10-K

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[Mark One]

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number

01-13697 

MOHAWK INDUSTRIES, INC.

(Exact name of registrant as specified in its charter) 

Delaware			52-1604305
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
160 S. Industrial Blvd.	Calhoun	Georgia	30701
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (706) 629-7721

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $.01 par value	MHK	New York Stock Exchange
Floating Rate Notes due 2021		New York Stock Exchange
2.000% Senior Notes due 2022		New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ý    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act    Yes  ¨    No  ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 USC. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ý

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ý

The aggregate market value of the Common Stock of the Registrant held by non-affiliates (excludes beneficial owners of more than 10% of the Common Stock) of the Registrant (57,880,506 shares) on June 26, 2020 (the last business day of the Registrant’s most recently completed fiscal second quarter) was $5,539,743,229. The aggregate market value was computed by reference to the closing price of the Common Stock on such date.

Number of shares of Common Stock outstanding as of February 22, 2021: 70,226,354 shares of Common Stock, $.01 par value. Mohawk Industries, Inc. common stock trades on the New York Stock Exchange under symbol MHK.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the 2021 Annual Meeting of Stockholders-Part III.

Table of Contents

		Page No.
Part I
Item 1.	Business	3
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	21
Item 3.	Legal Proceedings	22
Item 4.	Mine Safety Disclosures	22
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 8.	Consolidated Financial Statements and Supplementary Data	37
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	82
Item 9A.	Controls and Procedures	82
Item 9B.	Other Information	82
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	83
Item 11.	Executive Compensation	83
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	83
Item 13.	Certain Relationships and Related Transactions, and Director Independence	83
Item 14.	Principal Accounting Fees and Services	83
Part IV
Item 15.	Exhibits, Financial Statement Schedules	84

2

PART I

Item 1.Business

Unless this Form 10-K indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Mohawk,” or “the Company” as used in this Form 10-K refer to Mohawk Industries, Inc.

General

Mohawk is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company’s vertically integrated manufacturing and distribution processes provide competitive advantages in carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile (“LVT”) and sheet vinyl flooring. The Company’s industry-leading innovation develops products and technologies that differentiate its brands in the marketplace and satisfy all flooring-related remodeling and new construction requirements. The Company’s brands are among the most recognized in the industry and include American Olean®, Daltile®, Durkan®, Eliane®, Feltex®, Godfrey Hirst®, IVC®, Karastan®, Marazzi®, Mohawk®, Pergo®, Quick-Step® and Unilin®. During the past two decades, the Company has transformed its business from an American carpet manufacturer into the world’s largest flooring company with operations in Australia, Brazil, Canada, Europe, India, Malaysia, Mexico, New Zealand, Russia, United Kingdom and the United States. The Company had annual net sales in 2020 of $9.6 billion. Approximately 60% of this amount was generated by sales in the United States and approximately 40% was generated by sales outside the United States. The Company has three reporting segments, Global Ceramic, Flooring North America (“Flooring NA”) and Flooring Rest of the World (“Flooring ROW”) with their 2020 net sales representing 36%, 38% and 26%, respectively, of the Company’s total revenue. Selected financial information for the three segments, geographic net sales and the location of long-lived assets are set forth in Note 18-Segment Reporting.

The Global Ceramic Segment designs, manufactures, sources, distributes and markets a broad line of ceramic, porcelain and natural stone tile products used for floor and wall applications in residential and commercial channels for both remodeling and new construction.  In addition, the Global Ceramic Segment manufactures, sources and distributes other products, including natural stone, quartz and porcelain slab countertops, as well as installation materials. The Global Ceramic Segment markets and distributes its products under various brands, including the following:  American Olean, Daltile, Eliane, EmilGroup®, KAI®, Kerama Marazzi, Marazzi and Ragno®. The Segment sells its products through company-owned and franchised operations, independent distributors, home centers, floor covering retailers, ceramic specialists, commercial contractors and commercial end users. The Global Ceramic Segment operations are vertically integrated from the production of raw material for body and glaze preparation to the manufacturing and distribution of ceramic and porcelain tile and countertops.

The Flooring NA Segment designs, manufactures, sources and distributes a broad range of floor covering products in a variety of colors, textures and patterns for both residential and commercial remodeling and new construction channels. The Segment’s product lines include broadloom carpet, carpet tile, rugs and mats, carpet pad, laminate, medium-density fiberboard (“MDF”), wood flooring, LVT and sheet vinyl. The Flooring NA Segment markets and distributes its flooring products under various brands, including the following: Aladdin Commercial®, Durkan, IVC, Karastan, Mohawk, Mohawk Group®, Mohawk Home®, Pergo, Portico® and Quick-Step. The Segment sells its products through floor covering retailers, distributors, home centers, mass merchants, department stores, e-commerce retailers, shop at home, buying groups, builders, commercial contractors and commercial end users.

The Flooring ROW Segment designs, manufactures, sources and distributes a wide variety of laminate, LVT and sheet vinyl, wood flooring, broadloom carpet and carpet tile collections used in the residential and commercial markets for both remodeling and new construction. In addition, the Flooring ROW Segment manufactures roofing panels, insulation boards, mezzanine flooring, MDF and chipboards primarily for the European market. The Segment also licenses certain patents related to flooring manufacturing throughout the world. The Segment markets and distributes its products under various brands, including the following: Balterio®, Feltex, Godfrey Hirst, Hycraft®, IVC, Leoline®, Moduleo®, Pergo, Quick-Step, Unilin and Xtratherm®. The Segment sells its products through floor covering retailers, wholesalers, company-operated distributors independent distributors and home centers.

3

Business Strategy

Mohawk’s business strategy provides a consistent vision for the organization and focuses employees around the globe on key priorities. The strategy is cascaded down through the organization with an emphasis on five key points:

•Optimizing the Company’s position as the industry’s preferred provider by delivering exceptional value to customers;

•Treating employees fairly to retain the best organization;

•Driving innovation in all aspects of the business;

•Taking reasonable, well considered risks to grow the business; and

•Enhancing the communities in which the Company operates.

The Mohawk business strategy provides continuity for the Company’s operating principles and ensures a focus on exceeding customer expectations.

Strengths

Market Position

Mohawk’s fashionable and innovative products, successful participation in all sales channels, creative marketing programs and extensive sales resources have enabled the Company to build market leadership positions in multiple geographies, primarily North America, Brazil, Europe, Russia and Australasia, as well as to export products to more than 170 countries. In North America, Mohawk’s largest marketplace, the Company has leveraged its brands, broad offering and award-winning merchandising to build strong positions across all product categories. In Europe and Russia, similar advantages have supported market leadership in ceramic tile, premium laminate and sheet vinyl. The Company also has established a strong position in the fast-growing LVT market in the U.S. and Europe following the 2015 acquisition of IVC and subsequent investments to expand production. The 2018 acquisition of Godfrey Hirst provided the Company with the largest market position in carpet in Australasia to complement the leading hard surface presence that the Company had grown through its earlier acquisitions of national distributors in both Australia and New Zealand. In 2018, the Company acquired Eliane, a leading ceramic tile manufacturer in Brazil, the world’s third largest ceramic market. The Eliane brand is highly regarded for innovative design and strength in high-end porcelain floor and wall tile. The Company believes Eliane is Brazil’s largest ceramic tile exporter.

4

Product Innovation

Mohawk drives performance through innovation and process improvements across all product categories. In ceramic, this includes proprietary Reveal Imaging® printing that replicates the appearance of other surfaces, such as long planks with the visuals and texture of natural wood as well as tiles that mimic natural stone, cement, textiles and other alternatives. The Company has patented an innovative new Clic-Fit™ installation technology for its Revo-Tile™ collection that significantly reduces the time and cost to install ceramic tile flooring. Given the frequent use of ceramic tile in kitchens and baths, the Company has also introduced numerous collections featuring antimicrobial treatment that becomes a permanent part of the product. In Italy and Russia, the Company manufactures large-scale porcelain slabs that replicate the look of stone but are harder and more durable. The slabs are being sold in the European and North American markets and are used for floors, walls and countertops. In the U.S., the Company manufactures quartz countertops that along with its stone and porcelain slabs, provide customers with a comprehensive array of surface options. In carpet, the Company introduced the unique Air.o™ unified soft surface collection that integrates a polyester pad into tufted carpet, offering consumers a hypoallergenic and moisture-resistant alternative to traditional carpet. The Company has also launched an innovative carpet backing called Recover™ that is hypoallergenic, latex and VOC free and is easier to install and seam. The Company’s exclusive fiber technologies include the proprietary bio-based SmartStrand® and its brand extensions that represented the first super-soft stain-resistant products on the market as well as the patented Continuum™ process that adds bulk and softness to polyester fiber, differentiating the Company’s products in this fast-growing component of the carpet market. These fiber advantages have been extended into the Company’s rug production, as well, adding luxurious feel and performance enhancements to the Company’s design leadership. In laminate, the Company’s patented Uniclic® installation technology revolutionized the category and has been extended into the LVT and wood categories, as well. The Company continues to deliver new innovations such as unique HydroSeal™ water-resistance that has extended the laminate category into kitchens and baths, more realistic visuals with GenuEdge® pressed bevel edges and surface embossing in register that precisely recreates the appearance of wood. As consumer preference for water-proof flooring has increased, the Company has introduced a propriety technology called WetProtect™ that makes the joints of installed laminate and LVT water tight and prevents liquid spills from reaching the subfloor. This technology has been uniquely applied to wood flooring with UltraWood™, which also features an advanced waterproof finish in addition to improved scratch, wear and dent resistance. The Company’s vinyl offerings reflect significant investments in leading-edge technology that yield incredibly realistic reproductions of stone, wood and other materials with embossed finishes that create more realistic visuals. To complement the beauty of its LVT collections, the Company has also enhanced the performance of its premium rigid products with a solid stone-plastic composite core and an enhanced lacquer finish to provide a dent proof, scratch resistant surface that can withstand today’s active family homes.

Operational Excellence

Mohawk’s highly efficient manufacturing and distribution assets serve as the foundation for successful growth. By leveraging continuous process improvement and automation, the Company’s operations drive innovation, quality and value. Through its commitment to sustainability practices, the Company has also optimized natural resources and raw materials. The Company has invested to expand capacity, introduce differentiated new products and improve efficiencies. In particular, the Company’s capital investments have improved recently acquired businesses by upgrading their product offerings, expanding their distribution and improving their productivity. For fifteen years, Mohawk’s training and development programs have been ranked among the best by Training magazine, and Forbes has designated Mohawk as one of the Best Large U.S. Employers.

Sustainability

The Company believes that it is the industry leader in sustainable products and processes. The Company’s extensive use of recycled content in its products includes the use of more than 7 billion plastic bottles (2019) to create polyester carpet fiber and more than 42 million pounds of tires to produce decorative crumb rubber mats. In all, the Company diverts more than 6.5 billion pounds of waste from landfills each year, with 50 of the Company’s manufacturing sites internally certified as Zero Process Waste to Landfill facilities. The Company’s commitment to sustainability extends beyond its products to resource utilization, including a 513-million-gallon reduction in water use since 2015, lower greenhouse gas emissions and increased energy efficiency. The Company also produces energy through solar panels, windmills and a waste-to-energy program using scrap material. The Company’s commitment to safety and wellness helps to retain a talented workforce. The Company currently operates 19 on-site, near-site or virtual Healthy Life Centers to assist employees with management of chronic conditions as well as the treatment of acute illness. The Company’s annual sustainability report details these and other initiatives and may be accessed at http://www.mohawksustainability.com.

5

Sales and Distribution

Global Ceramic Segment

The Global Ceramic Segment designs, markets, manufactures, distributes and sources a broad line of ceramic tile, porcelain tile and natural stone products, including natural stone, quartz and porcelain slab countertops. Products are distributed through various channels, including independent distributors, home centers, Company-operated service centers and stores, ceramic tile specialists, commercial contractors and directly to commercial end users. The business is organized with dedicated sales forces to address the specific customer needs of each distribution channel.

The Company provides customers with one of the ceramic tile industry’s broadest product lines—a complete selection of glazed floor tile, glazed wall tile, mosaic tile, porcelain tile, quarry tile, porcelain landscaping pavers, porcelain roofing, stone products, porcelain slab countertops, quartz countertops and installation products. In addition to products manufactured by the Company’s ceramic tile business, the Company also sources products from other manufacturers to enhance its product offering.

The Global Ceramic Segment markets its products under the American Olean, Daltile, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi and Ragno brand names. These brands are supported by a fully integrated marketing program, displays, merchandising boards, literature, catalogs and websites. Innovative design, quality and response to changes in customer preference enhance recognition in the marketplace. The Company is focused on sales growth opportunities through innovative products and programs in both the residential and commercial channels for both remodeling and new construction.

The Global Ceramic Segment utilizes various distribution methods including regional distribution centers, service centers, direct shipping and customer pick-up from manufacturing facilities. The Segment’s sales forces are organized by product type and sales channels in order to best serve each type of customer. The Company believes its distribution methods for the Global Ceramic Segment provide high-quality customer service and enhance its ability to plan and manage inventory requirements.

Flooring NA Segment

Through its Flooring NA Segment, the Company designs, markets, manufactures, distributes and sources broadloom carpet, carpet tile, carpet pad, rugs, laminate, LVT, sheet vinyl and wood flooring in a broad range of colors, textures and patterns. The Flooring NA Segment positions product lines in all price ranges and emphasizes quality, style, performance and service. The Flooring NA Segment markets and distributes its product lines to independent distributors, floor covering retailers, home centers, mass merchandisers, department stores, e-commerce retailers, shop at home, buying groups, commercial contractors and commercial end users. Some products are also marketed through private labeling programs. Sales to customers focused on residential products represent a significant portion of the total industry and the majority of the Segment’s sales.

The Company has positioned its brand names across all price ranges. IVC, Karastan, Mohawk, Mohawk Home, Pergo, Portico and Quick-Step are positioned to sell in the residential flooring markets. Aladdin Commercial and Mohawk Group are positioned to sell in the commercial market, which is made up of corporate office space, educational facilities, institutional facilities, healthcare/assisted living facilities and retail space. The Company also sells into the commercial hospitality space (hotels, restaurants, gaming facilities, etc.) under its Durkan brand.

The Segment’s sales forces are generally organized by sales channels to best serve each type of customer. Product delivery to independent dealers is facilitated predominantly on Mohawk trucks operating from a strategically positioned national network of warehouses and cross-docks that receive inbound product directly from the Company’s manufacturing operations.

Flooring ROW Segment

The Flooring ROW Segment designs, manufactures, markets, licenses, distributes and sources laminate, LVT, sheet vinyl, wood flooring, broadloom carpet and carpet tile. It also designs and manufactures roofing panels, insulation boards, MDF and chipboards. Products are sold through separate distribution channels, consisting of retailers, independent distributors, company-operated distributors, wholesalers, home centers, commercial contractors and commercial end users. The business is organized to address the specific customer needs of each distribution channel.

6

The Flooring ROW Segment markets and sells laminate, LVT sheet vinyl, broadloom carpet, carpet tile and wood under the Balterio, Feltex, Godfrey Hirst, Hycraft, IVC, Leoline, Moduleo, Pergo and Quick-Step brands. The Flooring ROW Segment also sells private label laminate, wood and vinyl flooring products. The Company believes Quick-Step and Pergo are leading brand names in the European flooring industry, and that Godfrey Hirst and Feltex are leading brand names in the Australasian flooring market. In addition, the Flooring ROW Segment markets and sells insulation boards, roof panels, MDF and chipboards in Europe under the Unilin and Xtratherm brands. The Segment also licenses its intellectual property to flooring manufacturers throughout the world.

The Company uses regional distribution centers and direct shipping from manufacturing facilities to provide high-quality customer service and enhance the Company’s ability to plan and manage inventory requirements.

Advertising and Promotion

The Company’s brands are among the best known and most widely distributed in the industry. The Company vigorously supports the value and name recognition of its brands through traditional advertising channels, including numerous trade publications and unique promotional events that highlight product design and performance, as well as social media initiatives and Internet-based advertising. The Company has invested significantly in websites that educate consumers about the Company’s products, helping them to make informed decisions about purchases, and that identify local retailers that offer the Company’s collections. The Company offers its customers the award-winning Omnify™, an Internet platform that automatically syncs updated product and sales information between the Company and its U.S. aligned retailer websites, ensuring that consumers have access to the most accurate and timely information.

In North America, the Company actively supports well known programs as Susan G. Komen® (breast cancer research), Habitat for Humanity® (housing for low income families), HomeAid® (housing for homeless families) and Operation Finally Home® (housing for disabled veterans), which include marketing partnerships that showcase the Company’s products and highlight its corporate values. The Company also sponsors a European cycling team to promote its Quick-Step brand through logo placements and use of the team in its advertising and point-of-sale displays.

The Company introduces new products, merchandising and marketing campaigns through participation in regional, national and international trade shows as well as at exclusive dealer conventions. The Company supports sales with its retail customers through cooperative advertising programs that extend the reach of the Company’s promotion as well as with innovative merchandising displays that highlight the Company’s differentiated products and provide samples to consumers. The cost of providing merchandising displays, product samples and point of sale promotional marketing, is partially recovered by the purchase of these items by the Company’s customers.

Manufacturing and Operations

Global Ceramic Segment

The Company’s ceramic tile manufacturing operations are vertically integrated from the production of raw material for body and glaze preparation to the manufacturing and distribution of ceramic and porcelain tile and quartz countertops. The Company believes that its manufacturing organization’s leading-edge technology offers competitive advantages due to its ability to create a differentiated product line consisting of one of the industry’s broadest offerings of colors, textures and finishes, as well as the industry’s largest offering of trim and decorative pieces. In addition, the Global Ceramic Segment also sources a portion of its collections to enhance its product offerings. The Global Ceramic Segment continues to invest in equipment that utilizes the latest technologies, which supports the Company's efforts to increase manufacturing capacity, improve efficiency, meet the growing demand for its innovative products and develop new capabilities.

Flooring NA Segment

The Company’s carpet and rug manufacturing operations are vertically integrated and include the extrusion of triexta, nylon, polyester and polypropylene resins, as well as recycled post-consumer plastics, into fiber. The Flooring NA Segment is also vertically integrated in yarn processing, carpet backing manufacturing, tufting, weaving, dyeing, coating and finishing.

The Segment is also vertically integrated with significant manufacturing assets that produce laminate flooring, high density fiber board, wood flooring, fiberglass sheet vinyl and luxury vinyl tile. The Flooring NA Segment continues to invest in capital projects, such as the expansion of the Company’s North American LVT and premium laminate manufacturing capacity. Other investments in state-of-the-art equipment support market growth, increase manufacturing efficiency and improve overall cost competitiveness.

7

Flooring ROW Segment

The Company’s laminate and vinyl flooring manufacturing operations in Europe are vertically integrated. The Company believes its Flooring ROW Segment has advanced equipment that results in competitive manufacturing in terms of cost and flexibility. In addition, the Flooring ROW Segment has significant manufacturing capability for wood flooring, LVT and sheet vinyl. The 2018 acquisition of Godfrey Hirst established vertically integrated broadloom carpet and carpet tile operations in Australia and New Zealand, including the production of wool yarn. The Flooring ROW Segment is also vertically integrated in carpet manufacturing, including tufting, weaving, dyeing, coating and finishing.

The Flooring ROW Segment continues to invest in capital expenditures, such as LVT and laminate expansions, as well as new carpet tile and sheet vinyl plants in Europe and Russia, respectively, utilizing the latest advances in technologies to increase manufacturing capacity, improve efficiency and develop new capabilities including state-of-the-art, fully integrated production that will leverage the Company’s proven record of bringing innovative and high-quality products to its markets. The manufacturing facilities for roofing panels, insulation boards, MDF and chipboards in the Flooring ROW Segment are all configured for cost-efficient manufacturing and production flexibility and are competitive in the European market.

Inputs and Suppliers

Global Ceramic Segment

The principal raw materials used in the production of ceramic tile are clay, talc, feldspar, industrial minerals and glazes. The Company has long-term clay mining rights in North America, Russia, Bulgaria and Brazil that satisfy a portion of its clay requirements for producing tile. The Company also purchases a number of different grades of clay for the manufacture of its tile. Glazes are used on a significant percentage of manufactured tiles. Glazes consist of frit (ground glass), zircon, stains and other materials, with frit being the largest component. The Company manufactures a significant amount of its frit requirements. The Company believes that there is an adequate supply of all grades of clay, talc and industrial minerals that are readily available from a number of independent sources. If these suppliers were unable to satisfy the Company’s requirements, the Company believes that alternative supply arrangements would be available.

