ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
52-1604305
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(State or other jurisdiction of
incorporation or organization)
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|
(I.R.S. Employer
Identification No.)
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|
|
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160 S. Industrial Blvd.,
Calhoun, Georgia
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|
30701
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $.01 par value
|
|
New York Stock Exchange
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Large accelerated filer
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|
ý
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Accelerated filer
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|
¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
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Business
|
•
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annual reports on Form 10-K;
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•
|
quarterly reports on Form 10-Q;
|
•
|
current reports on Form 8-K; and
|
•
|
amendments to the foregoing reports.
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Item 1A.
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Risk Factors
|
•
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maintaining executive offices in different locations;
|
•
|
manufacturing and selling different types of products through different distribution channels;
|
•
|
conducting business from various locations;
|
•
|
maintaining different operating systems and software on different computer hardware; and
|
•
|
providing different employment and compensation arrangements for employees.
|
•
|
changes in foreign country regulatory requirements;
|
•
|
differing business practices associated with foreign operations;
|
•
|
various import/export restrictions and the availability of required import/export licenses;
|
•
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imposition of foreign tariffs and other trade barriers;
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•
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political, legal and economic instability;
|
•
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foreign currency exchange rate fluctuations;
|
•
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foreign country tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations in tax laws;
|
•
|
inflation;
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•
|
differing labor laws and changes in those laws;
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•
|
work stoppages and disruptions in the shipping of imported and exported products;
|
•
|
government price controls;
|
•
|
extended payment terms and the inability to collect accounts receivable;
|
•
|
tax inefficiencies and currency exchange controls that may adversely impact its ability to repatriate cash from non-U.S. subsidiaries; and
|
•
|
compliance with laws governing international relations, including those that prohibit improper payments to government officials.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
|
Properties
|
|
Mohawk Segment
|
|
Dal-Tile Segment
|
|
Unilin Segment
|
||||||||||||
Primary Purpose
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
||||||
Manufacturing
|
17.7
|
|
|
—
|
|
|
4.6
|
|
|
0.1
|
|
|
8.7
|
|
|
0.4
|
|
Selling and Distribution
|
3.7
|
|
|
4.8
|
|
|
0.4
|
|
|
7.4
|
|
|
0.1
|
|
|
0.3
|
|
Other
|
0.9
|
|
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|
—
|
|
Total
|
22.3
|
|
|
4.9
|
|
|
5.2
|
|
|
7.8
|
|
|
8.9
|
|
|
0.7
|
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Item 6.
|
Selected Financial Data
|
|
As of or for the Years Ended December 31,
|
||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
||||||
|
(In thousands, except per share data)
|
||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
||||||
Net sales (a)
|
$
|
5,787,980
|
|
|
5,642,258
|
|
|
5,319,072
|
|
|
5,344,024
|
|
|
6,826,348
|
|
Cost of sales (a)
|
4,297,922
|
|
|
4,225,379
|
|
|
3,916,472
|
|
|
4,111,794
|
|
|
5,088,584
|
|
|
Gross profit
|
1,490,058
|
|
|
1,416,879
|
|
|
1,402,600
|
|
|
1,232,230
|
|
|
1,737,764
|
|
|
Selling, general and administrative expenses
|
1,110,550
|
|
|
1,101,337
|
|
|
1,088,431
|
|
|
1,188,500
|
|
|
1,318,501
|
|
|
Impairment of goodwill and other intangibles (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,543,397
|
|
|
Operating income (loss)
|
379,508
|
|
|
315,542
|
|
|
314,169
|
|
|
43,730
|
|
|
(1,124,134
|
)
|
|
Interest expense
|
74,713
|
|
|
101,617
|
|
|
133,151
|
|
|
127,031
|
|
|
127,050
|
|
|
Other expense (income), net (c)
|
303
|
|
|
14,051
|
|
|
(11,630
|
)
|
|
(5,588
|
)
|
|
21,288
|
|
|
Earnings (loss) before income taxes
|
304,492
|
|
|
199,874
|
|
|
192,648
|
|
|
(77,713
|
)
|
|
(1,272,472
|
)
|
|
Income tax expense (benefit) (d)
|
53,599
|
|
|
21,649
|
|
|
2,713
|
|
|
(76,694
|
)
|
|
180,062
|
|
|
Net earnings (loss)
|
250,893
|
|
|
178,225
|
|
|
189,935
|
|
|
(1,019
|
)
|
|
(1,452,534
|
)
|
|
Less: Net earnings attributable to the noncontrolling interest
|
635
|
|
|
4,303
|
|
|
4,464
|
|
|
4,480
|
|
|
5,694
|
|
|
Net earnings (loss) attributable to Mohawk Industries, Inc.
|
$
|
250,258
|
|
|
173,922
|
|
|
185,471
|
|
|
(5,499
|
)
|
|
(1,458,228
|
)
|
Basic earnings (loss) per share
|
$
|
3.63
|
|
|
2.53
|
|
|
2.66
|
|
|
(0.08
|
)
|
|
(21.32
|
)
|
Diluted earnings (loss) per share
|
$
|
3.61
|
|
|
2.52
|
|
|
2.65
|
|
|
(0.08
|
)
|
|
(21.32
|
)
|
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||
Working capital (includes short-term debt)
|
$
|
1,721,397
|
|
|
1,296,818
|
|
|
1,199,699
|
|
|
1,474,978
|
|
|
1,369,333
|
|
Total assets (b and d)
|
6,303,684
|
|
|
6,206,228
|
|
|
6,098,926
|
|
|
6,391,446
|
|
|
6,446,175
|
|
|
Long-term debt (including current portion)
|
1,382,942
|
|
|
1,586,439
|
|
|
1,653,582
|
|
|
1,854,479
|
|
|
1,954,786
|
|
|
Total stockholders’ equity
|
3,719,617
|
|
|
3,415,785
|
|
|
3,271,556
|
|
|
3,200,823
|
|
|
3,153,803
|
|
(a)
|
During 2009, the Company recognized an increased number of warranty claims related to the performance of commercial carpet tiles that used a newer carpet backing technology. As a result, the Company recorded a $121,224 carpet sales allowance and a $12,268 inventory write-off.
|
(b)
|
In 2008, the Company recorded an impairment of goodwill and other intangibles which included $276,807 for the Mohawk segment, $531,930 for the Dal-Tile segment and $734,660 for the Unilin segment.
|
(c)
|
In 2010, the Company received $7,730 in refunds from the U.S. government in reference to settlement of customs disputes dating back to 1986.
|
(d)
|
In 2008, the Company recorded a valuation allowance of approximately $253,000 against the deferred tax asset recorded in 2007 as a result of a change in residency the Company implemented in one of its foreign subsidiaries.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
For the Years Ended December 31,
|
|||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|||||||||||||
|
(In millions)
|
|||||||||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
5,788.0
|
|
|
100.0
|
%
|
|
5,642.3
|
|
|
100.0
|
%
|
|
5,319.1
|
|
|
100.0
|
%
|
Cost of sales (1)
|
4,297.9
|
|
|
74.3
|
%
|
|
4,225.4
|
|
|
74.9
|
%
|
|
3,916.5
|
|
|
73.6
|
%
|
|
Gross profit
|
1,490.1
|
|
|
25.7
|
%
|
|
1,416.9
|
|
|
25.1
|
%
|
|
1,402.6
|
|
|
26.4
|
%
|
|
Selling, general and administrative expenses (2)
|
1,110.6
|
|
|
19.2
|
%
|
|
1,101.3
|
|
|
19.5
|
%
|
|
1,088.4
|
|
|
20.5
|
%
|
|
Operating income
|
379.5
|
|
|
6.6
|
%
|
|
315.6
|
|
|
5.6
|
%
|
|
314.2
|
|
|
5.9
|
%
|
|
Interest expense (3)
|
74.7
|
|
|
1.3
|
%
|
|
101.6
|
|
|
1.8
|
%
|
|
133.2
|
|
|
2.5
|
%
|
|
Other expense (income) (4)
|
0.3
|
|
|
0.0
|
%
|
|
14.1
|
|
|
0.2
|
%
|
|
(11.6
|
)
|
|
(0.2
|
)%
|
|
Earnings before income taxes
|
304.5
|
|
|
5.3
|
%
|
|
199.9
|
|
|
3.5
|
%
|
|
192.6
|
|
|
3.6
|
%
|
|
Income tax expense
|
53.6
|
|
|
0.9
|
%
|
|
21.7
|
|
|
0.4
|
%
|
|
2.7
|
|
|
0.1
|
%
|
|
Net earnings
|
250.9
|
|
|
4.3
|
%
|
|
178.2
|
|
|
3.2
|
%
|
|
189.9
|
|
|
3.6
|
%
|
|
Less: Net earnings attributable to the noncontrolling interest
|
0.6
|
|
|
0.0
|
%
|
|
4.3
|
|
|
0.1
|
%
|
|
4.4
|
|
|
0.1
|
%
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
250.3
|
|
|
4.3
|
%
|
|
173.9
|
|
|
3.1
|
%
|
|
185.5
|
|
|
3.5
|
%
|
(1) Cost of sales includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Restructuring charges
|
$
|
14.8
|
|
|
0.3
|
%
|
|
17.5
|
|
|
0.3
|
%
|
|
12.4
|
|
|
0.2
|
%
|
(2) Selling, general and administrative expenses include:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Restructuring charges
|
3.7
|
|
|
0.1
|
%
|
|
5.7
|
|
|
0.1
|
%
|
|
0.8
|
|
|
—
|
%
|
|
Lease charges
|
—
|
|
|
—
|
%
|
|
6.0
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
|
(3) Interest expense includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt extinguishment costs
|
—
|
|
|
—
|
%
|
|
1.1
|
|
|
—
|
%
|
|
7.5
|
|
|
0.1
|
%
|
|
(4) Other expense (income) includes:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Unrealized foreign currency losses
|
—
|
|
|
—
|
%
|
|
9.1
|
|
|
0.2
|
%
|
|
—
|
|
|
—
|
%
|
|
U.S. customs refund
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(7.7
|
)
|
|
(0.1
|
)%
|
|
Acquisitions purchase accounting
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1.7
|
|
|
—
|
%
|
|
2012
|
|
2011
|
|
Change
|
||||
First quarter
|
$
|
1,409.0
|
|
|
1,343.6
|
|
|
4.9
|
%
|
Second quarter
|
1,469.8
|
|
|
1,477.9
|
|
|
(0.5
|
)%
|
|
Third quarter
|
1,473.5
|
|
|
1,442.5
|
|
|
2.1
|
%
|
|
Fourth quarter
|
1,435.7
|
|
|
1,378.3
|
|
|
4.2
|
%
|
|
Total year
|
$
|
5,788.0
|
|
|
5,642.3
|
|
|
2.6
|
%
|
|
2011
|
|
2010
|
|
Change
|
||||
First quarter
|
$
|
1,343.6
|
|
|
1,347.2
|
|
|
(0.3
|
)%
|
Second quarter
|
1,477.9
|
|
|
1,400.1
|
|
|
5.6
|
%
|
|
Third quarter
|
1,442.5
|
|
|
1,309.6
|
|
|
10.1
|
%
|
|
Fourth quarter
|
1,378.3
|
|
|
1,262.2
|
|
|
9.2
|
%
|
|
Total year
|
$
|
5,642.3
|
|
|
5,319.1
|
|
|
6.1
|
%
|
|
Total
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
||||||||
Recorded Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including current maturities and capital leases
|
$
|
1,382.9
|
|
|
55.2
|
|
|
13.7
|
|
|
300.9
|
|
|
1,012.9
|
|
|
0.2
|
|
|
—
|
|
Unrecorded Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest payments on long-term debt and capital leases (1)
|
234.5
|
|
|
67.1
|
|
|
66.9
|
|
|
66.6
|
|
|
33.8
