x
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QUARTERLY 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
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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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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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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page No
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Part I.
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Item 1.
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Condensed Consolidated Balance Sheets
as of June 28, 2014 and December 31, 2013
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Condensed Consolidated Statements of Operations
for the three and six months ended June 28, 2014 and June 29, 2013
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Condensed Consolidated Statements of Comprehensive Income (Loss)
for the three and six months ended June 28, 2014 and June 29, 2013
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Condensed Consolidated Statements of Cash Flows
for the six months ended June 28, 2014 and June 29, 2013
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 1.
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||
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Item 1A.
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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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June 28,
2014 |
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December 31,
2013 |
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ASSETS
|
|
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|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
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$
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70,044
|
|
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54,066
|
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Receivables, net
|
1,261,808
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|
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1,062,875
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|
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Inventories
|
1,644,768
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|
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1,572,325
|
|
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Prepaid expenses
|
230,263
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|
|
204,034
|
|
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Deferred income taxes
|
135,259
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|
|
147,534
|
|
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Other current assets
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36,947
|
|
|
44,884
|
|
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Total current assets
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3,379,089
|
|
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3,085,718
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Property, plant and equipment
|
5,208,907
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|
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4,950,149
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Less: accumulated depreciation
|
2,378,705
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2,248,406
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Property, plant and equipment, net
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2,830,202
|
|
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2,701,743
|
|
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Goodwill
|
1,730,713
|
|
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1,736,092
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|
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Tradenames
|
694,350
|
|
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700,592
|
|
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Other intangible assets subject to amortization, net
|
97,910
|
|
|
111,010
|
|
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Deferred income taxes and other non-current assets
|
149,417
|
|
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159,022
|
|
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$
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8,881,681
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|
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8,494,177
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
|
|
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|
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Current portion of long-term debt and commercial paper
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$
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619,229
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|
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127,218
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Accounts payable and accrued expenses
|
1,253,291
|
|
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1,193,593
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Total current liabilities
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1,872,520
|
|
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1,320,811
|
|
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Deferred income taxes
|
409,332
|
|
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445,823
|
|
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Long-term debt, less current portion
|
1,807,609
|
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2,132,790
|
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Other long-term liabilities
|
118,920
|
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|
124,447
|
|
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Total liabilities
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4,208,381
|
|
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4,023,871
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Commitments and contingencies (Notes 9 and 15)
|
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|
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Stockholders’ equity:
|
|
|
|
|||
Preferred stock, $.01 par value; 60 shares authorized; no shares issued
|
—
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|
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—
|
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Common stock, $.01 par value; 150,000 shares authorized; 80,991 and 80,841 shares issued in 2014 and 2013, respectively
|
810
|
|
|
808
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Additional paid-in capital
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1,580,010
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1,566,985
|
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Retained earnings
|
3,187,640
|
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2,953,809
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Accumulated other comprehensive income, net
|
135,379
|
|
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178,689
|
|
|
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4,903,839
|
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4,700,291
|
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Less treasury stock at cost; 8,155 shares in 2014 and 2013
|
239,230
|
|
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239,234
|
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Total Mohawk Industries, Inc. stockholders' equity
|
4,664,609
|
|
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4,461,057
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Noncontrolling interest
|
8,691
|
|
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9,249
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Total stockholders' equity
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4,673,300
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|
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4,470,306
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$
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8,881,681
|
|
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8,494,177
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|
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Three Months Ended
|
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Six Months Ended
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|||||||||
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June 28,
2014 |
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June 29,
2013 |
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June 28,
2014 |
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June 29,
2013 |
|||||
Net sales
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$
|
2,048,247
|
|
|
1,976,299
|
|
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3,861,342
|
|
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3,463,114
|
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Cost of sales
|
1,473,435
|
|
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1,462,243
|
|
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2,805,175
|
|
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2,571,992
|
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Gross profit
|
574,812
|
|
|
514,056
|
|
|
1,056,167
|
|
|
891,122
|
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Selling, general and administrative expenses
|
352,564
|
|
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380,858
|
|
|
703,184
|
|
|
671,082
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|
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Operating income
|
222,248
|
|
|
133,198
|
|
|
352,983
|
|
|
220,040
|
|
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Interest expense
|
20,702
|
|
|
25,312
|
|
|
42,798
|
|
|
44,468
|
|
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Other (income) expense
|
(1,555
|
)
|
|
(1,097
|
)
|
|
3,335
|
|
|
5,290
|
|
|
Earnings from continuing operations before income taxes
|
203,101
|
|
|
108,983
|
|
|
306,850
|
|
|
170,282
|
|
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Income tax expense
|
50,240
|
|
|
23,240
|
|
|
72,936
|
|
|
33,972
|
|
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Earnings from continuing operations
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152,861
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|
|
85,743
|
|
|
233,914
|
|
|
136,310
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Loss from discontinued operations, net of income tax benefit of $485
|
—
|
|
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(1,361
|
)
|
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—
|
|
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(1,361
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)
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Net earnings including noncontrolling interest
|
152,861
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|
|
84,382
|
|
|
233,914
|
|
|
134,949
|
|
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Net income (loss) attributable to noncontrolling interest
|
111
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|
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(190
|
)
|
|
83
|
|
|
(118
|
)
|
|
Net earnings attributable to Mohawk Industries, Inc.