Flooring NA Segment

The principal raw materials used in the production of carpet and rugs are polypropelene, polyester, triexta, nylon, caprolactam, recycled post-consumer plastics, synthetic backing materials, latex and various dyes and chemicals, the majority of which are petroleum based. The Company uses wood chips, wood veneers, lumber, paper and resins in its production of laminate and wood products. In its vinyl flooring operations, the Company uses glass fiber, plasticizers and polyvinyl chloride (PVC) resins. Major raw materials used in the Company’s manufacturing process are available from independent sources, and the Company obtains most of its raw materials from major suppliers that provide inputs to each major product category. If these suppliers were unable to satisfy the requirements, the Company believes that alternative supply arrangements would be available. Although the market for raw materials is sensitive to temporary disruptions, the North American flooring industry has not experienced a significant shortage of raw materials in recent years.

Flooring ROW Segment

The principal raw materials used in the production of boards, laminate and wood flooring are wood, paper and resins. The wood suppliers provide a variety of wood species, providing the Company with a cost-effective and secure supply of raw material. In its vinyl flooring operations, the Company uses glass fiber, plasticizers and PVC resins. Major raw materials used in the Company’s manufacturing process are available from independent sources, and the Company has long-standing relationships with a number of suppliers. The principal raw materials used in the production of broadloom carpet and carpet tile are polypropelene, polyester, triexta, nylon, caprolactam, recycled post-consumer plastics, synthetic backing materials, latex and various dyes and chemicals, the majority of which are petroleum based. Although the market for raw materials is sensitive to temporary disruptions, the flooring industry has not experienced a significant shortage of raw materials in recent years. If these suppliers were unable to satisfy the requirements, the Company believes that alternative supply arrangements would be available.

8

Industry and Competition

The Company is the largest flooring manufacturer in a fragmented industry composed of a wide variety of companies ranging from small, privately-held firms to large multinationals. In 2019, the U.S. floor covering industry reported $27.6 billion in sales, up approximately 1.1% over 2018’s sales of $27.3 billion. In 2019, the primary categories of flooring in the U.S., based on sales, were carpet and rugs (41.0%), resilient (includes sheet vinyl and LVT) and rubber (23.2%), ceramic tile (14.1%), wood (13.0%), stone (5.5%) and laminate (3.2%). In 2019, the primary categories of flooring in the U.S., based on square feet, were carpet and rugs (46.4%), resilient (includes sheet vinyl and LVT) and rubber (27.3%), ceramic tile (14.2%), wood (6.7%), laminate (4.0%) and stone (1.4%).  Each of these categories is influenced by the residential and commercial construction and residential and commercial remodeling end-use markets. These markets are influenced by many factors including changing consumer preferences, consumer confidence, spending for durable goods, interest rates, inflation, availability of credit, turnover in housing and the overall strength of the economy.

The principal methods of competition within the floor covering industry generally are product innovation, style, quality, price, performance technology and service. In each of the markets, price and market coverage are particularly important when competing among product lines. The Company actively seeks to differentiate its products in the marketplace by introducing innovative products with premium features that provide a superior value proposition. The Company’s investments in manufacturing technology, computer systems and distribution network, as well as the Company’s marketing strategies and resources, contribute to its ability to compete on the basis of performance, quality, style and service, rather than price.

Global Ceramic Segment

Globally, the ceramic tile industry is significantly fragmented. Certain regions around the world have established sufficient capacity to allow them to meet domestic needs in addition to exporting product to other markets where their design and/or technical advantages may drive consumer preferences. Some mature markets have seen industry consolidation driven by mergers and acquisitions; however, most markets are comprised of many relatively small manufacturers all working with similar technologies, raw materials and designs. During 2019, the estimated global capacity for ceramic tile was 136 billion square feet - down slightly from the prior year primarily due to reduced production in China - with selling prices varying widely based on many factors, including supply within the market, materials used, size, shape and design. While the Company operates ceramic manufacturing facilities in eight countries, the Company has leveraged advantages in technology, design, brand recognition and marketing to extend exports of its products to approximately 150 countries. As a result of this global sales strategy, the Company faces competition in the ceramic tile market from a large number of foreign and domestic manufacturers, all of which compete for sales of ceramic tile to customers through multiple residential and commercial channels. The Company believes it is the largest manufacturer, distributor and marketer of ceramic tile in the world. The Company also believes it is the largest manufacturer, distributor and marketer of ceramic tile in specific markets, including the U.S., Europe and Russia, as well as maintaining leading positions in the Mexican and Brazilian markets. The Company has leveraged the advantages of its scale, product innovation and unique designs in these markets to solidify its leadership position, however the Company continues to face pressures in these markets from imported ceramic products as well as alternate flooring categories.

Flooring NA Segment

The North American flooring industry is highly competitive, with an increasing variety of product categories, shifting consumer preferences and pressures from imported products, particularly in the rug and hard surface categories. Based on industry publications, in 2019, the U.S. flooring industry had carpet and rug sales in excess of $11.3 billion out of the overall $27.6 billion market. Based on its 2019 net sales, the Company believes it is the largest producer of rugs and the second largest producer of carpet in the world. The Company differentiates its carpet and rug products in the market place through proprietary fiber systems, state-of-the-art manufacturing technologies and unique styling as well as leveraging the strength of some of the oldest and best-known brands in the industry. The Company also believes it is the largest manufacturer and distributor of laminate flooring in the U.S. as well as one of the largest manufacturers and distributors of wood flooring.  The Company’s leading position in laminate flooring is driven by the strength of its premium brands as well as technical innovations such as water resistance, realistic visuals, beveled edges, deeply embossed in register surfaces and patented installation technologies. The U.S. resilient industry is highly competitive, and according to industry publications, grew more than 18% in 2019. Based on industry publications, in 2019 LVT and sheet vinyl generated sales of $6.1 billion out of the $27.6 billion total U.S. flooring market. The Company believes that it is one of the largest manufacturers and distributors of LVT and sheet vinyl in the U.S. The Company’s sheet vinyl operations produce fiberglass backed products, which have proven more popular with consumers in the past several years due to superior performance and durability.

9

Flooring ROW Segment

The Company faces competition in the non-U.S. laminate, wood, LVT and sheet vinyl flooring business from a large number of domestic manufacturers as well as pressures from imports. The Company believes it is one of the largest manufacturers and distributors of laminate flooring in the world, with a focus on premium products, which the Company supplies under some of the best-known and most widely marketed brands in its regions. In addition, the Company believes it has a competitive advantage in its laminate flooring markets as a result of the Company’s industry-leading water resistance, realistic visuals and embossed-in-register surfaces as well as patented installation technologies, all of which allow the Company to differentiate its products in the areas of design, performance, installation and assembly. In wood flooring, the Company has extended the strength of its well-known laminate brands and its installation technologies to add value to its wood collections. The Company faces competition in the non-U.S. vinyl flooring channel from a large number of domestic and foreign manufacturers, but believes it has a competitive advantage in its LVT and sheet vinyl markets due to industry-leading design, patented technologies, brand recognition and vertical integration. The Company has elevated the performance of its sheet vinyl collections and is now aggressively placing the product in commercial applications. After initially extending its geographic footprint by acquiring national hard surface distributors in Australia and New Zealand, the Company acquired Godfrey Hirst in 2018, making the Company the largest manufacturer of carpet in both countries. The Company has integrated its soft and hard surface businesses to provide a comprehensive offering to residential and commercial customers in the region. In Australia and New Zealand, the Company faces competition from a large number of domestic and foreign manufacturers, but believes it has a competitive advantage in its carpet and hard surface offering due to industry-leading design, patented technologies, brand recognition and vertical integration of manufacturing and distribution. Through the 2015 acquisition of Xtratherm, the Company has extended its insulation panel business to the United Kingdom and Ireland while expanding sales in its core Benelux Region. The Company also expanded its European mezzanine flooring offering by acquiring German-based Berghoef in 2018.

Patents and Trademarks

Intellectual property is important to the Company’s business and the Company relies on a combination of patent, copyright, trademark and trade secret laws to protect its interests.

The Company uses several trademarks that it considers important in the marketing of its products, including American Olean, Daltile, Durkan, EmilGroup, Feltex, Godfrey Hirst, IVC, Karastan, Leoline, Marazzi, Moduleo, Mohawk, Mohawk Group, Mohawk Home, Pergo, Quick-Step and Unilin. These trademarks reflect innovations in design, performance and installation, which represent competitive advantages and provide differentiation from competing brands in the market.

The Flooring ROW Segment owns a number of patent families in Europe and the U.S., some of which the Company licenses to manufacturers throughout the world. The Company continues to explore additional opportunities to generate revenue from its patent portfolio.

Major Customers

During 2020, no single customer accounted for more than 10% of the Company’s total net sales, and the top 10 customers accounted for less than 20% of the Company’s total net sales. The Company believes the loss of one major customer would not have a material adverse effect on its business.

Human Capital

The Company’s management team recognizes the importance of its employees to the Company’s overall long-term success. The Company continues to focus on the recruitment, development, safety, engagement, and retention of its employees. The health and safety of the Company’s employees during the COVID-19 pandemic have been particularly important. The safety procedures the Company has put in place to prevent workplace transfer of the virus include strict policies on quarantining, audits and enforcement of social distancing, temperature scans, masks and sanitization standards.

As of December 31, 2020, the Company employed approximately 42,000 persons, consisting of approximately 19,600 in North America, approximately 14,600 in Europe and Russia and approximately 7,800 in other countries. The majority of the Company’s European and Russian manufacturing employees are members of unions. Less than 1% of the Company’s U.S. employees are party to a collective bargaining agreement. Additionally, the Company has not experienced any major strikes or work stoppages in recent years. The Company believes that its relations with its employees are good.

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Available Information

The Company’s Internet address is https://www.mohawkind.com. The Company makes available the following reports it files on its website, free of charge, under the heading “Investors”:

•annual reports on Form 10-K;

•quarterly reports on Form 10-Q;

•current reports on Form 8-K; and

•amendments to the foregoing reports.

The foregoing reports are made available on the Company’s website as soon as practicable after they are filed with, or furnished to the Securities and Exchange Commission (“SEC”).

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Item 1A.Risk Factors

In addition to the other information provided in this Form 10-K, the following risk factors should be considered when evaluating an investment in shares of the Company’s Common Stock. If any of the events described in these risks were to occur, it could have a material adverse effect on the Company’s business, financial condition and results of operations.

Industry and Economic Risks

The floor covering industry is sensitive to changes in general economic conditions, such as consumer confidence, income and spending, corporate and government spending, interest rate levels, availability of credit and demand for housing. Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s business.

Downturns in the U.S. and global economies, including as a result of the COVID-19 pandemic, negatively impact the floor covering industry and the Company’s business. During times of economic uncertainty or decline, end consumers tend to spend less on remodeling their homes, which is how the Company derives a majority of its sales. Likewise, new home construction - and the corresponding need for new flooring materials - tends to slow down during recessionary periods. There may be downturns in the foreseeable future that could cause the industry to deteriorate globally or in the local markets in which the Company operates. A significant or prolonged decline in residential or commercial remodeling or new construction activity could have a material adverse effect on the Company’s business and results of operations.

The Company faces intense competition in the flooring industry that could decrease demand for the Company’s products or force it to lower prices, which could have a material adverse effect on the Company’s business.

The floor covering industry is highly competitive. The Company faces competition from a number of manufacturers and independent distributors. Some of the Company’s competition is from companies located outside of the United States, and these competitors may benefit from lower input costs or state subsidies. Also, trade tariffs may impact both the Company and its competitors in different and unpredictable ways. Maintaining the Company’s competitive position may require substantial investments in the Company’s product development efforts, manufacturing facilities, distribution network and sales and marketing activities. Competitive pressures may also result in decreased demand for the Company’s products, force the Company to lower prices or prevent the Company from raising prices to keep up with inflation. Moreover, fluctuations in currency exchange rates and input costs may contribute to more attractive pricing for imports that compete with the Company’s products, which may put pressure on the Company’s pricing.  Any of these factors could have a material adverse effect on the Company’s business.

The COVID-19 pandemic has materially impacted our business, and will likely continue to impact our business in the future.

Mohawk generates sales in more than 170 countries and maintains manufacturing operations in 18 countries. Due to its large global footprint, Mohawk’s business is sensitive to macroeconomic events in the United States and abroad. While the near-term economic and financial impact of the COVID-19 pandemic is continuing to evolve and difficult to measure, based on current visibility, the Company expects that it will continue to see fluctuating demand across a number of its markets. In particular, pent up demand for travel and entertainment may reduce consumer willingness to make investments in the Company’s products as health conditions improve. Also, the Company has experienced and may continue to experience plant closures or slowdowns in productivity resulting from lower demand, health-based concerns, and government mandated closures.

During economic downturns, including the current downturn resulting from the COVID-19 pandemic, demand for the Company’s products may significantly decrease. This reduced demand may lead to lower sales and intensified competitive pressures.

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The Company experienced certain disruptions to its business and further disruptions may occur that could materially affect the Company’s ability to obtain supplies, manufacture its products or deliver inventory in a timely manner. Future disruptions may result in lost revenue, additional costs or impairments to goodwill or other assets. Although we believe that we can manage our exposure to these risks, there is no guarantee that we will be able to do so in the future. The Company continues to follow the recommendations of local health authorities to minimize exposure risk for its employees, suppliers, customers and other stakeholders. The Company has implemented business continuity plans during the crisis and is attempting to minimize the pandemic’s impact, but it may be unable to adequately respond to further outbreaks in particular geographies and its operations may be materially impacted. The extent to which the COVID-19 pandemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including the successful implementation of vaccination programs and the continued fiscal support currently provided by governments in the Company’s markets. Accordingly, the COVID-19 pandemic and the related global reaction could have a material adverse effect on the Company’s business, results of operations and financial condition.

To the extent the COVID-19 pandemic adversely affects our business, financial conditions and results of operations it may also have the effect of heightening many of the other risks described in this “Risk Factor” section.

International Risks

The Company manufactures, sources and sells many products internationally and is exposed to risks associated with doing business globally.

The Company’s international activities are significant to its manufacturing capacity, revenues and profits; and the Company continues to expand internationally through the construction of new manufacturing operations and investments in existing ones. Currently, the Company’s Flooring ROW segment has significant operations in Europe, Russia, Brazil, Malaysia, Australia and New Zealand, and the Company’s Global Ceramic segment has significant operations in Brazil, Europe, Russia and Mexico. In addition, the Company sources raw materials and finished goods from multiple international locations.

The Company’s international sales, supply chain, operations and investments are subject to risks and uncertainties, including:

•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;

•imposition of foreign or domestic tariffs and other trade barriers;

•foreign currency exchange rate fluctuations;

•differing inflationary or deflationary market pressures;

•foreign country tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations in tax laws;

•differing labor laws and changes in those laws;

•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;

•potential difficulties repatriating cash from non-U.S. subsidiaries; and

•compliance with laws governing international relations, including those U.S. laws that relate to sanctions and corruption.

The Company cannot assure investors that it will succeed in developing and implementing policies and strategies to address the foregoing risks effectively in each location where the Company does business, and, therefore that the foregoing factors will not have a material adverse effect on the Company’s business.

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The Company operates in emerging markets, including Brazil, eastern Europe, Malaysia, Mexico and Russia, and therefore has exposure to doing business in potentially unstable areas of the world.

Operations in emerging markets are subject to greater risk than more developed markets, including in some cases significant legal, economic and political risks. Market conditions and the political structures that support them are subject to rapid change in these economies, and the Company may not be able to react quickly enough to protect its assets and business operations. In particular, developing markets in which the Company operates may be characterized by one or more of the following:

•complex and conflicting laws and regulations, which may be inconsistently or arbitrarily enforced;

•high incidences of corruption in state regulatory agencies;

•volatile inflation;

•widespread poverty and resulting political instability;

•compliance with laws governing international relations, including U.S. laws that relate to sanctions and corruption;

•immature legal and banking systems;

•uncertainty with respect to title to real and personal property;

•underdeveloped infrastructure;

•heavy state control of natural resources and energy supplies;

•state ownership of transportation and supply chain assets;

•high protective tariffs and inefficient customs processes; and

•high crime rates.

Changes in any one or a combination of these factors could have a material adverse effect on the Company’s business.

Fluctuations in currency exchange rates may impact the Company’s financial condition and results of operations and may affect the comparability of results between the Company’s financial periods.

The results of the Company’s foreign subsidiaries are translated into U.S. dollars from the local currency for consolidated reporting. The exchange rates between some of these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the future. The Company may not be able to manage effectively its currency translation risks, and volatility in currency exchange rates may have a material adverse effect on the Company’s consolidated financial statements and affect comparability of the Company’s results between financial periods.

Business and Operational Risks

The Company may be unable to predict customer preferences or demand accurately, or to respond to technological developments.

The Company operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design, product category and technical features. Failure to quickly and effectively respond to changing customer demand or technological developments could have a material adverse effect on the business.

In periods of rising costs, the Company may be unable to pass raw materials, labor, energy and fuel-related cost increases on to its customers, which could have a material adverse effect on the Company’s business.

The prices of raw materials, labor, energy and fuel-related costs vary significantly with market conditions. Although the Company generally attempts to pass on increases in raw material, labor, energy and fuel-related costs to its customers, the Company’s ability to do so is dependent upon the rate and magnitude of any increase, competitive pressures and market conditions for the Company’s products. There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be recovered. During such periods of time, the Company’s business may be materially adversely affected.

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The Company may be unable to obtain raw materials or sourced product on a timely basis, which could have a material adverse effect on the Company’s business.

The principal raw materials used in the Company’s manufacturing operations include triexta, nylon, polypropylene, and polyester resins and fibers, which are used in the Company’s carpet and rug business; clay, talc, feldspar and glazes, including frit (ground glass), zircon and stains, which are used in the Company’s ceramic tile business; wood, paper and resins, which are used in the Company’s wood and laminate flooring business; and glass fiber, plasticizers, and pvc resins, which are used in the Company’s sheet vinyl and luxury vinyl tile business. In addition to raw materials, the Company sources finished goods. For certain raw materials and sourced products, the Company is dependent on one or a small number of suppliers. An adverse change in the Company’s relationship with such a supplier, the financial condition of such a supplier or such supplier’s ability to manufacture or deliver such raw materials or sourced products to the Company could lead to an interruption of supply or require the Company to purchase more expensive alternatives. Also, the Company’s ability to obtain raw materials or source products at reasonable costs may be impacted by tariffs, global trade uncertainties and international crises, such as the COVID-19 pandemic. While the Company continues to monitor the COVID-19 pandemic and government restrictions enacted to address the pandemic, the near-term impact on its supply chain is unpredictable. An extended interruption in the supply of sourced products or raw materials used in the Company’s business or in the supply of suitable substitute materials or products would disrupt the Company’s operations, which could have a material adverse effect on the Company’s business.

The Company makes significant capital investments in its business and such capital investments may not be successful or achieve their intended results.

The Company’s business requires significant capital investment to expand capacity to support its growth, introduce new products, enter new markets and improve operating efficiencies.  The Company has historically made significant capital investments each year and will continue to make capital investments in future periods, including approximately $570-$590 million of capital investments in 2021. While the Company believes that many of its past capital investments have been successful, there is no guarantee that the return on investment from the Company’s recent or future capital projects will be sufficient to recover the expenses and opportunity costs associated with these projects.  Furthermore, a meaningful portion of the Company’s capital investment is based on forecasted growth in its business, which is subject to uncertainty such as general economic trends, including as a result of the COVID-19 pandemic, increased competition and consumer preferences.  If the Company does not accurately forecast its future capital investment needs, the Company could have excess capacity or insufficient capacity, either of which would negatively affect its revenues and profitability.

The Company may experience certain risks associated with acquisitions, joint ventures and strategic investments.

The Company intends to grow its business through a combination of organic growth and acquisitions. Growth through acquisitions involves risks, many of which may continue to affect the Company after the acquisition. The Company cannot give assurance that an acquired company will achieve the levels of revenue, profitability and production that the Company expects. Acquisitions may require the issuance of additional securities or the incurrence of additional indebtedness, which may dilute the ownership interests of existing security holders or impose higher interest costs on the Company. Additional challenges related to the Company’s acquisition strategy include:

•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

•retaining key employees.

Failure to successfully manage and integrate an acquisition with the Company’s existing operations could lead to the potential loss of customers of the acquired business, the potential loss of employees who may be vital to the new operations, the potential loss of business opportunities or other adverse consequences that could have a material adverse effect on the Company’s business. Even if integration occurs successfully, failure of the acquisition to achieve levels of anticipated sales growth, profitability, or otherwise perform as expected, may result in goodwill or other asset impairments or otherwise have a material adverse effect on the Company’s business. Finally, acquisition targets may be subject to material liabilities that are not properly identified in due diligence and that are not covered by seller indemnification obligation or third-party insurance. The unknown liabilities of the Company’s acquisition targets may have a material adverse effect on the Company’s business.

