||||||
Less: Net earnings attributable to noncontrolling interests | 0.5 | 0.0 | % | 0.4 | 0.0 | % | |||||||||||||||||
Net earnings attributable to Mohawk Industries, Inc. | $ | 25.2 | 0.2 | % | 1,033.2 | 9.2 | % | ||||||||||||||||
(1) Cost of sales includes: | |||||||||||||||||||||||
Restructuring, acquisition and integration-related charges | $ | 68.0 | 0.6 | % | 18.4 | 0.2 | % | ||||||||||||||||
Acquisition inventory step-up | 2.8 | 0.0 | % | 1.7 | 0.0 | % | |||||||||||||||||
Other charges | 3.2 | 0.0 | % | — | — | % | |||||||||||||||||
(2) Selling, general and administrative expenses include: | |||||||||||||||||||||||
Restructuring, acquisition and integration-related charges | 13.7 | 0.1 | % | 5.2 | 0.0 | % | |||||||||||||||||
Legal settlements, reserves and fees, net of insurance proceeds | 54.2 | 0.5 | % | — | — | % | |||||||||||||||||
Other charges | 1.0 | 0.0 | % | — | — | % | |||||||||||||||||
(3) Other expense (income) includes: | |||||||||||||||||||||||
Resolution of foreign non-income tax contingencies | — | — | % | (6.2) | (0.1) | % | |||||||||||||||||
Release of indemnification asset | 7.3 | 0.1 | % | — | — | % | |||||||||||||||||
Other charges | 1.8 | 0.0 | % | (0.5) | 0.0 | % | |||||||||||||||||
(4) Income tax expense includes: | |||||||||||||||||||||||
One-time tax planning election | — | — | % | (22.2) | (0.2) | % | |||||||||||||||||
Income taxes - reversal of uncertain position | (7.3) | (0.1) | % | — | — | % | |||||||||||||||||
Income tax effect on resolution of foreign non-income tax contingencies | — | — | % | 2.3 | 0.0 | % | |||||||||||||||||
Other charges | 0.5 | 0.0 | % | 0.9 | 0.0 | % |
2022 | 2021 | Change | |||||||||||||||
First quarter | $ | 3,015.7 | 2,669.0 | 13.0 | % | ||||||||||||
Second quarter | 3,153.2 | 2,953.8 | 6.8 | % | |||||||||||||
Third quarter | 2,917.5 | 2,817.0 | 3.6 | % | |||||||||||||
Fourth quarter | 2,650.7 | 2,760.7 | (4.0) | % | |||||||||||||
Full year | $ | 11,737.1 | 11,200.6 | 4.8 | % |
Total | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | |||||||||||||||||||||||||||||||||||
Contractual obligations and commitments: | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, including current maturities | $ | 2,826.4 | 840.6 | 920.7 | 9.0 | 7.0 | 539.3 | 509.8 | |||||||||||||||||||||||||||||||||
Interest payments on long-term debt and finance leases (1) | 317.9 | 108.9 | 52.4 | 28.0 | 27.8 | 22.3 | 78.5 | ||||||||||||||||||||||||||||||||||
Operating leases | 435.2 | 125.1 | 103.2 | 82.8 | 61.8 | 34.8 | 27.4 | ||||||||||||||||||||||||||||||||||
Purchase commitments (2) | 428.3 | 192.3 | 66.4 | 28.2 | 27.9 | 26.3 | 87.2 | ||||||||||||||||||||||||||||||||||
Expected pension contributions (3) | 4.5 | 4.5 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Uncertain tax positions (4) | 8.1 | 8.1 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Guarantees (5) | 15.9 | 15.9 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Total | $ | 4,036.3 | 1,295.4 | 1,142.7 | 148.0 | 124.5 | 622.7 | 702.9 |
/s/ |
/s/ KPMG LLP |
2022 | 2021 | ||||||||||
(In thousands, except per share data) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | ||||||||||
Short-term investments | |||||||||||
Receivables, net | |||||||||||
Inventories | |||||||||||
Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Right of use operating lease assets | |||||||||||
Goodwill | |||||||||||
Tradenames | |||||||||||
Other intangible assets subject to amortization, net | |||||||||||
Deferred income taxes and other non-current assets | |||||||||||
Total assets | $ | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Short-term debt and current portion of long-term debt | $ | ||||||||||
Accounts payable and accrued expenses | |||||||||||
Current operating lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Deferred income taxes | |||||||||||
Long-term debt, less current portion | |||||||||||
Non-current operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Less: treasury stock at cost; | |||||||||||
Total Mohawk Industries, Inc. stockholders’ equity | |||||||||||
Nonredeemable noncontrolling interests | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders' equity | $ |
2022 | 2021 | 2020 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Net sales | $ | ||||||||||||||||
Cost of sales | |||||||||||||||||
Gross profit | |||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||
Impairment of goodwill and indefinite-lived intangibles | |||||||||||||||||
Operating income | |||||||||||||||||
Interest expense | |||||||||||||||||
Other expense (income), net | ( | ( | |||||||||||||||
Earnings before income taxes | |||||||||||||||||
Income tax expense | |||||||||||||||||
Net earnings including noncontrolling interests | |||||||||||||||||
Net earnings attributable to noncontrolling interests | |||||||||||||||||
Net earnings attributable to Mohawk Industries, Inc. | $ | ||||||||||||||||
Basic earnings per share attributable to Mohawk Industries, Inc. | |||||||||||||||||
Basic earnings per share attributable to Mohawk Industries, Inc. | $ | ||||||||||||||||
Weighted-average common shares outstanding—basic | |||||||||||||||||
Diluted earnings per share attributable to Mohawk Industries, Inc. | |||||||||||||||||
Diluted earnings per share attributable to Mohawk Industries, Inc. | $ | ||||||||||||||||
Weighted-average common shares outstanding—diluted |
2022 | 2021 | 2020 | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net earnings including noncontrolling interests | $ | |||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||
Prior pension and post-retirement benefit service cost and actuarial gain, net of tax | ( | |||||||||||||||||||
Other comprehensive (loss) income | ( | ( | ||||||||||||||||||
Comprehensive (loss) income | ( | |||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | ( | |||||||||||||||||||
Comprehensive (loss) income attributable to Mohawk Industries, Inc. | $ | ( | ||||||||||||||||||
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Nonredeemable Noncontrolling Interests | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Shares issued under employee and director stock plans, net of shares withheld to pay taxes on employees’ equity awards | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment on noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Prior pension and post-retirement benefit service cost and actuarial loss | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
— | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under employee and director stock plans, net of shares withheld to pay taxes on employees’ equity awards | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment on noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Prior pension and post-retirement benefit service cost and actuarial gain | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2021 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under employee and director stock plans, net of shares withheld to pay taxes on employees’ equity awards | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | ( | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment on noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Purchase of redeemable noncontrolling interest and noncontrolling interest, net of taxes | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Prior pension and post-retirement benefit service cost and actuarial gain | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2022 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ |
2022 | 2021 | 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net earnings including noncontrolling interests | $ | ||||||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||||
Restructuring | |||||||||||||||||
Impairment of goodwill and indefinite-lived intangibles | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Deferred income taxes | ( | ( | |||||||||||||||
Loss on disposal of property, plant and equipment | |||||||||||||||||
Stock-based compensation expense | |||||||||||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||||||||
Receivables, net | ( | ( | ( | ||||||||||||||
Inventories | ( | ( | |||||||||||||||
Accounts payable and accrued expenses | ( | ||||||||||||||||
Other assets and prepaid expenses | ( | ( | ( | ||||||||||||||
Other liabilities | ( | ( | |||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Additions to property, plant and equipment | ( | ( | ( | ||||||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||||||||
Purchases of short-term investments | ( | ( | ( | ||||||||||||||
Redemption of short-term investments | |||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Payments on Senior Credit Facilities | ( | ( | |||||||||||||||
Proceeds from Senior Credit Facilities | |||||||||||||||||
Payments on commercial paper | ( | ( | ( | ||||||||||||||
Proceeds from commercial paper | |||||||||||||||||
Proceeds from Senior Notes issuance | |||||||||||||||||
Repayments on Senior Notes | ( | ( | ( | ||||||||||||||
Proceeds from Term Loan Facility | |||||||||||||||||
Payments on Term Loan Facility | ( | ||||||||||||||||
Net payments of other financing activities | ( | ( | ( | ||||||||||||||
Debt issuance costs | ( | ( | |||||||||||||||
Purchase of Mohawk common stock | ( | ( | ( | ||||||||||||||
Change in outstanding checks in excess of cash | ( | ( | ( | ||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||||||||
Net change in cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents, beginning of year | |||||||||||||||||
Cash and cash equivalents, end of year | $ |
2022 | 2021 | 2020 | |||||||||||||||
Net earnings available to common stockholders | $ | ||||||||||||||||
Weighted-average common shares outstanding—basic and diluted: | |||||||||||||||||
Weighted-average common shares outstanding—basic | |||||||||||||||||
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net | |||||||||||||||||
Weighted-average common shares outstanding-diluted | |||||||||||||||||
Earnings per share attributable to Mohawk Industries, Inc. | |||||||||||||||||
Basic | $ | ||||||||||||||||
Diluted | $ |
Foreign currency translation adjustments | Prior pension and post-retirement benefit service cost and actuarial gain (loss) | Total | |||||||||||||||
Balance as of December 31, 2019 | $ | ( | ( | ( | |||||||||||||
Current period other comprehensive income (loss) | ( | ||||||||||||||||
Balance as of December 31, 2020 | ( | ( | ( | ||||||||||||||
Current period other comprehensive (loss) income | ( | ( | |||||||||||||||
Balance as of December 31, 2021 | ( | ( | ( | ||||||||||||||
Current period other comprehensive (loss) income | ( | ( | |||||||||||||||
Balance as of December 31, 2022 | $ | ( | ( |
December 31, 2022 | Global Ceramic | Flooring NA | Flooring ROW | Total | |||||||||||||||||||
Geographical Markets | |||||||||||||||||||||||
United States | $ | ||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Russia | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | ||||||||||||||||||||||
Product Categories | |||||||||||||||||||||||
Ceramic & Stone | $ | ||||||||||||||||||||||
Carpet & Resilient | |||||||||||||||||||||||
Laminate & Wood | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
Total | $ |
December 31, 2021 | Global Ceramic | Flooring NA | Flooring ROW | Total | |||||||||||||||||||
Geographical Markets | |||||||||||||||||||||||
United States | $ | ||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Russia | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | ||||||||||||||||||||||
Product Categories | |||||||||||||||||||||||
Ceramic & Stone | $ | ||||||||||||||||||||||
Carpet & Resilient | |||||||||||||||||||||||
Laminate & Wood | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
Total | $ |
December 31, 2020 | Global Ceramic | Flooring NA | Flooring ROW | Total | |||||||||||||||||||
Geographical Markets | |||||||||||||||||||||||
United States | $ | ||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Russia | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | ||||||||||||||||||||||
Product Categories | |||||||||||||||||||||||
Ceramic & Stone | $ | ||||||||||||||||||||||
Carpet & Resilient | |||||||||||||||||||||||
Laminate & Wood | |||||||||||||||||||||||
Other (1) | |||||||||||||||||||||||
Total | $ |
2022 | 2021 | 2020 | ||||||||||||||||||
Cost of sales | ||||||||||||||||||||
Restructuring costs | $ | |||||||||||||||||||
Acquisition integration-related costs | ||||||||||||||||||||
Restructuring and acquisition integration-related costs | $ | |||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||
Restructuring costs | $ | |||||||||||||||||||
Acquisition transaction-related costs | ||||||||||||||||||||
Acquisition integration-related costs | ||||||||||||||||||||
Restructuring, acquisition transaction and integration-related costs | $ |
Lease impairments | Asset write-downs (gains on disposals) | Severance | Other restructuring costs | Total | |||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | ||||||||||||||||||||||||||||
Restructuring costs | |||||||||||||||||||||||||||||
Global Ceramic | |||||||||||||||||||||||||||||
Flooring NA | ( | ( | |||||||||||||||||||||||||||
Flooring ROW | ( | ( | ( | ||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||
Total restructuring costs for 2021 | ( | ||||||||||||||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||||||||||||||
Non-cash items | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Balance as of December 31, 2021 | |||||||||||||||||||||||||||||
Restructuring costs | |||||||||||||||||||||||||||||
Global Ceramic | |||||||||||||||||||||||||||||
Flooring NA | |||||||||||||||||||||||||||||
Flooring ROW | |||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||
Total restructuring costs for 2022 | |||||||||||||||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||||||||||||||
Non-cash items | ( | ( | ( | ||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | ||||||||||||||||||||||||||||
2021 restructuring costs recorded in: | |||||||||||||||||||||||||||||
Cost of sales | $ | ( | |||||||||||||||||||||||||||
Selling, general and administrative expenses | ( | ||||||||||||||||||||||||||||
Total restructuring costs for 2021 | $ | ( | |||||||||||||||||||||||||||
2022 restructuring costs recorded in: | |||||||||||||||||||||||||||||
Cost of sales | $ | ||||||||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||||||||
Total restructuring costs for 2022 | $ | ||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||
Short-term investments: | ||||||||||||||
Commercial paper (Level 2) | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Customers, trade | $ | ||||||||||
Income tax receivable | |||||||||||
Other | |||||||||||
Less: allowance for discounts, returns, claims and doubtful accounts | |||||||||||
Receivables, net | $ |
Balance at beginning of year | Acquisitions | Additions charged to net sales or costs and expenses | Deductions (1) | Balance at end of year | |||||||||||||||||||||||||
2020 | $ | ||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||
2022 |
December 31, 2022 | December 31, 2021 | ||||||||||
Finished goods | $ | ||||||||||