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$
|
152,750
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|
|
84,572
|
|
|
233,831
|
|
|
135,067
|
|
|
|
|
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|
|||||
Basic earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|||||
Income from continuing operations
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$
|
2.10
|
|
|
1.19
|
|
|
3.21
|
|
|
1.92
|
|
Loss from discontinued operations
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
(0.02
|
)
|
|
Basic earnings per share attributable to Mohawk Industries, Inc.
|
$
|
2.10
|
|
|
1.17
|
|
|
3.21
|
|
|
1.90
|
|
Weighted-average common shares outstanding—basic
|
72,832
|
|
|
72,406
|
|
|
72,788
|
|
|
70,907
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|||||
Income from continuing operations
|
$
|
2.08
|
|
|
1.18
|
|
|
3.19
|
|
|
1.91
|
|
Loss from discontinued operations
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
(0.02
|
)
|
|
Diluted earnings per share attributable to Mohawk Industries, Inc.
|
$
|
2.08
|
|
|
1.16
|
|
|
3.19
|
|
|
1.89
|
|
Weighted-average common shares outstanding—diluted
|
73,297
|
|
|
72,867
|
|
|
73,302
|
|
|
71,405
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Net earnings including noncontrolling interest
|
$
|
152,861
|
|
|
84,382
|
|
|
233,914
|
|
|
134,949
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
19,768
|
|
|
(32,428
|
)
|
|
(43,314
|
)
|
|
(110,134
|
)
|
|
Pension prior service cost and actuarial gain
|
2
|
|
|
(8
|
)
|
|
4
|
|
|
207
|
|
|
Other comprehensive income (loss)
|
19,770
|
|
|
(32,436
|
)
|
|
(43,310
|
)
|
|
(109,927
|
)
|
|
Comprehensive income
|
172,631
|
|
|
51,946
|
|
|
190,604
|
|
|
25,022
|
|
|
Comprehensive income (loss) attributable to the noncontrolling interest
|
111
|
|
|
(190
|
)
|
|
83
|
|
|
(118
|
)
|
|
Comprehensive income attributable to Mohawk Industries, Inc.