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In addition, the Company has made certain investments, including through joint ventures, in which the Company has a minority equity interest and lacks management and operational control. The controlling joint venture partner may have business interests, strategies or goals that are inconsistent with those of the Company. Business decisions or other actions or omissions of the controlling joint venture partner, or the joint venture company, may result in harm to the Company’s reputation or adversely affect the value of the Company’s investment in the joint venture.

A failure to identify suitable acquisition candidates or partners for strategic investments and to complete acquisitions could have a material adverse effect on the Company’s business.

As part of the Company’s business strategy, the Company intends to pursue a wide array of potential strategic transactions, including acquisitions of complementary businesses, as well as strategic investments and joint ventures. Although the Company regularly evaluates such opportunities, the Company may not be able to successfully identify suitable acquisition candidates or to obtain sufficient financing on acceptable terms to fund such strategic transactions, which may slow the Company’s growth and have a material adverse effect on the Company’s business.

The Company has been, and in the future may be, subject to costs, liabilities and other obligations under existing or new laws and regulations, which could have a material adverse effect on the Company’s business.

The Company is subject to increasingly numerous and complex laws, regulations and licensing requirements in each of the jurisdictions in which the Company conducts business. In addition, new laws and regulations may be enacted in the U.S. or abroad, the compliance of which may require the Company to incur additional personnel-related, environmental, or other costs on an ongoing basis.

In particular, the Company’s operations are subject to various environmental, health and safety laws and regulations, including those governing air emissions, wastewater discharges, and the use, storage, treatment, recycling and disposal of materials and finished product. The applicable requirements under these laws are subject to amendment, to the imposition of new or additional requirements and to changing interpretations of agencies or courts. The Company may incur material costs in order to comply with new or existing regulations, including fines and penalties and increased costs of its operations. For example, Extended Producer Responsibility laws place a shared responsibility for post-consumer product management on various entities involved in the supply chain, including producers and manufacturers. Expansion of Extended Producer Responsibility legislation in the jurisdictions where the Company operates could impose additional responsibility on the Company in relation to the ultimate treatment or disposal of its products, which could lead to an increase in total costs related to the Company’s products. Also, the Company’s manufacturing facilities may become subject to further limitations on the emission of “greenhouse gases” due to public policy concerns regarding climate change issues or other environmental or health and safety concerns. While the form of any additional regulations cannot be predicted, a “cap-and-trade” system similar to the system that applies to the Company’s businesses in the European Union could be adopted in the United States. The Company’s manufacturing processes use a significant amount of energy, especially natural gas. Any such “cap-and-trade” system or other limitations imposed on the emission of “greenhouse gases” could require the Company to increase its capital expenditures, use its cash to acquire emission credits or restructure its manufacturing operations, any of which could have a material adverse effect on its business.

The Company’s business operations could suffer significant losses from natural disasters, catastrophes, fire, pandemics or other unexpected events.

Many of the Company’s business activities involve substantial investments in manufacturing facilities and many products are produced at a limited number of locations. These facilities could be materially damaged by natural disasters, such as floods, tornados, hurricanes and earthquakes, or by fire, pandemics (including COVID-19) or other unexpected events. The Company could incur uninsured losses and liabilities arising from such events, including damage to its reputation, and/or suffer material losses in operational capacity, which could have a material adverse impact on its business.

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The Company may be exposed to litigation, claims and other legal proceedings relating to its products, operations and compliance with various laws and regulations, which could have a material adverse effect on the Company’s business.

In the ordinary course of business, the Company is subject to a variety of product-related claims, lawsuits and legal proceedings, including those relating to product liability, product warranty, product recall, personal injury, and other matters. The Company is also subject to various claims related to its operations and its compliance with various corporate laws and regulations, including a putative securities class action and related matters described in Note 16, Commitments and Contingencies. A very large claim or several similar claims asserted by a large class of plaintiffs could have a material adverse effect on the Company’s business, if the Company is unable to successfully defend against or resolve these matters or if its insurance coverage is insufficient to satisfy any judgments against the Company or settlements relating to these matters. Although the Company has product liability insurance and other types of insurance, the policies may not provide coverage for certain claims against the Company or may not be sufficient to cover all possible liabilities. Further, the Company may not be able to maintain insurance at commercially acceptable premium levels. Moreover, adverse publicity arising from claims made against the Company, even if the claims are not successful, could adversely affect the Company’s reputation or the reputation and sales of its products.

The long-term performance of the Company’s business relies on its ability to attract, develop and retain talented management.

The Company’s ability to attract, develop and retain qualified and talented personnel in management, sales, marketing, product design, and operations, including in new international markets into which the Company may enter, is key to the Company’s overall success. The Company competes with multinational firms for these employees and invests resources in recruiting, developing, motivating and retaining them. The failure to attract, develop, motivate and retain key employees could negatively affect the Company’s competitive position and its operating results.

The Company’s inability to maintain its patent licensing revenues could have a material adverse effect on the Company’s business.

The profit margins of certain of the Company’s businesses, particularly the Company’s Flooring ROW Segment, depend in part upon the Company’s ability to obtain, maintain and license proprietary technology used in the Company’s principal product families. The Company has filed and is continuing to file patents relating to many different aspects of the Company’s products and associated methods and is generating patent license revenues on these diverse patents; however, certain revenue-producing patents have expired or will expire. The failure to develop alternative revenues to replace expired or invalidated patents in the future could have a material adverse effect on the Company’s business.

The Company’s inability to protect its intellectual property rights could have a material adverse effect on the Company’s business

The Company relies, in part, on the patent, trade secret and trademark laws of the U.S., countries in the European Union and elsewhere, as well as confidentiality agreements with some of the Company’s employees, to protect that technology. The Company cannot assure investors that any patents owned by or issued to it will provide the Company with competitive advantages, that third parties will not challenge these patents, or that the Company’s pending patent applications will be approved.

Furthermore, despite the Company’s efforts, the Company may be unable to prevent competitors and/or third parties from using the Company’s technology without the Company’s authorization, independently developing technology that is similar to that of the Company or designing around the Company’s patents. The use of the Company’s technology or similar technology by others could reduce or eliminate any competitive advantage the Company has developed, cause the Company to lose sales or otherwise harm the Company’s business.

The Company has obtained and applied for numerous U.S. and foreign service marks and trademark registrations and will continue to evaluate the registration of additional service marks and trademarks, as appropriate. The Company cannot guarantee that any of the Company’s pending or future applications will be approved by the applicable governmental authorities. The failure to obtain trademark registrations in the U.S. and in other countries could limit the Company’s ability to protect its trademarks and impede its marketing efforts in those jurisdictions and could have a material effect on its business.

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The Company generally requires third parties with access to the Company’s trade secrets to agree to keep such information confidential. While such measures are intended to protect the Company’s trade secrets, there can be no assurance that these agreements will not be breached, that the Company will have adequate remedies for any breach or that the Company’s confidential and proprietary information and technology will not be independently developed by or become otherwise known to third parties. In any of these circumstances, the Company’s competitiveness could be significantly impaired, which would limit the Company’s growth and future revenue.

Third parties may claim that the Company infringed their intellectual property or proprietary rights, which could cause the Company to incur significant expenses or prevent the Company from selling its products.

In the past, third parties have claimed that certain technologies incorporated in the Company’s products infringe their patent rights. The Company cannot be certain that the Company’s products do not and will not infringe issued patents or other intellectual property rights of others.

The Company might be required to pay substantial damages (including punitive damages and attorney’s fees), discontinue the use and sale of infringing products, expend significant resources to develop non-infringing technology or obtain licenses authorizing the use of infringing technology. There can be no assurance that licenses for disputed technology or intellectual property rights would be available on reasonable commercial terms, if at all. In the event of a successful claim against the Company along with failure to develop or license a substitute technology, the Company’s business would be materially and adversely affected.

Information Technology Risks

The Company relies on information systems in managing the Company’s operations and any system failure or deficiency of such systems may have an adverse effect on the Company’s business.

The Company’s businesses rely on sophisticated software applications to obtain, process, analyze and manage data. The Company relies on these systems to, among other things:

•facilitate the purchase, management, distribution, and payment for inventory items;

•manage and monitor the daily operations of the Company’s distribution network;

•receive, process and ship orders on a timely basis;

•manage accurate billing to and collections from customers;

•control logistics and quality control for the Company’s retail operations;

•manage financial reporting; and

•monitor point of sale activity.

The Company also relies on its computer hardware, software and network for the storage, delivery and transmission of data to the Company’s sales and distribution systems, and certain of the Company’s production processes are managed and conducted by computer.

Any event that causes interruptions to the input, retrieval and transmission of data or increase in the service time could disrupt the Company’s normal operations. There can be no assurance that the Company can effectively carry out its disaster recovery plan to handle the failure of its information systems, or that the Company will be able to restore its operational capacity within sufficient time to avoid material disruption to its business. The occurrence of any of these events could cause unanticipated disruptions in service, decreased customer service and customer satisfaction, harm to the Company’s reputation and loss or misappropriation of sensitive information, which could result in loss of customers, increased operating expenses and financial losses. Any such events could in turn have a material adverse effect on the Company’s business, financial condition, results of operations, and prospects.

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The Company is subject to cybersecurity risks and expects to incur increasing costs in an effort to minimize those risks.

The Company’s business employs systems that allow for the secure storage and transmission of customers’, consumers’, vendors’, employees’ and its own sensitive and proprietary information.  These systems may be subject to computer hacking, acts of vandalism or theft, malware, computer viruses or other malicious codes, phishing, employee error or malfeasance, catastrophes, unforeseen events or other cyber-attacks.  Any significant compromise or breach of the Company’s data security, whether external or internal, or misuse of customer, consumer, employee, supplier or Company data, could result in significant costs, lost sales, fines, lawsuits, and damage to the Company’s reputation. Furthermore, as cyber-attacks become more sophisticated, the Company expects to incur increasing costs to strengthen its systems from outside intrusions and to maintain insurance coverage related to the threat of such attacks. While the Company has implemented administrative and technical controls and has taken other preventive actions to reduce the risk of cyber incidents and protect its information technology, they may be insufficient to prevent, or respond to, physical and electronic break-ins, cyber-attacks or other security breaches to the Company’s systems. 

In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to the Company’s business, compliance with those requirements could also result in additional costs to the Company. Any failure to comply with federal, state or international privacy-related or data protection laws and regulations could result in proceedings against the Company by government entities or others. In addition to reputational impacts, penalties could include significant legal liability.

Financial and Liquidity Risks

Changes in the global economy could affect the Company’s overall availability and cost of credit.

A downturn in the U.S. or global economies could impact the Company’s ability to obtain financing in the future, including any financing necessary to refinance existing indebtedness.

Further, negative economic conditions may factor into the Company’s periodic credit ratings assessment by Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Financial Services, LLC (“S&P”) and Fitch, Inc. Any future changes in the credit rating agencies’ methodology in assessing the Company’s credit strength and any downgrades in the Company’s credit ratings could increase the cost of its existing credit and could adversely affect the cost of and ability to obtain additional credit in the future. The Company can provide no assurances that downgrades will not occur. The cost and availability of credit during uncertain economic times could have a material adverse effect on the Company’s financial condition.

If the Company were unable to meet certain covenants contained in its existing credit facilities, it may be required to repay borrowings under the credit facilities prior to their maturity and may lose access to the credit facilities for additional borrowings that may be necessary to fund its operations and growth strategy.

On October 18, 2019, the Company entered into a $1,800 million, senior revolving credit facility (the “Senior Credit Facility”) that provides for revolving credit, including limited amounts of credit in the form of letters of credit and swingline loans. Any outstanding borrowings under the Company’s U.S. and European commercial paper programs also reduce availability under the Senior Credit Facility. Including commercial paper borrowings, the Company has utilized approximately $0.8 million under the Senior Credit Facility resulting in a total of $1,799.2 million available as of December 31, 2020.

If the Company’s cash flow is worse than expected, the Company may need to refinance all or a portion of its indebtedness through a public and/or private debt offering or a new bank facility and may not be able to do so on terms acceptable to it, or at all. If the Company is unable to access debt markets at competitive rates or in sufficient amounts due to credit rating downgrades, market volatility, market disruption, or weakness in the Company’s businesses, the Company’s ability to finance its operations or repay existing debt obligations may be materially and adversely affected.

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Additionally, the Company’s credit facilities include certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, payments and modifications of certain existing debt, future negative pledges, and changes in the nature of the Company’s business. In addition, the Senior Credit Facility requires the Company to maintain a Consolidated Interest Coverage Ratio of at least 3.0 to 1.0 and a Consolidated Net Leverage Ratio of no more than 4.75 to 1.0 through December 31, 2021 and 3.75 after December 31, 2021. A failure to comply with the obligations contained in the Company’s current or future credit facilities or indentures relating to its outstanding public debt could result in an event of default or an acceleration of debt under other instruments that may contain cross-acceleration or cross-default provisions. The Company cannot be certain that it would have, or be able to obtain, sufficient funds to make these accelerated payments.

Declines in the Company’s business conditions may result in an impairment of the Company’s assets which could result in a material non-cash charge.

A significant or prolonged decrease in the Company’s market capitalization, including a decline in stock price, or a negative long-term performance outlook, could result in an impairment of its assets which results when the carrying value of the Company’s assets exceed their fair value.

Negative tax consequences could materially and adversely affect the Company’s business.

The Company is subject to the tax laws of the many jurisdictions in which it operates. These tax laws are complex, and the manner in which they apply to the Company’s facts is sometimes open to interpretation. In calculating the provision for income taxes, the Company must make judgments about the application of these inherently complex tax laws. The Company’s domestic and international tax liabilities are largely dependent upon the distribution of profit before tax among these many jurisdictions. However, the Company’s provision for income taxes also includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings of the Company that could impact the valuation of its deferred tax assets. The Company’s future results of operations and tax liability could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in the overall profitability of the Company, changes in tax legislation and rates, changes in generally accepted accounting principles, changes in the valuation of deferred tax assets and liabilities, changes in the amount of earnings permanently reinvested offshore, the results of audits and examinations of previously filed tax returns, and ongoing assessments of the Company’s tax exposures.

Forward-Looking Information

Certain of the statements in this Form 10-K, particularly those anticipating future performance, business prospects, growth and operating strategies, and similar matters, and those that include the words “could,” “should,” “believes,” “anticipates,” “expects” and “estimates” or similar expressions constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation and deflation in freight, raw material prices and other input costs; inflation and deflation in consumer markets; currency fluctuations; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company’s products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; tax and tax reform, product and other claims; litigation; the risks and uncertainty related to the COVID-19 pandemic, regulatory and political changes in the jurisdictions in which the Company does business; and other risks identified in Mohawk’s SEC reports and public announcements.

Item 1B.Unresolved Staff Comments

None.

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Item 2.Properties

The Company owns and leases manufacturing and distribution facilities worldwide. The table below lists the primary owned and leased facilities at December 31, 2020. The Company owns its Corporate Headquarters in Calhoun, GA. The Company also owns and operates service centers and stores in the United States and Russia, none of which are individually material. The Company believes its existing facilities are suitable for its present needs.

Segment and Property Use	North America	Europe and Russia	Other	Total
Global Ceramic
Manufacturing	8	11	2	21
Distribution / Warehouse	8	7	2	17
Flooring North America
Manufacturing	18	—	—	18
Distribution / Warehouse	11	—	—	11
Flooring Rest of the World
Manufacturing	—	16	5	21
Distribution / Warehouse	—	3	—	3
Total
Manufacturing	26	27	7	60
Distribution / Warehouse	19	10	2	31

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Item 3.Legal Proceedings

The Company is involved in litigation from time to time in the regular course of its business. Except as noted elsewhere in this report, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

See Note 16. Commitments and Contingencies, and Note 15. Income Taxes, of the notes to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for a discussion of the Company’s legal proceedings.

Item 4.Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this annual report on Form 10-K.

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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for the Common Stock

The Company’s common stock, $0.01 par value per share (the “Common Stock”), is quoted on the New York Stock Exchange (“NYSE”) under the symbol “MHK.”

As of February 22, 2021, there were 222 holders of record of Common Stock. The Company has not paid or declared any cash dividends on shares of its Common Stock since completing its initial public offering. The payment of future cash dividends will be at the discretion of the Board of Directors and will depend upon the Company’s profitability, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors.

Issuer Purchases of Equity Securities

On October 26, 2020, after considering the Company’s liquidity position and strong cash flows, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock (“2020 Share Repurchase Program”). This was incremental to the previously approved 2018 Share Repurchase Program. In the fourth quarter 2020, the Company purchased $120.0 million of its common stock, exhausting the $57.1 million remaining under the 2018 Program as of October 26, 2020, and utilizing $62.8 million under the 2020 Program. As of December 31, 2020, there remains $437.2 million authorized under the 2020 Program.

Under the Share Repurchase Programs, the Company may purchase common stock in open market transactions, block or privately negotiated transactions, and may from time to time purchase shares pursuant to trading plans in accordance with Rules 10b5-1 or 10b-18 under the Exchange Act or by any combination of such methods. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions, regulatory requirements, the market price of the Company’s stock and the availability of alternative investment opportunities. No time limit was set for completion of repurchases under the Share Repurchase Programs and the Share Repurchase Programs may be suspended or discontinued at any time.

Period	Total Number of Shares Purchased in Millions	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan in Millions	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan in Millions
September 28 through October 30, 2020	—	$	—	—	$	557.1
November 2 through November 27, 2020	0.3	$	120.43	0.3	$	518.1
November 30 through December 31, 2020	0.6	$	133.67	0.6	$	437.2
Total	0.9	$	129.05	0.9

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Item 6.Selected Financial Data

The following table sets forth the selected financial data of the Company for the periods indicated which information is derived from the consolidated financial statements of the Company. The selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s consolidated financial statements and notes thereto included in Part II, Item 8 of this Form 10-K.

	As of or for the Years Ended December 31,
	2020		2019	2018(a)	2017	2016
	(In thousands, except per share data)
Statement of operations data:
Net sales	$	9,552,197	9,970,672	9,983,634	9,491,290	8,959,087
Cost of sales	7,121,507		7,294,629	7,145,564	6,494,876	6,146,262
Gross profit	2,430,690		2,676,043	2,838,070	2,996,414	2,812,825
Selling, general and administrative expenses	1,794,688		1,848,819	1,742,744	1,642,241	1,532,882
Operating income	636,002		827,224	1,095,326	1,354,173	1,279,943
Interest expense	52,379		41,272	38,827	31,111	40,547
Other expense (income), net	(751)		36,407	7,298	5,205	(1,729)
Earnings before income taxes	584,374		749,545	1,049,201	1,317,857	1,241,125
Income tax expense	68,647		4,974	184,346	343,165	307,559
Net earnings including noncontrolling interests	515,727		744,571	864,855	974,692	933,566
Less: Net earnings attributable to noncontrolling interests	132		360	3,151	3,054	3,204
Net earnings attributable to Mohawk Industries, Inc.	$	515,595	744,211	861,704	971,638	930,362
Basic earnings from continuing operations per share	$	7.24	10.34	11.53	13.07	12.55
Basic earnings per share attributable to Mohawk Industries, Inc.	$	7.24	10.34	11.53	13.07	12.55
Diluted earnings from continuing operations per share	$	7.22	10.30	11.47	12.98	12.48
Diluted earnings per share attributable to Mohawk Industries, Inc.	$	7.22	10.30	11.47	12.98	12.48
Balance sheet data:
Working capital	$	2,992,406	1,716,874	1,243,057	1,417,612	753,192
Total assets	14,327,751		13,386,680	13,099,123	12,094,853	10,230,596
Long-term debt (including current portion)	2,734,142		2,569,886	3,257,974	2,763,578	2,511,485
Total stockholders’ equity	8,541,158		8,126,448	7,440,059	7,067,009	5,783,487

(a)During 2018, the Company acquired Godfrey Hirst Group, Eliane S/A Revestimentos Ceramicos (“Eliane”) and 3 businesses in Flooring ROW segment as discussed in Note 2 of the notes to consolidated financial statements included in Part II, Item 8 of this Form 10-K.

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Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following discussion and analysis of the Company’s Results of Operations includes a comparison of fiscal 2020 to fiscal 2019. A similar discussion and analysis that compares fiscal 2019 to fiscal 2018 may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the Company’s Form 10-K for the fiscal year ended December 31, 2019.