Work in process | |||||||||||
Raw materials | |||||||||||
Total inventories | $ |
Global Ceramic | Flooring NA | Flooring ROW | Total | ||||||||||||||||||||
Balances as of December 31, 2020 (1) | $ | ||||||||||||||||||||||
Goodwill recognized during the period | |||||||||||||||||||||||
Currency translation during the period | ( | ( | ( | ||||||||||||||||||||
Balances as of December 31, 2021 (1) | |||||||||||||||||||||||
Goodwill adjustments related to acquisitions | ( | ( | |||||||||||||||||||||
Goodwill recognized during the period | |||||||||||||||||||||||
Impairment charge during the period | ( | ( | |||||||||||||||||||||
Currency translation during the period | ( | ( | ( | ||||||||||||||||||||
Balances as of December 31, 2022 | $ |
Tradenames | |||||
Indefinite life assets not subject to amortization: | |||||
Balance as of December 31, 2020 | $ | ||||
Intangible assets acquired during the year | |||||
Currency translation during the year | ( | ||||
Balance as of December 31, 2021 | |||||
Intangible assets acquired during the year | |||||
Intangible assets impaired during the year | ( | ||||
Currency translation during the year | ( | ||||
Balance as of December 31, 2022 | $ |
Customer relationships | Patents | Other | Total | ||||||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||
Balances as of December 31, 2020 | |||||||||||||||||||||||
Gross carrying amount | $ | ||||||||||||||||||||||
Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||
Net intangible assets subject to amortization | |||||||||||||||||||||||
Balances as of December 31, 2021 | |||||||||||||||||||||||
Gross carrying amount | |||||||||||||||||||||||
Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||
Net intangible assets subject to amortization | |||||||||||||||||||||||
Balances as of December 31, 2022 | |||||||||||||||||||||||
Gross carrying amount | |||||||||||||||||||||||
Accumulated amortization | ( | ( | ( | ( | |||||||||||||||||||
Net intangible assets subject to amortization | $ |
Years Ended December 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Amortization expense | $ |
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 |
December 31, 2022 | December 31, 2021 | ||||||||||
Land | $ | ||||||||||
Buildings and improvements | |||||||||||
Machinery and equipment | |||||||||||
Furniture and fixtures | |||||||||||
Leasehold improvements | |||||||||||
Construction in progress | |||||||||||
Less: accumulated depreciation | |||||||||||
Net property, plant and equipment | $ |
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||||
$ | |||||||||||||||||||||||
U.S. commercial paper | |||||||||||||||||||||||
European commercial paper | |||||||||||||||||||||||
U.S. Term Loan Facility | |||||||||||||||||||||||
European Term Loan Facility | |||||||||||||||||||||||
Finance leases and other | |||||||||||||||||||||||
Unamortized debt issuance costs | ( | ( | ( | ( | |||||||||||||||||||
Total debt | |||||||||||||||||||||||
Less current portion of long term-debt and commercial paper | |||||||||||||||||||||||
Long-term debt, less current portion | $ |
2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ | |||||
December 31, 2022 | December 31, 2021 | ||||||||||
Outstanding checks in excess of cash | $ | ||||||||||
Accounts payable, trade | |||||||||||
Accrued expenses | |||||||||||
Product warranties | |||||||||||
Accrued interest | |||||||||||
Accrued compensation and benefits | |||||||||||
Total accounts payable and accrued expenses | $ | ||||||||||
December 31, 2022 | Cost of Goods Sold | Selling, General and Administrative Expenses | Total | ||||||||||||||
Operating lease costs | |||||||||||||||||
Fixed | $ | ||||||||||||||||
Short-term | |||||||||||||||||
Variable | |||||||||||||||||
Sub-leases | ( | ( | ( | ||||||||||||||
$ | |||||||||||||||||
Depreciation and Amortization | Interest | Total | |||||||||||||||
Finance lease costs | |||||||||||||||||
Amortization of leased assets | $ | ||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
$ | |||||||||||||||||
Net lease costs | $ |
December 31, 2021 | Cost of Goods Sold | Selling, General and Administrative Expenses | Total | ||||||||||||||
Operating lease costs | |||||||||||||||||
Fixed | $ | ||||||||||||||||
Short-term | |||||||||||||||||
Variable | |||||||||||||||||
Sub-leases | ( | ( | ( | ||||||||||||||
$ | |||||||||||||||||
Depreciation and Amortization | Interest | Total | |||||||||||||||
Finance lease costs | |||||||||||||||||
Amortization of leased assets | $ | ||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
$ | |||||||||||||||||
Net lease costs | $ |
December 31, 2020 | Cost of Goods Sold | Selling, General and Administrative Expenses | Total | ||||||||||||||
Operating lease costs | |||||||||||||||||
Fixed | $ | ||||||||||||||||
Short-term | |||||||||||||||||
Variable | |||||||||||||||||
Sub-leases | ( | ( | ( | ||||||||||||||
$ | |||||||||||||||||
Depreciation and Amortization | Interest | Total | |||||||||||||||
Finance lease costs | |||||||||||||||||
Amortization of leased assets | $ | ||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
$ | |||||||||||||||||
Net lease costs | $ |
Classification | December 31, 2022 | December 31, 2021 | |||||||||||||||
Assets | |||||||||||||||||
Operating Leases | |||||||||||||||||
ROU operating lease assets | ROU operating lease assets | $ | |||||||||||||||
Finance Leases | |||||||||||||||||
Property, plant and equipment, gross | Property, plant and equipment | ||||||||||||||||
Accumulated depreciation | Accumulated depreciation | ( | ( | ||||||||||||||
Property, plant and equipment, net | |||||||||||||||||
Total lease assets | $ | ||||||||||||||||
Liabilities | |||||||||||||||||
Operating Leases | |||||||||||||||||
Other current | Current operating lease liabilities | $ | |||||||||||||||
Non-current | Non-current operating lease liabilities | ||||||||||||||||
Total operating liabilities | |||||||||||||||||
Finance Leases | |||||||||||||||||
Short-term debt and current portion of long-term debt | |||||||||||||||||
Long-term debt, less current portion | |||||||||||||||||
Total finance liabilities | |||||||||||||||||
Total lease liabilities | $ | ||||||||||||||||
Year ending December 31, | Finance Leases | Operating Leases | Total | ||||||||||||||
2023 | $ | ||||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
2027 | |||||||||||||||||
Thereafter | |||||||||||||||||
Total lease payments | |||||||||||||||||
Less imputed interest | |||||||||||||||||
Present value, Total | $ |
December 31, 2022 | December 31, 2021 | ||||||||||
Weighted Average Remaining Lease Term | |||||||||||
Operating Leases | |||||||||||
Finance Leases | |||||||||||
Weighted Average Discount Rate | |||||||||||
Operating Leases | % | % | |||||||||
Finance Leases | % | % |
Twelve Months Ended | |||||||||||||||||
December 31, 2022 | December 31, 2021 | December 31, 2020 | |||||||||||||||
Cash paid for amounts included in measurement of lease liabilities: | |||||||||||||||||
Operating cash flows from operating leases | $ | ||||||||||||||||
Operating cash flows from finance leases | |||||||||||||||||
Financing cash flows from finance leases | |||||||||||||||||
ROU assets obtained in exchange for lease obligations: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases | |||||||||||||||||
Amortization: | |||||||||||||||||
Amortization of ROU operating lease assets (1) |
Shares | Weighted average grant date fair value | Weighted average remaining contractual term (years) | Aggregate intrinsic value | ||||||||||||||||||||
RSUs outstanding, December 31, 2021 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Released | ( | ||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
RSUs outstanding, December 31, 2022 | $ | $ | |||||||||||||||||||||
Expected to vest as of December 31, 2022 | $ |
2022 | 2021 | 2020 | |||||||||||||||
RSUs outstanding, January 1 | |||||||||||||||||
Granted | |||||||||||||||||
Released | ( | ( | ( | ||||||||||||||
Forfeited | ( | ( | ( | ||||||||||||||
RSUs outstanding, December 31 | |||||||||||||||||
Expected to vest as of December 31 |
2022 | 2021 | 2020 | |||||||||||||||
Foreign currency losses (gains), net | $ | ||||||||||||||||
Release of indemnification asset | |||||||||||||||||
Impairment of joint venture in Brazil | |||||||||||||||||
Resolution of foreign non-income tax contingencies | ( | ||||||||||||||||
All other, net | ( | ( | ( | ||||||||||||||
Total other expense (income), net | $ | ( | ( |
2022 | 2021 | 2020 | |||||||||||||||
United States | $ | ( | |||||||||||||||
Foreign | |||||||||||||||||
Earnings before income taxes | $ |
2022 | 2021 | 2020 | |||||||||||||||
Current income taxes: | |||||||||||||||||
U.S. federal | $ | ( | |||||||||||||||
State and local | |||||||||||||||||
Foreign | |||||||||||||||||
Total current | |||||||||||||||||
Deferred income taxes: | |||||||||||||||||
U.S. federal | ( | ( | |||||||||||||||
State and local | |||||||||||||||||
Foreign | ( | ( | |||||||||||||||
Total deferred | ( | ( | |||||||||||||||
Total income tax expense | $ |
2022 | 2021 | 2020 | |||||||||||||||
Income taxes at statutory rate | $ | ||||||||||||||||
State and local income taxes, net of federal income tax benefit | |||||||||||||||||
Foreign income taxes (1) | ( | ( | ( | ||||||||||||||
Change in valuation allowance | |||||||||||||||||
Impairment of non-deductible goodwill | |||||||||||||||||
Loss on previously taxed earnings | ( | ||||||||||||||||
Carryback rate differential (2) | ( | ( | |||||||||||||||
Fixed asset adjustments | ( | ( | ( | ||||||||||||||
Non-deductible expenses | |||||||||||||||||
General business credits and incentives | ( | ( | ( | ||||||||||||||
Global intangible low-taxed income | |||||||||||||||||
Italy step-up adjustment (3) | ( | ||||||||||||||||
Tax contingencies and audit settlements, net | ( | ||||||||||||||||
Other, net | ( | ( | ( | ||||||||||||||
$ |
2022 | 2021 | ||||||||||
Deferred tax assets: | |||||||||||
Accounts receivable | $ | ||||||||||
Inventories | |||||||||||
Employee benefits | |||||||||||
Accrued expenses and other | |||||||||||
Deductible state tax and interest benefit | |||||||||||
Intangibles | |||||||||||
Lease liabilities | |||||||||||
Interest expense | |||||||||||
Federal, foreign and state net operating losses and credits | |||||||||||
Gross deferred tax assets | |||||||||||
Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Inventories | ( | ( | |||||||||
Plant and equipment | ( | ( | |||||||||
Intangibles | ( | ( | |||||||||
Right of use operating lease assets | ( | ( | |||||||||
Prepaids | ( | ( | |||||||||
Other liabilities | ( | ( | |||||||||
Gross deferred tax liabilities | ( | ( | |||||||||
Net deferred tax liability | $ | ( | ( |
2022 | 2021 | ||||||||||
Balance as of January 1 | $ | ||||||||||
Additions based on tax positions related to the current year | |||||||||||
Additions for tax positions of prior years | |||||||||||
Reductions resulting from the lapse of the statute of limitations | ( | ( | |||||||||
Effects of foreign currency translation | ( | ( | |||||||||
Balance as of December 31 | $ |
2022 | 2021 | 2020 | |||||||||||||||
Net cash paid during the years for: | |||||||||||||||||
Interest | $ | ||||||||||||||||
Income taxes | $ | ||||||||||||||||
Supplemental schedule of non-cash investing and financing activities: | |||||||||||||||||
Unpaid property plant and equipment in accounts payable and accrued expenses | $ | ||||||||||||||||
Fair value of net assets acquired in acquisition | $ | ||||||||||||||||
Liabilities assumed in acquisition | ( | ( | |||||||||||||||
$ |
2022 | 2021 | 2020 | |||||||||||||||
Assets: | |||||||||||||||||
Global Ceramic | $ | ||||||||||||||||
Flooring NA | |||||||||||||||||
Flooring ROW | |||||||||||||||||
Corporate and intersegment eliminations | |||||||||||||||||
Total | $ | ||||||||||||||||
Geographic net sales: | |||||||||||||||||
United States | $ | ||||||||||||||||
Europe | |||||||||||||||||
Russia | |||||||||||||||||
Other | |||||||||||||||||
Total | $ | ||||||||||||||||
Long-lived assets: (1) | |||||||||||||||||
United States | $ | ||||||||||||||||
Belgium | |||||||||||||||||
Other | |||||||||||||||||
Total | $ | ||||||||||||||||
Net sales by product categories: | |||||||||||||||||
Ceramic & Stone | $ | ||||||||||||||||
Carpet & Resilient | |||||||||||||||||
Laminate & Wood | |||||||||||||||||
Other (2) | |||||||||||||||||
Total | $ | ||||||||||||||||
Net sales: | |||||||||||||||||
Global Ceramic | $ | ||||||||||||||||
Flooring NA | |||||||||||||||||
Flooring ROW | |||||||||||||||||
Total | $ |
2022 | 2021 | 2020 | |||||||||||||||
Operating (loss) income: | |||||||||||||||||
Global Ceramic | $ | ( | |||||||||||||||
Flooring NA | |||||||||||||||||
Flooring ROW | |||||||||||||||||
Corporate and intersegment eliminations | ( | ( | ( | ||||||||||||||
Total | $ | ||||||||||||||||
Depreciation and amortization: | |||||||||||||||||
Global Ceramic | $ | ||||||||||||||||
Flooring NA | |||||||||||||||||
Flooring ROW | |||||||||||||||||
Corporate | |||||||||||||||||
Total | $ | ||||||||||||||||
Capital expenditures (excluding acquisitions): | |||||||||||||||||
Global Ceramic | $ | ||||||||||||||||
Flooring NA | |||||||||||||||||
Flooring ROW | |||||||||||||||||
Corporate | |||||||||||||||||
Total | $ |
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 | ||||||||
*4.1 | ||||||||
*4.2 | ||||||||
*4.3 | Form of Note for the 3.850% Senior Notes due 2023 (Incorporated herein by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K dated January 31, 2013.) | |||||||
*4.4 | ||||||||
*4.5 | ||||||||
*4.6 | ||||||||
*4.7 | ||||||||
*4.8 | ||||||||
*4.9 | ||||||||
*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 | ||||||||
*10.4 | ||||||||
*10.5 | ||||||||
*10.6 | ||||||||
*10.7 | ||||||||
*10.8 | ||||||||
*10.9 | ||||||||
Exhibits Related to Executive Compensation Plans, Contracts and other Arrangements: | ||||||||
*10.10 | ||||||||
*10.11 | ||||||||
*10.12 | ||||||||
*10.13 | ||||||||
*10.14 | ||||||||
*10.15 | ||||||||
*10.16 | ||||||||
10.17 | ||||||||
21 | ||||||||
22 | ||||||||
23.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
95.1 | ||||||||
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 | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) |
* | Indicates exhibit incorporated by reference. |
Mohawk Industries, Inc. | ||||||||
By: | /s/ JEFFREY S. LORBERBAUM | |||||||
February 22, 2023 | Jeffrey S. Lorberbaum, | |||||||
Chairman and Chief Executive Officer |
February 22, 2023 | /s/ JEFFREY S. LORBERBAUM | ||||
Jeffrey S. Lorberbaum, | |||||
Chairman and Chief Executive Officer (principal executive officer) |
February 22, 2023 | /s/ JAMES F. BRUNK | ||||
James F. Brunk, | |||||
Chief Financial Officer (principal financial officer) |
February 22, 2023 | /s/ WILLIAM W. HARKINS II | ||||
William W. Harkins II, | |||||
Chief Accounting Officer and Corporate Controller (principal accounting officer) |
February 22, 2023 | /s/ BRUCE C. BRUCKMANN | ||||
Bruce C. Bruckmann, Director |
February 22, 2023 | /s/ JERRY W. BURRIS | ||||
Jerry W. Burris, Director |
February 22, 2023 | /s/ JOHN M. ENGQUIST | ||||
John M. Engquist, Director |