|
$
|
172,520
|
|
|
52,136
|
|
|
190,521
|
|
|
25,140
|
|
|
Six Months Ended
|
|||||
|
June 28, 2014
|
|
June 29, 2013
|
|||
Cash flows from operating activities:
|
|
|
|
|||
Net earnings
|
$
|
233,914
|
|
|
134,949
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|||
Restructuring
|
8,751
|
|
|
28,389
|
|
|
Depreciation and amortization
|
164,738
|
|
|
140,992
|
|
|
Deferred income taxes
|
(21,984
|
)
|
|
(16,253
|
)
|
|
Loss on disposal of property, plant and equipment
|
700
|
|
|
422
|
|
|
Stock-based compensation expense
|
14,197
|
|
|
9,498
|
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|||
Receivables, net
|
(200,684
|
)
|
|
(172,457
|
)
|
|
Inventories
|
(74,600
|
)
|
|
(40,555
|
)
|
|
Accounts payable and accrued expenses
|
(1,314
|
)
|
|
47,120
|
|
|
Other assets and prepaid expenses
|
(13,951
|
)
|
|
(4,594
|
)
|
|
Other liabilities
|
(11,893
|
)
|
|
(13,597
|
)
|
|
Net provided by operating activities
|
97,874
|
|
|
113,914
|
|
|
Cash flows from investing activities:
|
|
|
|
|||
Additions to property, plant and equipment
|
(249,697
|
)
|
|
(146,097
|
)
|
|
Acquisitions, net of cash acquired
|
19
|
|
|
(449,464
|
)
|
|
Net cash used in investing activities
|
(249,678
|
)
|
|
(595,561
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|||
Payments on Senior Credit Facilities
|
(1,212,295
|
)
|
|
(878,634
|
)
|
|
Proceeds from Senior Credit Facilities
|
875,983
|
|
|
1,348,808
|
|
|
Payments on Commercial Paper
|
(2,213,101
|
)
|
|
—
|
|
|
Proceeds from Commercial Paper
|
2,773,101
|
|
|
—
|
|
|
Proceeds from 3.85% Senior Notes
|
—
|
|
|
600,000
|
|
|
Payments of acquired debt and other financings
|
(12,292
|
)
|
|
(895,127
|
)
|
|
Net change in asset securitization borrowings
|
—
|
|
|
20,000
|
|
|
Payments on other debt
|
(52,793
|
)
|
|
(22
|
)
|
|
Debt issuance costs
|
—
|
|
|
(5,815
|
)
|
|
Change in outstanding checks in excess of cash
|
2,938
|
|
|
(11,423
|
)
|
|
Proceeds and net tax benefit from stock transactions
|
6,822
|
|
|
29,859
|
|
|
Net cash provided by financing activities
|
168,363
|
|
|
207,646
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(581
|
)
|
|
(34,926
|
)
|
|
Net change in cash and cash equivalents
|
15,978
|
|
|
(308,927
|
)
|
|
Cash and cash equivalents, beginning of period
|
54,066
|
|
|
477,672
|
|
|
Cash and cash equivalents, end of period
|
$
|
70,044
|
|
|
168,745
|
|
|
|
|
|
•
|
A cash payment of
$307,052
; and
|
•
|
2,874
newly issued Shares for a value of
$313,906
.
|
Enterprise value
|
$
|
1,522,731
|
|
Assumed indebtedness
|
(901,773
|
)
|
|
Consideration transferred
|
$
|
620,958
|
|
|
|
||
Working capital
|
$
|
428,624
|
|
Property, plant and equipment, net
|
773,594
|
|
|
Tradenames
|
215,357
|
|
|
Customer relationships
|
21,792
|
|
|
Equity method investments
|
32
|
|
|
Goodwill
|
276,586
|
|
|
Other long-term assets
|
18,499
|
|
|
Long-term debt, including current portion
|
(901,773
|
)
|
|
Other long-term liabilities
|
(70,090
|
)
|
|
Deferred tax liability
|
(135,455
|
)
|
|
Noncontrolling interest
|
(6,208
|
)
|
|
Consideration transferred
|
$
|
620,958
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
|
June 28, 2014
|
|
June 29, 2013
|
|
June 28, 2014
|
|
June 29, 2013
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Net Sales:
|
|
|
|
|
|
|
|
|
|||||
As reported
|
|
$
|
2,048,247
|
|
|
1,976,299
|
|
|
3,861,342
|
|
|
3,463,114
|
|
Pro forma
|
|
$
|
2,048,247
|
|
|
1,976,299
|
|
|
3,861,342
|
|
|
3,725,595
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings from continuing operations attributable to Mohawk Industries, Inc.:
|
|
|
|
|
|
|
|
|
|||||
As reported
|
|
$
|
152,750
|
|
|
85,933
|
|
|
233,831
|
|
|
136,428
|
|
Pro forma
|
|
$
|
152,750
|
|
|
100,741
|
|
|
233,831
|
|
|
159,150
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share from continuing operations attributable to Mohawk Industries, Inc.:
|
|
|
|
|
|
|
|
|
|||||
As reported
|
|
$
|
2.10
|
|
|
1.19
|
|
|
3.21
|
|
|
1.92
|
|
Pro forma
|
|
$
|
2.10
|
|
|
1.39
|
|
|
3.21
|
|
|
2.20
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share from continuing operations attributable to Mohawk Industries, Inc.:
|
|
|
|
|
|
|
|
|
|||||
As reported
|
|
$
|
2.08
|
|
|
1.18
|
|
|
3.19
|
|
|
1.91
|
|
Pro forma
|
|
$
|
2.08
|
|
|
1.38
|
|
|
3.19
|
|
|
2.18
|
|
•
|
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 and workforce reductions.