During the past two decades, the Company has grown significantly. Its current geographic breadth and diverse product offering are reflected in three reporting segments: Global Ceramic; Flooring North America (“Flooring NA”); and Flooring Rest of the World (“Flooring ROW”). The Global Ceramic Segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone tile and other products including natural stone, quartz and porcelain slab countertops, which it distributes primarily in North America, Europe, Brazil and Russia through various selling channels, which include company-owned stores, independent distributors and home centers. The Flooring NA Segment designs, manufactures, sources and markets its floor covering products, including broadloom carpet, carpet tile, rugs, carpet cushion, laminate and vinyl products, including luxury vinyl tile (LVT) and sheet vinyl, and wood flooring, all of which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks, common carriers or rail transportation. The Segment’s product lines are sold through various channels, including independent floor covering retailers, independent distributors, home centers, mass merchandisers, department stores, shop at home, online retailers, buying groups, commercial contractors and commercial end users. The Flooring ROW Segment designs, manufactures, sources, licenses and markets laminate, vinyl products, including LVT and sheet vinyl, wood flooring, roofing panels, insulation boards, medium-density fiberboard (“MDF”) and chipboards, which it distributes primarily in Europe, Russia, Australia and New Zealand through various channels, including independent floor covering retailers, independent distributors, company-owned distributors, home centers, commercial contractors and commercial end users.

Mohawk is a significant supplier of every major flooring category with manufacturing operations in 18 nations and sales in more than 170 countries. Based on its annual sales, the Company believes it is the world’s largest flooring manufacturer. A majority of the Company’s long-lived assets are located in the United States and Europe, which are also the Company’s primary markets. Additionally, the Company maintains operations in United Kingdom, Russia, Mexico, Australia, New Zealand, Brazil and other parts of the world. The Company is a leading provider of flooring for residential and commercial markets and has earned significant recognition for its innovation in design and performance as well as sustainability.

Due to its global footprint, Mohawk’s business is sensitive to macroeconomic events in the United States and abroad. The current environment has placed unprecedented demands on the Company’s operations as the COVID-19 pandemic has caused disruptions to the Company's markets and operations around the world. While the near-term economic and financial impact of the COVID-19 pandemic is improving in its residential markets, the Company expects that it will continue to see fluctuating demand across a number of its markets. In order to mitigate the impact of lower demand during the initial stages of the pandemic, the Company was able to utilize retention related tax credits and certain tax deferrals for employers where the Company has significant operations. During the year, the Company also completed actions prompted by the evolving health crisis to enhance future performance including site closings, other facility and product rationalizations and workforce reductions. The Company anticipates these global actions will deliver savings of approximately $100 to $110 million of which approximately $50 million was realized in 2020, with 2020 cost of $150 million.

The Company believes it has the experience and resources necessary to capitalize on opportunities that will arise as employees return to work around the world and macroeconomic conditions improve. The Company also believes it is well positioned with a strong balance sheet and limited debt. During 2020, the Company issued over $1 billion of long-term bonds to strengthen its ability to strategically invest and better position itself for the future. Finally, the Company is following the recommendations of local health authorities to minimize exposure risk for its employees, suppliers, customers and other stakeholders. For information on risk factors that could impact the Company’s results, please refer to “Risk Factors” in Part I, Item 1A of this Form 10-K.

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In 2018, the Company completed five acquisitions: two that expanded the Company’s global footprint with leadership positions in major markets and three that extended the Company’s product offering and distribution in Europe. The Godfrey Hirst acquisition established the Company as the largest flooring manufacturer in Australia and New Zealand, with leading carpet and hard surface positions in both countries when combined with the Company’s existing regional flooring distribution business. Godfrey Hirst’s prestigious wool carpet collections are exported to numerous international markets and have been integrated into the U.S. soft surface product portfolio to expand sales. The acquisition of Brazil-based Eliane provided the Company with a leading ceramic tile position, the most appealing brand in one of the world’s largest ceramic tile markets and a gateway into the overall South American market as Eliane is Brazil’s largest ceramic exporter. The Company has made significant investments in both Godfrey Hirst and Eliane to upgrade product offerings, expand capacity and improve processes. The acquisition of Berghoef, a leading European mezzanine flooring company, created a leading position in a category that is rapidly expanding due to increased construction of e-commerce warehousing across the continent. The acquisition of Swiss and Italian hard surface distributors expanded the Company’s direct distribution of flooring sales in Europe, and two more hard surfaces distributors in The Netherlands and the Czech Republic were added in 2019.

In 2020, the Company invested $425.6 million in capital projects to introduce new product categories, enter new markets, expand capacity of constrained premium products and improve productivity.  In 2021, the Company plans to invest approximately an additional $570-$590 million to complete existing projects and commence new initiatives. The Company plans to invest in cost reduction initiatives, upgrades in recent acquisitions and previously initiated expansion projects as well as maintenance across the businesses. The main investment areas include the Company’s recently acquired ceramic tile business in Brazil and the Godfrey Hirst Group in Australia and New Zealand where the Company is investing to upgrade its product offering and improve profitability; premium water-proof laminate in the U.S.; outdoor porcelain pavers manufacturing in Europe; and premium sanitary ware manufacturing in Russia. 

Net earnings attributable to the Company were $515.6 million, or diluted EPS of $7.22 for 2020 compared to net earnings attributable to the Company of $744.2 million, or diluted EPS of $10.30 for 2019. The Company’s operations and net earnings for the period were unfavorably affected by disruptions caused by the COVID-19 pandemic. The change in EPS was primarily attributable to the unfavorable net impact of lower volumes, the unfavorable net impact of price and product mix, costs due to reducing production, higher restructuring, acquisition and integration-related costs, and costs associated with investments in new product development, partially offset by productivity gains and lower inflation costs.

For the year ended December 31, 2020, the Company generated $1,769.8 million of cash from operating activities. As of December 31, 2020, the Company had cash and cash equivalents of $768.6 million, of which $331.7 million was in the United States and $436.9 million was in foreign countries, in addition to $571.7 million in short-term investments. On May 14, 2020, the Company issued $500.0 million of 3.625% senior notes due May 15, 2030, which the Company used to pay off existing short-term debt. On June 12, 2020, a subsidiary of the Company issued €500.0 million of 1.750% senior notes due June 12, 2027, which the Company has used to strengthen its balance sheet in light of the COVID-19 pandemic.

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Results of Operations

Following are the results of operations for the last two years:

	For the Years Ended December 31,
	2020				2019
	(In millions)
Statement of operations data:
Net sales	$	9,552.2	100.0	%	9,970.7	100.0	%
Cost of sales (1)	7,121.5		74.6	%	7,294.6	73.2	%
Gross profit	2,430.7		25.4	%	2,676.0	26.8	%
Selling, general and administrative expenses (2)	1,794.7		18.8	%	1,848.8	18.5	%
Operating income	636.0		6.7	%	827.2	8.3	%
Interest expense (3)	52.4		0.5	%	41.3	0.4	%
Other expense (income) (4)	(0.8)		0.0	%	36.4	0.4	%
Earnings before income taxes	584.4		6.1	%	749.5	7.5	%
Income tax expense (5)	68.6		0.7	%	5.0	0.1	%
Net earnings including noncontrolling interests	515.7		5.4	%	744.6	7.5	%
Less: Net earnings attributable to noncontrolling interests	0.1		—	%	0.4	—	%
Net earnings attributable to Mohawk Industries, Inc.	$	515.6	5.4	%	744.2	7.5	%
(1)  Cost of sales includes:
Restructuring, acquisition and integration-related charges	$	102.4	1.1	%	88.3	0.9	%
Acquisition inventory step-up	—		—	%	3.9	—	%
Other	24.5		0.3	%	5.8	0.1	%
(2)  Selling, general and administrative expenses include:
Restructuring, acquisition and integration-related charges	26.5		0.3	%	12.9	0.1	%
Reversal of uncertain tax position indemnification asset	—		0.0	%	0.2	—	%
Other charges	10.1		0.1	%	—	—	%
(3)  Interest expense includes:
Deferred loan cost write-off	—		0.0	%	0.6	—	%
(4)  Other expense (income) includes:
Impairment of net investment in a manufacturer and distributor of Ceramic tile in China	—		0.0	%	59.9	0.6	%
Reversal of uncertain tax position indemnification asset	(0.3)		—	%	(0.3)	—	%
Other	3.6		—	%	(7.2)	(0.1)	%
(5) Income tax expense (income) includes:
European Restructuring	—		0.0	%	(136.2)	(1.4)	%
Reversal of uncertain tax position	0.3		—	%	0.1	—	%

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Year Ended December 31, 2020, as Compared with Year Ended December 31, 2019

Net sales

The Company’s global sales were affected by broader economic issues related to the COVID-19 pandemic resulting in decreased demand during the period. Net sales for 2020 were $9,552.2 million, reflecting a decrease of $418.5 million, or 4.2%, from the $9,970.7 million reported for 2019. The decrease was primarily attributable to the lower sales volume of approximately $240 million, the unfavorable net impact of price and product mix of approximately $119 million, and the unfavorable net impact from foreign exchange rates of approximately $59 million.

Global Ceramic Segment—Net sales decreased $198.3 million, or 5.5%, to $3,432.8 million for 2020, compared to $3,631.1 million for 2019. The decrease was primarily attributable to lower sales volume of approximately $89 million, the unfavorable net impact from foreign exchange rates of approximately $77 million, and the unfavorable net impact of price and product mix of approximately $33 million.

Flooring NA Segment—Net sales decreased $249.6 million, or 6.5%, to $3,594.1 million for 2020, compared to $3,843.7 million for 2019. The decrease was attributable to lower volumes of approximately $200 million, and the unfavorable net impact of price and product mix of approximately $49 million.

Flooring ROW Segment—Net sales increased $29.6 million, or 1.2%, to $2,525.4 million for 2020, compared to $2,495.8 million for 2019. The increase was primarily attributable to higher sales volume of approximately $49 million, and favorable net impact from foreign exchange rates of approximately $18 million, partially offset by the unfavorable net impact of price and product mix of approximately $37 million.

Quarterly net sales and the percentage changes in net sales by quarter for 2020 versus 2019 were as follows (dollars in millions):

	2020		2019	Change
First quarter	$	2,285.8	2,442.5	(6.4)	%
Second quarter	2,049.8		2,584.5	(20.7)	%
Third quarter	2,574.9		2,519.2	2.2	%
Fourth quarter	2,641.8		2,424.5	9.0	%
Total year	$	9,552.2	9,970.7	(4.2)	%

Gross profit

The Company experienced increased costs associated with short-term reductions in manufacturing output in addition to decreased demand as a result of the disruptions caused by the COVID-19 pandemic. Gross profit for 2020 was $2,430.7 million (25.4% of net sales), a decrease of $245.3 million or 9.2%, compared to gross profit of $2,676.0 million (26.8% of net sales) for 2019. As a percentage of net sales, gross profit decreased 140 basis points. The decrease in gross profit dollars was primarily attributable to the lower sales volume of approximately $128 million, the unfavorable net impact of price and product mix of approximately $122 million, costs due to temporarily reduced production of approximately $116 million, the impact of restructuring, acquisition and integration-related costs of approximately $29 million, and the unfavorable net impact from foreign exchange rates of approximately $20 million, partially offset by productivity gain of approximately $88 million, lower inflation of approximately $75 million and approximately $9 million of lower startup cost.

Selling, general and administrative expenses

Selling, general and administrative expenses for 2020 were $1,794.7 million (18.8% of net sales), an decrease of $54.1 million or (2.9)% compared to $1,848.8 million (18.5% of net sales) for 2019. As a percentage of net sales, selling, general and administrative expenses increased 30 basis points. The decrease in selling, general and administrative expenses in dollars was primarily attributable to productivity gain of approximately $93 million, favorable foreign exchange rates of approximately $9 million, partially offset by the impact of restructuring, acquisition and integration-related costs of approximately $23 million, higher inflation costs of approximately $19 million, and approximately $10 million of costs associated with investments in new product development, sales personnel and marketing.

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Operating income

As previously discussed, the Company’s operations for the year were negatively impacted by disruptions from the COVID-19 pandemic resulting in decreased demand and increased costs associated with short-term reductions in manufacturing output. Operating income for 2020 was $636.0 million (6.7% of net sales) reflecting a decrease of $191.2 million, or 23.1%, compared to operating income of $827.2 million (8.3% of net sales) for 2019. The decrease in operating income was primarily attributable to approximately $133 million due to lower sales volume, the unfavorable net impact of price and product mix of approximately $122 million, approximately $116 million of costs due to temporarily reduced production, the impact of restructuring, acquisition and integration-related costs of approximately $52 million, and approximately $10 million of costs associated with investments in new product development, partially offset by higher productivity gain of approximately $180 million, lower inflation costs of approximately $56 million, and lower startup costs of approximately $15 million.

Global Ceramic Segment—Operating income was $167.7 million (4.9% of segment net sales) for 2020 reflecting a decrease of $167.9 million, or 50.0%, compared to operating income of $335.6 million (9.2% of segment net sales) for 2019. The decrease in operating income was primarily attributable to approximately $69 million of costs due to temporarily reduced production, the impact of restructuring, acquisition and integration-related costs of approximately $57 million, the unfavorable net impact of price and product mix of approximately $52 million, approximately $49 million due to lower sales volume, higher inflation costs of approximately $7 million, and approximately $5 million of costs associated with investments in new product development, sales personnel and marketing, partially offset by higher productivity gain of approximately $70 million.

Flooring NA Segment—Operating income was $147.4 million (4.1% of segment net sales) for 2020 reflecting a decrease of $30.2 million, or 17.0%, compared to operating income of $177.6 million (4.6% of segment net sales) for 2019. The decrease in operating income was primarily attributable to approximately $81 million in decreased sales volume, the unfavorable net impact of price and product mix of approximately $40 million, approximately $31 million of costs due to temporarily reduced production, partially offset by higher productivity gain of approximately $61 million, the impact of lower restructuring, acquisition and integration-related costs of approximately $29 million, lower inflation costs of approximately $28 million and lower startup costs of approximately $4 million.

Flooring ROW Segment—Operating income was $366.9 million (14.5% of segment net sales) for 2020 reflecting an increase of $13.2 million, or 3.7%, compared to operating income of $353.7 million (14.2% of segment net sales) for 2019. The increase in operating income was primarily attributable to higher productivity gain of approximately $48 million, lower inflation costs of approximately $38 million, partially offset by unfavorable net impact of price and product mix of approximately $30 million, the impact of restructuring, acquisition and integration-related costs of approximately $20 million, approximately $16 million of costs due to temporarily reduced production, and the unfavorable net impact from foreign exchange rates of approximately $9 million.

Interest expense

Interest expense was $52.4 million for 2020, reflecting an increase of $11.1 million compared to interest expense of $41.3 million for 2019. During the second quarter of 2020, the Company issued new long-term debt to strengthen its liquidity position during the early months of the COVID pandemic. The new debt issuance shifted the Company from a mix of fixed and floating rate debt, with a lower average interest rate, to more fixed rate debt, which carries a higher average interest rate.

Other expense (income)

Other income was $0.8 million for 2020, reflecting a favorable change of $37.2 million compared to other expense of $36.4 million for 2019. The change was primarily attributable to a net impairment charge of $59.9 million related to the Company’s net investment in a manufacturer and distributor of ceramic tile in China in 2019, partially offset by unfavorable FX and other miscellaneous items.

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Income tax expense

For 2020, the Company recorded income tax expense of $68.6 million on earnings before income taxes of $584.4 million for an effective tax rate of 11.7%, as compared to an income tax expense of $5.0 million on earnings before income taxes of $749.5 million, resulting in an effective tax rate of 0.7% for 2019. In 2020, the Company realized a $33.8 million carryback rate differential in the U.S. and had a $10.3 million tax benefit from a foreign exchange loss on previously taxed earnings distributed during the year. In 2019, the Company implemented select operational, administrative and financial restructurings that centralized certain business processes and intangible assets in various European jurisdictions into a new entity. This implementation resulted in a net tax benefit of $136.2 million. In both 2020 and 2019, the Company was favorably impacted by its geographic mix of earnings.

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Liquidity and Capital Resources

The Company’s primary capital requirements are for working capital, capital expenditures and acquisitions. The Company’s capital needs are met primarily through a combination of internally generated funds, commercial paper, bank credit lines, term and senior notes and credit terms from suppliers. As of December 31, 2020, the Company had a total of $1,799.2 million available under its Senior Credit Facility. The Company also maintains local currency revolving lines of credit and other credit facilities to provide liquidity to its businesses around the world.  None of such local facilities are material in amount.

Management has and will continue to evaluate its liquidity needs and strategy regarding capital resources as the economic crisis caused by the COVID-19 pandemic evolves. In the second quarter of 2020, the Company issued $500.0 million of 3.625% senior notes, and a subsidiary of the Company issued €500.0 million of 1.750% senior notes, with ten and seven-year terms, respectively. The Company has taken multiple actions including managing inventory and production capacity, and reduced headcount through furloughs and layoffs. Management believes these actions along with cash secured from increased borrowing and continuing operations will allow the Company to take advantage of new opportunities.

Net cash provided by operating activities for the year ended 2020 was $1,769.8 million, compared to net cash provided by operating activities of $1,418.8 million for the year ended 2019. This increase of $351.1 million was primarily attributable to changes in working capital, partially offset by lower net earnings. The increase in cash provided by operating activities for 2019 as compared to 2018 of $237.4 million was primarily attributable to changes in working capital, partially offset by lower net earnings.

Net cash used in investing activities for the year ended 2020 was $954.8 million compared to net cash used in investing activities of $616.0 million for the year ended 2019. The increase was primarily due to an increase in the purchases of short-term investments of $539.7 million (net of redemption of short-term investments), partially offset by reduced capital expenditures of $119.9 million and a decrease in acquisition costs of $81.1 million. Net cash used in investing activities for the year ended 2019 was $616.0 million compared to net cash used in investing activities of $1,332.2 million for the year ended 2018. The decrease was primarily due to a $487.9 million reduction in acquisitions and a $248.6 million reduction in capital expenditures.

Net cash used in financing activities for the year ended 2020 was $188.2 million compared to net cash used in financing activities of $789.9 million for the year ended 2019. The change in cash used in financing is primarily attributable to the proceeds from the Senior Notes of $735.3 million (net of repayments of $326.9 million), partially offset by the increase in purchases of the Company’s shares of $88.5 million. Net cash used in financing activities for the year ended 2019 was $789.9 million compared to net cash provided by financing activities of $198.0 million for the year ended 2018. The change in cash used in financing is primarily attributable to lower borrowings of commercial paper of $860.6 million.

On October 26, 2020, after considering the Company’s liquidity position and strong cash flows, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock. This was incremental to the previously approved 2018 Share Repurchase Program. In the fourth quarter 2020, the Company purchased $120.0 million of its common stock, exhausting the $57.1 million remaining under the 2018 Program as of October 26, 2020, and utilizing $62.8 million under the 2020 Program. As of December 31, 2020, there remains $437.2 million authorized under the 2020 Program.

As of December 31, 2020, the Company had cash of $768.6 million, of which $436.9 million was held outside the United States. In addition to its cash on hand, the Company also had short-term investments of $571.7 million as of December 31, 2020. The Company plans to permanently reinvest the cash held outside the United States. The Company believes that its cash and cash equivalents, and short-term investments on hand, cash generated from operations and availability under its Senior Credit Facility will be sufficient to meet its planned capital expenditure, further working capital investment and debt servicing requirements over the next twelve months.

See Note 10. Long-Term Debt, of the notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further discussion of the Company’s long-term debt. The Company may continue, from time to time, to retire its outstanding debt through cash purchases in the open market, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, the Company’s liquidity requirements, contractual restrictions and other factors. The amount involved may be material.

31

Contractual obligations and commitments

The following is a summary of the Company’s future minimum payments under contractual obligations and commitments as of December 31, 2020 (in millions):

	Total		2021	2022	2023	2024	2025	Thereafter
Contractual obligations and commitments:
Long-term debt, including current maturities	$	2,745.3	377.2	622.8	607.1	5.5	4.1	1,128.6
Interest payments on long-term debt and finance leases (1)	301.4		65.1	53.6	31.3	29.3	29.2	92.9
Operating leases	355.0		113.2	88.6	60.1	38.8	26.8	27.5
Purchase commitments (2)	412.7		167.8	48.0	21.9	21.9	21.9	131.2
Expected pension contributions (3)	3.1		3.1	—	—	—	—	—
Uncertain tax positions (4)	3.6		3.6	—	—	—	—	—
Guarantees (5)	45.2		22.3	5.7	4.3	4.3	4.3	4.3
Total	$	3,866.3	752.3	818.7	724.7	99.8	86.3	1,384.5

(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, 2020 to these balances.