|
|
|
0.1
|
|
|
—
|
|
|
Operating leases
|
304.5
|
|
|
87.7
|
|
|
75.5
|
|
|
59.3
|
|
|
33.7
|
|
|
21.2
|
|
|
27.1
|
|
|
Purchase commitments (2)
|
145.4
|
|
|
80.3
|
|
|
37.9
|
|
|
26.0
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
Expected pension contributions (3)
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Uncertain tax positions (4)
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Guarantees
|
11.9
|
|
|
8.6
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
699.4
|
|
|
246.8
|
|
|
183.6
|
|
|
151.9
|
|
|
68.7
|
|
|
21.3
|
|
|
27.1
|
|
|
Total
|
$
|
2,082.3
|
|
|
302.0
|
|
|
197.3
|
|
|
452.8
|
|
|
1,081.6
|
|
|
21.5
|
|
|
27.1
|
|
(1)
|
For fixed rate debt, the Company calculated interest based on the applicable rates and payment dates. For variable rate debt, the Company estimated average outstanding balances for the respective periods and applied interest rates in effect as of
December 31, 2012
to these balances.
|
(2)
|
Includes commitments for natural gas, electricity and raw material purchases.
|
(3)
|
Includes the estimated pension contributions for
2013
only, as the Company is unable to estimate the pension contributions beyond
2013
. The Company’s projected benefit obligation and plan assets as of
December 31, 2012
were
$37.6 million
and
$32.6 million
, respectively. The projected benefit obligation liability has not been presented in the table above due to uncertainty as to amounts and timing regarding future payments.
|
(4)
|
Excludes
$33.7 million
of non-current accrued income tax liabilities and related interest and penalties for uncertain tax positions. These liabilities have not been presented in the table above due to uncertainty as to amounts and timing regarding future payments.
|
•
|
Accounts receivable and revenue recognition.
Revenues are recognized when there is persuasive evidence of an arrangement, delivery has occurred, the price has been fixed or is determinable, and collectability can be reasonably assured. The Company provides allowances for expected cash discounts, sales allowances, returns, claims and doubtful accounts based upon historical bad debt and claims experience and periodic evaluation of specific customer accounts and the aging of accounts receivable. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. A 10% change in the Company’s allowance for discounts, returns, claims and doubtful accounts would have affected net earnings by approximately
$2 million
for the year ended
December 31, 2012
.
|
•
|
Inventories are stated at the lower of cost or market (net realizable value).
Cost has been determined using the first-in first-out method (“FIFO”). Costs included in inventory include raw materials, direct and indirect labor and employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. Market, with respect to all inventories, is replacement cost or net realizable value. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence. Actual results could differ from assumptions used to value obsolete inventory, excessive inventory or inventory expected to be sold below cost and additional reserves may be required. A 10% change in the Company’s reserve for excess or obsolete inventory would have affected net earnings by approximately
$4 million
for the year ended
December 31, 2012
.
|
•
|
Goodwill and other intangibles.
Goodwill is tested annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. The Company considers the relationship between its market capitalization and its book value, among other factors, when reviewing for indicators of impairment. The goodwill impairment tests are based on determining the fair value of the specified reporting units based on management judgments and assumptions using the discounted cash flows and comparable company market valuation approaches. The Company has identified Mohawk, Dal-Tile, Unilin Flooring, Unilin Chipboard and Melamine, and Unilin Roofing as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about appropriate sales growth rates, operating margins, weighted average cost of capital (“WACC”), and comparable company market multiples. When developing these key judgments and assumptions, the Company considers economic, operational and market conditions that could impact the fair value of the reporting unit. However, estimates are inherently uncertain and represent only management’s reasonable expectations regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Should a significant or prolonged deterioration in economic conditions occur, such as declines in spending for new construction, remodeling and replacement activities; the inability to pass increases in the costs of raw materials and fuel on to customers; or a decline in comparable company market multiples, then key judgments and assumptions could be impacted. Generally, a decline in estimated after tax cash flows of more than
25%
or a more than
15%
increase in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment.
|
•
|
Income taxes.
The Company’s effective tax rate is based on its income, statutory tax rates and tax planning opportunities available in the jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining the Company’s tax expense and in evaluating the Company’s tax positions. Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in a future period. The Company evaluates the recoverability of these future tax benefits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely on estimates, including business forecasts and other projections of financial results over an extended period of time. In the event that the Company is not able to realize all or a portion of its deferred tax assets in the future, a valuation allowance is provided. The Company would recognize such amounts through a charge to income in the period in which that determination is made or when tax law changes are enacted. The Company had valuation allowances of
$321.6 million
in
2012
, $334.2 million in
2011
and $325.1 million in
2010
. For further information regarding the Company’s valuation allowances, see Note 13 to the consolidated financial statements.
|
•
|
Environmental and legal accruals.
Environmental and legal accruals are estimates based on judgments made by the Company relating to ongoing environmental and legal proceedings, as disclosed in the Company’s consolidated financial statements. In determining whether a liability is probable and reasonably estimable, the Company consults with its internal experts. The Company believes that the amounts recorded in the accompanying financial statements are based on the best estimates and judgments available to it.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Consolidated Financial Statements and Supplementary Data
|
|
|
/s/ KPMG LLP
|
/s/ KPMG LLP
|
|
2012
|
|
2011
|
|||
|
(In thousands, except per share data)
|
|||||
ASSETS
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
477,672
|
|
|
311,945
|
|
Receivables, net
|
679,473
|
|
|
686,165
|
|
|
Inventories
|
1,133,736
|
|
|
1,113,630
|
|
|
Prepaid expenses
|
138,117
|
|
|
112,779
|
|
|
Deferred income taxes
|
111,585
|
|
|
150,910
|
|
|
Other current assets
|
9,463
|
|
|
22,735
|
|
|
Total current assets
|
2,550,046
|
|
|
2,398,164
|
|
|
Property, plant and equipment, net
|
1,692,852
|
|
|
1,712,154
|
|
|
Goodwill
|
1,385,771
|
|
|
1,375,175
|
|
|
Tradenames
|
455,503
|
|
|
450,432
|
|
|
Other intangible assets, net
|
98,296
|
|
|
154,668
|
|
|
Deferred income taxes and other non-current assets
|
121,216
|
|
|
115,635
|
|
|
|
$
|
6,303,684
|
|
|
6,206,228
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
55,213
|
|
|
386,255
|
|
Accounts payable and accrued expenses
|
773,436
|
|
|
715,091
|
|
|
Total current liabilities
|
828,649
|
|
|
1,101,346
|
|
|
Deferred income taxes
|
329,810
|
|
|
355,653
|
|
|
Long-term debt, less current portion
|
1,327,729
|
|
|
1,200,184
|
|
|
Other long-term liabilities
|
97,879
|
|
|
99,537
|
|
|
Total liabilities
|
2,584,067
|
|
|
2,756,720
|
|
|
Commitments and contingencies (Notes 7 and 14)
|
|
|
|
|||
Redeemable noncontrolling interest
|
—
|
|
|
33,723
|
|
|
Stockholders’ equity:
|
|
|
|
|||
Preferred stock, $.01 par value; 60 shares authorized; no shares issued
|
—
|
|
|
—
|
|
|
Common stock, $.01 par value; 150,000 shares authorized; 80,185 and 79,815 shares issued in 2012 and 2011, respectively
|
802
|
|
|
798
|
|
|
Additional paid-in capital
|
1,277,521
|
|
|
1,248,131
|
|
|
Retained earnings
|
2,605,023
|
|
|
2,354,765
|
|
|
Accumulated other comprehensive income, net
|
159,733
|
|
|
135,639
|
|
|
|
4,043,079
|
|
|
3,739,333
|
|
|
Less treasury stock at cost; 11,032 and 11,034 shares in 2012 and 2011, respectively
|
323,462
|
|
|
323,548
|
|
|
Total stockholders’ equity
|
3,719,617
|
|
|
3,415,785
|
|
|
|
$
|
6,303,684
|
|
|
6,206,228
|
|
|
2012
|
|
2011
|
|
2010
|
||||
|
(In thousands, except per share data)
|
||||||||
Net sales
|
$
|
5,787,980
|
|
|
5,642,258
|
|
|
5,319,072
|
|
Cost of sales
|
4,297,922
|
|
|
4,225,379
|
|
|
3,916,472
|
|
|
Gross profit
|
1,490,058
|
|
|
1,416,879
|
|
|
1,402,600
|
|
|
Selling, general and administrative expenses
|
1,110,550
|
|
|
1,101,337
|
|
|
1,088,431
|
|
|
Operating income
|
379,508
|
|
|
315,542
|
|
|
314,169
|
|
|
Interest expense
|
74,713
|
|
|
101,617
|
|
|
133,151
|
|
|
Other expense (income)
|
303
|
|
|
14,051
|
|
|
(11,630
|
)
|
|
Earnings before income taxes
|
304,492
|
|
|
199,874
|
|
|
192,648
|
|
|
Income tax expense
|
53,599
|
|
|
21,649
|
|
|
2,713
|
|
|
Net earnings
|
250,893
|
|
|
178,225
|
|
|
189,935
|
|
|
Less: Net earnings attributable to noncontrolling interest
|
635
|
|
|
4,303
|
|
|
4,464
|
|
|
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
250,258
|
|
|
173,922
|
|
|
185,471
|
|
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
3.63
|
|
|
2.53
|
|
|
2.66
|
|
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
3.61
|
|
|
2.52
|
|
|
2.65
|
|
|
|
2012
|
|
2011
|
|
2010
|
||||
|
|
(in thousands)
|
||||||||
Net earnings
|
|
$
|
250,893
|
|
|
178,225
|
|
|
189,935
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
25,685
|
|
|
(42,006
|
)
|
|
(119,200
|
)
|
|
Pension prior service cost and actuarial (loss) gain
|
|
(1,591
|
)
|
|
(452
|
)
|
|
380
|
|
|
Other comprehensive income (loss)
|
|
24,094
|
|
|
(42,458
|
)
|
|
(118,820
|
)
|
|
Comprehensive income
|
|
274,987
|
|
|
135,767
|
|
|
71,115
|
|
|
Less: comprehensive income attributable to the non-controlling interest
|
|
635
|
|
|
4,303
|
|
|
4,464
|
|
|
Comprehensive income attributable to Mohawk Industries, Inc.