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28, 2014
|
|
June 29, 2013
|
|
June 28, 2014
|
|
June 29, 2013
|
|||||
Cost of sales
|
|
|
|
|
|
|
|
|||||
Restructuring costs
|
$
|
3,475
|
|
|
11,324
|
|
|
5,534
|
|
|
14,330
|
|
Acquisition integration-related costs
|
3,280
|
|
|
3,010
|
|
|
6,858
|
|
|
3,345
|
|
|
Restructuring and integration-related costs
|
$
|
6,755
|
|
|
14,334
|
|
|
12,392
|
|
|
17,675
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative expenses
|
|
|
|
|
|
|
|
|||||
Restructuring costs
|
$
|
615
|
|
|
8,843
|
|
|
3,217
|
|
|
14,059
|
|
Acquisition transaction-related costs
|
—
|
|
|
13,812
|
|
|
—
|
|
|
13,812
|
|
|
Acquisition integration-related costs
|
3,799
|
|
|
4,331
|
|
|
7,285
|
|
|
5,630
|
|
|
Restructuring, acquisition and integration-related costs
|
$
|
4,414
|
|
|
26,986
|
|
|
10,502
|
|
|
33,501
|
|
|
Lease
impairments
|
|
Asset write-downs
|
|
Severance
|
|
Other
restructuring
costs
|
|
Total
|
||||||
Balance as of December 31, 2013
|
$
|
5,904
|
|
|
—
|
|
|
18,144
|
|
|
—
|
|
|
24,048
|
|
Provision - Ceramic segment
|
—
|
|
|
1,220
|
|
|
738
|
|
|
(224
|
)
|
|
1,734
|
|
|
Provision - Laminate and Wood segment
|
—
|
|
|
—
|
|
|
2,047
|
|
|
4,970
|
|
|
7,017
|
|
|
Cash payments
|
(2,744
|
)
|
|
—
|
|
|
(12,757
|
)
|
|
(4,943
|
)
|
|
(20,444
|
)
|
|
Non-cash items
|
—
|
|
|
(1,220
|
)
|
|
—
|
|
|
224
|
|
|
(996
|
)
|
|
Balance as of June 28, 2014
|
$
|
3,160
|
|
|
—
|
|
|
8,172
|
|
|
27
|
|
|
11,359
|
|
|
June 28,
2014 |
|
December 31,
2013 |
|||
Customers, trade
|
$
|
1,280,046
|
|
|
1,076,824
|
|
Income tax receivable
|
7,017
|
|
|
7,590
|
|
|
Other
|
57,164
|
|
|
55,498
|
|
|
|
1,344,227
|
|
|
1,139,912
|
|
|
Less: allowance for discounts, returns, claims and doubtful accounts
|
82,419
|
|
|
77,037
|
|
|
Receivables, net
|
$
|
1,261,808
|
|
|
1,062,875
|
|
|
June 28,
2014 |
|
December 31,
2013 |
|||
Finished goods
|
$
|
1,100,102
|
|
|
1,039,478
|
|
Work in process
|
131,987
|
|
|
129,080
|
|
|
Raw materials
|
412,679
|
|
|
403,767
|
|
|
Total inventories
|
$
|
1,644,768
|
|
|
1,572,325
|
|
|
Carpet segment
|
|
Ceramic segment
|
|
Laminate and Wood segment
|
|
Total
|
|||||
Balance as of December 31, 2013
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
199,132
|
|
|
1,459,812
|
|
|
1,404,573
|
|
|
3,063,517
|
|
Accumulated impairment losses
|
(199,132
|
)
|
|
(531,930
|
)
|
|
(596,363
|
)
|
|
(1,327,425
|
)
|
|
|
$
|
—
|
|
|
927,882
|
|
|
808,210
|
|
|
1,736,092
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill recognized during the period
|
|
|
|
(2,497
|
)
|
|
7,775
|
|
|
5,278
|
|
|
Currency translation during the period
|
|
|
|
(4,768
|
)
|
|
(5,889
|
)
|
|
(10,657
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Balance as of June 28, 2014
|
|
|
|
|
|
|
|
|||||
Goodwill
|
$
|
199,132
|
|
|
1,452,547
|
|
|
1,406,459
|
|
|
3,058,138
|
|
Accumulated impairment losses
|
(199,132
|
)
|
|
(531,930
|
)
|
|
(596,363
|
)
|
|
(1,327,425
|
)
|
|
|
$
|
—
|
|
|
920,617
|
|
|
810,096
|
|
|
1,730,713
|
|
|
Tradenames
|
||
Balance as of December 31, 2013