(2)Includes volume commitments for primarily raw material purchases.

(3)Includes the estimated pension contributions for 2021 only, as the Company is unable to estimate the pension contributions beyond 2021. The Company’s projected benefit obligation and plan assets as of December 31, 2020 were $86.7 million and $68.4 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 $44.7 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.

(5)Includes bank guarantees and letters of credit.

Critical Accounting Policies

In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles, the Company must make decisions which impact the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. Such decisions include the selection of appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, the Company applies judgment based on its understanding and analysis of the relevant circumstances and historical experience. Actual amounts could differ from those estimated at the time the consolidated financial statements are prepared.

The Company’s significant accounting policies are described in Note 1 to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. Some of those significant accounting policies require the Company to make subjective or complex judgments or estimates. Critical accounting estimates are defined as those that are both most important to the portrayal of a company’s financial condition and results and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

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The Company believes the following accounting policies require it to use judgments and estimates in preparing its consolidated financial statements and represent critical accounting policies.

•Accounts receivable and revenue recognition. The Company recognizes revenues when it satisfies performance obligations as evidenced by the transfer of control of the promised goods to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. The nature of the promised goods are ceramic, stone, carpet, resilient, laminate, wood and other flooring products. Payment is typically received 90 days or less from the invoice date. The Company adjusts the amounts of revenue for expected cash discounts, sales allowances, returns, and claims, based upon historical experience. The Company adjusts accounts receivable for doubtful account allowances based upon relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, periodic evaluation of specific customer accounts, and the aging of accounts receivable. If the Company expects the financial condition of the Company’s customers to deteriorate based on current conditions or reasonable and supportable forecasts, 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 $7 million for the year ended December 31, 2020.

•Inventories are stated at the lower of cost or market (net realizable value). 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 a 10% change in the Company’s assumptions for excess or obsolete inventory would have affected net earnings by approximately $18 million for the year ended December 31, 2020.

•Acquisition Accounting. The fair value of the consideration the Company pays for each new acquisition is allocated to tangible assets and identifiable intangible assets, liabilities assumed, any noncontrolling interest in the acquired entity and goodwill.  The accounting for acquisitions involves a considerable amount of judgment and estimate, including the fair value of certain forms of consideration; fair value of acquired intangible assets involving projections of future revenues and cash flows that are then either discounted at an estimated discount rate or measured at an estimated royalty rate; fair value of other acquired assets and assumed liabilities, including potential contingencies; and the useful lives of the acquired assets. The assumptions used are determined at the time of the acquisition in accordance with accepted valuation models.  Projections are developed using internal forecasts, available industry and market data and estimates of long-term rates of growth for the business. The impact of prior or future acquisitions on the Company’s financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates.  See Note 2, Acquisitions included in Part II, Item 8 of this Form 10-K for further discussion of business combination accounting valuation methodology and assumptions.  

•Goodwill and other intangibles. Goodwill is tested annually for impairment in 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 Global Ceramic, Flooring NA and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as 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 greater than approximately10% to 33% or a percentage increase of approximately 7% to 38% in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment.

33

The impairment test for intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. These judgments and assumptions are subject to the variability discussed above.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted on the first day of the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, WACC and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things.

The Company reviews its long-lived asset groups, which include intangible assets subject to amortization, which for the Company are its patents and customer relationships, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

The Company conducted its annual assessment of goodwill and indefinite lived intangibles on the first day of the fourth quarter and no impairment was indicated for 2020. While the Company has concluded that neither goodwill nor any of its indefinite-lived intangible assets were impaired during the year ended December 31, 2020, a prolonged pandemic could impact the Company’s assumptions utilized in the determination of the estimated fair values of the Company’s reporting units and indefinite-lived intangible assets significantly enough to trigger an impairment. Hence, the Company continues to monitor the economic impact of the COVID-19 pandemic and may be required to reassess impairment of goodwill or indefinite-lived intangible assets in future interim periods.

•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. For further information regarding the Company’s valuation allowances, see Note 15, Income Taxes included in Part II, Item 8 of this Form 10-K.

In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information, as required by the provisions of the Financial Accounting Standards Board (“FASB”) FASB Accounting Standards Codification Topic (“ASC”) 740-10. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the consolidated financial statements. For further information regarding the Company’s uncertain tax positions, see Note 15, Income Taxes included in Part II, Item 8 of this Form 10-K.

34

•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.

Recent Accounting Pronouncements

See Note 1(y), “Summary of Significant Accounting Policies”, of the Company’s accompanying audited Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for a description of recent accounting pronouncements including the dates, or expected dates of adoption, and effects, or expected effects, on the Company’s disclosures, results of operations and financial condition.

Impact of Inflation

Inflation affects the Company’s manufacturing costs, distribution costs and operating expenses. The Company expects raw material prices, many of which are petroleum based, to fluctuate based upon worldwide supply and demand of commodities utilized in the Company’s production processes. Although the Company attempts to pass on increases in raw material, energy and fuel-related costs to its customers, the Company’s ability to do so is dependent upon the rate and magnitude of any increase, competitive pressures and market conditions for the Company’s products. There have been in the past, and may be in the future, periods of time during which increases in these costs cannot be fully recovered. In the past, the Company has often been able to enhance productivity and develop new product innovations to help offset increases in costs resulting from inflation in its operations.

Seasonality

The Company is a calendar year-end company. With respect to its Global Ceramic segment, the second quarter typically sees highest net sales, followed by the third and fourth quarters while the first quarter shows weakest net sales. For the segment’s operating income, generally, the second quarter shows the strongest earnings, followed by third and first quarters, and the fourth quarter shows weakest earnings. The Flooring NA segment’s third quarter typically produces the highest net sales and earnings followed by moderate second and fourth quarters, and a weakest first quarter. The Flooring ROW segment’s fourth quarter historically typically produces the highest net sales followed by moderate third and second quarters, and a weakest first quarter. For the segment’s operating income, generally, the second quarter shows the strongest earnings, followed by third and first quarters, and the fourth quarter shows weakest earnings.

The COVID-19 pandemic has created significant volatility in the global economy and has led to reduced economic activity, employment disruptions and supply chain constraints. The Company expects the impact of the COVID-19 pandemic to continue to impact normal seasonality trends into 2021, but the extent and duration of such impact cannot be predicted.

35

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

The Company’s market risk is impacted by changes in foreign currency exchange rates, interest rates and certain commodity prices. Financial exposures to these risks are monitored as an integral part of the Company’s risk management program, which seeks to reduce the potentially adverse effect that the volatility of these markets may have on its operating results. The Company does not regularly engage in speculative transactions, nor does it regularly hold or issue financial instruments for trading purposes. Excluding the hedge of net investment discussed in Note 1(r) “Hedges of Net Investments in Non-U.S. Operations”, of the Company’s accompanying consolidated financial statements in Part II, Item 8 of this Form 10-K, the Company did not have any derivative contracts outstanding as of December 31, 2020 and 2019.

Interest Rate Risk

As of December 31, 2020, approximately 87% of the Company’s debt portfolio was comprised of fixed-rate debt and 13% was floating-rate debt. The Company believes that probable near-term changes in interest rates would not materially affect its financial condition, results of operations or cash flows. The annual impact on interest expense of a one-percentage point interest rate change on the outstanding balance of the Company’s variable rate debt as of December 31, 2020 would be approximately $3 million or $0.04 to diluted EPS.

Foreign Exchange Risk

As a result of being a global enterprise, there is exposure to market risks from changes in foreign currency exchange rates, which may adversely affect the operating results and financial condition of the Company. Principal foreign currency exposures relate primarily to the euro and to a lesser extent the Russian ruble, the Mexican peso, the Canadian dollar, the Australian dollar, the British pound and the Brazilian real.

The Company’s objective is to balance, where possible, non-functional currency denominated assets to non-functional currency denominated liabilities to have a natural hedge and minimize foreign exchange impacts. The Company enters into cross border transactions through importing and exporting goods to and from different countries and locations. These transactions generate foreign exchange risk as they create assets, liabilities and cash flows in currencies other than their functional currency. This also applies to services provided and other cross border agreements among subsidiaries.

The Company takes steps to minimize risks from foreign currency exchange rate fluctuations through normal operating and financing activities. The Company does not enter into any speculative positions with regard to derivative instruments.

Based on financial results for the year ended December 31, 2020, a hypothetical overall 10 percent change in the U.S. dollar against the euro would have resulted in a translational adjustment of approximately $41 million.

36

Item 8.Consolidated Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm	38
Consolidated Balance Sheets as of December 31, 2020 and 2019	41
Consolidated Statements of Operations for the Years ended December 31, 2020, 2019, and 2018	42
Consolidated Statements of Comprehensive Income (Loss) for the Years ended December 31, 2020, 2019 and 2018	43
Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 2020, 2019 and 2018	44
Consolidated Statements of Cash Flows for the Years ended December 31, 2020, 2019 and 2018	45
Notes to Consolidated Financial Statements	46

37

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Mohawk Industries, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Mohawk Industries, Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Adoption of ASU 2016-02

As discussed in Notes 1 and 12 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases).

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the carrying value of goodwill in the Flooring North America and Global Ceramic reporting units

As discussed in Note 8 to the consolidated financial statements, the goodwill balance as of December 31, 2020 was $2,650.8 million, of which $531.1 million and $1,047.6 million related to the Flooring North America reporting unit and the Global Ceramic reporting unit, respectively. The Company performs goodwill impairment testing on an annual basis and whenever events or changes in circumstances indicate that the carrying value of goodwill might exceed the fair value of a reporting unit. The reporting units’ operating income declined during 2020 due to disruptions caused by the COVID-19 pandemic, lower sales volumes and other operational and market conditions. These conditions indicated that there could be a higher risk of goodwill impairment.

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We identified the assessment of the carrying value of goodwill in the Flooring North America and Global Ceramic reporting units as a critical audit matter. Specifically, the assessment of the Company’s forecasted sales growth rates, forecasted operating margins, discount rates, and selection of comparable company market multiples used in the Company’s fair value estimation of the reporting units required a higher degree of subjective auditor judgment and required the involvement of valuation professionals. Changes in these assumptions could have a significant impact on the fair value of the reporting units.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s goodwill impairment assessment process including controls over the reasonableness of the assumptions listed above. We evaluated the Company’s forecasted sales growth rates and operating margins for each reporting unit, and compared the growth assumptions to the Company’s historical performance and to relevant market data. To assess the Company’s ability to estimate cash flows, including forecasted sales growth rates and operating margins, we compared the Company’s historical cash flow forecasts to actual results. We also performed sensitivity analyses over certain assumptions listed above to assess their impact on the Company’s determination that the fair value of the Flooring North America and Global Ceramic reporting units exceeded their carrying values. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the reporting units’ discount rates by comparing them to discount rates that were independently developed using publicly available market data for comparable companies and the Company’s selection of comparable company market multiples.

Evaluation of the realizability of the deferred tax asset related to certain foreign intangible assets

As discussed in Note 15 to the consolidated financial statements, as of December 31, 2020, the Company had a $152.5 million deferred tax asset related to intangibles, which included a deferred tax asset related to amortization of the tax basis of certain intangible assets in a foreign entity.

The Company determined that projected future income of the entity will be sufficient to fully realize the deferred tax asset and accordingly has not recorded a valuation allowance. Assessments of future income could impact the valuation of deferred tax assets.

We identified the evaluation of the realizability of the deferred tax asset related to certain foreign intangible assets as a critical audit matter. A high degree of auditor judgment was required to evaluate the projected future income assumptions used in the Company’s long-term deferred tax asset recovery period. Specifically, subjective auditor judgment was required to assess the forecasted sales, operating margins, and other income. Changes to these assumptions could have a substantial impact on the realization of such deferred tax assets.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the deferred tax asset valuation allowance process, including controls over the assessment of the realizability of the deferred tax asset and development of the above noted assumptions for projected future income. We evaluated the Company’s projected future income by comparing the above noted assumptions to its historical performance and relevant market data. To assess the Company’s ability to estimate future income, we compared the historical forecasts for the intangible assets to actual results. We also performed sensitivity analyses over certain assumptions to assess their impact on the Company’s realizability assessment. We involved income tax professionals with specialized skills and knowledge who assisted in assessing the Company’s application of the relevant tax regulations. They also assisted in evaluating the tax planning strategies and the related impact of those strategies on the projected future income of the entity used in the realizability assessment.

/s/ KPMG LLP

We have served as the Company’s auditor since 1990.

Atlanta, Georgia

February 24, 2021

39

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Mohawk Industries, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Mohawk Industries, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated February 24, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Atlanta, Georgia

February 24, 2021

40

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

	2020		2019
	(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	768,625	134,785
Short-term investments	571,741		42,500
Receivables, net	1,709,493		1,526,619
Inventories	1,913,020		2,282,328
Prepaid expenses	369,432		415,546
Other current assets	31,343		27,679
Total current assets	5,363,654		4,429,457
Property, plant and equipment, net	4,591,229		4,698,917
Right of use operating lease assets	323,138		323,003
Goodwill	2,650,831		2,570,027
Tradenames	727,268		702,732
Other intangible assets subject to amortization, net	224,339		226,147
Deferred income taxes and other non-current assets	447,292		436,397
	$	14,327,751	13,386,680
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$	377,255	1,051,498
Accounts payable and accrued expenses	1,895,951		1,559,140
Current operating lease liabilities	98,042		101,945
Total current liabilities	2,371,248		2,712,583
Deferred income taxes	493,668		473,886
Long-term debt, less current portion	2,356,887		1,518,388
Non-current operating lease liabilities	234,726		228,155
Other long-term liabilities	330,064		327,220
Total liabilities	5,786,593		5,260,232
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $.01 par value; 60 shares authorized; no shares issued	—		—
Common stock, $.01 par value; 150,000 shares authorized; 77,624 and 78,980 shares issued in 2020 and 2019, respectively	776		790
Additional paid-in capital	1,885,142		1,868,250
Retained earnings	7,559,191		7,232,337
Accumulated other comprehensive loss	(695,145)		(765,824)
	8,749,964		8,335,553
Less: treasury stock at cost; 7,346 and 7,348 shares in 2020 and 2019, respectively	215,648		215,712
Total Mohawk Industries, Inc. stockholders’ equity	8,534,316		8,119,841
Nonredeemable noncontrolling interests	6,842		6,607
Total stockholders’ equity	8,541,158		8,126,448
	$	14,327,751	13,386,680

See accompanying notes to consolidated financial statements.

41

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Years Ended December 31, 2020, 2019 and December 31, 2018

	2020		2019	2018
	(In thousands, except per share data)
Net sales	$	9,552,197	9,970,672	9,983,634
Cost of sales	7,121,507		7,294,629	7,145,564
Gross profit	2,430,690		2,676,043	2,838,070
Selling, general and administrative expenses	1,794,688		1,848,819	1,742,744
Operating income	636,002		827,224	1,095,326
Interest expense	52,379		41,272	38,827
Other expense (income) net	(751)		36,407	7,298
Earnings before income taxes	584,374		749,545	1,049,201
Income tax expense	68,647		4,974	184,346
Net earnings including noncontrolling interests	515,727		744,571	864,855
Net earnings attributable to noncontrolling interests	132		360	3,151
Net earnings attributable to Mohawk Industries, Inc.	$	515,595	744,211	861,704
Basic earnings per share attributable to Mohawk Industries, Inc.
Basic earnings per share attributable to Mohawk Industries, Inc.	$	7.24	10.34	11.53
Weighted-average common shares outstanding—basic	71,214		71,986	74,413
Diluted earnings per share attributable to Mohawk Industries, Inc.
Diluted earnings per share attributable to Mohawk Industries, Inc.	$	7.22	10.30	11.47
Weighted-average common shares outstanding—diluted	71,401		72,264	74,773

See accompanying notes to consolidated financial statements.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

Years Ended December 31, 2020, 2019 and December 31, 2018

	2020		2019	2018
	(in thousands)
Net earnings including noncontrolling interests	$	515,727	744,571	864,855
Other comprehensive income (loss):
Foreign currency translation adjustments	72,956		28,996	(237,339)
Pension prior service cost and actuarial loss (gain), net of tax	(2,174)		(3,210)	1,094
Other comprehensive income (loss)	70,782		25,786	(236,245)
Comprehensive income	586,509		770,357	628,610
Comprehensive income (loss) attributable to noncontrolling interests	235		360	(13)
Comprehensive income attributable to Mohawk Industries, Inc.	$	586,274	769,997	628,623

See accompanying notes to consolidated financial statements.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2020, 2019 and December 31, 2018

			Total Stockholders’ Equity
	Redeemable Noncontrolling Interest		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Nonredeemable Noncontrolling Interests		Total Stockholders’ Equity
			Shares	Amount								Shares	Amount
	(In thousands)
Balances at December 31, 2017	$	29,463	81,771	$	818	$	1,828,131	$	6,004,506	$	(558,527)	(7,350)	$	(215,766)	$	7,847	$	7,067,009
Shares issued under employee and director stock plans	—		191	2		(8,400)		—		—		1	21		—		(8,377)
Stock-based compensation expense	—		—	—		31,382		—		—		—	—		—		31,382
Repurchases of common stock	—		(2,306)	(23)		—		(274,121)		—		—	—		—		(274,144)
Accretion of redeemable noncontrolling interest	3,892							(3,892)		—		—	—		—		(3,892)
Net earnings attributable to noncontrolling interests	2,474		—	—		—		—		—		—	—		677		677
Purchase of redeemable noncontrolling interest and noncontrolling interest, net of taxes	(33,884)		—	—		1,060		—		—		—	—		(1,060)		—
Currency translation adjustment on noncontrolling interests	(1,945)		—	—		—		—		—		—	—		(1,219)		(1,219)
Currency translation adjustment	—		—	—		—		—		(234,175)		—	—		—		(234,175)
Prior pension and post-retirement benefit service cost and actuarial loss	—		—	—		—		—		1,094		—	—		—		1,094
Net earnings			—	—		—		861,704		—		—	—		—		861,704
Balances at December 31, 2018	—		79,656	797		1,852,173		6,588,197		(791,608)		(7,349)	(215,745)		6,245		7,440,059
Shares issued under employee and director stock plans	—		130	1		(7,543)		—		—		1	33		—		(7,509)
Stock-based compensation expense	—		—	—		23,620		—		—		—	—		—		23,620
Repurchases of common stock	—		(806)	(8)		—		(100,071)		—		—	—		—		(100,079)
Net earnings attributable to noncontrolling interests	—		—	—		—		—		—		—	—		360		360
Currency translation adjustment on noncontrolling interests	—		—	—		—		—		—		—	—		2		2
Currency translation adjustment	—		—	—		—		—		28,994		—	—		—		28,994
Prior pension and post-retirement benefit service cost and actuarial loss	—		—	—		—		—		(3,210)		—	—		—		(3,210)
Net earnings			—	—		—		744,211		—		—	—		—		744,211
Balances at December 31, 2019	—		78,980	790		1,868,250		7,232,337		(765,824)		(7,348)	(215,712)		6,607		8,126,448
Shares issued under employee and director stock plans	—		152	1		(2,805)		—		—		2	64		—		(2,740)
Stock-based compensation expense	—		—	—		19,697		—		—		—	—		—		19,697
Repurchases of common stock	—		(1,508)	(15)		—		(188,610)		—		—	—		—		(188,625)
Net earnings attributable to noncontrolling interests	—		—	—		—		—		—		—	—		132		132
Currency translation adjustment on noncontrolling interests	—		—	—		—		—		—		—	—		103		103
Currency translation adjustment	—		—	—		—		—		72,853		—	—		—		72,853
Prior pension and post-retirement benefit service cost and actuarial gain	—		—	—		—		—		(2,174)		—	—		—		(2,174)
CECL adoption	—		—	—		—		(131)		—		—	—		—		(131)
Net earnings	—		—	—		—		515,595		—		—	—		—		515,595
Balances at December 31, 2020	$	—	77,624	$	776	$	1,885,142	$	7,559,191	$	(695,145)	(7,346)	$	(215,648)	$	6,842	$	8,541,158

See accompanying notes to consolidated financial statements.