February 22, 2023 | /s/ JOSEPH A. ONORATO | ||||
Joseph A. Onorato, Director |
February 22, 2023 | /s/ WILLIAM H. RUNGE III | ||||
William H. Runge III, Director |
February 22, 2023 | /s/ KAREN A. SMITH BOGART | ||||
Karen A. Smith Bogart, Director |
February 22, 2023 | /s/ W. CHRISTOPHER WELLBORN | ||||
W. Christopher Wellborn, Director |
Continuous Service | Percent of Units Vested | ||||
Subsidiary Name | Jurisdiction | ||||
A&S Energie NV | Belgium | ||||
A&U Energie NV | Belgium | ||||
Aladdin Manufacturing Corporation | DE | ||||
Aladdin Manufacturing of Alabama, LLC | AL | ||||
Aladdin Manufacturing of New York, LLC | NY | ||||
Avelgem Green Power CV | Belgium | ||||
Ballytherm UK Limited | United Kingdom | ||||
Berghoef GmbH | Germany | ||||
Berghoef-Hout B.V. | Netherlands | ||||
BGE Mexico, S. de R. L. de C.V. | Mexico | ||||
Bienes Raices y Materiales del Centro, S. de R.L. de C.V. | Mexico | ||||
Cerâmica Elizabeth Sul Ltda. | Brazil | ||||
Cerâmica Elizabeth RN Ltda. | Brazil | ||||
Cevotrans BV | Netherlands | ||||
Dal Italia LLC | DE | ||||
Dal-Elit, LLC | TX | ||||
Dal-Tile Administración, S. de R.L. de C.V. | Mexico | ||||
Dal-Tile Chile Comercial Limitada | Chile | ||||
Dal-Tile Colombia S.A.S. | Colombia | ||||
Dal-Tile, LLC | PA | ||||
Dal-Tile Distribution, LLC | DE | ||||
Dal-Tile Group Inc. | DE | ||||
Dal-Tile I, LLC | DE | ||||
Dal-Tile International Inc. | DE | ||||
Dal-Tile Mexico Comercial S. de R.L. de C.V. | Mexico | ||||
Dal-Tile Mexico, S. de R.L. de C.V. | Mexico | ||||
Dal-Tile of Canada ULC | BC, Canada | ||||
Dal-Tile Perú SRL | Peru | ||||
Dal-Tile Puerto Rico, Inc. | Puerto Rico | ||||
Dal-Tile Services, Inc. | DE | ||||
Dal-Tile Shared Services, Inc. | DE | ||||
Dal-Tile Tennessee, LLC | DE | ||||
DT Mex Holdings, LLC | DE | ||||
DTM/CM Holdings, LLC | DE | ||||
Eliane Ceramic Tiles (U.S.A.), Inc. | TX | ||||
Eliane Nordeste Revestimentos Ceramicos Ltda | Brazil | ||||
Eliane Revestimentos Ceramicos Ltda. | Brazil | ||||
Elizabeth Porcelanato S.A. | Brazil |
Elizabeth Produtos Cerâmicos Ltda. | Brazil | ||||
Emil Group Asia Limited | Hong Kong | ||||
Emil Russia OOO | Russian Federation | ||||
Emilamerica, Inc. | DE | ||||
Emilceramica India Pvt Ltd. | India | ||||
Emilceramica S.r.l | Italy | ||||
Emilgermany GmbH | Germany | ||||
F.I.L.S. Investments Unlimited Company | Ireland | ||||
Feltex Carpets Ltd | New Zealand | ||||
Feltex Carpets Pty Ltd | Australia | ||||
Feltex New Zealand Ltd | New Zealand | ||||
Flooring Foundation Ltd | New Zealand | ||||
Flooring Industries Limited S.à r.l. | Luxembourg | ||||
Flooring XL B.V. | Netherlands | ||||
Floorscape Limited | New Zealand | ||||
Floorsome GmbH | Germany | ||||
Foss Holdings, LLC | NV | ||||
Foss Manufacturing Company, LLC | NV | ||||
Godfrey Hirst & Co Pty Ltd | Australia | ||||
Godfrey Hirst Australia Pty Ltd | Australia | ||||
Godfrey Hirst Logistics Pty Ltd | Australia | ||||
Godfrey Hirst NZ Ltd | New Zealand | ||||
International Flooring Systems S.à r.l. | Luxembourg | ||||
International Vinyl Company - Vostok OOO | Russian Federation | ||||
IVC BV | Belgium | ||||
IVC Far-East Trading (Shanghai) Co. Ltd. | China | ||||
IVC France S.à r.l. | France | ||||
IVC Green Power BV | Belgium | ||||
IVC Group GmbH | Germany | ||||
IVC GROUP LIMITED | United Kingdom | ||||
IVC Luxembourg S.à r.l. | Luxembourg | ||||
IVC Rus OOO | Russian Federation | ||||
IVC US, LLC | GA | ||||
José Nilson Crispim – Administração E Participação S/S | Brazil | ||||
KAI Keramica Ltd | Greece | ||||
KAI Mining EOOD | Bulgaria | ||||
Kerama Marazzi OOO | Russian Federation | ||||
KERAMA-SPB. OOO | Russian Federation | ||||
Khan Asparuh - Transport EOOD | Bulgaria | ||||
Khan Asparuh AD | Bulgaria | ||||
Khan Omurtag AD | Bulgaria | ||||
KIT OOO | Russian Federation | ||||
Management Co EAD | Bulgaria | ||||
Marazzi Acquisition S.r.l. | Italy | ||||
Marazzi Deutschland G.m.b.H. | Germany |
Marazzi France Trading S.A.S. | France | ||||
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 Middle East FZ LLC | Dubai | ||||
Marazzi Schweiz S.A.G.L. | Switzerland | ||||
Marazzi UK Ltd. | United Kingdom | ||||
MG China Trading Ltd. | Hong Kong | ||||
MI Finance SRL | Barbados | ||||
Mohawk Assurance Services, Inc. | GA | ||||
Mohawk Canada Corporation | NS, Canada | ||||
Mohawk Capital Finance S.A. | Luxembourg | ||||
Mohawk Capital Luxembourg SA | Luxembourg | ||||
Mohawk Carpet Distribution, LLC | DE | ||||
Mohawk Carpet Transportation of Georgia, LLC | DE | ||||
Mohawk Carpet, LLC | DE | ||||
Mohawk Commercial, Inc. | DE | ||||
Mohawk ESV, Inc. | DE | ||||
Mohawk Factoring II, Inc. | DE | ||||
Mohawk Factoring, LLC | DE | ||||
Mohawk Flooring Investments, LLC | DE | ||||
Mohawk Foreign Acquisitions S.à r.l. | Luxembourg | ||||
Mohawk Global Financing S.à r.l. | Luxembourg | ||||
Mohawk Global Holdings S.à r.l. | Luxembourg | ||||
Mohawk Global Investments S.à r.l. | Luxembourg | ||||
Mohawk Holdings International B.V. | Netherlands | ||||
Mohawk International (Europe) S.à r.l. | Luxembourg | ||||
Mohawk International (Hong Kong) Limited | Hong Kong | ||||
Mohawk International Capital N.V. | Netherlands | ||||
Mohawk International Financing S.a.r.l | Luxembourg | ||||
Mohawk International Holdings (DE), LLC | DE | ||||
Mohawk International Holdings S.à r.l. | Luxembourg | ||||
Mohawk International Netherlands B.V. | Netherlands | ||||
Mohawk International Services BV | Belgium | ||||
Mohawk International Trading, LLC | DE | ||||
Mohawk Luxembourg Pacific S.à r.l. | Luxembourg | ||||
Mohawk Marazzi International BV | Netherlands | ||||
Mohawk Marazzi Holding BV | Netherlands | ||||
Mohawk Operaciones Mexicali S. de R.L. de C.V. | Mexico | ||||
Mohawk Operations Luxembourg S.à r.l. | Luxembourg | ||||
Mohawk Pacific Investments S.à r.l. | Luxembourg | ||||
Mohawk Partnership Holding, Inc. | DE | ||||
Mohawk Partnerships (Europe) S.C.S. | Luxembourg | ||||
Mohawk Partnerships Holdings I S.C.Sp | Luxembourg |
Mohawk Partnerships Holdings II S.C.Sp | Luxembourg | ||||
Mohawk Resources, LLC | DE | ||||
Mohawk Singapore Private Limited | Singapore | ||||
Mohawk Trading (Shanghai) Co., Ltd | China | ||||
Mohawk Turkey Halı ve Kilim Ticaret Limited Şirketi | Turkey | ||||
Mohawk United International B.V. | Netherlands | ||||
Molber Beheer B.V. | Netherlands | ||||
Monarch Ceramic Tile, LLC | TX | ||||
Orelshtamp OOO | Russian Federation | ||||
Otto Schneider GmbH & Co. KG | Germany | ||||
Panneaux de Correze SAS | France | ||||
Pergo Holding BV | Netherlands | ||||
Pergo India Pvt Ltd | India | ||||
Polcolorit S.A. | Poland | ||||
Premium Floors Australia Pty Limited | Australia | ||||
RR Apex, LLC | DE | ||||
S.C. KAI Ceramics SRL | Romania | ||||
Salesmark Ltd. | United Kingdom | ||||
SIA Kerama Baltics | Latvia | ||||
Stroytrans OAO Orelstroy | Russian Federation | ||||
Tiles Co EOOD | Bulgaria | ||||
Unilin (Malaysia) Sdn. Bhd. | Malaysia | ||||
Unilin Beheer BV | Netherlands | ||||
Unilin BV | Belgium | ||||
Unilin Czechia s.r.o. | Czech Republic | ||||
Unilin Denmark ApS | Denmark | ||||
Unilin Distribution Ukraine LLC | Ukraine | ||||
Unilin Distribution, Ltd. | United Kingdom | ||||
Unilin do Brasil Revestimentos Ltda. | Brazil | ||||
Unilin Finland OY | Finland | ||||
Unilin Flooring India Private Limited | India | ||||
Unilin Flooring Nederland B.V. | Netherlands | ||||
Unilin Flooring Polska sp. z o.o. | Poland | ||||
Unilin Flooring Romania S.R.L. | Romania | ||||
Unilin Flooring SAS | France | ||||
Unilin GmbH | Germany | ||||
Unilin Holding BV | Belgium | ||||
Unilin Insulation BV | Netherlands | ||||
Unilin Insulation Feluy Srl | Belgium | ||||
Unilin Insulation GmbH | Germany | ||||
Unilin Insulation Ireland Limited | Ireland | ||||
Unilin Insulation SAS | France | ||||
Unilin Insulation Sury SAS | France | ||||
Unilin Insulation UK Limited | United Kingdom | ||||
Unilin Italia S.R.L. | Italy |
Unilin Japan G.K. | Japan | ||||
Unilin Nordic AB | Sweden | ||||
Unilin North America, LLC | DE | ||||
Unilin Norway AS | Norway | ||||
Unilin OOO | Russian Federation | ||||
Unilin Panels SAS | France | ||||
Unilin Resins BV | Belgium | ||||
Unilin SAS | France | ||||
Unilin Slovakia s.r.o | Slovakia | ||||
Unilin Spain SL | Spain | ||||
Unilin Swiss GmbH | Switzerland | ||||
VPI Corporation | WI | ||||
VPI Export Sales Corporation | WI | ||||
WC Foss Investment II, Inc. | DE | ||||
World International, Inc. | Barbados |
/s/ KPMG LLP |
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. |
/s/ Jeffrey S. Lorberbaum | ||
Jeffrey S. Lorberbaum | ||
Chairman and Chief Executive Officer |
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. |
/s/ James F. Brunk | ||
James F. Brunk | ||
Chief Financial Officer |
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 |
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/ James F. Brunk | ||
James F. Brunk | ||
Chief Financial Officer |
Mine (Federal Mine Safety and Health Administration (MSHA) ID) | Total # of Significant & Substantial violations under §104(a) | Total # of orders under §104(b) | Total # of unwarrantable failure citations and orders under §104(d) | Total # of violations under §110(b)(2) | Total # of orders under §107(a) | Total dollar value of proposed assessments from MSHA ($ in thousands) | Total # of mining related fatalities | Received Notice of Pattern of Violations under §104(e) (yes/no)? | Received Notice of Potential to have Pattern under §104(e) (yes/no)? | Total # of Legal Actions Pending with the Mine Safety and Health Review Commission as of the Last Day of Period | Legal Actions Initiated or Resolved During Period | ||||||||||||||||||||||||
TP Claims 1&2/Rosa Blanca (4100867) | — | — | — | — | — | — | — | No | No | — | — | ||||||||||||||||||||||||
Allamore Mill (4100869) | — | — | — | — | — | — | — | No | No | — | — | ||||||||||||||||||||||||
Wild Horse Plant (4101527) | — | — | — | — | — | — | — | No | No | — | — |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Atlanta, Georgia |
Auditor Firm ID | 185 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
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 issued (in shares) | 70,875,000 | 72,952,000 |
Common stock, shares, outstanding (in shares) | 70,875,000 | 72,952,000 |
Treasury stock, common shares (in shares) | 7,341,000 | 7,343,000 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | |||
Net earnings including noncontrolling interests | $ 25,783 | $ 1,033,548 | $ 515,727 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (155,424) | (279,384) | 72,956 |
Prior pension and post-retirement benefit service cost and actuarial gain, net of tax | 8,124 | 7,137 | (2,174) |
Other comprehensive (loss) income | (147,300) | (272,247) | 70,782 |
Comprehensive (loss) income | (121,517) | 761,301 | 586,509 |
Comprehensive income (loss) attributable to noncontrolling interests | 541 | (51) | 235 |
Comprehensive (loss) income attributable to Mohawk Industries, Inc. | $ (122,058) | $ 761,352 | $ 586,274 |
Consolidated Statements of Stockholders' Equity (Parenthetical) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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 sheet 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. 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, 2022, the Company had cash and cash equivalents of $509,623, of which $210,368 was held outside the United States. As of December 31, 2021, the Company had cash and cash equivalents of $268,895, of which $200,501 was held outside the United States. Short-term Investments The Company invests in high quality credit instruments. At December 31, 2022 and December 31, 2021, short-term investments consisted solely of investments in the Company’s commercial paper by its wholly-owned captive insurance company. Fair Value Accounting principles generally accepted in the U.S. define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Accounts Receivable and Revenue Recognition The Company recognizes revenue 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 (includes sheet vinyl and LVT), 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 a change in their ability to make payments, additional allowances may be required. The Company accounts for incremental costs of obtaining a contract as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year. The Company accounts for shipping and handling activities performed after control has been transferred as a fulfillment cost in cost of sales. Inventories The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or net realizable value. Cost has been determined using the FIFO method. Costs included in inventory include raw materials, direct and indirect labor, employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. 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. 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 15-40 years for buildings and improvements, 3-25 years for machinery and equipment, 3-7 years for furniture and fixtures and the shorter of the estimated useful life or lease term for leasehold improvements. 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 In accordance with the provisions of the FASB ASC Topic 350, Intangibles-Goodwill and Other, the Company tests goodwill and other intangible assets with indefinite lives, which for the Company are tradenames, for impairment on an annual basis on the first day of 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’s annual impairment tests of goodwill and tradenames may be completed through qualitative assessments. The Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test, for any reporting unit or tradename, in any period. The Company can resume the qualitative assessment for any reporting unit or tradename in any subsequent period. The Company has identified Global Ceramic, Flooring North America (“Flooring NA”) and Flooring Rest of the World (“Flooring ROW”) as its reporting units for the purposes of allocating goodwill as well as assessing impairments. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. Under a qualitative approach, the Company’s impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. If the Company elects to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, the Company performs a quantitative goodwill impairment test that requires it to estimate the fair value of the reporting unit. The quantitative 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 under the income approach classified in Level 3 of the fair value hierarchy and comparable company market valuation classified in Level 2 of the fair value hierarchy approaches. If the carrying value of a reporting unit exceeds its fair value, the Company will measure any goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. 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. Under a qualitative approach, the Company’s impairment review for tradenames consists of an assessment of whether it is more-likely-than-not that a tradename’s fair value is less than its carrying value. If the Company elects to bypass the qualitative assessment for any tradename, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a tradename exceeds its fair value, the Company performs a quantitative tradename impairment test of the tradename. The quantitative impairment evaluation for tradenames involves a comparison of the estimated fair value of the tradename to its carrying amount. If the carrying value of the tradename exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the tradenames. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, applicable discount rate 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 tradenames. Estimated cash flows are sensitive to changes in the economy among other things. Intangible assets with finite lives are amortized based on average lives, which range from 5-20 years. Leases The Company measures right of use (“ROU”) assets and lease liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage. As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost. The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expensed as incurred. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 10 years. Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of the Company’s leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term. 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 The Company’s financial instruments consist primarily of short-term investments, 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 Company has a wholly-owned captive insurance company that may periodically invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon level two fair value hierarchy. The carrying amount of the Company’s variable-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 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 $126,898 in 2022, $139,538 in 2021 and $105,974 in 2020. 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 expenses, classified as a selling, general and administrative expense, were $15,231 in 2022, $22,092 in 2021 and $16,087 in 2020. 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 The Company reviews its long-lived asset groups, which include intangible assets such as patents and customer relationships subject to amortization, 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 The Company’s subsidiaries that operate outside the United States generally 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 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 has in the past and might in the future use 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. In June 2015, the Company designated its €500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. On October 19, 2021, the Company redeemed at par the 2.00% Senior Notes, originally due on January 14, 2022, and paid the remaining €500,000 outstanding principal of the 2.00% Senior Notes, plus any unpaid interest, utilizing cash on hand. In connection with this repayment, the Company dedesignated its €500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the years ended December 31, 2021 and December 31, 2020, the change in the U.S. dollar value of the Company’s euro denominated debt was a decrease of $35,363 ($26,928 net of taxes) and an increase of $54,907 ($41,708 net of taxes), respectively. Changes in the U.S. dollar value of the Company’s euro denominated debt are recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). Earnings per Share (“EPS”) Basic earnings per share 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 and unvested restricted shares (units) 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 excluded from the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2022, 2021 and 2020. Computations of basic and diluted earnings per share are presented for the years ended December 31, 2022, 2021 and 2020, respectively, in the following table:
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 The Company has 401(k) retirement savings plans (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 60 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 $63,648 and $24,483 in 2022, $61,082 and $23,884 in 2021 and $56,241 and $13,509 in 2020, respectively. The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within Flooring ROW. 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. The Company’s projected benefit obligation and plan assets as of December 31, 2022 were $55,236 and $50,702, respectively. The Company’s projected benefit obligation and plan assets as of December 31, 2021 were $80,324 and $65,118, respectively. As of December 31, 2022, the funded status of the Non-U.S. Plans was a liability of $4,534 of which $82 was recorded in accumulated other comprehensive income (loss), for a net liability of $4,452 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2021, the funded status of the Non-U.S. Plans was a liability of $15,206 of which $8,866 was recorded in accumulated other comprehensive income (loss), for a net liability of $6,340 recorded in other long-term liabilities within the consolidated balance sheets. 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 pension and post-retirement benefit service cost. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested. The Company presents currency translation adjustments on noncontrolling interests separately from currency translation adjustments on controlling interests in accumulated other comprehensive income (loss) within stockholders’ equity. The changes in accumulated other comprehensive income (loss) by component, net of tax, for the years ended December 31, 2022, 2021 and 2020 are as follows:
Self-Insurance Reserves The Company is self-insured in the U.S. for various levels of general liability, automobile liability, workers’ compensation and employee medical coverage. Insurance reserves 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. The Company has a wholly-owned captive insurance company, Mohawk Assurance Services, Inc. (“MAS”). MAS insures the retained portion of the Company’s U.S. general liability, automobile liability, workers’ compensation exposures, pandemic, terrorism and medical coverage to MAS. 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—Recently Adopted In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes which simplified the accounting for income taxes in several areas by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes. The Company adopted the new standard on January 1, 2021. The effect of adopting the new standard was not material. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further amended by additional accounting standards updates issued by the FASB. The new standard replaced the incurred loss impairment methodology for recognizing credit losses with a new methodology that requires recognition of lifetime expected credit losses when a financial asset is originated or purchased, even if the risk of loss is remote. The new methodology (referred to as the current expected credit losses model, or “CECL”) applies to most financial assets measured at amortized cost, including trade receivables, and requires consideration of a broader range of reasonable and supportable information to estimate expected credit losses. The Company adopted the new standard on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.
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Acquisitions |
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Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2022 Acquisitions During 2022, the Company completed acquisitions in Flooring NA for $164,579. The Company’s acquisitions resulted in a preliminary goodwill allocation of $60,842, pending working capital adjustments, and intangible assets subject to amortization of $19,900. Approximately half of the goodwill is expected to be deductible for tax purposes. The Company also completed acquisitions in Flooring ROW for $47,964, which resulted in a preliminary goodwill allocation of $11,542, pending working capital adjustments, and intangible assets subject to amortization of $3,376. Some of the goodwill is expected to be deductible for tax purposes. 2021 Acquisitions During 2021, the Company completed acquisitions in Flooring ROW totaling $121,027, including the acquisition of an insulation manufacturer, on September 7, 2021 for $66,334 and the acquisition of a MDF production plant on November 2, 2021 for $44,357. The Company’s acquisitions resulted in a goodwill allocation of $52,536 and intangible assets subject to amortization of $19,910. The goodwill was not deductible for tax purposes. The remaining acquisitions resulted in goodwill of $1,672 and intangible assets subject to amortization of $5,596.
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | Revenue from Contracts with Customers Contract Liabilities The Company 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 consolidated balance sheets. The Company had contract liabilities of $72,572 and $65,744 as of December 31, 2022 and December 31, 2021, 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 years ended December 31, 2022, 2021, and 2020 was immaterial. Costs to Obtain a Contract The Company incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying condensed consolidated balance sheets. Capitalized costs to obtain contracts were $59,015 and $49,644 as of December 31, 2022 and December 31, 2021, respectively. Straight-line amortization expense recognized during 2022, 2021 and 2020 related to these capitalized costs were $55,520, $61,681 and $68,201, respectively. Revenue Disaggregation The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories during the years ended December 31, 2022, 2021 and 2020, respectively:
(1) Other includes roofing elements, insulation boards, chipboards and IP contracts.
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Restructuring, Acquisition and Integration-Related Costs |
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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 ("asset write-downs") and workforce reductions. Restructuring, acquisition and integration-related costs consisted of the following during the year ended December 31, 2022, 2021 and 2020, respectively (in thousands):
The restructuring activity for the years ended December 31, 2022 and 2021, respectively is as follows (in thousands):
The Company generally expects the remaining severance and other restructuring costs to be paid over the next year.
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value The Company’s wholly-owned captive insurance company may invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon the Level 2 fair value hierarchy. Items Measured at Fair Value The following table presents the items measured at fair value as of December 31, 2022 and December 31, 2021:
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Receivables, net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables, net | Receivables, net
The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:
(1) Represents charge-offs, net of recoveries.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The components of inventories are as follows:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company performs its annual testing of goodwill and indefinite-lived intangibles in the fourth quarter of each year. Between annual testing dates, the Company monitors factors such as its market capitalization, comparable company market multiples and macroeconomic conditions to identify conditions that could impact the Company’s assumptions utilized in the determination of the estimated fair values of the Company’s reporting units and indefinite-lived intangible assets significantly enough to trigger an impairment. The goodwill impairment tests are based on determining the fair value of the specified reporting units based on management judgements and assumptions using the discounted cash flows under the income approach classified in Level 3 of the fair value hierarchy and comparable company market valuation classified in Level 2 of the fair value hierarchy 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 judgements and assumptions about appropriate sales growth rates, operating margins, WACC and comparable company market multiples. As a result of a decrease in the Company’s market capitalization, comparable company market multiples, projected future cash flows and an increase in the WACC due to increases in the risk free rate and applicable risk premiums, the Company determined that a triggering event occurred requiring goodwill impairment testing for each of its reporting units as of October 1, 2022. The impairment test indicated a pre-tax, non-cash goodwill impairment charge related to the Global Ceramic reporting unit of $688,514 ($679,664 net of tax), which the Company recorded during the third quarter of 2022. The Company concluded the goodwill of its other reporting units was not impaired on October 1, 2022. In addition, the Company compared the estimated fair values of its indefinite-lived intangibles to their carrying values and determined that there were of $7,257 ($5,939 net of tax) in the Flooring ROW and Flooring NA reporting units during the third quarter of 2022. The excess of fair value over carrying value for the Flooring ROW reporting unit was approximately 20% and the excess of fair value over carrying value for the Flooring NA reporting unit was less than 5%, as of October 1, 2022. The Company’s annual testing date for goodwill and tradenames is the first day of its fourth quarter and due to the fact that there were no significant changes in facts or circumstances in the one calendar day, the Company determined there was no additional impairment of goodwill or tradenames. The Company conducted a qualitative analysis as of December 31, 2022 and determined there was no indication of an impairment. A significant or prolonged deterioration in economic conditions, continued increases in the costs of raw materials and energy combined with an inability to pass these costs on to customers, a further decline in the Company’s market capitalization or comparable company market multiples, a reduction in projected future cash flows, or increases in the WACC, could impact the Company’s assumptions and require a reassessment of goodwill or indefinite-lived intangible assets for impairment in future periods. The following tables summarize the components of goodwill and intangible assets: Goodwill:
(1) Net of accumulated impairment losses of $1,327,425 ($531,930 in Global Ceramic, $343,054 in Flooring NA and $452,441 in Flooring ROW). Intangible assets:
Estimated amortization expense for the years ending December 31 are as follows:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Following is a summary of property, plant and equipment:
Additions to property, plant and equipment included capitalized interest of $16,895, $9,082 and $6,362 in 2022, 2021 and 2020, respectively. Depreciation expense was $564,255, $558,818 and $574,095 for 2022, 2021 and 2020, respectively. Included in property, plant and equipment are finance leases with a cost of $82,653 and $67,984 and accumulated depreciation of $30,218 and $19,902 as of December 31, 2022 and 2021, respectively.