|
|
$
|
274,352
|
|
|
131,464
|
|
|
66,651
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
||||||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interest
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Treasury Stock
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||
Balances at December 31, 2009
|
$
|
33,459
|
|
|
79,518
|
|
|
$
|
795
|
|
|
$
|
1,227,856
|
|
|
$
|
1,998,616
|
|
|
$
|
296,917
|
|
|
(11,034
|
)
|
|
$
|
(323,361
|
)
|
|
$
|
3,200,823
|
|
Shares issued under employee and director stock plans
|
—
|
|
|
148
|
|
|
2
|
|
|
1,685
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(265
|
)
|
|
1,422
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
6,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,888
|
|
|||||||
Tax deficit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
(984
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(984
|
)
|
|||||||
Distribution to noncontrolling interest, net of adjustments
|
(5,726
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Noncontrolling earnings
|
4,464
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Accretion of redeemable noncontrolling interest
|
3,244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,244
|
)
|
|||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,200
|
)
|
|
—
|
|
|
—
|
|
|
(119,200
|
)
|
|||||||
Pension prior service cost and actuarial gain or loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185,471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185,471
|
|
|||||||
Balances at December 31, 2010
|
35,441
|
|
|
79,666
|
|
|
797
|
|
|
1,235,445
|
|
|
2,180,843
|
|
|
178,097
|
|
|
(11,037
|
)
|
|
(323,626
|
)
|
|
3,271,556
|
|
|||||||
Shares issued under employee and director stock plans
|
—
|
|
|
149
|
|
|
1
|
|
|
2,543
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
78
|
|
|
2,622
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
10,159
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,159
|
|
|||||||
Tax deficit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||||
Distribution to noncontrolling interest, net of adjustments
|
(4,764
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Retained distribution noncontrolling interest
|
(1,257
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Noncontrolling earnings
|
4,303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,006
|
)
|
|
—
|
|
|
—
|
|
|
(42,006
|
)
|
|||||||
Pension prior service cost and actuarial gain or loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
|
—
|
|
|
(452
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173,922
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173,922
|
|
|||||||
Balances at December 31, 2011
|
33,723
|
|
|
79,815
|
|
|
798
|
|
|
1,248,131
|
|
|
2,354,765
|
|
|
135,639
|
|
|
(11,034
|
)
|
|
(323,548
|
)
|
|
3,415,785
|
|
|||||||
Shares issued under employee and director stock plans
|
|
|
|
370
|
|
|
4
|
|
|
13,467
|
|
|
|
|
|
|
|
|
2
|
|
|
86
|
|
|
13,557
|
|
|||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
14,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,082
|
|
|||||||
Tax benefit from stock-based compensation
|
|
|
|
|
|
|
|
|
|
1,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,133
|
|
|||||||
Distribution to noncontrolling interest, net of adjustments
|
(423
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Noncontrolling earnings
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Purchase of noncontrolling interest
|
(35,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Tax effect of purchase of noncontrolling interest
|
1,065
|
|
|
|
|
|
|
708
|
|
|
|
|
|
|
|
|
|
|
708
|
|
|||||||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,685
|
|
|
|
|
|
|
|
|
25,685
|
|
|||||||
Pension prior service cost and actuarial gain or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,591
|
)
|
|
|
|
|
|
|
|
(1,591
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
250,258
|
|
|
|
|
|
|
|
|
|
|
|
250,258
|
|
|||||||
Balances at December 31, 2012
|
$
|
—
|
|
|
80,185
|
|
|
$
|
802
|
|
|
$
|
1,277,521
|
|
|
$
|
2,605,023
|
|
|
$
|
159,733
|
|
|
(11,032
|
)
|
|
$
|
(323,462
|
)
|
|
$
|
3,719,617
|
|
|
2012
|
|
2011
|
|
2010
|
||||
|
(In thousands)
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net earnings
|
$
|
250,893
|
|
|
178,225
|
|
|
189,935
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||
Restructuring
|
18,564
|
|
|
23,209
|
|
|
12,341
|
|
|
Depreciation and amortization
|
280,293
|
|
|
297,734
|
|
|
296,773
|
|
|
Deferred income taxes
|
9,037
|
|
|
(4,616
|
)
|
|
(21,279
|
)
|
|
Loss on extinguishment of debt
|
—
|
|
|
1,116
|
|
|
7,514
|
|
|
Loss (gain) on disposal of property, plant and equipment
|
4,782
|
|
|
(1,273
|
)
|
|
(4,975
|
)
|
|
Stock-based compensation expense
|
14,082
|
|
|
10,159
|
|
|
6,888
|
|
|
Other
|
—
|
|
|
(1,257
|
)
|
|
—
|
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||
Receivables, net
|
10,888
|
|
|
(85,391
|
)
|
|
(12,273
|
)
|
|
Income tax receivable
|
—
|
|
|
1,631
|
|
|
68,740
|
|
|
Inventories
|
(17,079
|
)
|
|
(100,205
|
)
|
|
(118,903
|
)
|
|
Accounts payable and accrued expenses
|
39,181
|
|
|
(11,124
|
)
|
|
(86,947
|
)
|
|
Other assets and prepaid expenses
|
(9,864
|
)
|
|
(12,434
|
)
|
|
(11,791
|
)
|
|
Other liabilities
|
(13,187
|
)
|
|
5,219
|
|
|
(6,311
|
)
|
|
Net cash provided by operating activities
|
587,590
|
|
|
300,993
|
|
|
319,712
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||
Additions to property, plant and equipment
|
(208,294
|
)
|
|
(275,573
|
)
|
|
(156,180
|
)
|
|
Proceeds from insurance claim
|
—
|
|
|
—
|
|
|
4,615
|
|
|
Acquisitions, net of cash acquired
|
—
|
|
|
(24,097
|
)
|
|
—
|
|
|
Investment in joint venture
|
(7,007
|
)
|
|
—
|
|
|
(79,917
|
)
|
|
Net cash used in investing activities
|
(215,301
|
)
|
|
(299,670
|
)
|
|
(231,482
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
||||
Payments on revolving line of credit
|
(1,711,425
|
)
|
|
(1,431,349
|
)
|
|
—
|
|
|
Proceeds from revolving line of credit
|
1,567,300
|
|
|
1,729,349
|
|
|
—
|
|
|
Repayment of senior notes
|
(336,270
|
)
|
|
(368,478
|
)
|
|
(199,992
|
)
|
|
Proceeds from asset securitization borrowings
|
280,000
|
|
|
—
|
|
|
—
|
|
|
Borrowings (payments) on term loan and other debt
|
(3,259
|
)
|
|
2,806
|
|
|
(812
|
)
|
|
Debt issuance costs
|
(1,797
|
)
|
|
(8,285
|
)
|
|
—
|
|
|
Debt extinguishment costs
|
—
|
|
|
(1,734
|
)
|
|
(7,514
|
)
|
|
Purchase of non-controlling interest
|
(35,000
|
)
|
|
—
|
|
|
—
|
|
|
Distribution to non-controlling interest
|
(423
|
)
|
|
(4,764
|
)
|
|
(3,472
|
)
|
|
Change in restricted cash
|
—
|
|
|
27,954
|
|
|
(27,954
|
)
|
|
Change in outstanding checks in excess of cash
|
7,890
|
|
|
17,590
|
|
|
(17,900
|
)
|
|
Proceeds from stock transactions
|
16,153
|
|
|
3,787
|
|
|
2,445
|
|
|
Net cash used in financing activities
|
(216,831
|
)
|
|
(33,124
|
)
|
|
(255,199
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
10,269
|
|
|
(10,471
|
)
|
|
(10,272
|
)
|
|
Net change in cash and cash equivalents
|
165,727
|
|
|
(42,272
|
)
|
|
(177,241
|
)
|
|
Cash and cash equivalents, beginning of year
|
311,945
|
|
|
354,217
|
|
|
531,458
|
|
|
Cash and cash equivalents, end of year
|
$
|
477,672
|
|
|
311,945
|
|
|
354,217
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Net earnings attributable to Mohawk Industries, Inc.