44

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31, 2020, 2019 and December 31, 2018

	2020		2019	2018
	(In thousands)
Cash flows from operating activities:
Net earnings	$	515,727	744,571	864,855
Adjustments to reconcile net earnings to net cash provided by operating activities:
Restructuring	103,695		90,341	58,991
Depreciation and amortization	607,507		576,452	521,765
Deferred income taxes	22,324		(107,842)	88,456
Loss (gain) on disposal of property, plant and equipment	6,296		1,608	(205)
Stock-based compensation expense	19,697		23,620	31,382
Impairment of net investment in a manufacturer and distributor of ceramic tile in China	—		59,906	—
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	(54,977)		81,953	13,856
Inventories	357,516		7,212	(255,391)
Accounts payable and accrued expenses	255,466		(52,065)	(69,847)
Other assets and prepaid expenses	(55,084)		3,625	(79,482)
Other liabilities	(8,328)		(10,620)	6,964
Net cash provided by operating activities	1,769,839		1,418,761	1,181,344
Cash flows from investing activities:
Additions to property, plant and equipment	(425,557)		(545,462)	(794,110)
Acquisitions, net of cash acquired	—		(81,082)	(568,960)
Purchases of short-term investments	(1,187,891)		(581,500)	(664,133)
Redemption of short-term investments	658,650		592,000	695,000
Net cash used in investing activities	(954,798)		(616,044)	(1,332,203)
Cash flows from financing activities:
Payments on Senior Credit Facilities	(633,134)		(488,978)	(813,182)
Proceeds from Senior Credit Facilities	617,883		448,587	809,287
Payments on commercial paper	(4,890,991)		(15,168,820)	(16,756,404)
Proceeds from commercial paper	4,195,353		14,540,177	16,988,398
Proceeds from Floating Rate Notes	—		331,325	353,649
Payment on Floating Rate Notes	—		(331,325)	—
Proceeds from Senior Notes issuance	1,062,240		—	—
Repayments on Senior Notes	(326,904)		—	—
Proceeds from Term Loan Facility	500,000		—	—
Repayment on Term Loan Facility	(500,000)		—	—
Payments of other debt and financing costs	(4,799)		(4,294)	(69,569)
Debt issuance costs	(11,413)		(3,028)	(890)
Purchase of redeemable noncontrolling and noncontrolling interest	—		—	(34,944)
Purchase of Mohawk common stock	(188,625)		(100,080)	(274,144)
Change in outstanding checks in excess of cash	(4,256)		(4,664)	5,753
Shares redeemed for taxes	(3,539)		(8,777)	(9,925)
Net cash (used in) provided by financing activities	(188,185)		(789,877)	198,029
Effect of exchange rate changes on cash and cash equivalents	6,984		2,895	(13,004)
Net change in cash and cash equivalents	633,840		15,735	34,166
Cash and cash equivalents, beginning of year	134,785		119,050	84,884
Cash and cash equivalents, end of year	$	768,625	134,785	119,050

See accompanying notes to consolidated financial statements.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2020, 2019 and 2018

(In thousands, except per share data)

(1) Summary of Significant Accounting Policies

(a) Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile (“LVT”) and sheet vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(b) The COVID-19 Pandemic

During 2020, the Company experienced certain disruptions to its business and further disruptions may occur that could materially affect the Company’s ability to obtain supplies, manufacture its products or deliver inventory in a timely manner. Future disruptions may result in lost revenue, additional costs or impairments to goodwill or other assets. Although we believe that we can manage our exposure to these risks, there is no guarantee that we will be able to do so in the future. The Company continues to follow the recommendations of local health authorities to minimize exposure risk for its employees, suppliers, customers and other stakeholders. The Company has implemented business continuity plans during the crisis and is attempting to minimize the pandemic’s impact, but it may be unable to adequately respond to further outbreaks in particular geographies and its operations may be materially impacted. The extent to which the COVID-19 pandemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including the successful implementation of vaccination programs and the continued fiscal support currently provided by governments. Accordingly, the COVID-19 pandemic and the related global reaction could have a material adverse effect on the Company’s business, results of operations and financial condition.

(c) Cash and Cash Equivalents

The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2020, the Company had cash and cash equivalents of $768,625 of which $436,948 was held outside the United States. As of December 31, 2019, the Company had cash and cash equivalents of $134,785 of which $110,033 was held outside the United States.

(d) Short-term Investments

The Company invests in high quality credit instruments. At December 31, 2020, such investments consisted of a short-duration bond fund and managed income fund. At December 31, 2019, amounts consisted solely of investments in the Company's commercial paper by its wholly-owned captive insurance company. Such investments are not insured by the Federal Deposit Insurance Corporation.

The Company's investment in the short-duration bond fund and managed income fund is classified as an equity security, recorded at fair value based on the closing market price of the security. The Company recognizes dividends, realized and unrealized gains and losses to other expense (income), net in the statement of operations.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(e) Fair Value

Accounting principles generally accepted in the U.S. define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

(f) Accounts Receivable and Revenue Recognition

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

The Company accounts for incremental costs of obtaining a contract as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.

The Company accounts for shipping and handling activities performed after control has been transferred as a fulfillment cost in cost of sales.

(g) Inventories

The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or net realizable value. Cost has been determined using the FIFO method. Costs included in inventory include raw materials, direct and indirect labor and employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence.

(h) Property, Plant and Equipment

Property, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 15-40 years for buildings and improvements, 3-25 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(i) Accounting for Business Combinations

The Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.

(j) Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 350, Intangibles-Goodwill and Other, the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis on the first day of the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). The Company 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’s judgments and assumptions using the discounted cash flows and comparable company market valuation approaches. The Company has identified Global Ceramic, Flooring NA, and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted on the first day of the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The impairment tests for indefinite lived intangible assets may be completed through an assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts.  If the qualitative assessment indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative impairment test is not required.  If a quantitative test is necessary, the Company estimates the fair value of the intangible asset and compares it to its carrying amount.  If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company may also elect to bypass the qualitative assessment and perform a quantitative impairment test in any period.  If the Company elects to perform a quantitative impairment test, it may resume the qualitative assessment in subsequent periods. 

The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, applicable discount rate and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. 

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(k) Leases

The Company measures right of use (“ROU”) assets and lease liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost.

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expensed as incurred. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 10 years.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of the Company’s leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

(l) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(m) Financial Instruments

The Company’s financial instruments consist primarily of short-term investments, receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The Company has a wholly-owned captive insurance company that may periodically invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon level two fair value hierarchy. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(n) Advertising Costs and Vendor Consideration

Advertising and promotion expenses are charged to earnings during the period in which they are incurred. Advertising and promotion expenses included in selling, general, and administrative expenses were $105,974 in 2020, $130,207 in 2019 and $116,854 in 2018.

Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising. Co-op advertising expenses, classified as a selling, general and administrative expense, were $16,087 in 2020, $11,418 in 2019 and $13,332 in 2018. 

(o) Product Warranties

The Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

(p) Impairment of Long-Lived Assets

The Company reviews its long-lived asset groups, which include intangible assets such as patents and customer relationships subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

(q) Foreign Currency Translation

The Company’s subsidiaries that operate outside the United States generally use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

(r) Hedges of Net Investments in Non-U.S. Operations

The Company has numerous investments outside the United States. The net assets of these subsidiaries are exposed to changes and volatility in currency exchange rates. The Company uses foreign currency denominated debt to hedge its non-U.S. net investments against adverse movements in exchange rates. The gains and losses on the Company’s net investments in its non-U.S. operations are economically offset by losses and gains on its foreign currency borrowings. The Company designated its €500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the years ended December 31, 2020, December 31, 2019 and December 31, 2018 the change in the U.S. dollar value of the Company’s euro denominated debt was an increase of $54,907 ($41,708 net of taxes), a decrease of $12,049 ($9,153 net of taxes) and a decrease of $27,948 ($20,376 net of taxes), respectively, which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase in the U.S. dollar value of the Company’s debt partially offsets the euro-to-dollar translation of the Company’s net investment in its European operations.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(s) Earnings per Share (“EPS”)

Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method. There were no common stock options and unvested restricted shares (units) that were excluded from the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2020, 2019 and 2018.

Computations of basic and diluted earnings per share are presented in the following table:

	2020		2019	2018
Net earnings attributable to Mohawk Industries, Inc.	$	515,595	744,211	861,704
Accretion of redeemable noncontrolling interest(a)	—		—	(3,892)
Net earnings available to common stockholders	$	515,595	744,211	857,812
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding—basic	71,214		71,986	74,413
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net	187		278	360
Weighted-average common shares outstanding-diluted	71,401		72,264	74,773
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	7.24	10.34	11.53
Diluted	$	7.22	10.30	11.47

(a) Represents the accretion of the Company’s redeemable noncontrolling interest to redemption value. The holder put this option to the Company on December 20, 2018 for $33,884.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(t) Stock-Based Compensation

The Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards’ estimated lives for fixed awards with ratable vesting provisions.

(u) Employee Benefit Plans

The Company has 401(k) retirement savings plans (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 60 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $56,241 and $13,509 in 2020, $57,354 and $23,008 in 2019 and $55,796 and $22,689 in 2018, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans. The Company’s projected benefit obligation and plan assets as of December 31, 2020 were $86,722 and $68,413, respectively. The Company’s projected benefit obligation and plan assets as of December 31, 2019 were $73,510 and $60,040, respectively. As of December 31, 2020, the funded status of the Non-U.S. Plans was a liability of $18,309 of which $7,005 was recorded in accumulated other comprehensive income, for a net liability of $11,304 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2019, the funded status of the Non-U.S. Plans was a liability of $13,470 of which $8,303 was recorded in accumulated other comprehensive income, for a net liability of $5,167 recorded in other long-term liabilities within the consolidated balance sheets.

(v) Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested. The Company presents currency translation adjustments on noncontrolling interests separately from currency translation adjustments on controlling interests in accumulated other comprehensive income (loss) within stockholders’ equity.

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2020, 2019 and 2018 are as follows:

	Foreign currency translation adjustments		Pensions and post-retirement benefits	Total
Balance as of December 31, 2017	$	(547,927)	(10,600)	(558,527)
Current period other comprehensive income (loss) before reclassifications	(234,175)		1,094	(233,081)
Balance as of December 31, 2018	(782,102)		(9,506)	(791,608)
Current period other comprehensive income (loss) before reclassifications	28,994		(3,210)	25,784
Balance as of December 31, 2019	(753,108)		(12,716)	(765,824)
Current period other comprehensive income (loss) before reclassifications	72,853		(2,174)	70,679
Balance as of December 31, 2020	$	(680,255)	(14,890)	(695,145)

52

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(w) Self-Insurance Reserves

The Company is self-insured in the U.S. for various levels of general liability, automobile liability, workers’ compensation and employee medical coverage. Insurance reserves are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on the Company’s results of operations and financial condition.

The Company has a wholly-owned captive insurance company, Mohawk Assurance Services, Inc. (“MAS”). MAS insures the retained portion of the Company’s U.S. general liability, automobile liability, and workers’ compensation exposures. In the fourth quarter of 2020, the Company also moved pandemic, terrorism and medical coverage to MAS.

(x) Fiscal Year

The Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

(y) Recent Accounting Pronouncements

- Effective in Future Years

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which simplified the accounting for income taxes in several areas by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes. The amendment is effective commencing January 1, 2021 for the Company. The Company evaluated the impact that this accounting standards update will have on its consolidated financial statements and does not expect the adoption of this guidance to have a significant impact to the financial statements.

- Recently Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further amended by additional accounting standards updates issued by the FASB.  The new standard replaced the incurred loss impairment methodology for recognizing credit losses with a new methodology that requires recognition of lifetime expected credit losses when a financial asset is originated or purchased, even if the risk of loss is remote. The new methodology (referred to as the current expected credit losses model, or "CECL") applies to most financial assets measured at amortized cost, including trade receivables, and requires consideration of a broader range of reasonable and supportable information to estimate expected credit losses.  The Company adopted the new standard on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.    

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350): Simplifying the test for goodwill impairment. The amendments remove the second step of the current goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The Company adopted the new standard in the fourth quarter of 2019. The effect of adopting the new standard was not material.

53

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

In February 2016, the FASB issued a new standard ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases). ASC 842 was issued to increase transparency and comparability among organizations by requiring the recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The adoption of ASC 842 had a material impact on the Company’s condensed consolidated balance sheets, but did not have a material impact on the Company’s condensed consolidated statements of operations or cashflow. The most significant impact was the recognition of ROU assets of $328,169 and lease liabilities for operating leases of $332,286 at January 1, 2019, based on the present value of the future minimum rental payments for existing operating leases. The difference in the balances is due to deferred rent, tenant incentive allowances and prepaid amounts taken into account for adoption. The Company’s accounting for finance leases remained substantially unchanged. See Note 12, Leases.

On January 1, 2019, the Company adopted the new accounting standard, ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. The effect of adopting the new standard was not material.

54

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(2) Acquisitions

2019 Acquisitions

During 2019, the Company acquired two hard surface flooring distribution companies based in the Netherlands and the Czech Republic for $76,237, which resulted in allocations of goodwill of $38,366 and intangible assets subject to amortization of $12,789. The results have been included in the Flooring ROW segment and are not material to the Company’s consolidated results of operations.    

2018 Acquisitions

On November 16, 2018, the Company completed its purchase of Eliane S/A Revestimentos Ceramicos (“Eliane”), one of the largest ceramic tile companies in Brazil. Pursuant to the purchase agreement, the Company (i) acquired the entire issued share capital of Eliane and (ii) acquired $99,037 of net indebtedness of Eliane, with total cash consideration paid of $148,302. The Company’s acquisition of Eliane resulted in allocations of goodwill of $33,019, indefinite-lived tradename intangible assets of $32,238 and intangible assets subject to amortization of $5,818. The majority of the goodwill is deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include product, sales and manufacturing synergies. Eliane’s results of operations have been included in the consolidated financial statements since the date of acquisition in the Global Ceramic reporting segment.

On July 2, 2018, the Company completed its acquisition of Godfrey Hirst Group, the leading flooring company in Australia and New Zealand, further extending Mohawk’s global position. The total value of the acquisition was $400,894. The Company’s acquisition of Godfrey Hirst Group resulted in allocations of goodwill of $88,655, indefinite-lived tradename intangible assets of $58,671 and intangible assets subject to amortization of $43,635. The goodwill is deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include product, sales and manufacturing synergies. The Godfrey Hirst Group’s results have been included in the condensed consolidated financial statements since the date of acquisition in the Flooring NA and Flooring ROW segments.

During the first quarter of 2018, the Company completed the acquisition of three hard surface distribution businesses in the Flooring ROW segment for $24,610, resulting in a goodwill allocation of $12,874 and intangibles subject to amortization of $7.     

(3) Revenue from Contracts with Customers

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $39,466 and $34,959 as of December 31, 2020 and December 31, 2019, respectively.

Performance obligations

Substantially all of the Company’s revenue is recognized at a point in time when the product is either shipped or received from the Company's facilities and control of the product is transferred to the customer.  Accordingly, in any period, the Company does not recognize a significant amount of revenue from performance obligations satisfied or partially satisfied in prior periods and the amount of such revenue recognized during the years ended December 31, 2020, 2019, and 2018 was immaterial.

Costs to obtain a contract

The Company historically incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying condensed consolidated balance sheets. Capitalized costs to obtain contracts were $59,847 and $69,039 as of December 31, 2020 and December 31, 2019, respectively. Straight-line amortization expense recognized during 2020 related to these capitalized costs was $68,201.

55

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Revenue disaggregation

The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories during the years ended December 31, 2020, 2019 and 2018, respectively:

December 31, 2020	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,050,470	3,477,556	2,381	5,530,407
Europe	699,715		1,506	1,785,549	2,486,770
Russia	262,846		50	122,934	385,830
Other	419,725		114,963	614,502	1,149,190
Total	$	3,432,756	3,594,075	2,525,366	9,552,197
Product Categories
Ceramic & Stone	$	3,425,672	31,531	—	3,457,203
Carpet & Resilient	7,084		2,871,050	857,754	3,735,888
Laminate & Wood	—		691,494	847,473	1,538,967
Other(1)	—		—	820,139	820,139
Total	$	3,432,756	3,594,075	2,525,366	9,552,197

December 31, 2019	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,131,029	3,688,691	2,873	5,822,593
Europe	711,762		6,922	1,813,555	2,532,239
Russia	269,142		66	116,187	385,395
Other	519,209		148,035	563,201	1,230,445
Total	$	3,631,142	3,843,714	2,495,816	9,970,672
Product Categories
Ceramic & Stone	$	3,631,142	55,503	—	3,686,645
Carpet & Resilient	—		3,136,474	785,295	3,921,769
Laminate & Wood	—		651,737	849,340	1,501,077
Other(1)	—		—	861,181	861,181
Total	$	3,631,142	3,843,714	2,495,816	9,970,672

56

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

December 31, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,251,233	3,851,267	1,289	6,103,789
Europe	714,315		6,487	1,861,890	2,582,692
Russia	245,867		2	103,351	349,220
Other	341,441		171,392	435,100	947,933
Total	$	3,552,856	4,029,148	2,401,630	9,983,634
Product Categories
Ceramic & Stone	$	3,552,856	68,337	—	3,621,193
Carpet & Resilient	—		3,258,029	645,669	3,903,698
Laminate & Wood	—		702,782	850,250	1,553,032
Other(1)	—		—	905,711	905,711
Total	$	3,552,856	4,029,148	2,401,630	9,983,634

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

(4) Restructuring, Acquisition Transaction and Integration-Related Costs

The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost-reduction/productivity initiatives. For example:

•In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•In connection with the Company’s cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions including accelerated depreciation ("Asset write-downs") and workforce reductions.     

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2020, 2019 and December 31, 2018, respectively (in thousands):

	2020		2019	2018
Cost of sales
Restructuring costs(1)	$	101,230	84,844	43,733
Acquisition integration-related costs	1,153		3,458	3,330
Restructuring and acquisition integration-related costs	$	102,383	88,302	47,063
Selling, general and administrative expenses
Restructuring costs(1)	$	24,127	5,497	15,259
Acquisition transaction-related costs	213		1,502	4,977
Acquisition integration-related costs	2,127		5,871	11,351
Restructuring, acquisition transaction and integration-related costs	$	26,467	12,870	31,587

(1) The restructuring costs for 2020, 2019 and 2018 primarily relate to the Company’s actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as well as actions related to the Company’s recent acquisitions. The Company currently estimates that it will incur additional restructuring costs of approximately $18,000 primarily related to accelerated depreciation and period closure costs mainly in its Flooring North America segment.

57

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The restructuring activity for the years ended December 31, 2020 and 2019, respectively is as follows (in thousands):

	Lease impairments		Asset write-downs	Severance	Other restructuring costs	Total
Balance as of December 31, 2018	$	397	—	7,866	250	8,513
Provision
Global Ceramic segment	—		—	5,264	—	5,264
Flooring NA segment	—		37,820	2,617	33,975	74,412
Flooring ROW segment	—		3,936	4,615	2,099	10,650
Corporate	—		—	15	—	15
Total provision for the Year 2019	—		41,756	12,511	36,074	90,341
Cash payments	(376)		—	(16,113)	(19,165)	(35,654)
Non-cash items	—		(41,756)	(142)	(17,043)	(58,941)
Balance as of December 31, 2019	21		—	4,122	116	4,259
Provision
Global Ceramic segment	2,239		19,963	13,987	6,927	43,116
Flooring NA segment	227		32,902	4,660	13,809	51,598
Flooring ROW segment	—		12,913	5,746	6,391	25,050
Corporate	—		3,685	1,908	—	5,593
Total provision for the Year 2020	2,466		69,463	26,301	27,127	125,357
Cash payments	(21)		—	(20,001)	(18,425)	(38,447)
Non-cash items	(2,466)		(69,463)	1,154	(8,089)	(78,864)
Balance as of December 31, 2020	$	—	—	11,576	729	12,305
2019 provision amounts recorded in:
Cost of sales	$	—	41,756	8,273	34,815	84,844
Selling, general and administrative expenses	—		—	4,238	1,259	5,497
Total provision for the Year 2019	$	—	41,756	12,511	36,074	90,341
2020 provision amounts recorded in:
Cost of sales	$	—	64,415	13,949	22,866	101,230
Selling, general and administrative expenses	2,466		5,048	12,352	4,261	24,127
Total provision for the Year 2020	$	2,466	69,463	26,301	27,127	125,357

The Company generally expects the remaining severance and other restructuring costs to be paid over the next year.

58

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(5) Fair Value

For publicly-traded investment securities, consisting of the Company’s money market, short-duration bond fund and managed income fund, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1. The Company’s wholly-owned captive insurance company may also invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon the Level 2 fair value hierarchy.

Items Measured at Fair Value

The following table presents the items measured at fair value as of December 31, 2020 and December 31, 2019:

	Fair Value
	December 31, 2020		December 31, 2019
Cash and cash equivalents:
Money market fund (Level 1)	$	197,835	—
Short-term investments:
Short-term investments (Level 1) (1)	571,741		—
Commercial paper (Level 2)	—		42,500

(1) The Company's short-term investments are in a short-duration bond fund and a managed income fund that are designed to deliver current income consistent with the preservation of capital through investing in high-and medium grade fixed income securities. The investments are readily convertible into cash.