|
$
|
700,592
|
|
Currency translation during the period
|
(6,242
|
)
|
|
Balance as of June 28, 2014
|
$
|
694,350
|
|
Gross carrying amounts:
|
Customer
relationships |
|
Patents
|
|
Other
|
|
Total
|
|||||
Balance as of December 31, 2013
|
$
|
383,359
|
|
|
307,186
|
|
|
1,501
|
|
|
692,046
|
|
Currency translation during the period
|
(2,295
|
)
|
|
(3,494
|
)
|
|
13
|
|
|
(5,776
|
)
|
|
Balance as of June 28, 2014
|
$
|
381,064
|
|
|
303,692
|
|
|
1,514
|
|
|
686,270
|
|
|
|
|
|
|
|
|
|
|||||
Accumulated amortization:
|
Customer
relationships |
|
Patents
|
|
Other
|
|
Total
|
|||||
Balance as of December 31, 2013
|
$
|
342,361
|
|
|
238,115
|
|
|
560
|
|
|
581,036
|
|
Amortization during the period
|
3,528
|
|
|
8,957
|
|
|
62
|
|
|
12,547
|
|
|
Currency translation during the period
|
(2,503
|
)
|
|
(2,726
|
)
|
|
6
|
|
|
(5,223
|
)
|
|
Balance as of June 28, 2014
|
$
|
343,386
|
|
|
244,346
|
|
|
628
|
|
|
588,360
|
|
|
|
|
|
|
|
|
|
|||||
Intangible assets subject to amortization, net
|
$
|
37,678
|
|
|
59,346
|
|
|
886
|
|
|
97,910
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Amortization expense
|
$
|
6,509
|
|
|
6,774
|
|
|
12,547
|
|
|
12,748
|
|
|
June 28,
2014 |
|
December 31,
2013 |
|||
Outstanding checks in excess of cash
|
$
|
20,950
|
|
|
18,012
|
|
Accounts payable, trade
|
711,807
|
|
|
631,732
|
|
|
Accrued expenses
|
262,401
|
|
|
273,230
|
|
|
Product warranties
|
32,235
|
|
|
35,818
|
|
|
Accrued interest
|
35,455
|
|
|
35,618
|
|
|
Income taxes payable
|
12,838
|
|
|
1,095
|
|
|
Deferred tax liability
|
11,710
|
|
|
11,235
|
|
|
Accrued compensation and benefits
|
165,895
|
|
|
186,853
|
|
|
Total accounts payable and accrued expenses
|
$
|
1,253,291
|
|
|
1,193,593
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Balance at beginning of period
|
$
|
33,260
|
|
|
35,483
|
|
|
35,818
|
|
|
32,930
|
|
Warranty claims paid during the period
|
(15,862
|
)
|
|
(16,306
|
)
|
|
(29,886
|
)
|
|
(29,607
|
)
|
|
Acquisitions
|
—
|
|
|
503
|
|
|
—
|
|
|
3,283
|
|
|
Warranty expense during the period
|
14,837
|
|
|
13,994
|
|
|
26,303
|
|
|
27,068
|
|
|
Balance at end of period
|
$
|
32,235
|
|
|
33,674
|
|
|
32,235
|
|
|
33,674
|
|
|
Foreign currency translation adjustments
|
|
Pensions (1)
|
|
Total
|
||||
Balance as of December 31, 2013
|
$
|
178,846
|
|
|
(157
|
)
|
|
178,689
|
|
Current period other comprehensive (loss) income before reclassifications
|
(43,314
|
)
|
|
4
|
|
|
(43,310
|
)
|
|
Amounts reclassified from accumulated other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of June 28, 2014
|
$
|
135,532
|
|
|
(153
|
)
|
|
135,379
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Foreign currency (gains) losses, net
|
$
|
(1,033
|
)
|
|
(767
|
)
|
|
4,855
|
|
|
3,032
|
|
All other, net
|
(522
|
)
|
|
(330
|
)
|
|
(1,520
|
)
|
|
2,258
|
|
|
Total other (income) expense
|
$
|
(1,555
|
)
|
|
(1,097
|
)
|
|
3,335
|
|
|
5,290
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Earnings from continuing operations attributable to Mohawk Industries, Inc.