|
$
|
250,258
|
|
|
173,922
|
|
|
185,471
|
|
Accretion of redeemable noncontrolling interest (1)
|
—
|
|
|
—
|
|
|
(3,244
|
)
|
|
Net earnings available to common stockholders
|
$
|
250,258
|
|
|
173,922
|
|
|
182,227
|
|
Weighted-average common shares outstanding-basic and diluted:
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
68,988
|
|
|
68,736
|
|
|
68,578
|
|
|
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net
|
318
|
|
|
228
|
|
|
206
|
|
|
Weighted-average common shares outstanding-diluted
|
69,306
|
|
|
68,964
|
|
|
68,784
|
|
|
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
3.63
|
|
|
2.53
|
|
|
2.66
|
|
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
3.61
|
|
|
2.52
|
|
|
2.65
|
|
(1)
|
Amount represents the adjustment to fair value of a redeemable noncontrolling interest in a consolidated subsidiary of the Company.
|
|
Foreign
translation
adjustment
|
|
Pensions
|
|
Total
|
||||
December 31, 2009
|
$
|
296,182
|
|
|
735
|
|
|
296,917
|
|
2010 activity
|
(119,200
|
)
|
|
380
|
|
|
(118,820
|
)
|
|
December 31, 2010
|
176,982
|
|
|
1,115
|
|
|
178,097
|
|
|
2011 activity
|
(42,006
|
)
|
|
(452
|
)
|
|
(42,458
|
)
|
|
December 31, 2011
|
134,976
|
|
|
663
|
|
|
135,639
|
|
|
2012 activity
|
25,685
|
|
|
(1,591
|
)
|
|
24,094
|
|
|
December 31, 2012
|
$
|
160,661
|
|
|
(928
|
)
|
|
159,733
|
|
|
December 31,
2012 |
|
December 31,
2011 |
|||
Customers, trade
|
$
|
691,553
|
|
|
696,856
|
|
Income tax receivable
|
—
|
|
|
1,703
|
|
|
Other
|
25,793
|
|
|
31,311
|
|
|
|
717,346
|
|
|
729,870
|
|
|
Less allowance for discounts, returns, claims and doubtful accounts
|
37,873
|
|
|
43,705
|
|
|
Receivables, net
|
$
|
679,473
|
|
|
686,165
|
|
|
Balance at
beginning
of year
|
|
Additions
charged to
costs and
expenses
|
|
Deductions(1)
|
|
Balance
at end
of year
|
|||||
2010
|
$
|
62,809
|
|
|
170,274
|
|
|
187,328
|
|
|
45,755
|
|
2011
|
45,755
|
|
|
161,073
|
|
|
163,123
|
|
|
43,705
|
|
|
2012
|
43,705
|
|
|
180,616
|
|
|
186,448
|
|
|
37,873
|
|
(1)
|
Represents charge-offs, net of recoveries.
|
|
December 31,
2012 |
|
December 31,
2011 |
|||
Finished goods
|
$
|
695,606
|
|
|
670,877
|
|
Work in process
|
103,685
|
|
|
113,311
|
|
|
Raw materials
|
334,445
|
|
|
329,442
|
|
|
Total inventories
|
$
|
1,133,736
|
|
|
1,113,630
|
|
|
Mohawk
|
|
Dal-Tile
|
|
Unilin
|
|
Total
|
|||||
Balances as of December 31, 2010
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
199,132
|
|
|
1,186,913
|
|
|
1,310,774
|
|
|
2,696,819
|
|
Accumulated impairments losses
|
(199,132
|
)
|
|
(531,930
|
)
|
|
(596,363
|
)
|
|
(1,327,425
|
)
|
|
|
—
|
|
|
654,983
|
|
|
714,411
|
|
|
1,369,394
|
|
|
Goodwill recognized during the year
|
—
|
|
|
—
|
|
|
19,066
|
|
|
19,066
|
|
|
Currency translation during the year
|
—
|
|
|
—
|
|
|
(13,285
|
)
|
|
(13,285
|
)
|
|
Balances as of December 31, 2011
|
|
|
|
|
|
|
|
|||||
Goodwill
|
199,132
|
|
|
1,186,913
|
|
|
1,316,555
|
|
|
2,702,600
|
|
|
Accumulated impairments losses
|
(199,132
|
)
|
|
(531,930
|
)
|
|
(596,363
|
)
|
|
(1,327,425
|
)
|
|
|
—
|
|
|
654,983
|
|
|
720,192
|
|
|
1,375,175
|
|
|
Currency translation during the year
|
—
|
|
|
—
|
|
|
10,596
|
|
|
10,596
|
|
|
Balances as of December 31, 2012
|
|
|
|
|
|
|
|
|||||
Goodwill
|
199,132
|
|
|
1,186,913
|
|
|
1,327,151
|
|
|
2,713,196
|
|
|
Accumulated impairments losses
|
(199,132
|
)
|
|
(531,930
|
)
|
|
(596,363
|
)
|
|
(1,327,425
|
)
|
|
|
$
|
—
|
|
|
654,983
|
|
|
730,788
|
|
|
1,385,771
|
|
|
Customer
relationships
|
|
Patents
|
|
Other
|
|
Total
|
|||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|||||
Balance as of December 31, 2010
|
$
|
106,432
|
|
|
112,520
|
|
|
1,285
|
|
|
220,237
|
|
Intangible assets recognized during the year
|
5,181
|
|
|
—
|
|
|
—
|
|
|
5,181
|
|
|
Amortization during the year
|
(47,460
|
)
|
|
(22,782
|
)
|
|
(122
|
)
|
|
(70,364
|
)
|
|
Currency translation during the year
|
805
|
|
|
(1,194
|
)
|
|
3
|
|
|
(386
|
)
|
|
Balance as of December 31, 2011
|
64,958
|
|
|
88,544
|
|
|
1,166
|
|
|
154,668
|
|
|
Amortization during the year
|
(38,595
|
)
|
|
(18,747
|
)
|
|
(121
|
)
|
|
(57,463
|
)
|
|
Currency translation during the year
|
(153
|
)
|
|
1,234
|
|
|
10
|
|
|
1,091
|
|
|
Balance as of December 31, 2012
|
$
|
26,210
|
|
|
71,031
|
|
|
1,055
|
|
|
98,296
|
|
|
Years Ended December 31,
|
||||||||
|
2012
|
|
2011
|
|
2010
|
||||
Amortization expense
|
$
|
57,463
|
|
|
70,364
|
|
|
69,513
|
|
|
December 31,
2012 |
|
December 31,
2011 |
|||
Land
|
$
|
178,110
|
|
|
180,584
|
|
Buildings and improvements
|
730,668
|
|
|
682,395
|
|
|
Machinery and equipment
|
2,550,779
|
|
|
2,470,485
|
|
|
Furniture and fixtures
|
98,519
|
|
|
90,963
|
|
|
Leasehold improvements
|
54,880
|
|
|
54,501
|
|
|
Construction in progress
|
145,368
|
|
|
160,929
|
|
|
|
3,758,324
|
|
|
3,639,857
|
|
|
Less accumulated depreciation and amortization
|
2,065,472
|
|
|
1,927,703
|
|
|
Net property, plant and equipment
|
$
|
1,692,852
|
|
|
1,712,154
|
|
|
December 31, 2012
|
|
December 31, 2011
|
|||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|||||
7.20% senior notes, payable April 15, 2012 interest payable semiannually
|
$
|
—
|
|
|
—
|
|
|
336,606
|
|
|
336,270
|
|
6.125% notes, payable January 15, 2016 interest payable semiannually
|
1,011,600
|
|
|
900,000
|
|
|
963,900
|
|
|
900,000
|
|
|
Five-year senior secured credit facility, due July 8, 2016
|
153,875
|
|
|
153,875
|
|
|
298,000
|
|
|
298,000
|
|
|
Securitization facility
|
280,000
|
|
|
280,000
|
|
|
—
|
|
|
—
|
|
|
Industrial revenue bonds, capital leases and other
|
49,067
|
|
|
49,067
|
|
|
52,169
|
|
|
52,169
|
|
|
Total long-term debt
|
1,494,542
|
|
|
1,382,942
|
|
|
1,650,675
|
|
|
1,586,439
|
|
|
Less current portion
|
55,213
|
|
|
55,213
|
|
|
386,591
|
|
|
386,255
|
|
|
Long-term debt, less current portion
|
$
|
1,439,329
|
|
|
1,327,729
|
|
|
1,264,084
|
|
|
1,200,184
|
|
2013
|
$
|
55,213
|
|
2014
|
13,653
|
|
|
2015
|
300,944
|
|
|
2016
|
1,012,864
|
|
|
2017
|
229
|
|
|
Thereafter
|
39
|
|
|
|
$
|
1,382,942
|
|
|
|
|
December 31, 2012
|
|
December 31, 2011
|
|||
Outstanding checks in excess of cash
|
$
|
25,480
|
|
|
17,590
|
|
Accounts payable, trade
|
387,871
|
|
|
372,616
|
|
|
Accrued expenses
|
180,039
|
|
|
154,560
|
|
|
Product warranties
|
32,930
|
|
|
30,144
|
|
|
Accrued interest
|
26,843
|
|
|
34,235
|
|
|
Deferred tax liability
|
6,309
|
|
|
8,760
|
|
|
Income taxes payable
|
2,074
|
|
|
—
|
|
|
Accrued compensation and benefits
|
111,890
|
|
|
97,186
|
|
|
Total accounts payable and accrued expenses
|
$
|
773,436
|
|
|
715,091
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Balance at beginning of year
|
$
|
30,144
|
|
|
37,265
|
|
|
66,545
|
|
Warranty claims paid during the year
|
(55,314
|
)
|
|
(57,163
|
)
|
|
(77,017
|
)
|
|
Pre-existing warranty accrual adjustment during the year
|
—
|
|
|
4,473
|
|
|
2,261
|
|
|
Warranty expense during the year
|
58,100
|
|
|
45,569
|
|
|
45,476
|
|