The fair values and carrying values of the Company’s debt are disclosed in Note 10 - Long-Term Debt.

(6) Receivables, net

	December 31, 2020		December 31, 2019
Customers, trade	$	1,591,503	1,491,592
Income tax receivable	112,580		8,428
Other	89,092		88,520
	1,793,175		1,588,540
Less: allowance for discounts, returns, claims and doubtful accounts(1)	83,682		61,921
Receivables, net	$	1,709,493	1,526,619

(1) The Company adopted the new standard, ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to net sales or costs and expenses	Deductions(1)	Balance at end of year
2018	$	86,103	4,240	317,716	333,341	74,718
2019	74,718		382	387,253	400,432	61,921
2020	61,921		—	384,403	362,642	83,682

(1) Represents charge-offs, net of recoveries.

59

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(7) Inventories

The components of inventories are as follows:

	December 31, 2020		December 31, 2019
Finished goods	$	1,372,234	1,610,742
Work in process	126,231		144,639
Raw materials	414,555		526,947
Total inventories	$	1,913,020	2,282,328

(8) Goodwill and Other Intangible Assets

The Company conducted its annual impairment assessment on the first day of the fourth quarter of 2020 and determined the fair values of its reporting units and trademarks exceeded their carrying values. As a result, no impairment was indicated. 

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic		Flooring NA	Flooring ROW	Total
Balances as of December 31, 2018
Goodwill	$	1,564,987	874,198	1,409,206	3,848,391
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,033,057		531,144	956,765	2,520,966
Goodwill recognized during the period	13,197		—	49,619	62,816
Currency translation during the period	5,392		—	(19,147)	(13,755)
Balances as of December 31, 2019
Goodwill	1,583,576		874,198	1,439,678	3,897,452
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,051,646		531,144	987,237	2,570,027
Goodwill recognized during the period	—		—	(9,642)	(9,642)
Currency translation during the period	(4,085)		—	94,531	90,446
Balances as of December 31, 2020
Goodwill	1,579,491		874,198	1,524,567	3,978,256
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	$	1,047,561	531,144	1,072,126	2,650,831

60

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Intangible assets:

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2018	$	707,380
Intangible assets acquired during the year(1)	(874)
Currency translation during the year	(3,774)
Balance as of December 31, 2019	702,732
Currency translation during the year	24,536
Balance as of December 31, 2020	$	727,268

(1) Includes adjustments on previously acquired intangible assets.

	Customer relationships		Patents	Other	Total
Intangible assets subject to amortization:
Balances as of December 31, 2018	$	244,628	4,495	5,307	254,430
Intangible assets acquired during the year	2,092		—	—	2,092
Amortization during the year	(25,527)		(2,156)	70	(27,613)
Currency translation during the year	(2,752)		(111)	101	(2,762)
Balances as of December 31, 2019	218,441		2,228	5,478	226,147
Intangible assets acquired during the year	12,789		—	—	12,789
Amortization during the year	(26,612)		(2,195)	(84)	(28,891)
Currency translation during the year	13,921		111	262	14,294
Balances as of December 31, 2020	$	218,539	144	5,656	224,339

	December 31, 2020
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	645,206	12,789	41,800	481,256	218,539
Patents	249,100		—	24,470	273,426	144
Other	6,631		—	314	1,289	5,656
Total	$	900,937	12,789	66,584	755,971	224,339

	December 31, 2019
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	651,014	2,092	(7,900)	426,765	218,441
Patents	254,483		—	(5,383)	246,872	2,228
Other	6,534		—	97	1,153	5,478
Total	$	912,031	2,092	(13,186)	674,790	226,147

	Years Ended December 31,
	2020		2019	2018
Amortization expense	$	28,891	27,613	30,745

61

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Estimated amortization expense for the years ending December 31 are as follows:

2021	$	29,429
2022	28,634
2023	26,998
2024	26,264
2025	26,064

(9) Property, Plant and Equipment

Following is a summary of property, plant and equipment:

	December 31, 2020		December 31, 2019
Land	$	484,450	469,837
Buildings and improvements	1,856,859		1,790,781
Machinery and equipment	5,987,272		5,602,474
Furniture and fixtures	164,027		163,017
Leasehold improvements	103,172		103,755
Construction in progress	309,486		366,144
	8,905,266		8,496,008
Less: accumulated depreciation	4,314,037		3,797,091
Net property, plant and equipment	$	4,591,229	4,698,917

Additions to property, plant and equipment included capitalized interest of $6,362, $7,214 and $10,684 in 2020, 2019 and 2018, respectively. Depreciation expense was $574,095, $544,733 and $487,411 for 2020, 2019 and 2018, respectively. Included in property, plant and equipment are finance leases with a cost of $58,170 and $35,271 and accumulated depreciation of $12,498 and $5,664 as of December 31, 2020 and 2019, respectively.

(10) Long-Term Debt

Senior Credit Facility

On October 18, 2019, the Company amended and restated its $1,800,000 senior credit facility, extending the maturity from March 26, 2022 to October 18, 2024 (as amended and restated, the “Senior Credit Facility”). The Senior Credit Facility marginally reduced the commitment fee and modified certain negative covenants to provide the Company with additional flexibility, including flexibility to make acquisitions and incur additional indebtedness. The restatement also renewed the Company’s option to extend the maturity of the Senior Credit Facility up to two times for an additional one-year period each.

At the Company’s election, revolving loans under the Senior Credit Facility bear interest at annual rates equal to either (a) LIBOR for 1, 2, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.125% as of December 31, 2020), or (b) the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.5%, or the Eurocurrency Rate (as defined in the Senior Credit Facility) rate plus 1.0%, plus an applicable margin ranging between 0.00% and 0.75% (0.125% as of December 31, 2020). The Company also pays a commitment fee to the lenders under the Senior Credit Facility on the average amount by which the aggregate commitments of the lenders exceed utilization of the Senior Credit Facility ranging from 0.09% to 0.20% per annum (0.11% as of December 31, 2020). The applicable margins and the commitment fee are determined based on whichever of the Company’s Consolidated Net Leverage Ratio or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

The obligations of the Company and its subsidiaries in respect of the Senior Credit Facility are unsecured.

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Notes to Consolidated Financial Statements—(Continued)

The Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, subsidiary indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, future negative pledges, and changes in the nature of the Company’s business. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirements and is not otherwise in default. The Senior Credit Facility originally required the Company to maintain a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.00, each as of the last day of any fiscal quarter. However, on May 7, 2020 the Company amended the Senior Credit Facility to temporarily increase the minimum Consolidated Net Leverage Ratio to 4.75 to 1.00 and to increase the amount of certain adjustments to Net Income that are permitted to calculate the ratio. The relief provided by the amendment is in effect for the fiscal quarters ending on September 26, 2020 through (and including) the fiscal quarter ending December 31, 2021.

The Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

In 2019, the Company paid financing costs of $2,264 in connection with the amendment and restatement of its Senior Credit Facility. These costs were deferred and, along with previously unamortized costs of $3,405 are being amortized over the term of the Senior Credit Facility.

As of December 31, 2020, amounts utilized under the Senior Credit Facility included zero borrowings and $787 of standby letters of credit related to various insurance contracts and foreign vendor commitments. Any outstanding borrowings under the Company's U.S. and European commercial paper programs reduce availability under the Senior Credit Facility. The Company has utilized $787 under the Senior Credit Facility resulting in a total of $1,799,213 available as of December 31, 2020.

Commercial Paper

On February 28, 2014 and July 31, 2015, the Company established programs for the issuance of unsecured commercial paper in the United States and Eurozone capital markets, respectively. Commercial paper issued under the U.S. and European programs will have maturities ranging up to 397 and 183 days, respectively. None of the commercial paper notes may be voluntarily prepaid or redeemed by the Company and all rank pari passu with all of the Company’s other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company.

The Company uses its Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount outstanding under all of the Company’s commercial paper programs may not exceed $1,800,000 (less any amounts drawn on the Senior Credit Facility) at any time.

The proceeds from the issuance of commercial paper notes will be available for general corporate purposes. As of December 31, 2020, there was zero outstanding under the U.S. commercial paper program and the European program.     

Senior Notes

On June 12, 2020, Mohawk Capital Finance S.A. (“Mohawk Finance”), an indirect wholly-owned finance subsidiary of the Company, completed the issuance and sale of €500,000 aggregate principal amount of 1.750% Senior Notes (“1.750% Senior Notes”) due June 12, 2027. The 1.750% Senior Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 1.750% Senior Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. Interest on the 1.750% Senior Notes is payable annually in cash on June 12 of each year, commencing on June 12, 2021. The Company paid financing costs of $4,400 in connection with the 1.750% Senior Notes. These costs were deferred and are being amortized over the term of the 1.750% Senior Notes.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

On May 14, 2020, the Company completed the issuance and sale of $500,000 aggregate principal amount of 3.625% Senior Notes (“3.625% Senior Notes”) due May 15, 2030. The 3.625% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 3.625% Senior Notes is payable semi-annually in cash on May 15 and November 15 of each year, commencing on November 15, 2020. The Company paid financing costs of $5,476 in connection with the 3.625% Senior Notes. These costs were deferred and are being amortized over the term of the 3.625% Senior Notes.     

On September 4, 2019, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due September 4, 2021 (“2021 Floating Rate Notes”). The 2021 Floating Rate Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2021 Floating Rate Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bear interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.2% (but in no event shall the interest rate be less than zero). Interest on the 2021 Floating Rate Notes is payable quarterly on December 4, March 4, June 4, and September 4 of each year. Mohawk Finance received an issuance premium of €744 and paid financing cost of $754 in connection with the 2021 Floating Rate Notes. The issuance premium and financing costs have been deferred and are being amortized over the term of the 2021 Floating Rate Notes.

On May 18, 2018, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due May 18, 2020 (“2020 Floating Rate Notes”). The 2020 Floating Rate Notes were senior unsecured obligations of Mohawk Finance and ranked pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2020 Floating Rate Notes were fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bore interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.3% (but in no event would the interest rate be less than zero). Interest on the 2020 Floating Rate Notes was payable quarterly on August 18, November 18, February 18, and May 18 of each year. Mohawk Finance paid financing costs of $890 in connection with the 2020 Floating Rate Notes. These costs were deferred and amortized over the term of the 2020 Floating Rate Notes. On May 18, 2020, the Company paid the remaining €300,000 outstanding principal of the 2020 Floating Rate Notes utilizing cash on hand and borrowings under its commercial paper programs.

On September 11, 2017, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due September 11, 2019 (“2019 Floating Rate Notes”). The 2019 Floating Rate Notes were senior unsecured obligations of Mohawk Finance and ranked pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2019 Floating Rate Notes were fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bore interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.3% (but in no event would the interest rate be less than zero). Interest on the 2019 Floating Rate Notes was payable quarterly on September 11, December 11, March 11, and June 11 of each year. Mohawk Finance paid financing costs of $911 in connection with the 2019 Floating Rate Notes. These costs were deferred and amortized over the term of the 2019 Floating Rate Notes. On September 11, 2019, the Company paid the remaining €300,000 outstanding principal of the 2019 Floating Rate Notes utilizing cash on hand and borrowings under its European commercial paper program.

On June 9, 2015, the Company issued €500,000 aggregate principal amount of 2.00% Senior Notes (“2.00% Senior Notes”) due January 14, 2022. The 2.00% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 2.00% Senior Notes is payable annually in cash on January 14 of each year, commencing on January 14, 2016. The Company paid financing costs of $4,218 in connection with the 2.00% Senior Notes. These costs were deferred and are being amortized over the term of the 2.00% Senior Notes.

On January 31, 2013, the Company issued $600,000 aggregate principal amount of 3.85% Senior Notes (“3.85% Senior Notes”) due February 1, 2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes is payable semi-annually in cash on February 1 and August 1 of each year. The Company paid financing costs of $6,000 in connection with the 3.85% Senior Notes. These costs were deferred and are being amortized over the term of the 3.85% Senior Notes.

As defined in the related agreements, the Company’s senior notes contain covenants, representations and warranties and events of default, subject to exceptions, and restrictions on the Company’s financial and business operations, including limitations on liens, restrictions on entering into sale and leaseback transactions, fundamental changes, and a provision allowing the holder of the notes to require repayment upon a change of control triggering event.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Term Loan

On April 7, 2020, the Company entered into a credit agreement that provided for a $500,000 delayed draw term loan facility (the “Term Loan Facility”). On April 15, 2020, the Company borrowed the full amount on the Term Loan Facility, the proceeds of which could be used for funding working capital and general corporate purposes of the Company. The principal amount of the Term Loan Facility was to be repaid in a single installment on April 6, 2021. The Company could prepay all or a portion of the Term Loan Facility from time to time, plus accrued and unpaid interest. The obligations of the Company and its subsidiaries in respect of the Term Loan Facility were unsecured. The Term Loan Facility was subject to the same affirmative and negative covenants that are applicable to the Senior Credit Facility. The Company recorded financing costs of $1,088 in connection with the Term Loan Facility. On May 15, 2020, the Company prepaid the entire outstanding balance on the Term Loan Facility utilizing cash on hand and proceeds from the 3.625% Senior Notes and associated financing costs were written off in the quarter ending June 27, 2020.    

The fair values and carrying values of the Company’s debt instruments are detailed as follows:

	At December 31, 2020			At December 31, 2019
	Fair Value		Carrying Value	Fair Value	Carrying Value
1.750% Senior Notes, payable June 12, 2027; interest payable annually	$	635,664	615,006	—	—
3.625% Senior Notes, payable May 15, 2030; interest payable semi-annually	561,890		500,000	—	—
3.85% Senior Notes, payable February 1, 2023; interest payable semi-annually	638,844		600,000	627,144	600,000
2.00% Senior Notes, payable January 14, 2022; interest payable annually	624,680		615,006	580,235	560,099
2020 Floating Rate Notes, payable May 18, 2020; interest payable quarterly	—		—	336,066	336,059
2021 Floating Rate Notes, payable September 04, 2021; interest payable quarterly	368,738		369,004	335,965	336,059
U.S. commercial paper	—		—	317,000	317,000
European commercial paper	—		—	376,946	376,946
Five-year Senior unsecured Credit Facility, due October 18, 2024	—		—	16,803	16,803
Finance leases and other	46,302		46,302	30,049	30,049
Unamortized debt issuance costs	(11,176)		(11,176)	(3,129)	(3,129)
Total debt	2,864,942		2,734,142	2,617,079	2,569,886
Less current portion of long term debt and commercial paper	376,989		377,255	1,051,498	1,051,498
Long-term debt, less current portion	$	2,487,953	2,356,887	1,565,581	1,518,388

The fair values of the Company’s debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The aggregate maturities of total debt as of December 31, 2020 are as follows(1):

2021	$	377,208
2022	622,832
2023	607,116
2024	5,459
2025	4,131
Thereafter	1,128,572
	$	2,745,318

(1) Debt maturity table excludes deferred loan costs.

(11) Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2020		December 31, 2019
Outstanding checks in excess of cash	$	5,672	9,924
Accounts payable, trade	1,016,897		824,956
Accrued expenses	566,052		461,035
Product warranties	54,692		49,184
Accrued interest	30,403		21,050
Accrued compensation and benefits	222,235		192,991
Total accounts payable and accrued expenses	$	1,895,951	1,559,140

(12) Leases

Effective January 1, 2019 the Company adopted ASC 842, which requires recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet, based on the present value of the future minimum rental payments for existing operating leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11.

Certain of the Company’s leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of the Company’s leases contain residual value guarantees and none of the Company’s agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage.

The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists mainly of operating leases.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The components of lease costs for the twelve months ended December 31, 2020 and December 31, 2019 are as follows:    

	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Cost of Goods Sold		Selling, General and Administrative	Total		Cost of Goods Sold	Selling, General and Administrative	Total
Operating lease costs
Fixed	$	25,067	102,504	127,571		30,002	97,988	127,990
Short-term	11,633		16,021	27,654		9,725	13,933	23,658
Variable	8,285		30,036	38,321		8,123	29,852	37,975
Sub-leases	(411)		(741)	(1,152)		(311)	(537)	(848)
	$	44,574	147,820	192,394		47,539	141,236	188,775
	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Depreciation and Amortization		Interest	Total		Depreciation and Amortization	Interest	Total
Finance lease costs
Amortization of leased assets	$	6,423	—	6,423		4,015	—	4,015
Interest on lease liabilities	—		690	690		—	491	491
	$	6,423	690	7,113		4,015	491	4,506
Net lease costs				$	199,507			193,281

Rental expense under fixed operating leases was $143,513 in 2018.

67

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Supplemental balance sheet information related to leases is as follows:

	Classification	At December 31, 2020		At December 31, 2019
Assets
Operating Leases
Right of use operating lease assets	Right of use operating lease assets	$	323,138	323,003
Finance Leases
Property, plant and equipment, gross	Property, plant and equipment	58,170		35,271
Accumulated depreciation	Accumulated depreciation	(12,498)		(5,664)
Property, plant and equipment, net	Property, plant and equipment, net	45,672		29,607
Total lease assets		$	368,810	352,610
Liabilities
Operating Leases
Other current	Current operating lease liabilities	$	98,042	101,945
Non-current	Non-current operating lease liabilities	234,726		228,155
Total operating liabilities		332,768		330,100
Finance Leases
Short-term debt	Short-term debt and current portion of long-term debt	8,025		4,835
Long-term debt	Long-term debt, less current portion	38,098		25,214
Total finance liabilities		46,123		30,049
Total lease liabilities		$	378,891	360,149

Maturities of lease liabilities as of December 31, 2020 are as follows:

Year ending December 31,	Finance Leases		Operating Leases	Total
2021	$	8,830	113,151	121,981
2022	8,399		88,607	97,006
2023	7,632		60,118	67,750
2024	5,870		38,785	44,655
2025	4,453		26,837	31,290
Thereafter	14,599		27,454	42,053
Total lease payments	49,783		354,952	404,735
Less imputed interest	3,660		22,184
Present value, Total	$	46,123	332,768

The Company had approximately $12,375 of leases that commenced after December 31, 2020 that created rights and obligations to the Company. These leases are not included in the above maturity schedule.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Lease term and discount rate are as follows:

	At December 31, 2020		At December 31, 2019
Weighted Average Remaining Lease Term
Operating Leases	4.5 years		4.3 years
Finance Leases	7.7 years		8.4 years
Weighted Average Discount Rate
Operating Leases	2.8	%	3.3	%
Finance Leases	1.4	%	1.4	%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended
	December 31, 2020		December 31, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	124,708	127,213
Operating cash flows from finance leases	690		349
Financing cash flows from finance leases	6,386		3,975
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	110,036		133,959
Finance leases	18,248		20,464
Amortization:
Amortization of right of use operating lease assets(1)	113,898		109,884

(1) Amortization of Right of use operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.

(13) Stock-Based Compensation

The Company recognized compensation expense for all share-based payments granted for the years ended December 31, 2020, 2019 and 2018 based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the options’ or other awards’ estimated lives for fixed awards with ratable vesting provisions.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through December 31, 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. The grant date fair value of restricted stock and RSUs is equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

On May 19, 2017, the Company’s stockholders approved the 2017 Long-Term Incentive Plan (“2017 Plan”), which allows the Company to reserve up to a maximum of 3,000 shares of common stock for issuance upon the grant or exercise of awards under the 2017 Plan. No additional awards may be granted under the 2012 Plan after May 19, 2017.

69

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Restricted Stock Plans

A summary of the Company’s RSUs under the Company’s long-term incentive plans as of December 31, 2020, and changes during the year then ended is presented as follows:

	Shares	Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2019	362	$	158.13
Granted	192	120.36
Released	(146)	203.05
Forfeited	(33)	140.69
Restricted Stock Units outstanding, December 31, 2020	375	$	122.84	1.4	$	52,822
Expected to vest as of December 31, 2020	361			1.4	$	50,895

The Company recognized stock-based compensation costs related to the issuance of RSUs of $19,697 ($14,576, net of taxes), $23,620 ($17,479, net of taxes) and $31,382 ($24,436, net of taxes) for the years ended December 31, 2020, 2019 and 2018, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $17,706 as of December 31, 2020, and will be recognized as expense over a weighted-average period of approximately 1.60 years.