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Senior Credit Facility On August 12, 2022, the Company entered into a fourth amendment (the “Amendment”) to its existing senior revolving credit facility (the “Senior Credit Facility”). The Amendment, among other things, (i) extended the maturity of the Senior Credit Facility from October 18, 2024 to August 12, 2027, (ii) renewed the Company’s option to extend the maturity of the Senior Credit Facility up to two times for an additional one-year period each, (iii) increased the Consolidated Interest Coverage Ratio financial maintenance covenant from 3.00:1.00 to 3.50:1.00, (iv) eliminated certain covenants applicable to the Company and its subsidiaries, including, but not limited to, restrictions on dispositions, restricted payments, and transactions with affiliates, and the Consolidated Net Leverage Ratio financial covenant, and (v) increased the amount available under the Senior Credit Facility to $1,950,000 until October 18, 2024, after which the amount available under the Senior Credit Facility will decrease to $1,485,000. The Amendment also permits the Company to increase the commitments under the Senior Credit Facility by an aggregate amount not to exceed $600,000. At the Company’s election, U.S.-dollar denominated revolving loans under the Senior Credit Facility bear interest at annual rates equal to either (a) SOFR (plus a 0.10% SOFR adjustment) for 1, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.00% as of December 31, 2022), or (b) the Base Rate (defined as the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds Effective Rate plus 0.5%, or SOFR (plus a 0.10% SOFR adjustment) for a 1 month period rate plus 1.0%), plus an applicable margin ranging between 0.00% and 0.75% (0.00% as of December 31, 2022). At the Company’s election, revolving loans under the Senior Credit Facility denominated in Canadian dollars, Australian dollars, Hong Kong dollars or euros bear interest at annual rates equal to either (a) the applicable benchmark for such currency plus an applicable margin ranging between 1.00% and 1.75% (1.00% as of December 31, 2022), or (b) the Base Rate plus an applicable margin ranging between 0.00% and 0.75% (0.00% as of December 31, 2022). The Company also pays a commitment fee to the lenders under the Senior Credit Facility on the average amount by which the aggregate commitments of the lenders exceed utilization of the Senior Credit Facility ranging from 0.09% to 0.20% per annum (0.09% as of December 31, 2022). 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). On October 28, 2021, the Company amended the Senior Credit Facility to replace LIBOR for euros with the EURIBOR benchmark rate. The obligations of the Company and its subsidiaries in respect of the Senior Credit Facility are unsecured. The 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, future negative pledges, and changes in the nature of the Company’s business. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirement and is not otherwise in default. The Senior Credit Facility originally required the Company to maintain a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.00, each as of the last day of any fiscal quarter. However, on May 7, 2020 the Company amended the Senior Credit Facility to temporarily increase the minimum Consolidated Net Leverage Ratio to 4.75 to 1.00 and to increase the amount of certain adjustments to Net Income that are permitted to calculate the ratio. The relief provided by the amendment was in effect for the fiscal quarters ending on September 26, 2020 through (and including) the fiscal quarter ending December 31, 2021. As described above, the Consolidated Net Leverage Ratio financial covenant was eliminated on August 12, 2022. The Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods. In 2022, the Company paid financing costs of $1,879 in connection with the Amendment of its Senior Credit Facility. These costs were deferred and, along with previously unamortized costs of $2,663, are being amortized over the term of the Senior Credit Facility. As of December 31, 2022, amounts utilized under the Senior Credit Facility included zero borrowings and $19,614 of standby letters of credit related to various insurance contracts and foreign vendor commitments. Any outstanding borrowings under the Company’s U.S. and European commercial paper programs reduce the availability of the Senior Credit Facility. Including commercial paper borrowings, the Company has utilized $848,420 under the Senior Credit Facility, resulting in a total of $1,101,580 available as of December 31, 2022. Commercial Paper On February 28, 2014 and July 31, 2015, the Company established programs for the issuance of unsecured commercial paper in the United States and Eurozone capital markets, respectively. Commercial paper issued under the U.S. and European programs will have maturities ranging up to 397 and 183 days, respectively. None of the commercial paper notes may be voluntarily prepaid or redeemed by the Company and rank pari passu with 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. The Company uses its Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount outstanding under the Company’s commercial paper programs may not exceed $1,950,000 (less any amounts drawn on the Senior Credit Facility) at any time. The proceeds from the issuance of commercial paper notes will be available for general corporate purposes. As of December 31, 2022, there was $785,998 outstanding under the U.S. commercial paper program, and the euro equivalent of $42,808 under the European program. The weighted-average interest rate and maturity period for the U.S. program were 4.85% and 27.0 days, respectively. The weighted-average interest rate and maturity period for the European program were 1.98% and 11.8 days, respectively. Senior Notes On June 12, 2020, Mohawk Capital Finance S.A. (“Mohawk Finance”), an indirect wholly-owned finance subsidiary of the Company, completed the issuance and sale of €500,000 aggregate principal amount of 1.750% Senior Notes (“1.750% Senior Notes”) due June 12, 2027. The 1.750% Senior Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with Mohawk Finance’s other existing and future senior unsecured indebtedness. The 1.750% Senior Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. Interest on the 1.750% Senior Notes is payable annually in cash on June 12 of each year, commencing on June 12, 2021. The Company paid financing costs of $4,400 in connection with the 1.750% Senior Notes. These costs were deferred and are being amortized over the term of the 1.750% Senior Notes. On May 14, 2020, the Company completed the issuance and sale of $500,000 aggregate principal amount of 3.625% Senior Notes (“3.625% Senior Notes”) due May 15, 2030. The 3.625% Senior Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s existing and future unsecured indebtedness. Interest on the 3.625% Senior Notes is payable semi-annually in cash on May 15 and November 15 of each year, commencing on November 15, 2020. The Company paid financing costs of $5,476 in connection with the 3.625% Senior Notes. These costs were deferred and are being amortized over the term of the 3.625% Senior Notes. On January 31, 2013, the Company issued $600,000 aggregate principal amount of 3.85% Senior Notes (“3.85% Senior Notes”) due February 1, 2023. The 3.85% Senior Notes were senior unsecured obligations of the Company and ranked pari passu with the Company’s existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes was 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 were amortized over the term of the 3.85% Senior Notes. On November 1, 2022, the Company redeemed at par all of the 3.85% Senior Notes. As defined in the related agreements, the Company’s senior notes contain covenants, representations and warranties and events of default, subject to exceptions, and restrictions on the Company’s financial and business operations, including limitations on liens, restrictions on entering into sale and leaseback transactions, fundamental changes, and a provision allowing the holder of the notes to require repayment upon a change of control triggering event. Term Loan On August 12, 2022, the Company and its indirect wholly-owned subsidiary, Mohawk International Holdings S.à r.l. (“Mohawk International”), entered into an agreement that provides for a delayed draw term loan facility (the “Term Loan Facility”), consisting of borrowings of up to $575,000 and €220,000. On October 3,2022, an additional $100,000 of borrowing capacity was added to the Term Loan Facility. The Term Loan Facility could be drawn upon in up to two advances on any business day on or before December 31, 2022, with the proceeds being used for funding working capital and general corporate purposes. On October 31, 2022 and December 6, 2022, the Company made draws of $675,000 and €220,000, respectively. The Company must pay the outstanding principal amount of the Term Loan Facility, plus accrued and unpaid interest, not later than the maturity date of August 12, 2024. The Company may prepay all or a portion of the Term Loan Facility, plus accrued and unpaid interest, from time to time, without premium or penalty. At the Company’s election, U.S. dollar-denominated loans under the Term Loan Facility bear interest at an annual rate equal to either (a) SOFR (plus a 0.10% SOFR adjustment) for 1, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 0.825% and 1.50% (0.825% as of December 31, 2022), determined based upon the Company’s consolidated net leverage ratio, or (b) the base rate (defined as the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds Effective Rate plus 0.5%, and SOFR (plus a 0.10% SOFR adjustment) for a 1 month period plus 1.0%) plus an applicable margin ranging between 0.00% and 0.50% (0.00% as of December 31, 2022), determined based upon the Company’s consolidated net leverage ratio. Euro-denominated loans under the Term Loan Facility bear interest at an annual rate equal to EURIBOR for 1, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 0.825% and 1.50% (0.825% as of December 31, 2022), determined based upon the Company’s consolidated net leverage ratio. In 2022, the Company paid financing costs of $664 in connection with the Term Loan Facility. These costs were deferred and are being amortized over the term of the Term Loan Facility. The obligations of the Company and its subsidiaries in respect of the Term Loan Facility are unsecured. The Term Loan Facility includes certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, indebtedness, fundamental changes, and changes in the nature of the Company’s business. Many of these limitations are subject to numerous exceptions. The Company is also required to maintain a Consolidated Interest Coverage Ratio of at least 3.5 to 1.0 as of the last day of any fiscal quarter. The Term Loan Facility also contains customary representations and warranties. The Term Loan Facility contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company. Upon the occurrence of an event of default, the outstanding obligations under the Term Loan Facility may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to the Company, the Company is required to repay the loans outstanding under the Term Loan Facility. On April 7, 2020, the Company entered into a credit agreement that provided for a $500,000 delayed draw term loan facility (the “Term Loan Facility”). On April 15, 2020, the Company borrowed the full amount on the Term Loan Facility, the proceeds of which could be used for funding working capital and general corporate purposes of the Company. The principal amount of the Term Loan Facility was to be repaid in a single installment on April 6, 2021. The Company could prepay all or a portion of the Term Loan Facility from time to time, plus accrued and unpaid interest. The obligations of the Company and its subsidiaries in respect of the Term Loan Facility were unsecured. The Term Loan Facility was subject to the same affirmative and negative covenants that are applicable to the Senior Credit Facility. The Company recorded financing costs of $1,088 in connection with the Term Loan Facility. On May 15, 2020, the Company prepaid the entire outstanding balance on the Term Loan Facility utilizing cash on hand and proceeds from the 3.625% Senior Notes and associated financing costs were written off in the quarter ending June 27, 2020. The fair values and carrying values of the Company’s debt instruments are detailed as follows:
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 total debt as of December 31, 2022 are as follows (1):
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Accounts Payable and Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Certain of the Company’s leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of the Company’s leases contain residual value guarantees and none of the Company’s agreements contain material restrictive covenants. The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists mainly of operating leases. The components of lease costs for the twelve months ended December 31, 2022, 2021 and 2020, respectively, are as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities as of December 31, 2022 are as follows:
The Company had approximately $6,516 of leases that commenced after December 31, 2022 that created rights and obligations to the Company. These leases are not included in the above maturity schedule. Lease term and discount rate are as follows:
Supplemental cash flow information related to leases was as follows:
(1) Amortization of ROU operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.
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Leases | Leases The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Certain of the Company’s leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of the Company’s leases contain residual value guarantees and none of the Company’s agreements contain material restrictive covenants. The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists mainly of operating leases. The components of lease costs for the twelve months ended December 31, 2022, 2021 and 2020, respectively, are as follows:
Supplemental balance sheet information related to leases is as follows:
Maturities of lease liabilities as of December 31, 2022 are as follows:
The Company had approximately $6,516 of leases that commenced after December 31, 2022 that created rights and obligations to the Company. These leases are not included in the above maturity schedule. Lease term and discount rate are as follows:
Supplemental cash flow information related to leases was as follows:
(1) Amortization of ROU operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.
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Stock-Based Compensation |
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Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company recognized compensation expense for all share-based payments granted for the years ended December 31, 2022, 2021 and 2020 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 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 and five years with a 10-year contractual term. The grant date fair value of restricted stock and RSUs is equal to the market price of the Company’s common stock on the date of the grant and generally vest between and five years. On May 19, 2017, the Company’s stockholders approved the 2017 Long-Term Incentive Plan (“2017 Plan”), which allows the Company to reserve up to a maximum of 3,000 shares of common stock for issuance upon the grant or exercise of awards under the 2017 Plan. No additional awards may be granted under the 2012 Plan after May 19, 2017. Restricted Stock Plans A summary of the Company’s RSUs under the Company’s long-term incentive plans as of December 31, 2022, and changes during the year then ended is presented as follows:
The Company recognized stock-based compensation costs related to the issuance of RSUs of $22,409 ($16,582, net of taxes), $25,651 ($18,982, net of taxes) and $19,697 ($14,576, net of taxes) for the years ended December 31, 2022, 2021 and 2020, respectively, which has been allocated to selling, general and administrative expenses and cost of goods sold. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $19,321 as of December 31, 2022, and will be recognized as expense over a weighted-average period of approximately 1.45 years. Additional information relating to the Company’s RSUs under the Company’s long-term incentive plans are as follows:
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Other Expense (Income) |
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Other Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense (Income) | Other Expense (Income) Following is a summary of other expense (income):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Following is a summary of (loss) earnings before income taxes for United States and foreign operations:
Income tax expense (benefit) for the years ended December 31, 2022, 2021 and 2020 consists of the following:
The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. A substantial portion of the Company’s business activities are conducted in the United States, which gave rise to a loss in the current year. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Brazil, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Russia, Spain and the United Kingdom. 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, 2022, 2021 and 2020 were (36.5)%, 33.8%, and (12.0)%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2022, 2021 and 2020 were 17.5%, 14.1%, and 16.3%, respectively. The difference in rates applicable in foreign jurisdictions results from many 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 before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:
(1) Foreign income taxes include statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items. (2) The CARES Act permits the Company to carry back its 2020 U.S. taxable loss to a tax year before the corporate income tax rate was lowered by the Tax Cuts and Jobs Act. (3) The company realized a one-time Italian step-up benefit allowing for the realignment of tax asset values. 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, 2022 and 2021 are presented below:
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, 2022, and 2021 is $284,347 and $236,357, respectively. The valuation allowance as of December 31, 2022 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 2022 valuation allowance was an increase of $47,990 related to increased losses, foreign currency translation, and other activities. The total change in the 2021 valuation allowance was a decrease of $31,481 related to tax rate changes, foreign currency translation, and other activities. 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, 2022, the Company has state net operating loss carry forwards and state tax credits with potential tax benefits of $46,388, net of federal income tax benefit; these carry forwards expire over various periods based on taxing jurisdiction. A valuation allowance totaling $31,760 has been recorded against these state deferred tax assets as of December 31, 2022. In addition, as of December 31, 2022, the Company has credits and net operating loss carry forwards in the U.S. with potential tax benefits of $6,753 and in various foreign jurisdictions with potential tax benefits of $1,565,514. A valuation allowance of $6,242 and $246,345, respectively, has been recorded against these deferred tax assets as of December 31, 2022. As a result of the redemption of hybrid instruments in response to changes in global tax regimes, the Company has an ASC 740-10 liability of $1,169,896 for the full tax effected loss on the hybrid instrument in the Tax Uncertainties section below. This ASC 740-10-45 liability is recorded as a reduction to the related deferred tax asset in the financial statements as a result of management’s determination that it is not more likely than not that the benefit will be realized. The Company has no intentions or plans to repatriate foreign earnings and continues to assert that historical earnings of its foreign subsidiaries as of December 31, 2022 are permanently reinvested. Should the remaining earnings be distributed in the form of dividends in the future, the Company might be subject to withholding taxes (possibly offset by U.S. foreign tax credits) in various foreign jurisdictions, but the Company would not expect incremental U.S. federal or state taxes to be accrued on these previously taxed earnings. 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 and penalties related to unrecognized tax benefits 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, 2022, the Company’s gross amount of unrecognized tax benefits is $1,230,632, excluding interest and penalties. If the Company were to prevail on all uncertain tax positions, $47,881 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:
As a result of the redemption of hybrid instruments in response to changes in global tax regimes, the Company has an ASC 740-10 liability for the full tax effected loss on hybrid instruments. This ASC 740-10-45 liability is recorded as a reduction to the related deferred tax asset in the financial statements as a result of management’s determination that it is not more likely than not that the benefit will be realized. The tax effected loss was adjusted for foreign currency translation changes in 2022, resulting in an updated balance of $1,169,896 as of December 31, 2022. As of December 31, 2022 and 2021, the Company has $14,801 and $14,494, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable. During the years ended December 31, 2022, 2021 and 2020, the Company accrued interest and penalties through income tax expense of $437, $3,236 and $(695), respectively. The Company believes that its unrecognized tax benefits could decrease by $9,152 within the next twelve months. The Company’s 2018, 2019 and 2020 federal tax returns are currently under audit by the Internal Revenue Service. As permitted by the CARES Act, the company carried back its 2020 taxable losses to tax years before the corporate income tax rate was lowered by the Tax Cut and Jobs Act. Federal income tax matters related to years prior to 2014 have been effectively settled. Various other state and foreign income tax returns are open to examination for various years. Belgian Tax Matter The Company has been in a dispute with the Belgian Tax Authority (the “BTA”) regarding the proper tax treatment of the royalty income arising from intellectual property (“IP”) owned by a Luxembourg subsidiary, Flooring Industries Limited S.à r.l. (“FIL”). The BTA had assessed Unilin BV for the calendar years ending December 2005 through 2010 in an amount totaling €223,321 (including penalties but excluding interest), alleging that Unilin BV inappropriately transferred valuable IP to FIL and income associated with that IP should be taxed in Belgium. Unilin BV challenged all of these assessments and prevailed both in the Court of First Appeal in Bruges and in the Ghent Court of Appeal. In 2021, the BTA indicated it will not appeal these cases to the Supreme Court and has withdrawn all of the assessments for 2005 through 2010. Consequently, all of those tax years are now closed. Having lost under its original theory, the BTA initiated new assessments for later years against FIL rather than Unilin BV. In that connection, the BTA alleged that FIL had a taxable presence in Belgium and should have been taxed on royalties received in respect of its IP. The BTA issued initial assessments in December 2020 and June 2021 that totaled €371,696 (including penalties but excluding interest) for calendar years ending December 2013 through 2018. However, in November and December of 2021, the BTA cancelled these assessments and in April 2022 issued new assessments that total €186,734 (including penalties but excluding interest) for those years using different calculations. The Company was expecting an additional assessment for 2019. Under the statute of limitations, the BTA may not assess FIL for any years prior to 2013, and the Company believes that FIL’s statute of limitations is closed for 2013 through 2016. These assessments would involve the same underlying facts at issue in the above referenced cases where Unilin BV prevailed at two different levels. Although Mohawk believes its tax position in Belgium was correct, FIL entered into an agreement with the BTA on November 23, 2022, to settle the dispute for a one-time payment of €3,000. No fines were upheld due to the good faith of the company. This settlement covers calendar years ending December 31, 2013, through 2020. Consequently, FIL will not be liable for additional taxes, penalties, or interest related to all calendar years through the year ending December 31, 2020.