|
$
|
152,750
|
|
|
85,933
|
|
|
233,831
|
|
|
136,428
|
|
|
|
|
|
|
|
|
|
|||||
Weighted-average common shares outstanding-basic and diluted:
|
|
|
|
|
|
|
|
|||||
Weighted-average common shares outstanding—basic
|
72,832
|
|
|
72,406
|
|
|
72,788
|
|
|
70,907
|
|
|
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net
|
465
|
|
|
461
|
|
|
514
|
|
|
498
|
|
|
Weighted-average common shares outstanding-diluted
|
73,297
|
|
|
72,867
|
|
|
73,302
|
|
|
71,405
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per share from continuing operations attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|||||
Basic
|
$
|
2.10
|
|
|
1.19
|
|
|
3.21
|
|
|
1.92
|
|
Diluted
|
$
|
2.08
|
|
|
1.18
|
|
|
3.19
|
|
|
1.91
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||
|
June 28,
2014 |
|
June 29,
2013 |
|
June 28,
2014 |
|
June 29,
2013 |
|||||
Net sales:
|
|
|
|
|
|
|
|
|||||
Carpet segment
|
$
|
780,308
|
|
|
770,868
|
|
|
1,455,234
|
|
|
1,466,202
|
|
Ceramic segment
|
796,724
|
|
|
760,168
|
|
|
1,491,818
|
|
|
1,172,049
|
|
|
Laminate and Wood segment
|
501,257
|
|
|
470,980
|
|
|
969,265
|
|
|
875,455
|
|
|
Intersegment sales
|
(30,042
|
)
|
|
(25,717
|
)
|
|
(54,975
|
)
|
|
(50,592
|
)
|
|
|
$
|
2,048,247
|
|
|
1,976,299
|
|
|
3,861,342
|
|
|
3,463,114
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|||||
Carpet segment
|
$
|
62,826
|
|
|
54,862
|
|
|
97,097
|
|
|
80,100
|
|
Ceramic segment
|
106,407
|
|
|
46,304
|
|
|
167,066
|
|
|
76,280
|
|
|
Laminate and Wood segment
|
60,843
|
|
|
41,362
|
|
|
104,962
|
|
|
80,055
|
|
|
Corporate and intersegment eliminations
|
(7,828
|
)
|
|
(9,330
|
)
|
|
(16,142
|
)
|
|
(16,395
|
)
|
|
|
$
|
222,248
|
|
|
133,198
|
|
|
352,983
|
|
|
220,040
|
|
|
June 28,
2014 |
|
December 31,
2013 |
|||
Assets:
|
|
|
|
|||
Carpet segment
|
$
|
1,960,106
|
|
|
1,786,085
|
|
Ceramic segment
|
3,900,387
|
|
|
3,787,785
|
|
|
Laminate and Wood segment
|
2,818,129
|
|
|
2,716,759
|
|
|
Corporate and intersegment eliminations
|
203,059
|
|
|
203,548
|
|
|
|
$
|
8,881,681
|
|
|
8,494,177
|
|
|
June 28, 2014
|
|
December 31, 2013
|
|||||||||
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|||||
3.85% senior notes, payable January 31, 2023; interest payable semiannually
|
$
|
603,600
|
|
|
600,000
|
|
|
569,400
|
|
|
600,000
|
|
6.125% notes, payable January 15, 2016; interest payable semiannually
|
972,900
|
|
|
900,000
|
|
|
983,700
|
|
|
900,000
|
|
|
Commercial paper
|
560,000
|
|
|
560,000
|
|
|
—
|
|
|
—
|
|
|
Five-year senior secured credit facility, due September 25, 2018
|
27,444
|
|
|
27,444
|
|
|
364,005
|
|
|
364,005
|
|
|
Securitization facility
|
300,000
|
|
|
300,000
|
|
|
300,000
|
|
|
300,000
|
|
|
Capital leases and other
|
39,394
|
|
|
39,394
|
|
|
96,003
|
|
|
96,003
|
|
|
Total debt
|
2,503,338
|
|
|
2,426,838
|
|
|
2,313,108
|
|
|
2,260,008
|
|
|
Less current portion of long term debt and commercial paper
|
619,229
|
|
|
619,229
|
|
|
127,218
|
|
|
127,218
|
|
|
Long-term debt, less current portion
|
$
|
1,884,109
|
|
|
1,807,609
|
|
|
2,185,890
|
|
|
2,132,790
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
No.