|
Balance at end of year
|
$
|
32,930
|
|
|
30,144
|
|
|
37,265
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Options outstanding at beginning of year
|
1,305
|
|
|
1,371
|
|
|
1,481
|
|
Options granted
|
83
|
|
|
76
|
|
|
40
|
|
Options exercised
|
(277
|
)
|
|
(82
|
)
|
|
(74
|
)
|
Options forfeited and expired
|
(116
|
)
|
|
(60
|
)
|
|
(76
|
)
|
Options outstanding at end of year
|
995
|
|
|
1,305
|
|
|
1,371
|
|
Options exercisable at end of year
|
814
|
|
1,106
|
|
|
1,160
|
|
|
Option prices per share:
|
|
|
|
|
|
|||
Options granted during the year
|
66.14
|
|
|
57.34
|
|
|
46.80
|
|
Options exercised during the year
|
28.37-88.33
|
|
|
28.37-63.14
|
|
|
16.66-57.88
|
|
Options forfeited and expired during the year
|
46.80-93.65
|
|
|
28.37-93.65
|
|
|
22.63-93.65
|
|
Options outstanding at end of year
|
28.37-93.65
|
|
|
28.37-93.65
|
|
|
28.37-93.65
|
|
Options exercisable at end of year
|
28.37-93.65
|
|
|
28.37-93.65
|
|
|
28.37-93.65
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Risk-free interest rate
|
1.0
|
%
|
|
2.0
|
%
|
|
2.3
|
%
|
Volatility
|
47.1
|
%
|
|
48.1
|
%
|
|
45.2
|
%
|
Expected life (years)
|
5
|
|
|
5
|
|
|
5
|
|
|
Shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
|
|||||
Options outstanding, December 31, 2011
|
1,305
|
|
|
$
|
72.08
|
|
|
|
|
|
||
Granted
|
83
|
|
|
66.14
|
|
|
|
|
|
|||
Exercised
|
(277
|
)
|
|
60.76
|
|
|
|
|
|
|||
Forfeited and expired
|
(116
|
)
|
|
70.93
|
|
|
|
|
|
|||
Options outstanding, December 31, 2012
|
995
|
|
|
74.87
|
|
|
3.9
|
|
$
|
15,643
|
|
|
Vested and expected to vest as of December 31, 2012
|
989
|
|
|
$
|
74.95
|
|
|
3.9
|
|
$
|
15,453
|
|
Exercisable as of December 31, 2012
|
814
|
|
|
$
|
77.78
|
|
|
3.0
|
|
$
|
10,437
|
|
|
Outstanding
|
|
Exercisable
|
||||||||||||
Exercise price range
|
Number of
shares
|
|
Average
life
|
|
Average
price
|
|
Number of
shares
|
|
Average
price
|
||||||
Under $57.34
|
171
|
|
|
6.4
|
|
$
|
47.90
|
|
|
98
|
|
|
$
|
44.34
|
|
$57.88-$73.45
|
197
|
|
|
4.4
|
|
69.97
|
|
|
115
|
|
|
72.75
|
|
||
$73.54-$81.40
|
162
|
|
|
4.7
|
|
74.91
|
|
|
136
|
|
|
74.99
|
|
||
$81.90-$86.51
|
167
|
|
|
2.8
|
|
83.16
|
|
|
167
|
|
|
83.16
|
|
||
$87.87-$88.00
|
35
|
|
|
2.8
|
|
87.96
|
|
|
35
|
|
|
87.96
|
|
||
$88.33-$93.65
|
263
|
|
|
2.3
|
|
89.08
|
|
|
263
|
|
|
89.08
|
|
||
Total
|
995
|
|
|
3.9
|
|
$
|
74.87
|
|
|
814
|
|
|
$
|
77.78
|
|
|
Shares
|
|
Weighted
average price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic value
|
|||||
Restricted Stock Units outstanding, December 31, 2011
|
495
|
|
|
$
|
50.76
|
|
|
|
|
|
||
Granted
|
260
|
|
|
65.98
|
|
|
|
|
|
|||
Released
|
(140
|
)
|
|
43.55
|
|
|
|
|
|
|||
Forfeited
|
(10
|
)
|
|
59.07
|
|
|
|
|
|
|||
Restricted Stock Units outstanding, December 31, 2012
|
605
|
|
|
57.87
|
|
|
2.3
|
|
$
|
54,774
|
|
|
Expected to vest as of December 31, 2012
|
551
|
|
|
|
|
|
2.1
|
|
$
|
49,872
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Restricted Stock Units outstanding, January 1
|
495
|
|
|
404
|
|
|
359
|
|
Granted
|
260
|
|
|
196
|
|
|
149
|
|
Released
|
(140
|
)
|
|
(91
|
)
|
|
(95
|
)
|
Forfeited
|
(10
|
)
|
|
(14
|
)
|
|
(9
|
)
|
Restricted Stock Units outstanding, December 31
|
605
|
|
|
495
|
|
|
404
|
|
Expected to vest as of December 31
|
551
|
|
|
438
|
|
|
343
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Service cost of benefits earned
|
$
|
1,870
|
|
|
1,708
|
|
|
1,506
|
|
Interest cost on projected benefit obligation
|
1,367
|
|
|
1,400
|
|
|
1,219
|
|
|
Expected return on plan assets
|
(1,192
|
)
|
|
(1,232
|
)
|
|
(1,025
|
)
|
|
Amortization of actuarial gain
|
(10
|
)
|
|
(26
|
)
|
|
4
|
|
|
Net pension expense
|
$
|
2,035
|
|
|
1,850
|
|
|
1,704
|
|
|
2012
|
|
2011
|
Discount rate
|
4.50%
|
|
4.75%
|
Expected rate of return on plan assets
|
2.50%-3.50%
|
|
4.00%-5.00%
|
Rate of compensation increase
|
2.00%-4.00%
|
|
0.00%-3.00%
|
Underlying inflation rate
|
2.00%
|
|
2.00%
|
|
2012
|
|
2011
|
|||
Change in benefit obligation:
|
|
|
|
|||
Projected benefit obligation at end of prior year
|
$
|
29,231
|
|
|
26,977
|
|
Cumulative foreign exchange effect
|
669
|
|
|
(876
|
)
|
|
Service cost
|
1,870
|
|
|
1,708
|
|
|
Interest cost
|
1,367
|
|
|
1,400
|
|
|
Plan participants contributions
|
827
|
|
|
763
|
|
|
Actuarial loss
|
5,179
|
|
|
455
|
|
|
Benefits paid
|
(1,552
|
)
|
|
(1,196
|
)
|
|
Effect of curtailment and settlement
|
(40
|
)
|
|
—
|
|
|
Projected benefit obligation at end of year
|
$
|
37,551
|
|
|
29,231
|
|
Change in plan assets:
|
|
|
|
|||
Fair value of plan assets at end of prior year
|
$
|
26,109
|
|
|
24,108
|
|
Cumulative foreign exchange effect
|
515
|
|
|
(594
|
)
|
|
Actual return on plan assets
|
4,771
|
|
|
1,203
|
|
|
Employer contributions
|
1,888
|
|
|
1,825
|
|
|
Benefits paid
|
(1,552
|
)
|
|
(1,196
|
)
|
|
Plan participant contributions
|
827
|
|
|
763
|
|
|
Fair value of plan assets at end of year
|
$
|
32,558
|
|
|
26,109
|
|
Funded status of the plans:
|
|
|
|
|||
Ending funded status
|
$
|
(4,993
|
)
|
|
(3,122
|
)
|
Net amount recognized in consolidated balance sheets:
|
|
|
|
|||
Accrued benefit liability (non-current liability)
|
$
|
(4,993
|
)
|
|
(3,122
|
)
|
Accumulated other comprehensive income
|
928
|
|
|
(663
|
)
|
|
Net amount recognized
|
$
|
(4,065
|
)
|
|
(3,785
|
)
|
|
2012
|
|
2011
|
Discount rate
|
3.25%
|
|
4.50%
|
Rate of compensation increase
|
2.00%-4.00%
|
|
0.00%-3.00%
|
Underlying inflation rate
|
2.00%
|
|
2.00%
|
|
Non-U.S. Plans
|
|||||
|
December 31,
2012 |
|
December 31,
2011 |
|||
Plans with accumulated benefit obligations in excess of plan assets:
|
|
|
|
|||
Projected benefit obligation
|
$
|
15,067
|
|
|
16,492
|
|
Accumulated benefit obligation
|
12,396
|
|
|
15,496
|
|
|
Fair value of plan assets
|
11,702
|
|
|
14,703
|
|
|
Plans with plan assets in excess of accumulated benefit obligations:
|
|
|
|
|||
Projected benefit obligation
|
$
|
22,484
|
|
|
12,739
|
|
Accumulated benefit obligation
|
20,640
|
|
|
10,687
|
|
|
Fair value of plan assets
|
20,856
|
|
|
11,406
|
|
2013
|
|
976
|
|
2014
|
|
984
|
|
2015
|
|
1,071
|
|
2016
|
|
1,102
|
|
2017
|
|
1,606
|
|
Thereafter
|
|
10,241
|
|
|
2012
|
|
2011
|
|||
Non-U.S. Plans:
|
|
|
|
|||
Insurance contracts (100%)
|
$
|
32,558
|
|
|
26,109
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Foreign currency losses (gains)
|
$
|
(5,599
|
)
|
|
10,423
|
|
|
(2,270
|
)
|
U.S. customs refund
|
—
|
|
|
—
|
|
|
(7,730
|
)
|
|
All other, net
|
5,902
|
|
|
3,628
|
|
|
(1,630
|
)
|
|
Total other expense (income)
|
$
|
303
|
|
|
14,051
|
|
|
(11,630
|
)
|
|
2012
|
|
2011
|
|
2010
|
||||
United States
|
$
|
164,122
|
|
|
78,224
|
|
|
39,332
|
|
Foreign
|
140,370
|
|
|
121,650
|
|
|
153,316
|
|
|
Earnings before income taxes
|
$
|
304,492
|
|
|
199,874
|
|
|
192,648
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Current income taxes:
|
|
|
|
|
|
||||
U.S. federal
|
$
|
26,204
|
|
|
13,957
|
|
|
14,052
|
|
State and local