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Commitments and Contingencies |
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Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company had approximately $19,614 and $1,432 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2022 and 2021, respectively that expire within two years. From time to time in the regular course of its business, the Company is involved in various lawsuits, claims, investigations and other legal matters. 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. Perfluorinated Compounds (“PFCs”) Litigation In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Gadsden Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers, and users of chemicals containing specific PFCs, including the Company. In May 2017, the Water Works and Sewer Board of the Town of Centre, Alabama (the “Centre Water Board”) filed a similar complaint in the Circuit Court of Cherokee County, Alabama. The Gadsden Water Board and the Centre Water Board both sought monetary damages and injunctive relief claiming that their water supplies contain excessive amounts of PFCs. Certain defendants, including the Company, filed dispositive motions in each case arguing that the Alabama state courts lack personal jurisdiction over them. These motions were denied. In June and September 2018, certain defendants, including the Company, petitioned the Alabama Supreme Court for Writs of Mandamus directing each lower court to enter an order granting the defendants’ dispositive motions on personal jurisdiction grounds. The Alabama Supreme Court denied the petitions on December 20, 2019. Certain defendants, including the Company, filed an Application for Rehearing with the Alabama Supreme Court asking the court to reconsider its December 2019 decision. The Alabama Supreme Court denied the application for rehearing. On August 21, 2020, certain defendants, including the Company, petitioned the Supreme Court of the United States for review of the matter. On January 19, 2021, the Supreme Court denied the defendants’ petition for review. On October 14, 2022, the Gadsden Water Board settled its claims against Mohawk Industries, Inc. and Mohawk Carpet, LLC. The case filed by the Centre Water Board remains pending. In December 2019, the City of Rome, Georgia (“Rome”) filed a complaint in the Superior Court of Floyd County, Georgia that is similar to the Gadsden Water Board and Centre Water Board complaints, again seeking monetary damages and injunctive relief related to PFCs. Also in December 2019, Jarrod Johnson filed a putative class action in the Superior Court of Floyd County, Georgia purporting to represent all water subscribers with the Rome (Georgia) Water and Sewer Division and/or the Floyd County (Georgia) Water Department and seeking to recover, among other things, damages in the form of alleged increased rates and surcharges incurred by ratepayers for the costs associated with eliminating certain PFCs from their drinking water. In January 2020, defendant 3M Company removed the class action to federal court. The Company filed motions to dismiss in both of these cases. On December 17, 2020, the Superior Court of Floyd County denied the Company’s motion to dismiss in the Rome case. On September 20, 2021, the Northern District of Georgia denied the Company’s motion to dismiss in the class action. The Company denies all liability in these matters and intends to defend all pending matters vigorously. Putative Securities Class Action On January 3, 2020, the Company and certain of its executive officers were named as defendants in a putative shareholder class action lawsuit filed in the United States District Court for the Northern District of Georgia (the “Securities Class Action”). The complaint alleged that defendants violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements and that the officers are control persons under Section 20(a) of the Securities Exchange Act of 1934. The complaint was filed on behalf of shareholders who purchased shares of the Company’s common stock between April 28, 2017 and July 25, 2019 (“Class Period”). On June 29, 2020, an amended complaint was filed in the Securities Class Action against Mohawk and its CEO Jeff Lorberbaum, based on the same claims and the same Class Period. The amended complaint alleges that the Company (1) engaged in fabricating revenues by attempting delivery to customers that were closed and recognizing these attempts as sales; (2) overproduced product to report higher operating margins and maintained significant inventory that was not salable; and (3) valued certain inventory improperly or improperly delivered inventory with knowledge that it was defective and customers would return it. On October 27, 2020, defendants filed a motion to dismiss the amended complaint. On September 29, 2021, the court issued an order granting in part and denying the defendants’ motion to dismiss the amended complaint. Defendants filed an answer to the amended complaint on November 12, 2021, and fact discovery commenced. On January 26, 2022, Lead Plaintiff moved for class certification, to appoint itself as class representative, and for appointment of class counsel. The court granted plaintiff’s motion for class certification on November 28, 2022. On December 13, 2022, the parties reached an agreement in principle to settle the Securities Class Action for $60,000, of which a significant portion is covered by insurance, in exchange for the dismissal and a release of all claims against the defendants (the “Agreement”). The Agreement, which is subject to court approval, is without admission of fault or wrongdoing by defendants. On February 6, 2023, the court issued an order granting Lead Plaintiff’s motion to preliminarily approve the settlement and setting May 31, 2023 as the date of the final settlement hearing. The Company believes the allegations in the Securities Class Action are without merit. Government Subpoenas As previously disclosed, on June 25, 2020, the Company received subpoenas issued by the U.S. Attorney’s Office for the Northern District of Georgia (the “USAO”) and the U.S. Securities and Exchange Commission (the “SEC”) relating to matters similar to the allegations of wrongdoing raised by the Securities Class Action. The Company’s Audit Committee, with the assistance of outside legal counsel, conducted a thorough internal investigation into these allegations. The Audit Committee has completed the investigation and concluded that the allegations of wrongdoing are without merit. The USAO and SEC investigations are ongoing, and the Company is cooperating fully with those authorities. The Company will continue to vigorously defend against the allegations of wrongdoing and does not believe they have merit. Delaware State Court Action The Company and certain of its present and former executive officers were named as defendants in a putative state securities class action lawsuit filed in the Superior Court of the State of Delaware on January 30, 2020. The complaint alleged that defendants violated Sections 11 and 12 of the Securities Act of 1933. The complaint was filed on behalf of shareholders who purchased shares of the Company’s common stock in Mohawk Industries Retirement Plan 1 and Mohawk Industries Retirement Plan 2 between April 27, 2017 and July 25, 2019. On March 27, 2020, the court granted a temporary stay of the litigation. The stay may be lifted according to the terms set forth in the court’s order to stay litigation. The parties reached an agreement in principle to settle the lawsuit, which will be funded in full by Mohawk’s insurers, in exchange for the dismissal and a release of all claims against the defendants (the “Settlement Agreement”). The Settlement Agreement, which is subject to court approval, is without admission of fault or wrongdoing by defendants. The Company believes the allegations in the lawsuit are without merit. Georgia State Court Investor Actions The Company and certain of its present and former executive officers were named as defendants in certain investor actions, filed in the State Court of Fulton County of the State of Georgia on April 22, 2021, April 23, 2021, and May 11, 2022. Five complaints brought on behalf of purported former Mohawk stockholders each allege that defendants defrauded the respective plaintiffs through false or misleading statements and thereby induced plaintiffs to purchase Company stock at artificially inflated prices. The allegations are similar to those of the Securities Class Action. The claims alleged include fraud, negligent misrepresentation, violations of the Georgia Securities Act, and violations of the Georgia Racketeering and Corrupt Organizations statute. Plaintiffs in the investor actions seek compensatory and punitive damages. On June 28, 2021, defendants filed motions to dismiss each of the four complaints filed in April 2021 and answers to the same. On October 5, 2021, all four investor actions filed in April 2021 were transferred by the State Court of Fulton County to the Metro Atlanta Business Case Division, where fact discovery is ongoing. On January 28, 2022, the Court granted in part and denied in part the motions to dismiss the four actions filed in April 2021, dismissing the Georgia Securities Act claims as to all defendants, and the negligent misrepresentation claim as to the Company. On May 19, 2022, the parties in the last-filed action filed a joint motion to transfer the investor action initiated on May 11, 2022 to the Metro Atlanta Business Case Division where the other four actions were and are pending. On August 2, 2022, this motion was granted and the last-filed investor action initiated on May 11, 2022 was transferred to the Metro Atlanta Business Case Division. On September 1, 2022, defendants in the last-filed investor action filed motions to dismiss the complaint filed on May 2022 and answers to the same. On November 16, 2022, plaintiffs in the last-filed investor action voluntarily dismissed the suit. The Company intends to vigorously defend against the claims in these actions. Federal Investor Actions The Company and certain of its present and former executive officers were named as defendants in three additional non-class action lawsuits filed in the United States District Court for the Northern District of Georgia on June 22, 2021, March 25, 2022, and April 26, 2022 (collectively, “Federal Investor Actions”), respectively. Each complaint is brought on behalf of one or more purported former Mohawk stockholders and alleges that defendants defrauded the plaintiffs through false or misleading statements and thereby induced plaintiffs to purchase Company stock at artificially inflated prices. The allegations are similar to those of the Securities Class Action. The federal law claims alleged include violations of Sections 10(b) and 18 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements and that the officers are control persons under Section 20(a) of the Securities Exchange Act of 1934. The state law claims alleged include fraud, negligent misrepresentation, violations of the Georgia Securities Act, and violations of the Georgia Racketeering and Corrupt Organizations statute. Plaintiffs in the lawsuits seek compensatory and punitive damages and attorneys’ fees. On December 13, 2021, defendants filed motions to dismiss the June 22, 2021 complaint, which motions are fully briefed and remain pending. On July 6, 2022, defendants filed motions to dismiss the March 25, 2022 complaint, which motions are fully briefed and remain pending. On July 27, 2022, defendants filed motions to dismiss the April 26, 2022 complaint, which motions are fully briefed as of November 4, 2022 and remain pending. On August 9, 2022, defendants filed a motion to consolidate all three Federal Investor Actions for pre-trial purposes, which motion is fully briefed and remains pending. The Company intends to vigorously defend against the claims asserted in the Federal Investor Actions. Derivative Actions The Company and certain of its executive officers and directors were named as defendants in certain derivative actions filed in the United States District Court for the Northern District of Georgia on May 18, 2020 and August 6, 2020, respectively (the “NDGA Derivative Actions”), in the Superior Court of Gordon County of the State of Georgia on March 3, 2021 and July 12, 2021 (the “Georgia Derivative Actions”), and in the Delaware Court of Chancery on March 10, 2022 (the “Delaware Derivative Action”). The complaints allege that defendants breached their fiduciary duties to the Company by causing the Company to issue materially false and misleading statements. The complaints are filed on behalf of the Company and seek to remedy fiduciary duty breaches occurring from April 28, 2017 to July 25, 2019. On July 20, 2020, the court in the NDGA Derivative Actions granted a temporary stay of the litigation. On October 21, 2020, the court entered an order consolidating the NDGA Derivative Actions and appointing Lead Counsel. Other shareholders of record jointly moved to intervene in the derivative actions to stay the proceedings. On September 28, 2021, the court in the NDGA Derivative Actions issued an order granting the request to intervene. On April 8, 2021, the court in the first-filed of the Georgia Derivative Actions granted a temporary stay of the litigation. On January 18, 2022, the Court in the NDGA Derivative Actions lifted the temporary stay of the litigation. On January 20, 2022, the court in the second-filed of the Georgia Derivative Actions entered an order on scheduling requiring defendants to file and serve their response to the complaint on February 21, 2022. On February 28, 2022, the court granted a stay of the Georgia Derivative Actions until the entry of a final judgment in the NDGA Derivative Actions and stipulating that the prevailing party in the NDGA Derivative Actions would be the prevailing party in the Georgia Derivative Actions. On April 6, 2022, the court granted a stay of the Delaware Derivative Action until the entry of a final judgment in the NDGA Derivative Actions and stipulating that the prevailing party in the NDGA Derivative Actions would be the prevailing party in the Delaware Derivative Action. The Company intends to vigorously defend against the claims. 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. 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 acknowledges that it 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 |
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Consolidated Statements of Cash Flows Information | Consolidated Statements of Cash Flows Information Supplemental disclosures of cash flow information are as follows:
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company has three reporting segments: Global Ceramic, Flooring NA and Flooring ROW. Global Ceramic designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone, porcelain slabs, quartz countertops and other products, which it distributes primarily in North America, Europe, South America 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. Flooring NA designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, laminate, resilient (includes sheet vinyl and LVT) and wood flooring, which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks, common carriers 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. Flooring ROW designs, manufactures, sources, licenses and markets laminate, sheet vinyl, LVT, wood flooring, roofing elements, insulation boards, medium-density fiberboard (“MDF”), chipboards and other wood products, which it distributes primarily in Europe, Australia, New Zealand and Russia through various selling channels, which include retailers, Company-operated distributors, 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. No single customer accounted for more than 10% of net sales for the years ended December 31, 2022, 2021 or 2020. Segment information is as follows:
(1) Long-lived assets are composed of property, plant and equipment - net, and ROU operating lease assets. (2) Other includes roofing elements, insulation boards, chipboards and IP contracts.