|
|
Description
|
|
|
|
10.1
|
|
Second Amendment to Credit and Security Agreement and Waiver, dated as of April 11, 2014, among Mohawk Factoring, LLC as borrower, Mohawk Servicing, LLC, as servicer, the lenders from time to time party thereto, the liquidity banks from time to time party thereto, the co-agents from time to time party thereto and SunTrust Bank, as administrative agent.
|
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.
|
|
|
|
|
MOHAWK INDUSTRIES, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
Dated:
|
August 4, 2014
|
By:
|
|
/s/ Jeffrey S. Lorberbaum
|
|
|
|
|
JEFFREY S. LORBERBAUM
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
(principal executive officer)
|
|
|
|
|
|
Dated:
|
August 4, 2014
|
By:
|
|
/s/ Frank H. Boykin
|
|
|
|
|
FRANK H. BOYKIN
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer)
|
MOHAWK FACTORING, LLC, as Borrower
|
||
|
|
|
By:
|
|
/s/ Shailesh Bettadapur
|
Name:
|
|
Shailesh Bettadapur
|
Title:
|
|
Vice President and Treasurer
|
|
|
|
MOHAWK SERVICING, LLC, as Servicer
|
||
|
|
|
By:
|
|
/s/ Shailesh Bettadapur
|
Name:
|
|
Shailesh Bettadapur
|
Title:
|
|
Vice President and Treasurer
|
|
|
|
VICTORY RECEIVABLES CORPORATION
|
||
|
|
|
By:
|
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/s/ David V. DeAngelis
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Name:
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David V. DeAngelis
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Title:
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Vice President
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THE BANK OF TOKYO‑MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Co‑Agent
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||
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By:
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/s/ Richard Gregory Hurst
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Name:
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Richard Gregory Hurst
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Title:
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Managing Director
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THE BANK OF TOKYO‑MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Victory Liquidity Bank
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By:
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/s/ R. Mumick
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Name:
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R. Mumick
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Title:
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Director
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WORKING CAPITAL MANAGEMENT CO., L.P., AS CONDUIT
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By:
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/s/ Shinichi Nochiide
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Name:
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Shinichi Nochiide
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Title:
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Attorney-In-Fact
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SUNTRUST BANK, as a Non-Conduit Lender
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By:
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/s/ Michael Peden
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Name:
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Michael Peden
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Title:
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Vice President
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SUNTRUST BANK, as Co-Agent and Administrative Agent
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By:
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/s/ Michael Peden
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Name:
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Michael Peden
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Title:
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Vice President
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MIZUHO CORPORATE BANK, LTD., as WCM Liquidity Bank and as Co-Agent
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||
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By:
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/s/ David Lim
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Name:
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David Lim
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Title:
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Authorized Signatory
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MOHAWK INDUSTRIES, INC.
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By:
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/s/ Shailesh Bettadapur
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Name:
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Shailesh Bettadapur
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Title:
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Vice President and Treasurer
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1.
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I have reviewed this annual report on Form 10-Q 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 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)
|
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)
|
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)
|
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 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)
|
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)
|
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-Q 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/ Frank H. Boykin
|
Frank H. Boykin
|
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/ Frank H. Boykin
|
Frank H. Boykin
|
Chief Financial Officer
|