|
4,583
|
|
|
5,118
|
|
|
1,514
|
|
|
Foreign
|
13,775
|
|
|
7,190
|
|
|
8,426
|
|
|
Total current
|
44,562
|
|
|
26,265
|
|
|
23,992
|
|
|
Deferred income taxes:
|
|
|
|
|
|
||||
U.S. federal
|
31,106
|
|
|
8,994
|
|
|
(8,578
|
)
|
|
State and local
|
4,704
|
|
|
(3,488
|
)
|
|
18,562
|
|
|
Foreign
|
(26,773
|
)
|
|
(10,122
|
)
|
|
(31,263
|
)
|
|
Total deferred
|
9,037
|
|
|
(4,616
|
)
|
|
(21,279
|
)
|
|
Total
|
$
|
53,599
|
|
|
21,649
|
|
|
2,713
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Income taxes at statutory rate
|
$
|
106,572
|
|
|
69,956
|
|
|
67,427
|
|
State and local income taxes, net of federal income tax benefit
|
6,004
|
|
|
2,821
|
|
|
2,358
|
|
|
Foreign income taxes
|
(66,538
|
)
|
|
(45,112
|
)
|
|
(21,389
|
)
|
|
Change in valuation allowance
|
5,703
|
|
|
(2,052
|
)
|
|
(17,139
|
)
|
|
Tax contingencies and audit settlements
|
(3,598
|
)
|
|
(5,911
|
)
|
|
(3,447
|
)
|
|
Acquisition related tax contingencies
|
—
|
|
|
—
|
|
|
(30,162
|
)
|
|
Change in statutory tax rate
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
Other, net
|
5,456
|
|
|
1,947
|
|
|
5,114
|
|
|
|
$
|
53,599
|
|
|
21,649
|
|
|
2,713
|
|
|
2012
|
|
2011
|
|||
Deferred tax assets:
|
|
|
|
|||
Accounts receivable
|
$
|
12,289
|
|
|
10,031
|
|
Inventories
|
38,801
|
|
|
39,227
|
|
|
Accrued expenses and other
|
97,808
|
|
|
90,171
|
|
|
Deductible state tax and interest benefit
|
13,119
|
|
|
17,224
|
|
|
Intangibles
|
113,282
|
|
|
136,891
|
|
|
Federal, foreign and state net operating losses and credits
|
247,786
|
|
|
273,509
|
|
|
Gross deferred tax assets
|
523,085
|
|
|
567,053
|
|
|
Valuation allowance
|
(321,585
|
)
|
|
(334,215
|
)
|
|
Net deferred tax assets
|
201,500
|
|
|
232,838
|
|
|
Deferred tax liabilities:
|
|
|
|
|||
Inventories
|
(8,106
|
)
|
|
(5,270
|
)
|
|
Plant and equipment
|
(277,324
|
)
|
|
(294,960
|
)
|
|
Intangibles
|
(128,433
|
)
|
|
(137,888
|
)
|
|
Other liabilities
|
(7,854
|
)
|
|
(6,401
|
)
|
|
Gross deferred tax liabilities
|
(421,717
|
)
|
|
(444,519
|
)
|
|
Net deferred tax liability (1)
|
$
|
(220,217
|
)
|
|
(211,681
|
)
|
(1)
|
This amount includes
$4,317
and
$1,822
of non-current deferred tax assets which are in deferred income taxes and other non-current assets and
$6,309
and
$8,760
current deferred tax liabilities which are included in accounts payable and accrued expenses in the consolidated balance sheets as of
December 31, 2012
and
2011
, respectively.
|
|
2012
|
|
2011
|
|||
Balance as of January 1
|
$
|
46,087
|
|
|
49,943
|
|
Additions based on tax positions related to the current year
|
3,142
|
|
|
306
|
|
|
Additions for tax positions of prior years
|
17,006
|
|
|
7,907
|
|
|
Reductions for tax positions of prior years
|
(3,571
|
)
|
|
(926
|
)
|
|
Reductions resulting from the lapse of the statute of limitations
|
(1,764
|
)
|
|
(1,391
|
)
|
|
Settlements with taxing authorities
|
(7,065
|
)
|
|
(9,752
|
)
|
|
Balance as of December 31
|
$
|
53,835
|
|
|
46,087
|
|
|
Lease
impairments
|
|
Asset write-downs
|
|
Severance
|
|
Other
restructuring
costs
|
|
Total
|
||||||
Balance as of December 31, 2010
|
$
|
10,983
|
|
|
—
|
|
|
2,108
|
|
|
420
|
|
|
13,511
|
|
Provisions
|
|
|
|
|
|
|
|
|
|
||||||
Mohawk segment
|
3,680
|
|
|
10,643
|
|
|
5,120
|
|
|
3,766
|
|
|
23,209
|
|
|
Cash payments
|
(3,707
|
)
|
|
—
|
|
|
(4,850
|
)
|
|
(2,406
|
)
|
|
(10,963
|
)
|
|
Noncash items
|
—
|
|
|
(10,643
|
)
|
|
—
|
|
|
(269
|
)
|
|
(10,912
|
)
|
|
Balance as of December 31, 2011
|
10,956
|
|
|
—
|
|
|
2,378
|
|
|
1,511
|
|
|
14,845
|
|
|
Provisions:
|
|
|
|
|
|
|
|
|
|
||||||
Mohawk segment
|
—
|
|
|
6,687
|
|
|
4,069
|
|
|
(252
|
)
|
|
10,504
|
|
|
Dal-Tile segment
|
373
|
|
|
3,727
|
|
|
2,009
|
|
|
—
|
|
|
6,109
|
|
|
Unilin segment
|
—
|
|
|
138
|
|
|
1,775
|
|
|
38
|
|
|
1,951
|
|
|
Cash payments
|
(3,872
|
)
|
|
—
|
|
|
(7,333
|
)
|
|
(1,297
|
)
|
|
(12,502
|
)
|
|
Noncash items
|
—
|
|
|
(10,552
|
)
|
|
—
|
|
|
—
|
|
|
(10,552
|
)
|
|
Balance as of December 31, 2012
|
$
|
7,457
|
|
|
—
|
|
|
2,898
|
|
|
—
|
|
|
10,355
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Net cash paid (received) during the years for:
|
|
|
|
|
|
||||
Interest
|
$
|
80,985
|
|
|
119,463
|
|
|
139,358
|
|
Income taxes
|
$
|
43,650
|
|
|
34,479
|
|
|
(5,862
|
)
|
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||
Fair value of assets acquired in acquisition
|
$
|
—
|
|
|
37,486
|
|
|
—
|
|
Liabilities assumed in acquisition
|
—
|
|
|
(13,389
|
)
|
|
—
|
|
|
|
$
|
—
|
|
|
24,097
|
|
|
—
|
|
|
2012
|
|
2011
|
|
2010
|
||||
Net sales:
|
|
|
|
|
|
||||
Mohawk
|
$
|
2,912,055
|
|
|
2,927,674
|
|
|
2,844,876
|
|
Dal-Tile
|
1,616,383
|
|
|
1,454,316
|
|
|
1,367,442
|
|
|
Unilin
|
1,350,349
|
|
|
1,344,764
|
|
|
1,188,274
|
|
|
Intersegment sales
|
(90,807
|
)
|
|
(84,496
|
)
|
|
(81,520
|
)
|
|
|
$
|
5,787,980
|
|
|
5,642,258
|
|
|
5,319,072
|
|
Operating income (loss):
|
|
|
|
|
|
||||
Mohawk
|
$
|
158,196
|
|
|
109,874
|
|
|
122,904
|
|
Dal-Tile
|
120,951
|
|
|
101,298
|
|
|
97,334
|
|
|
Unilin
|
126,409
|
|
|
127,147
|
|
|
114,298
|
|
|
Corporate and intersegment eliminations
|
(26,048
|
)
|
|
(22,777
|
)
|
|
(20,367
|
)
|
|
|
$
|
379,508
|
|
|
315,542
|
|
|
314,169
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||
Mohawk
|
$
|
95,648
|
|
|
90,463
|
|
|
91,930
|
|
Dal-Tile
|
41,176
|
|
|
42,723
|
|
|
45,578
|
|
|
Unilin
|
132,183
|
|
|
151,884
|
|
|
145,941
|
|
|
Corporate
|
11,286
|
|
|
12,664
|
|
|
13,324
|
|
|
|
$
|
280,293
|
|
|
297,734
|
|
|
296,773
|
|
Capital expenditures (excluding acquisitions):
|
|
|
|
|
|
||||
Mohawk
|
$
|
97,972
|
|
|
125,630
|
|
|
84,013
|
|
Dal-Tile
|
49,426
|
|
|
66,419
|
|
|
37,344
|
|
|
Unilin
|
56,605
|
|
|
78,615
|
|
|
29,439
|
|
|
Corporate
|
4,291
|
|
|
4,909
|
|
|
5,384
|
|
|
|
$
|
208,294
|
|
|
275,573
|
|
|
156,180
|
|
Assets:
|
|
|
|
|
|
||||
Mohawk
|
$
|
1,721,214
|
|
|
1,769,065
|
|
|
1,637,319
|
|
Dal-Tile
|
1,731,258
|
|
|
1,732,818
|
|
|
1,644,448
|
|
|
Unilin
|
2,672,389
|
|
|
2,533,070
|
|
|
2,475,049
|
|
|
Corporate and intersegment eliminations
|
178,823
|
|
|
171,275
|
|
|
342,110
|
|
|
|
$
|
6,303,684
|
|
|
6,206,228
|
|
|
6,098,926
|
|
Geographic net sales:
|
|
|
|
|
|
||||
North America
|
$
|
4,798,804
|
|
|
4,619,771
|
|
|
4,447,965
|
|
Rest of world
|
989,176
|
|
|
1,022,487
|
|
|
871,107
|
|
|
|
$
|
5,787,980
|
|
|
5,642,258
|
|
|
5,319,072
|
|
Long-lived assets (1):
|
|
|
|
|
|
||||
North America
|
$
|
1,968,561
|
|
|
1,996,517
|
|
|
1,971,612
|
|
Rest of world
|
1,110,062
|
|
|
1,090,812
|
|
|
1,084,906
|
|
|
|
$
|
3,078,623
|
|
|
3,087,329
|
|
|
3,056,518
|
|
Net sales by product categories (2):
|
|
|
|
|
|
||||
Soft surface
|
$
|
2,696,462
|
|
|
2,722,113
|
|
|
2,645,952
|
|
Tile
|
1,676,971
|
|
|
1,513,210
|
|
|
1,428,571
|
|
|
Wood
|
1,414,547
|
|
|
1,406,935
|
|
|
1,244,549
|
|
|
|
$
|
5,787,980
|
|
|
5,642,258
|
|
|
5,319,072
|
|
(1)
|
Long-lived assets are composed of property, plant and equipment, net, and goodwill.