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2022 | |
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 sheet 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.
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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. |
Short-term Investments | Short-term InvestmentsThe Company invests in high quality credit instruments. At December 31, 2022 and December 31, 2021, short-term investments consisted solely of investments in the Company’s commercial paper by its wholly-owned captive insurance company. |
Fair Value | Fair Value Accounting principles generally accepted in the U.S. define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets. Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
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Accounts Receivable and Revenue Recognition | Accounts Receivable and Revenue Recognition The Company recognizes revenue 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 (includes sheet vinyl and LVT), 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 a change in their ability to make payments, additional allowances may be required. The Company accounts for incremental costs of obtaining a contract as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year. The Company accounts for shipping and handling activities performed after control has been transferred as a fulfillment cost in cost of sales.
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Inventories | InventoriesThe Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or net realizable value. Cost has been determined using the FIFO method. Costs included in inventory include raw materials, direct and indirect labor, employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. 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. |
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 15-40 years for buildings and improvements, 3-25 years for machinery and equipment, 3-7 years for furniture and fixtures and the shorter of the estimated useful life or lease term for leasehold improvements.
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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.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets In accordance with the provisions of the FASB ASC Topic 350, Intangibles-Goodwill and Other, the Company tests goodwill and other intangible assets with indefinite lives, which for the Company are tradenames, for impairment on an annual basis on the first day of 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’s annual impairment tests of goodwill and tradenames may be completed through qualitative assessments. The Company may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test, for any reporting unit or tradename, in any period. The Company can resume the qualitative assessment for any reporting unit or tradename in any subsequent period. The Company has identified Global Ceramic, Flooring North America (“Flooring NA”) and Flooring Rest of the World (“Flooring ROW”) as its reporting units for the purposes of allocating goodwill as well as assessing impairments. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. Under a qualitative approach, the Company’s impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. If the Company elects to bypass the qualitative assessment for any reporting units, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, the Company performs a quantitative goodwill impairment test that requires it to estimate the fair value of the reporting unit. The quantitative 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 under the income approach classified in Level 3 of the fair value hierarchy and comparable company market valuation classified in Level 2 of the fair value hierarchy approaches. If the carrying value of a reporting unit exceeds its fair value, the Company will measure any goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. 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. Under a qualitative approach, the Company’s impairment review for tradenames consists of an assessment of whether it is more-likely-than-not that a tradename’s fair value is less than its carrying value. If the Company elects to bypass the qualitative assessment for any tradename, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a tradename exceeds its fair value, the Company performs a quantitative tradename impairment test of the tradename. The quantitative impairment evaluation for tradenames involves a comparison of the estimated fair value of the tradename to its carrying amount. If the carrying value of the tradename exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the tradenames. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, applicable discount rate 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 tradenames. Estimated cash flows are sensitive to changes in the economy among other things. Intangible assets with finite lives are amortized based on average lives, which range from 5-20 years.
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Leases | Leases The Company measures right of use (“ROU”) assets and lease liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage. As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost. The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expensed as incurred. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 10 years. Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of the Company’s leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
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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.
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Financial Instruments | Financial Instruments The Company’s financial instruments consist primarily of short-term investments, 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 Company has a wholly-owned captive insurance company that may periodically invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon level two fair value hierarchy. The carrying amount of the Company’s variable-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.
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Advertising Costs and Vendor Consideration | Advertising Costs and Vendor ConsiderationAdvertising and promotion expenses are charged to earnings during the period in which they are incurred.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. |
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.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived asset groups, which include intangible assets such as patents and customer relationships subject to amortization, 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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Foreign Currency Translation | Foreign Currency TranslationThe Company’s subsidiaries that operate outside the United States generally 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. OperationsThe 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 has in the past and might in the future use 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. |
Earnings per Share ("EPS") | Earnings per Share (“EPS”) Basic earnings per share 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 and unvested restricted shares (units) 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 excluded from the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2022, 2021 and 2020.
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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.
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Employee Benefit Plans | Employee Benefit Plans The Company has 401(k) retirement savings plans (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 60 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 $63,648 and $24,483 in 2022, $61,082 and $23,884 in 2021 and $56,241 and $13,509 in 2020, respectively. The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within Flooring ROW. 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.
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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 pension and post-retirement benefit service cost. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested. The Company presents currency translation adjustments on noncontrolling interests separately from currency translation adjustments on controlling interests in accumulated other comprehensive income (loss) within stockholders’ equity.
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Self-Insurance Reserves | Self-Insurance Reserves The Company is self-insured in the U.S. for various levels of general liability, automobile liability, workers’ compensation and employee medical coverage. Insurance reserves 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. The Company has a wholly-owned captive insurance company, Mohawk Assurance Services, Inc. (“MAS”). MAS insures the retained portion of the Company’s U.S. general liability, automobile liability, workers’ compensation exposures, pandemic, terrorism and medical coverage to MAS.
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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.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements—Recently Adopted In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes which simplified the accounting for income taxes in several areas by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes. The Company adopted the new standard on January 1, 2021. The effect of adopting the new standard was not material. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further amended by additional accounting standards updates issued by the FASB. The new standard replaced the incurred loss impairment methodology for recognizing credit losses with a new methodology that requires recognition of lifetime expected credit losses when a financial asset is originated or purchased, even if the risk of loss is remote. The new methodology (referred to as the current expected credit losses model, or “CECL”) applies to most financial assets measured at amortized cost, including trade receivables, and requires consideration of a broader range of reasonable and supportable information to estimate expected credit losses. The Company adopted the new standard on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computations of Basic and Diluted Earnings Per Share | Computations of basic and diluted earnings per share are presented for the years ended December 31, 2022, 2021 and 2020, respectively, in the following table:
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Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component, net of tax, for the years ended December 31, 2022, 2021 and 2020 are as follows:
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Revenue from Contracts with Customers (Tables) |
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Summary of Disaggregated Revenue | The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories during the years ended December 31, 2022, 2021 and 2020, respectively:
(1) Other includes roofing elements, insulation boards, chipboards and IP contracts.
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Restructuring, Acquisition and Integration-Related Costs (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | Restructuring, acquisition and integration-related costs consisted of the following during the year ended December 31, 2022, 2021 and 2020, respectively (in thousands):
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Schedule of Restructuring and Related Costs | The restructuring activity for the years ended December 31, 2022 and 2021, respectively is as follows (in thousands):
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Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements | The following table presents the items measured at fair value as of December 31, 2022 and December 31, 2021:
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Receivables, net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Components of Receivables |
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Schedule of 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:
(1) Represents charge-offs, net of recoveries.
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Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Components of Inventories | The components of inventories are as follows:
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Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill and Intangible Assets | The following tables summarize the components of goodwill and intangible assets: Goodwill:
(1) Net of accumulated impairment losses of $1,327,425 ($531,930 in Global Ceramic, $343,054 in Flooring NA and $452,441 in Flooring ROW).
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Schedule of Indefinite Life Assets Not Subject to Amortization |
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Schedule of Intangible Assets Subject to Amortization |
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Schedule of Amortization Expense |
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Schedule of Expected Amortization Expense | Estimated amortization expense for the years ending December 31 are as follows:
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Property, Plant and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant and Equipment | Following is a summary of property, plant and equipment:
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Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The fair values and carrying values of the Company’s debt instruments are detailed as follows:
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Schedule of Maturities of Long-Term Debt | The aggregate maturities of total debt as of December 31, 2022 are as follows (1):
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Accounts Payable and Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are as follows:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease costs for the twelve months ended December 31, 2022, 2021 and 2020, respectively, are as follows:
Lease term and discount rate are as follows:
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Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases is as follows:
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Schedule of Maturity of Operating Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows:
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Schedule of Maturity of Finance Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows:
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Schedule of Supplemental Cash Flow Information | Supplemental cash flow information related to leases was as follows:
(1) Amortization of ROU operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of RSUs Under the Long-Term Incentive Plans | A summary of the Company’s RSUs under the Company’s long-term incentive plans as of December 31, 2022, and changes during the year then ended is presented as follows:
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Summary of Additional Information for RSUs Under the Long-Term Incentive Plans | Additional information relating to the Company’s RSUs under the Company’s long-term incentive plans are as follows:
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Other Expense (Income) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other Expense (Income) | Following is a summary of other expense (income):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings (Loss) From Continuing Operations Before Income Taxes | Following is a summary of (loss) earnings before income taxes for United States and foreign operations:
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Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) for the years ended December 31, 2022, 2021 and 2020 consists of the following:
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Schedule of Reconciliation Of Income Tax Expense (Benefit) | Income tax expense (benefit) attributable to earnings before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:
(1) Foreign income taxes include statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items. (2) The CARES Act permits the Company to carry back its 2020 U.S. taxable loss to a tax year before the corporate income tax rate was lowered by the Tax Cuts and Jobs Act. (3) The company realized a one-time Italian step-up benefit allowing for the realignment of tax asset values.
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Schedule of 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, 2022 and 2021 are presented below:
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Schedule of Reconciliation Of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Consolidated Statements of Cash Flows Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Disclosures of Cash Flow Information | Supplemental disclosures of cash flow information are as follows:
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Segment Reporting (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Information | Segment information is as follows:
(1) Long-lived assets are composed of property, plant and equipment - net, and ROU operating lease assets. (2) Other includes roofing elements, insulation boards, chipboards and IP contracts.