|
(2)
|
The Soft surface product category includes carpets, rugs, carpet pad and resilient. The Tile product category includes ceramic tile, porcelain tile and natural stone. The Wood product category includes laminate, hardwood, roofing panels, wood-based panels and licensing.
|
|
Quarters Ended
|
|||||||||||
|
March 31,
2012 |
|
June 30,
2012 |
|
September 29,
2012 |
|
December 31,
2012 |
|||||
Net sales
|
$
|
1,409,035
|
|
|
1,469,793
|
|
|
1,473,493
|
|
|
1,435,659
|
|
Gross profit
|
359,426
|
|
|
388,464
|
|
|
372,837
|
|
|
369,331
|
|
|
Net earnings
|
40,377
|
|
|
73,188
|
|
|
70,304
|
|
|
66,389
|
|
|
Basic earnings per share
|
0.59
|
|
|
1.06
|
|
|
1.02
|
|
|
0.96
|
|
|
Diluted earnings per share
|
0.58
|
|
|
1.06
|
|
|
1.01
|
|
|
0.96
|
|
|
Quarters Ended
|
|||||||||||
|
April 2,
2011 |
|
July 2,
2011 |
|
October 1,
2011 |
|
December 31, 2011 (1)
|
|||||
Net sales
|
$
|
1,343,595
|
|
|
1,477,854
|
|
|
1,442,512
|
|
|
1,378,297
|
|
Gross profit
|
341,592
|
|
|
382,247
|
|
|
357,623
|
|
|
335,417
|
|
|
Net earnings
|
23,442
|
|
|
60,903
|
|
|
46,646
|
|
|
42,931
|
|
|
Basic earnings per share
|
0.34
|
|
|
0.89
|
|
|
0.68
|
|
|
0.62
|
|
|
Diluted earnings per share
|
0.34
|
|
|
0.88
|
|
|
0.68
|
|
|
0.62
|
|
(1)
|
During the fourth quarter of 2011, the Company corrected an immaterial error in its consolidated financial statements. The error related to accounting for operating leases. The correction of
$6,035
resulted in an additional charge to selling, general and administrative expense in the Company’s 2011 fourth quarter consolidated statement of operations. The Company believes the correction of this error to be both quantitatively and qualitatively immaterial to its quarterly results for 2011 or to any of its previously issued consolidated financial statements. The correction had no impact on the Company’s cash flows as previously presented.
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
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.)
|
|
|
|
*2.2
|
|
Share Purchase Agreement, dated as of December 20, 2012, by and among LuxELIT S.a r.l., Finceramica S.p.A, Mohawk Industries, Inc. and Mohawk International Holdings (DE) Corporation (Incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated December 21, 2012.)
|
|
|
|
*3.1
|
|
Restated Certificate of Incorporation of Mohawk, as amended. (Incorporated herein by reference to Exhibit 3.1 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998.)
|
|
|
|
*3.2
|
|
Restated Bylaws of Mohawk. (Incorporated herein by reference to Exhibit 3.2 in the Company's Report on Form 8-K dated December 4, 2007.)
|
|
|
|
*4.1
|
|
See Article 4 of the Restated Certificate of Incorporation of Mohawk. (Incorporated herein by reference to Exhibit 3.1 in the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1998.)
|
|
|
|
*4.2
|
|
See Articles 2, 6, and 9 of the Restated Bylaws of Mohawk. (Incorporated herein by reference to Exhibit 3.2 in the Company's Current Report on Form 8-K dated December 4, 2007.)
|
|
|
|
*4.4
|
|
Indenture dated as of January 9, 2006, between Mohawk Industries, Inc. and SunTrust Bank, as trustee. (Incorporated herein by reference to Exhibit 4.4 in the Company's Registration Statement on Form S-3, Registration Statement No. 333-130910.)
|
|
|
|
*4.5
|
|
First Supplemental Indenture, dated as of January 17, 2006, by and between Mohawk Industries, Inc., and SunTrust Bank, as trustee. (Incorporated by reference to Exhibit 4.1 in the Company's Current Report on form 8-K dated January 17, 2006.)
|
|
|
|
*4.6
|
|
Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated January 31, 2013.)
|
|
|
|
*4.7
|
|
First Supplemental Indenture, dated as of January 31, 2013, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as Trustee (Incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated January 31, 2013.)
|
|
|
|
*10.1
|
|
Registration Rights Agreement by and among Mohawk, Citicorp Investments, Inc., ML-Lee Acquisition Fund, L.P. and Certain Management Investors. (Incorporated herein by reference to Exhibit 10.14 of the Company's Registration Statement on Form S-1, Registration No. 33-45418.)
|
|
|
|
10.15
|
|
Amendment No. 1 to Second Amended and Restated Employment Agreement, dated as of December 20, 2012, by and between the Company and W. Christopher Wellborn.
|
|
|
|
*10.16
|
|
Mohawk Carpet Corporation Supplemental Executive Retirement Plan, as amended. (Incorporated herein by reference to Exhibit 10.2 of the Company's Registration Statement on Form S-1, Registration No. 33-45418.)
|
|
|
|
*10.17
|
|
Mohawk Industries, Inc. 1992 Stock Option Plan. (Incorporated herein by reference to Exhibit 10.8 of the Company's Registration Statement on Form S-1, Registration No. 33-45418.)
|
|
|
|
*10.18
|
|
Amendment dated July 22, 1993 to the Mohawk Industries, Inc. 1992 Stock Option Plan. (Incorporated herein by reference to Exhibit 10.2 in the Company's quarterly report on Form 10-Q (File No. 001-13697) for the quarter ended July 3, 1993.)
|
|
|
|
*10.19
|
|
Second Amendment dated February 17, 2000 to the Mohawk Industries, Inc. 1992 Stock Option Plan. (Incorporated herein by reference to Exhibit 10.35 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1999.)
|
|
|
|
*10.20
|
|
Mohawk Industries, Inc. 1992 Mohawk-Horizon Stock Option Plan. (Incorporated herein by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-1, Registration Number 33-53932.)
|
|
|
|
*10.21
|
|
Amendment dated July 22, 1993 to the Mohawk Industries, Inc. 1992 Mohawk-Horizon Stock Option Plan. (Incorporated herein by reference to Exhibit 10.1 of the Company's quarterly report on Form 10-Q (File No. 001-13697) for the quarter ended July 3, 1993.)
|
|
|
|
*10.22
|
|
Second Amendment dated February 17, 2000 to the Mohawk Industries, Inc. 1992 Mohawk-Horizon Stock Option Plan. (Incorporated herein by reference to Exhibit 10.38 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1999.)
|
|
|
|
*10.23
|
|
Mohawk Industries, Inc. 1993 Stock Option Plan. (Incorporated herein by reference to Exhibit 10.39 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1992.)
|
|
|
|
*10.24
|
|
First Amendment dated February 17, 2000 to the Mohawk Industries, Inc. 1993 Stock Option Plan. (Incorporated herein by reference to Exhibit 10.40 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1999.)
|
|
|
|
*10.25
|
|
The Mohawk Industries, Inc. Senior Management Deferred Compensation Plan (Incorporated herein by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 2010.)
|
|
|
|
*10.26
|
|
Mohawk Industries, Inc. 1997 Non-Employee Director Stock Compensation Plan (Amended and Restated as of January 1, 2009) (Incorporated herein by reference to Exhibit 10.32 in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008.)
|
|
|
|
*10.27
|
Mohawk Industries, Inc. 2012 Non-Employee Director Stock Compensation Plan (Incorporated herein by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q dated August 3, 2012.)
|
|
|
|
|
*10.28
|
|
2002 Long-Term Incentive Plan. (Incorporated herein by reference to Appendix A in the 2002 Mohawk Industries, Inc. Proxy Statement dated March 29, 2002.)
|
|
|
|
*10.29
|
|
Mohawk Industries, Inc. 2007 Incentive Plan (Incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-13697) filed with the Securities and Exchange Commission on April 9, 2007.)
|
|
|
|
*10.30
|
|
Mohawk Industries, Inc. 2012 Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-13697) filed with the Securities and Exchange Commission on April 3, 2012.)
|
|
|
|
21
|
|
Subsidiaries of the Registrant.
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm (KPMG LLP).
|
|
|
|
31.1
|
|
Certification Pursuant to Rule 13a-14(a).
|
|
|
|
31.2
|
|
Certification Pursuant to Rule 13a-14(a).
|
|
|
|
32.1
|
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Indicates exhibit incorporated by reference.
|
Mohawk Industries, Inc.
|
|
|
|
|
|
February 27, 2013
|
By:
|
/s/ J
EFFREY
S. L
ORBERBAUM
|
|
|
Jeffrey S. Lorberbaum,
|
|
|
Chairman and Chief Executive Officer
|
February 27, 2013
|
/s/ J
EFFREY
S. L
ORBERBAUM
|
|
Jeffrey S. Lorberbaum,
|
|
Chairman and Chief Executive Officer
(principal executive officer)
|
February 27, 2013
|
/s/ F
RANK
H. B
OYKIN
|
|
Frank H. Boykin,
|
|
Chief Financial Officer and Vice President-Finance
(principal financial officer)
|
February 27, 2013
|
/s/ J
AMES
F. B
RUNK
|
|
James F. Brunk,
|
|
Vice President and Corporate Controller
(principal accounting officer)
|
February 27, 2013
|
/s/ P
HYLLIS
O. B
ONANNO
|
|
Phyllis O. Bonanno,
Director
|
February 27, 2013
|
/s/ B
RUCE
C. B
RUCKMANN
|
|
Bruce C. Bruckmann,
Director
|
February 27, 2013
|
/s/ F
RANS
D
E
C
OCK
|
|
Frans De Cock,
Director
|
February 27, 2013
|
/s/ J
OHN
F. F
IEDLER
|
|
John F. Fiedler,
Director
|
February 27, 2013
|
/s/ R
ICHARD
C. I
LL
|
|
Richard C. Ill,
Director
|
February 27, 2013
|
/s/ D
AVID
L. K
OLB
|
|
David L. Kolb,
Director
|
February 27, 2013
|
/s/ J
OSEPH
A. O
NORATO
|
|
Joseph A. Onorato,
Director
|
February 27, 2013
|
/s/ K
AREN
A. S
MITH
B
OGART
|
|
Karen A. Smith Bogart,
Director
|
February 27, 2013
|
/s/ W. C
HRISTOPHER
W
ELLBORN
|
|
W. Christopher Wellborn,
Director
|
MOHAWK FACTORING, LLC, as Borrower
|
|
|
|
By:/s/ John J. Koach
|
|
|
Name: John J. Koach
|
|
Title: Secretary
|
|
|
MOHAWK SERVICING, LLC, as Servicer
|
|
|
|
By:/s/ Shailesh S. Bettadapur
|
|
|
Name: Shailesh S. Bettadapur
|
|
Title: VP & Treasurer
|
|
|
VICTORY RECEIVABLES CORPORATION
|
|
|
|
By: /s/ David V. DeAngelis
|
|
|
Name: David V. DeAngelis
|
|
Title: Vice President
|
|
|
THE BANK OF TOKYO‑MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Co‑Agent
|
|
|
|
By: /s/ Richard Gregory Hurst
|
|
|
Name: /s/ Richard Gregory Hurst
|
|
Title: Director
|
|
|
WORKING CAPITAL MANAGEMENT CO., L.P., AS CONDUIT
|
|
|
|
By: /s/ Shinichi Nochilde
|
|
|
Name: Shinichi Nochilde
|
|
Title: Attorney in Fact
|
|
|
|
|
SUNTRUST BANK, as a Non-Conduit Lender
|
|
|
|
By: /s/ Kyle Shenton
|
|
|
Name: Kyle Shenton
|
|
Title: Vice President
|
|
|
SUNTRUST BANK, as Co-Agent and Administrative Agent
|
|
|
|
By: /s/ Kyle Shenton
|
|
|
Name: Kyle Shenton
|
|
Title: Vice President
|
|
|
MIZUHO CORPORATE BANK, LTD., as WCM Liquidity Bank and as Co-Agent
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By: /s/ David Lim
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Name: David Lim
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Title: Senior Vice President
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1.
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Good Reason Provision
. The Agreement is hereby amended by deleting Section 10(d) thereof in its entirety and substituting therefore the following:
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2.
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Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect. The parties are authorized to restate the entire Agreement as amended hereby.
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Aladdin Manufacturing Corporation
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Delaware
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Horizon Europe, Inc.
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Georgia
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Lees Mohawk (UK) Limited
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UK
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Mohawk Canada Corporation
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Nova Scotia
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Mohawk Carpet, LLC
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Delaware
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Mohawk Carpet Distribution, Inc.
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Delaware
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Mohawk Carpet Transportation of Georgia, LLC
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Delaware
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Mohawk Commercial, Inc.
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Delaware
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Mohawk ESV, Inc.
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Delaware
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Mohawk Factoring II, Inc.
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Delaware
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Mohawk Factoring, LLC
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Delaware
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Mohawk International (China) Ltd.
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Mauritius
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Mohawk International (India) Ltd.
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Mauritius
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Mohawk Resources, LLC
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Delaware
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Mohawk Servicing, LLC
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Delaware
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Wayn-Tex LLC
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Delaware
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World International, Inc.
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Barbados
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Dal-Tile International, Inc.
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Delaware
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Dal-Elit, LLC
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Texas
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Dal Italia LLC
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Delaware
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Dal-Tile Corporation
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Pennsylvania
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Dal-Tile Group, Inc.
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Delaware
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Dal-Tile I, LLC
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Delaware
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Dal-Tile Operaciones Mexico, S. de R.L. de C.V.
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Mexico
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Dal-Tile Industrias S. de R.L. de C.V.
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Mexico
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Dal-Tile Recubrimientos, S. de R.L. de C.V.
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Mexico
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Dal-Tile Mexico S. de R.L. de C.V.
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Mexico
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Dal-Tile of Canada Inc.
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Ontario
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Dal-Tile Puerto Rico, Inc.
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Puerto Rico
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Dal-Tile Shared Services, Inc.
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Delaware
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Dal-Tile Services, Inc.
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Delaware
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Dal-Tile Distribution, Inc.
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Delaware
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DTM/CM Holdings LLC
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Delaware
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Cevotrans BV
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Netherlands
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Mohawk Global Investments S.àr.l
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Luxembourg
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Mohawk International (Europe) S.àr.l
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Luxembourg
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Mohawk International Holdings (DE) Corporation
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Delaware
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Mohawk International Holdings S.àr.l
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Luxembourg
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Opstalan BV
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Netherlands
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Syarikat Malaysia Wood Industries Sdn Bhd
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Malaysia
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Timber Technique Finance Ltd.
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Ireland
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Unilin Beheer BV
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Netherlands
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Unilin Flooring NC, LLC
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N. Carolina
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Unilin GmbH
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Germany
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Unilin Holding SAS
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France
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Unilin Industries BVBA
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Belgium
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Unilin/Multiprè BV
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Netherlands
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Unilin BVBA
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Belgium
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Unilin SAS
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France
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Unilin Systems SAS
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France
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Unilin Systems SUD SAS
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France
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Unilin UK Ltd.
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UK
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F.I.L.S Investments
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Ireland
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Mohawk International (Hong Kong) Ltd.
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Hong Kong
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Mohawk Trading (Shanghai) Co., Ltd.
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China
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Mohawk Unilin International BV
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Netherlands
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Unilin OOO
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Russia
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Mohawk Finance S.àr.l.
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Luxembourg
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Unilin Distribution, Ltd.
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UK
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Mohawk Foreign Holdings, S.àr.l.
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Luxembourg
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DT Mexico Holding, LLC
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Delaware
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Mohawk Singapore Private Ltd.
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Singapore
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Premium Floors Australia Pty Limited
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Australia
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Unilin Insulation SAS
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France
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Unilin Holdings BVBA
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Netherlands
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Mohawk Unilin Luxembourg S.àr.l.
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Luxembourg
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Flooring Industries Ltd.
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Luxembourg
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Mohawk Foreign Funding S.àr.L.
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Luxembourg
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Mohawk Foreign Acquisitions S.àr.L.
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Luxembourg
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Mohawk Europe BVBA
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Belgium
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MUD Holdings (Brazil) Ltda
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Brazil
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/s/ KPMG LLP
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1.
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I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer(s) 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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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The registrant’s other certifying officer(s) 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):
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(a)
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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
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(b)
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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.
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/
S
/ J
EFFREY
S. L
ORBERBAUM
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Jeffrey S. Lorberbaum
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Chairman and Chief Executive Officer
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February 27, 2013
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1.
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I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer(s) 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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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The registrant’s other certifying officer(s) 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):
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(a)
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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
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(b)
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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.
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/
S
/ F
RANK
H. B
OYKIN
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Frank H. Boykin
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Chief Financial Officer
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February 27, 2013
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/
S
/ J
EFFREY
S. L
ORBERBAUM
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Jeffrey S. Lorberbaum
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Chairman and Chief Executive Officer
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/
S
/ F
RANK
H. B
OYKIN
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Frank H. Boykin
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Chief Financial Officer
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