|
Summary of Significant Accounting Policies - Schedule of Computations Of Basic And Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounting Policies [Abstract] | |||
Net earnings available to common stockholders | $ 25,247 | $ 1,033,159 | $ 515,595 |
Weighted-average common shares outstanding—basic and diluted: | |||
Weighted-average common shares outstanding-basic (in shares) | 63,826 | 68,852 | 71,214 |
Add weighted-average dilutive potential common shares - options and to purchase common shares and RSUs, net (in shares) | 236 | 293 | 187 |
Weighted-average common shares outstanding-diluted (in shares) | 64,062 | 69,145 | 71,401 |
Earnings per share attributable to Mohawk Industries, Inc. | |||
Basic (in dollars per share) | $ 0.40 | $ 15.01 | $ 7.24 |
Diluted (in dollars per share) | $ 0.39 | $ 14.94 | $ 7.22 |
Revenue from Contracts with Customers - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue from Contract with Customer [Abstract] | |||
Contract liability | $ 72,572,000 | $ 65,744,000 | |
Revenue recognized related to contract liabilities | 0 | 0 | $ 0 |
Capitalized contract cost | 59,015,000 | 49,644,000 | |
Amortization of capitalized contract costs | $ 55,520,000 | $ 61,681,000 | $ 68,201,000 |
Restructuring, Acquisition and Integration-Related Costs - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring | $ 76,715 | $ 19,200 | |
Cost of sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring | 67,621 | 17,899 | $ 101,230 |
Acquisition integration-related costs | 396 | 497 | 1,153 |
Restructuring and acquisition integration-related costs | 68,017 | 18,396 | 102,383 |
Selling, general and administrative expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring | 9,094 | 1,301 | 24,127 |
Acquisition integration-related costs | 2,992 | 1,568 | 2,127 |
Acquisition transaction-related costs | 1,654 | 2,372 | 213 |
Restructuring and acquisition integration-related costs | $ 13,740 | $ 5,241 | $ 26,467 |
Fair Value - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair value, recurring | Level 2 | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 158,000 | $ 323,000 |
Receivables, net - Schedule of Net Components Of Receivables (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Receivables [Abstract] | ||
Customers, trade | $ 1,699,130 | $ 1,721,584 |
Income tax receivable | 60,080 | 73,727 |
Other | 219,355 | 117,823 |
Receivables, gross | 1,978,565 | 1,913,134 |
Less: allowance for discounts, returns, claims and doubtful accounts | 73,779 | 73,149 |
Receivables, net | $ 1,904,786 | $ 1,839,985 |
Receivables, net - Schedule of Allowances For Discounts, Returns, Claims And Doubtful Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of year | $ 73,149 | $ 83,682 | $ 61,921 |
Acquisitions | 584 | 644 | 0 |
Additions charged to net sales or costs and expenses | 382,027 | 357,635 | 384,403 |
Deductions | 381,981 | 368,812 | 362,642 |
Balance at end of year | $ 73,779 | $ 73,149 | $ 83,682 |
Inventories - Schedule of Net Components of Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,986,005 | $ 1,677,707 |
Work in process | 160,757 | 144,004 |
Raw materials | 647,003 | 569,961 |
Total inventories | $ 2,793,765 | $ 2,391,672 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Oct. 01, 2022 |
Dec. 31, 2022 |
|
Goodwill [Line Items] | ||
Impairment charge during the period | $ 688,514 | |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Impairment of goodwill and indefinite-lived intangibles | |
Global Ceramic | ||
Goodwill [Line Items] | ||
Impairment charge during the period | $ 688,514 | |
Non-cash goodwill impairment charge , net of tax | 679,664 | |
Flooring ROW and Flooring NA | ||
Goodwill [Line Items] | ||
Impairment charge | 7,257 | |
Impairment of intangible assets net of tax | $ 5,939 | |
Flooring ROW | ||
Goodwill [Line Items] | ||
Excess of fair value over carrying value (as a percent) | 20.00% | |
Flooring NA | ||
Goodwill [Line Items] | ||
Excess of fair value over carrying value (as a percent) | 5.00% |
Goodwill and Other Intangible Assets - Schedule of Indefinite Life Assets Not Subject to Amortization (Details) - Tradenames - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Indefinite-lived Intangible Assets [Roll Forward] | ||
Indefinite life assets not subject to amortization, beginning balance | $ 694,905 | $ 727,268 |
Intangible assets acquired during the year | 2,725 | |
Currency translation during the year | (19,655) | (35,088) |
Intangible assets acquired during the year | 335 | |
Intangible assets impaired during the year | (7,257) | |
Indefinite life assets not subject to amortization, ending balance | $ 668,328 | $ 694,905 |
Goodwill and Other Intangible Assets - Schedule of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Finite-lived Intangible Assets [Roll Forward] | |||
Gross carrying amount | $ 924,186 | $ 943,299 | $ 980,310 |
Accumulated amortization | (734,566) | (738,224) | (755,971) |
Net Value | 189,620 | 205,075 | 224,339 |
Customer relationships | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross carrying amount | 673,586 | 680,177 | 699,795 |
Accumulated amortization | (493,361) | (483,748) | (481,256) |
Net Value | 180,225 | 196,429 | 218,539 |
Patents | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross carrying amount | 242,089 | 256,336 | 273,570 |
Accumulated amortization | (239,010) | (252,414) | (273,426) |
Net Value | 3,079 | 3,922 | 144 |
Other | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Gross carrying amount | 8,511 | 6,786 | 6,945 |
Accumulated amortization | (2,195) | (2,062) | (1,289) |
Net Value | $ 6,316 | $ 4,724 | $ 5,656 |
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 28,086 | $ 29,280 | $ 28,891 |
Goodwill and Other Intangible Assets - Schedule of Expected Amortization Expense (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 28,049 |
2024 | 27,334 |
2025 | 27,117 |
2026 | 26,896 |
2027 | $ 19,972 |
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Abstract] | |||
Capitalized interest included in property, plant and equipment | $ 16,895 | $ 9,082 | $ 6,362 |
Depreciation expense | 564,255 | 558,818 | $ 574,095 |
Finance leases | 82,653 | 67,984 | |
Finance leases, accumulated depreciation | $ 30,218 | $ 19,902 |
Long-Term Debt - Commercial Paper (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Jul. 31, 2015 |
Feb. 28, 2014 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Oct. 18, 2019 |
|
United States | Commercial Paper | |||||
Line of Credit Facility [Line Items] | |||||
Maturity period of debt | 397 days | ||||
Maximum borrowing capacity under credit facility | $ 1,950,000,000 | ||||
Europe | Commercial Paper | |||||
Line of Credit Facility [Line Items] | |||||
Maturity period of debt | 183 days | ||||
Carrying Value | United States | |||||
Line of Credit Facility [Line Items] | |||||
Commercial paper | $ 785,998,000 | $ 598,000,000 | |||
Carrying Value | United States | Commercial Paper | |||||
Line of Credit Facility [Line Items] | |||||
Maturity period of debt | 27 years | ||||
Weighted average interest rate on debt | 4.85% | ||||
Carrying Value | Europe | |||||
Line of Credit Facility [Line Items] | |||||
Commercial paper | $ 42,808,000 | $ 15,859,000 | |||
Carrying Value | Europe | Commercial Paper | |||||
Line of Credit Facility [Line Items] | |||||
Maturity period of debt | 11 years 9 months 18 days | ||||
Weighted average interest rate on debt | 1.98% |
Long-Term Debt - Aggregate Maturities Of Long-Term Debt (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2023 | $ 840,571 |
2024 | 920,725 |
2025 | 9,012 |
2026 | 6,990 |
2027 | 539,284 |
Thereafter | 509,822 |
Long-term debt, less current portion | $ 2,826,404 |
Accounts Payable and Accrued Expenses - Schedule of Components of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Payables and Accruals [Abstract] | ||
Outstanding checks in excess of cash | $ 2,791 | $ 3,005 |
Accounts payable, trade | 1,094,038 | 1,228,621 |
Accrued expenses | 742,099 | 666,209 |
Product warranties | 38,425 | 45,215 |
Accrued interest | 8,748 | 17,940 |
Accrued compensation and benefits | 238,347 | 256,428 |
Total accounts payable and accrued expenses | $ 2,124,448 | $ 2,217,418 |
Leases - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating lease costs | |||
Fixed | $ 132,037 | $ 124,781 | $ 127,571 |
Short-term | 36,159 | 31,849 | 27,654 |
Variable | 43,674 | 38,076 | 38,321 |
Sub-leases | (2,343) | (1,642) | (1,152) |
Operating lease costs | 209,527 | 193,064 | 192,394 |
Finance lease costs | |||
Amortization of leased assets | 11,108 | 9,193 | 6,423 |
Interest on lease liabilities | 816 | 772 | 690 |
Finance lease costs | 11,924 | 9,965 | 7,113 |
Net lease costs | 221,451 | 203,029 | 199,507 |
Cost of Sales | |||
Operating lease costs | |||
Fixed | 21,321 | 20,130 | 25,067 |
Short-term | 17,005 | 13,415 | 11,633 |
Variable | 7,689 | 7,949 | 8,285 |
Sub-leases | (691) | (529) | (411) |
Operating lease costs | 45,324 | 40,965 | 44,574 |
Selling, general and administrative expenses | |||
Operating lease costs | |||
Fixed | 110,716 | 104,651 | 102,504 |
Short-term | 19,154 | 18,434 | 16,021 |
Variable | 35,985 | 30,127 | 30,036 |
Sub-leases | (1,652) | (1,113) | (741) |
Operating lease costs | 164,203 | 152,099 | 147,820 |
Depreciation and Amortization | |||
Finance lease costs | |||
Amortization of leased assets | 11,108 | 9,193 | 6,423 |
Interest on lease liabilities | 0 | 0 | 0 |
Finance lease costs | 11,108 | 9,193 | 6,423 |
Interest | |||
Finance lease costs | |||
Amortization of leased assets | 0 | 0 | 0 |
Interest on lease liabilities | 816 | 772 | 690 |
Finance lease costs | $ 816 | $ 772 | $ 690 |
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases | ||
ROU operating lease assets | $ 387,816 | $ 389,967 |
Finance Leases | ||
Property, plant and equipment, gross | 82,653 | 67,984 |
Accumulated depreciation | (30,218) | (19,902) |
Property, plant and equipment, net | 52,435 | 48,082 |
Total lease assets | $ 440,251 | $ 438,049 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Operating Leases | ||
Other current | $ 105,266 | $ 104,434 |
Non-current | 296,136 | 297,390 |
Total operating liabilities | 401,402 | 401,824 |
Finance Leases | ||
Short-term debt | 11,765 | 9,560 |
Long-term debt | 40,285 | 38,390 |
Total finance liabilities | 52,050 | 47,950 |
Total lease liabilities | $ 453,452 | $ 449,774 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Less current portion of long term-debt and commercial paper | Less current portion of long term-debt and commercial paper |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt, less current portion | Long-term debt, less current portion |
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Finance Leases | ||
2023 | $ 12,574 | |
2024 | 10,939 | |
2025 | 9,498 | |
2026 | 7,344 | |
2027 | 4,433 | |
Thereafter | 10,509 | |
Total lease payments | 55,297 | |
Less imputed interest | 3,247 | |
Present value, Total | 52,050 | $ 47,950 |
Operating Leases | ||
2023 | 125,068 | |
2024 | 103,229 | |
2025 | 82,839 | |
2026 | 61,815 | |
2027 | 34,829 | |
Thereafter | 27,414 | |
Total lease payments | 435,194 | |
Less imputed interest | 33,792 | |
Present value, Total | 401,402 | $ 401,824 |
Total | ||
2023 | 137,642 | |
2024 | 114,168 | |
2025 | 92,337 | |
2026 | 69,159 | |
2027 | 39,262 | |
Thereafter | 37,923 | |
Total lease payments | $ 490,491 |
Leases - Narrative (Details) $ in Thousands |
Dec. 31, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
Amount of leases not yet commenced | $ 6,516 |
Leases - Schedule of Lease Term and Discount Rate (Details) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Weighted Average Remaining Lease Term | ||
Operating Leases | 4 years 6 months | 4 years 8 months 12 days |
Finance Leases | 6 years 2 months 12 days | 7 years 2 months 12 days |
Weighted Average Discount Rate | ||
Operating Leases | 3.80% | 2.40% |
Finance Leases | 1.50% | 1.30% |
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Cash paid for amounts included in measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 129,895 | $ 122,886 | $ 124,708 |
Operating cash flows from finance leases | 816 | 772 | 690 |
Financing cash flows from finance leases | 10,770 | 9,289 | 6,386 |
ROU assets obtained in exchange for lease obligations: | |||
Operating leases | 119,115 | 186,605 | 110,036 |
Finance leases | 16,160 | 13,395 | 18,248 |
Amortization of right of use operating lease assets | $ 120,666 | $ 115,650 | $ 113,898 |
Stock-Based Compensation - Schedule of Additional Information for RSU's Under The Long-Term Incentive Plans (Details) - 2007 and 2012 Incentive plan - Restricted Stock Units (RSUs) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Shares | |||
RSUs outstanding, beginning balance (in shares) | 439 | 375 | 362 |
Granted (in shares) | 192 | 194 | 192 |
Released (in shares) | (134) | (105) | (146) |
Forfeited (in shares) | (43) | (25) | (33) |
RSUs outstanding, ending balance (in shares) | 454 | 439 | 375 |
Expected to vest at end of year (in shares) | 437 | 418 | 361 |
Other Expense (Income) - Summary of Other Expense (Income) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other Nonoperating Income (Expense) [Abstract] | |||
Foreign currency losses (gains), net | $ 15,429 | $ 6,298 | $ 7,815 |
Release of indemnification asset | 7,324 | 0 | 0 |
Impairment of joint venture in Brazil | 0 | 0 | 3,599 |
Resolution of foreign non-income tax contingencies | 0 | (6,211) | 0 |
All other, net | (14,367) | (12,321) | (12,165) |
Total other expense (income), net | $ 8,386 | $ (12,234) | $ (751) |
Income Taxes - Schedule of Earnings (Loss) From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ (233,208) | $ 380,632 | $ 94,829 |
Foreign | 417,101 | 909,361 | 489,545 |
Earnings before income taxes | $ 183,893 | $ 1,289,993 | $ 584,374 |
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Current income taxes: | |||
U.S. federal | $ 91,948 | $ 93,085 | $ (33,821) |
State and local | 11,230 | 24,904 | 7,794 |
Foreign | 106,032 | 143,385 | 72,350 |
Total current | 209,210 | 261,374 | 46,323 |
Deferred income taxes: | |||
U.S. federal | (27,756) | (2,655) | 14,533 |
State and local | 9,586 | 13,306 | 112 |
Foreign | (32,930) | (15,580) | 7,679 |
Total deferred | (51,100) | (4,929) | 22,324 |
Total income tax expense | $ 158,110 | $ 256,445 | $ 68,647 |
Income Taxes - Schedule of Reconciliation Of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Income taxes at statutory rate | $ 38,618 | $ 270,898 | $ 122,719 |
State and local income taxes, net of federal income tax benefit | 4,858 | 25,658 | 8,081 |
Foreign income taxes | (50,483) | (34,981) | (57,898) |
Change in valuation allowance | 44,814 | 5,947 | 35,381 |
Impairment of non-deductible goodwill | 132,497 | 0 | 0 |
Loss on previously taxed earnings | 0 | 0 | (10,346) |
Carryback rate differential | 0 | (15,743) | (33,739) |
Fixed asset adjustments | (7,289) | (7,113) | (8,630) |
Non-deductible expenses | 11,250 | 8,128 | 8,424 |
General business credits and incentives | (21,833) | (3,958) | (4,004) |
Global intangible low-taxed income | 7,200 | 34,400 | 2,500 |
Italy step-up adjustment | 0 | (22,163) | 0 |
Tax contingencies and audit settlements, net | (96) | 12,505 | 6,779 |
Other, net | (1,426) | (17,133) | (620) |
Total income tax expense | $ 158,110 | $ 256,445 | $ 68,647 |
Income Taxes - Schedule of Deferred Tax Assets And Deferred Tax Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred tax assets: | ||
Accounts receivable | $ 15,783 | $ 16,550 |
Inventories | 53,088 | 38,388 |
Employee benefits | 47,089 | 54,865 |
Accrued expenses and other | 95,682 | 73,983 |
Deductible state tax and interest benefit | 7,584 | 7,206 |
Intangibles | 122,710 | 135,777 |
Lease liabilities | 108,596 | 106,753 |
Interest expense | 10,749 | 0 |
Federal, foreign and state net operating losses and credits | 448,759 | 408,434 |
Gross deferred tax assets | 910,040 | 841,956 |
Valuation allowance | (284,347) | (236,357) |
Net deferred tax assets | 625,693 | 605,599 |
Deferred tax liabilities: | ||
Inventories | (17,415) | (23,484) |
Plant and equipment | (463,810) | (467,451) |
Intangibles | (175,788) | (188,417) |
Right of use operating lease assets | (102,959) | (101,935) |
Prepaids | (47,079) | (45,077) |
Other liabilities | (58,799) | (67,914) |
Gross deferred tax liabilities | (865,850) | (894,278) |
Net deferred tax liability | $ (240,157) | $ (288,679) |
Income Taxes - Schedule of Reconciliation Of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Balance as of January 1 | $ 1,296,523 | $ 1,388,391 |
Additions based on tax positions related to the current year | 1,439 | 458 |
Additions for tax positions of prior years | 4,678 | 18,001 |
Reductions resulting from the lapse of the statute of limitations | (3,419) | (3,336) |
Effects of foreign currency translation | (68,589) | (106,991) |
Balance as of December 31 | $ 1,230,632 | $ 1,296,523 |
Consolidated Statements of Cash Flows Information - Schedule of Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Net cash paid during the years for: | |||
Interest | $ 75,199 | $ 75,514 | $ 44,584 |
Income taxes | 248,693 | 323,718 | 106,891 |
Supplemental schedule of non-cash investing and financing activities: | |||
Unpaid property plant and equipment in accounts payable and accrued expenses | 118,701 | 117,084 | 90,767 |
Fair value of net assets acquired in acquisition | 243,934 | 176,924 | 0 |
Liabilities assumed in acquisition | (34,332) | (52,955) | 0 |
Noncash investing and financing activities, total | $ 209,602 | $ 123,969 | $ 0 |
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