Additional information relating to the Company’s RSUs under the Company’s long-term incentive plans are as follows:

	2020	2019	2018
Restricted Stock Units outstanding, January 1	362	446	555
Granted	192	187	136
Released	(146)	(230)	(235)
Forfeited	(33)	(41)	(10)
Restricted Stock Units outstanding, December 31	375	362	446
Expected to vest as of December 31	361	356	440

During 2020, 2019 and 2018, a total of 1 shares were awarded each year to certain non-employee directors in lieu of cash for their annual retainers.

The Company has not granted stock options since the year ended December 31, 2012. At December 31, 2020, there were fully vested options to acquire 63 shares outstanding, with a weighted average remaining contractual term of less than one year.

70

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(14) Other Expense (Income)

Following is a summary of other expense (income):

	2020		2019	2018
Foreign currency losses (gains), net	$	7,815	(7,190)	9,613
Release of indemnification asset	—		(304)	4,606
Impairment of joint venture in Brazil	3,599		—	—
Dividend income	(2,976)		—	—
Impairment of net investment in a manufacturer and distributor of Ceramic tile in China(1)	—		59,906	—
All other, net	(9,189)		(16,005)	(6,921)
Total other expense (income), net	$	(751)	36,407	7,298

(1) During 2019, the Company determined that its net investment in a manufacturer and distributor of ceramic tile in China was impaired and therefore recorded a net impairment charge of $59,906.

(15) Income Taxes

Following is a summary of earnings before income taxes for United States and foreign operations:

	2020		2019	2018
United States	$	94,829	163,764	387,564
Foreign	489,545		585,781	661,637
Earnings before income taxes	$	584,374	749,545	1,049,201

Income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 consists of the following:

	2020		2019	2018
Current income taxes:
U.S. federal	$	(33,821)	19,936	22,700
State and local	7,794		12,659	14,521
Foreign	72,350		80,221	58,669
Total current	46,323		112,816	95,890
Deferred income taxes:
U.S. federal	14,533		11,993	54,983
State and local	112		15,371	19,076
Foreign	7,679		(135,206)	14,397
Total deferred	22,324		(107,842)	88,456
Total income tax expense	$	68,647	4,974	184,346

71

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. Approximately 16% of the Company’s current year earnings before income taxes was generated in the United States. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Brazil, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Russia, Spain, the United Kingdom and Ukraine. The effective tax rates that the Company accrues in these jurisdictions vary widely, but they are generally lower than the Company’s overall effective tax rate. The Company’s domestic effective tax rates for the years ended December 31, 2020, 2019 and 2018 were (12.0)%, 36.6%, and 28.7%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2020, 2019 and 2018 were 16.3%, (9.4)%, and 11.0%, respectively. The difference in rates applicable in foreign jurisdictions results from a number of factors, including lower statutory rates, historical loss carry-forwards, financing arrangements, and other factors. The Company’s effective tax rate has been and will continue to be impacted by the geographical dispersion of the Company’s earnings and losses. To the extent that domestic earnings increase while the foreign earnings remain flat or decrease, or increase at a lower rate, the Company’s effective tax rate will increase.

Income tax expense (benefit) attributable to earnings before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:

	2020		2019	2018
Income taxes at statutory rate	$	122,719	157,404	220,332
State and local income taxes, net of federal income tax benefit	8,081		22,185	22,315
Foreign income taxes(a)	(57,898)		(17,276)	(39,915)
Change in valuation allowance	35,381		(21,975)	2,472
European Restructuring(b)	—		(136,194)	—
Loss on previously taxed earnings	(10,346)		—	—
Carryback rate differential(c)	(33,739)		—	—
Transition Tax	—		—	28,201
Transition tax planning initiatives	—		—	(18,706)
Tax contingencies and audit settlements, net	6,779		6,686	(31,874)
Other, net	(2,330)		(5,856)	1,521
	$	68,647	4,974	184,346

(a) Foreign income taxes include statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) The Company implemented select operational, administrative and financial restructurings that centralized certain business processes and intangible assets in various European jurisdictions into a new entity.

(c) The CARES Act permits the Company to carry back its 2020 U.S. taxable loss to a tax year before the corporate income tax rate was lowered by the Tax Cuts and Jobs Act.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are presented below:

	2020		2019
Deferred tax assets:
Accounts receivable	$	14,384	7,063
Inventories	44,597		50,585
Employee benefits	39,526		36,068
Accrued expenses and other	103,892		67,638
Deductible state tax and interest benefit	4,042		3,665
Intangibles	152,499		146,953
Lease liabilities	91,359		86,717
Federal, foreign and state net operating losses and credits	433,822		376,375
Gross deferred tax assets	884,121		775,064
Valuation allowance	(267,838)		(232,196)
Net deferred tax assets	616,283		542,868
Deferred tax liabilities:
Inventories	(17,403)		(12,885)
Plant and equipment	(489,240)		(510,952)
Intangibles	(197,009)		(182,424)
Right of use assets	(87,351)		(83,271)
Prepaids	(56,140)		—
Other liabilities	(46,121)		(24,220)
Gross deferred tax liabilities	(893,264)		(813,752)
Net deferred tax liability	$	(276,981)	(270,884)

The Company evaluates its ability to realize the tax benefits associated with deferred tax assets by analyzing its forecasted taxable income using both historic and projected future operating results, the reversal of existing temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The valuation allowance as of December 31, 2020, and 2019 is $267,838 and $232,196, respectively. The valuation allowance as of December 31, 2020 relates to the net deferred tax assets of certain of the Company’s foreign subsidiaries as well as certain state net operating losses and tax credits. The total change in the 2020 valuation allowance was an increase of $35,642 related to tax rate changes, foreign currency translation, and other activities. The total change in the 2019 valuation allowance was a decrease of $115,590, which includes $148,240 related to the tax liability resulting from the European Restructuring, with remaining $32,650 related to tax rate changes, foreign currency translation, and other activities.

Management believes it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances, based upon the expected reversal of deferred tax liabilities and the level of historic and forecasted taxable income over periods in which the deferred tax assets are deductible.

As of December 31, 2020, the Company has state net operating loss carry forwards and state tax credits with potential tax benefits of $57,613, net of federal income tax benefit; these carry forwards expire over various periods based on taxing jurisdiction. A valuation allowance totaling $29,919 has been recorded against these state deferred tax assets as of December 31, 2020. In addition, as of December 31, 2020, the Company has credits and net operating loss carry forwards in the U.S. with potential tax benefits of $10,179 and in various foreign jurisdictions with potential tax benefits of $1,710,619. A valuation allowance of $5,881 and $232,038, respectively, has been recorded against these deferred tax assets as of December 31, 2020. As a result of the redemption of hybrid instruments in response to changes in global tax regimes, the Company has an ASC 740-10 liability of $1,344,589 for the full tax effected loss on the hybrid instrument in the Tax Uncertainties section below. This ASC 740-10-45 liability is recorded as a reduction to the related deferred tax asset in the financial statements as a result of management’s determination that it is not more likely than not that the benefit will be realized.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

As of December 31, 2019, the Company had recognized $134,754 of income tax expense on foreign earnings of approximately $2,126,617. Due to the impact of the COVID-19 pandemic, the Company made a one-time distribution of $1,742,539 of previously taxed earnings during the current year to address short term liquidity needs in the US. The tax effects related to this distribution were not material to the Company’s income tax expense. Notwithstanding the one-time distribution and the new territorial tax regime created by the Tax Cuts and Jobs Act passed in 2017, the Company has no intentions or plans to repatriate additional foreign earnings and continues to assert that historical earnings of its foreign subsidiaries as of December 31, 2020 are permanently reinvested. Should the remaining earnings be distributed in the form of dividends in the future, the Company might be subject to withholding taxes (possibly offset by U.S. foreign tax credits) in various foreign jurisdictions, but the Company would not expect incremental U.S. federal or state taxes to be accrued on these previously taxed earnings.

Tax Uncertainties

In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing jurisdictions. Accordingly, the Company accrues liabilities when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with ASC 740-10. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense (benefit). Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to the Company’s consolidated results of operations or cash flow in any given quarter or annual period.

As of December 31, 2020, the Company’s gross amount of unrecognized tax benefits is $1,388,391, excluding interest and penalties. If the Company were to prevail on all uncertain tax positions, $33,144 of the unrecognized tax benefits would affect the Company’s effective tax rate, exclusive of any benefits related to interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020		2019
Balance as of January 1	$	1,260,970	1,330,713
Additions based on tax positions related to the current year (a)	1,694		2,302
Additions for tax positions of acquired companies	—		2,094
Additions for tax positions of prior years	7,663		4,744
Transition tax planning initiatives	—		—
Reductions resulting from the lapse of the statute of limitations	(1,239)		(2,729)
Reductions due to Luxembourg tax rate change	—		(46,841)
Settlements with taxing authorities	(497)		(1,929)
Effects of foreign currency translation	119,800		(27,384)
Balance as of December 31	$	1,388,391	1,260,970

(a)The tax effected loss was adjusted for tax rate and foreign currency translation changes in 2020, resulting in an updated balance of $1,344,589 as of December 31, 2019. This $1,344,589 of unrecognized benefit is presented as a reduction to the related deferred tax asset in the balance sheet.

As of December 31, 2020 and 2019, the Company has $11,485 and $12,555, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable. During the years ended December 31, 2020, 2019 and 2018, the Company accrued interest and penalties through income tax expense of $(695), $5,368 and $(1,085), respectively.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

The Company believes that its unrecognized tax benefits could decrease by $8,575 within the next twelve months. The Internal Revenue Service has completed its audit of the Company’s 2014 & 2015 tax years, therefore Federal income tax matters related to years prior to 2016 has been effectively settled. Various other state and foreign income tax returns are open to examination for various years.

Belgian Tax Matter

Between 2012 and 2014, the Company received assessments from the Belgian tax authority for the calendar years 2005 through 2010 in the amounts of €46,135, €38,817, €39,635, €30,131, €25,486 and €43,117 respectively, including penalties, but excluding interest. The Belgian tax authority denied the Company’s formal protests against these assessments and the Company brought all six years before the Court of First Appeal in Bruges. The Court of First Appeal in Bruges ruled in favor of the Company on January 27, 2016, with respect to the calendar years ending December 31, 2005 and December 31, 2009; and on June 13, 2018, the Court of First Appeal in Bruges ruled in favor of the Company with respect to the calendar years ending December 31, 2006, December 31, 2007, December 31, 2008 and December 31, 2010. The Belgian tax authority has lodged its Notification of Appeal for all six years with the Ghent Court of Appeal. On September 17, 2019, the Company pled its case to the Ghent Court of Special (Tax) Appeals and on October 1, 2019, the Court ruled in favor of the Company, re-confirming the rulings of the Court of First Appeals in Bruges with respect to the calendar years ending December 31, 2005 and December 31, 2009. On March 12, 2020, the Belgian tax authority filed another revised assessment for the calendar year ending December 31, 2009, with the Ghent Court.

In March 2019, the Company received assessments from the Belgian tax authority for tax years 2011 through 2017 which were, as a result of the positive ruling of the Ghent Court of Appeal, cancelled in January 2020.

On March 10, 2020, a new notice of change was received for the year ending December 31, 2016, resulting in a tax assessment in the amount of €67,959, including penalties, but excluding interest, against which the Company filed a protest on April 10, 2020. On December 22, 2020, a tax assessment for the year ending December 31, 2017, was received in the amount of €17,655, including penalties, but excluding interest, against which the company will file a protest in 2021. These notices of change/tax assessments from the Belgian tax authority represent a change in position in which it intends to apply new rules applicable as of 2018 to the Company's open tax years going back to 2009.

On October 22, 2020, a notice of change was received by the Company’s licensing subsidiary in Luxembourg, against which the Company will file a protest. The notice covers the years ending December 31, 2013 to December 31, 2018 and is based on the same facts underlying the original actions that were unsuccessfully tried and appealed by the Belgian government. In December 2020, the Company received assessments for the years ending December 31, 2013 and 2017, in the amount of €45,466 and €65,152, respectively, including penalties, but excluding interest, against which the company will file a protest in 2021. In view of the allegations made against the Company’s licensing subsidiary in Luxembourg, the tax assessment received in the amount of €67,959 for the year ending December 31, 2016, was cancelled on January 27, 2021.

The Company continues to disagree with the views of the Belgian tax authority on all matters referenced above and will persist in its vigorous defense. Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the Company’s properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment. The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal. The lien does not interfere with the Company’s operations at these properties.

75

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(16) Commitments and Contingencies

The Company had approximately $787 and $22,787 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2020 and 2019, respectively that expire within two years.

The Company is involved in litigation from time to time in the regular course of its business. Except as noted below and in Note 15, Income Taxes Belgian Tax Matter, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Perfluorinated Compounds (“PFCs”) Litigation

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Gadsden Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers, and users of chemicals containing specific PFCs, including the Company. In May 2017, the Water Works and Sewer Board of the Town of Centre, Alabama (the “Centre Water Board”) filed a similar complaint in the Circuit Court of Cherokee County, Alabama. The Gadsden Water Board and the Centre Water Board both seek monetary damages and injunctive relief claiming that their water supplies contain excessive amounts of PFCs. Certain defendants, including the Company, filed dispositive motions in each case arguing that the Alabama state courts lack personal jurisdiction over them. These motions were denied. In June and September 2018, certain defendants, including the Company, petitioned the Alabama Supreme Court for Writs of Mandamus directing each lower court to enter an order granting the defendants’ dispositive motions on personal jurisdiction grounds. The Alabama Supreme Court denied the petitions on December 20, 2019.  Certain defendants, including the Company, filed an Application for Rehearing with the Alabama Supreme Court asking the Court to reconsider its December 2019 decision. The Alabama Supreme Court denied the application for rehearing. On August 21, 2020, certain defendants, including the Company, petitioned the Supreme Court of the United States for review of the matter. On January 19, 2021, the Supreme Court denied the defendants’ petition for review.

In December 2019, the City of Rome, Georgia (“Rome”) filed a complaint in the Superior Court of Floyd County, Georgia that is similar to the Gadsden Water Board and Centre Water Board complaints, again seeking monetary damages and injunctive relief related to PFCs.  Also in December 2019, Jarrod Johnson filed a putative class action in the Superior Court of Floyd County, Georgia purporting to represent all water subscribers with the Rome (Georgia) Water and Sewer Division and/or the Floyd County (Georgia) Water Department and seeking to recover, among other things, damages in the form of alleged increased rates and surcharges incurred by ratepayers for the costs associated with eliminating certain PFCs from their drinking water.  In January 2020, defendant 3M Company removed the class action to federal court. The Company has filed motions to dismiss in both of these cases. On December 17, 2020, the Superior Court of Floyd County denied the Company’s motion to dismiss in the Rome case.

The Company denies all liability in these matters and intends to defend them vigorously.

Putative Securities Class Action

On January 3, 2020, the Company and certain of its executive officers were named as defendants in a putative shareholder class action lawsuit filed in the United States District Court for the Northern District of Georgia (the "Securities Class Action"). The complaint alleges that defendants violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements and that the officers are control persons under Section 20(a) of the Securities Exchange Act of 1934. The complaint is filed on behalf of shareholders who purchased shares of the Company’s common stock between April 28, 2017 and July 25, 2019 (“Class Period”). On June 29, 2020, an amended complaint was filed in the Securities Class Action against Mohawk and its CEO Jeff Lorberbaum, based on the same claims and the same Class Period. The amended complaint alleges that the Company (1) engaged in fabricating revenues by attempting delivery to customers that were closed and recognizing these attempts as sales; (2) overproduced product to report higher operating margins and maintained significant inventory that was not salable; and (3) valued certain inventory improperly or improperly delivered inventory with knowledge that it was defective and customers would return it. On October 27, 2020, defendants filed a motion to dismiss the amended complaint. The Company intends to vigorously defend against the claims.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Government Subpoenas

As previously disclosed, on June 25, 2020, the Company received subpoenas issued by the U.S. Attorney’s Office for the Northern District of Georgia (the “USAO”) and the U.S. Securities and Exchange Commission (the “SEC”) relating to matters similar to the allegations of wrongdoing raised by the Securities Class Action. The Company’s Audit Committee, with the assistance of outside legal counsel, conducted a thorough internal investigation into these allegations. The Audit Committee has completed the investigation and concluded that the allegations of wrongdoing are without merit. The USAO and SEC investigations are ongoing, and the Company is cooperating fully with those authorities. The Company will continue to vigorously defend against the allegations of wrongdoing in the Securities Class Action and does not believe they have merit.

Delaware State Court Action

The Company and certain of its present and former executive officers were named as defendants in a putative state securities class action lawsuit filed in the Superior Court of the State of Delaware on January 30, 2020. The complaint alleges that defendants violated Sections 11 and 12 of the Securities Act of 1933. The complaint is filed on behalf of shareholders who purchased shares of the Company’s common stock in Mohawk Industries Retirement Plan 1 and Mohawk Industries Retirement Plan 2 between April 27, 2017 and July 25, 2019. On March 27, 2020, the Court granted a temporary stay of the litigation pending the earlier of either the close of fact discovery or the deadline to appeal the dismissal of the related Securities Class Action pending in the United States District Court for the Northern District of Georgia.  The stay may be lifted according to the terms set forth in the Court’s Order to Stay Litigation. The Company intends to vigorously defend against the claims.

Derivative Actions

The Company and certain of its executive officers and directors were named as defendants in certain derivative actions filed in the United States District Court for the Northern District of Georgia on May 18, 2020 and August 6, 2020, respectively. The complaints allege that defendants breached their fiduciary duties to the Company by causing the Company to issue materially false and misleading statements. The complaints are filed on behalf of the Company and seek to remedy fiduciary duty breaches occurring from April 28, 2017 – July 25, 2019. On July 20, 2020, the Court granted a temporary stay of the litigation. Other shareholders of record have jointly moved to intervene in the derivative actions to stay the proceedings. The Court has not yet ruled on the motion to intervene. On October 21, 2020, the Court entered an Order consolidating the derivative actions and appointing Lead Counsel. The consolidated action will remain stayed pending the earlier of either the Securities Class Action defendants filing an answer to the operative complaint or the deadline to appeal the dismissal of the Securities Class Action. The Company intends to vigorously defend against the claims.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and the Company is unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

The Company is subject to various federal, state, local and foreign environmental health and safety laws and regulations, including those governing air emissions, wastewater discharges, the use, storage, treatment, recycling and disposal of solid and hazardous materials and finished product, and the cleanup of contamination associated therewith. Because of the nature of the Company’s business, the Company has incurred, and will continue to incur, costs relating to compliance with such laws and regulations. The Company is involved in various proceedings relating to environmental matters and is currently engaged in environmental investigation, remediation and post-closure care programs at certain sites. The Company has provided accruals for such activities that it has determined to be both probable and reasonably estimable. The Company does not expect that the ultimate liability with respect to such activities will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

77

MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(17) Consolidated Statements of Cash Flows Information

Supplemental disclosures of cash flow information are as follows:

	2020		2019	2018
Net cash paid (received) during the years for:
Interest	$	44,584	45,241	46,186
Income taxes	$	106,891	123,974	196,193
Supplemental schedule of non-cash investing and financing activities:
Unpaid property plant and equipment in accounts payable and accrued expenses	$	90,767	104,823	101,389
Fair value of net assets acquired in acquisition	$	—	107,290	831,760
Liabilities assumed in acquisition	—		(31,053)	(257,515)
	$	—	76,237	574,245

(18) Segment Reporting

The Company has three reporting segments: the Global Ceramic segment, the Flooring NA segment and the Flooring ROW segment. The Global Ceramic segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone, quartz, porcelain slab countertops and other products, which it distributes primarily in North America, Europe, South America and Russia through its network of regional distribution centers and Company-operated service centers using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through Company-operated service centers, independent distributors, home center retailers, tile and flooring retailers and contractors. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, laminate, resilient (includes sheet vinyl and LVT) and wood flooring, which it distributes through its network of regional distribution centers and satellite warehouses using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through various selling channels, including independent floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. The Flooring ROW segment designs, manufactures, sources, licenses and markets laminate, wood flooring, roofing elements, insulation boards, medium-density fiberboard (“MDF”), chipboards, other wood products, sheet vinyl and LVT, which it distributes primarily in Europe, Australia, New Zealand and Russia through various selling channels, which include retailers, company-operated distributors, independent distributors and home centers.

The accounting policies for each operating segment are consistent with the Company’s policies for the consolidated financial statements. Amounts disclosed for each segment are prior to any elimination or consolidation entries. Corporate general and administrative expenses attributable to each segment are estimated and allocated accordingly. Segment performance is evaluated based on operating income. No single customer accounted for more than 10% of net sales for the years ended December 31, 2020, 2019 or 2018.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Segment information is as follows:

	2020		2019	2018
Assets:
Global Ceramic segment	$	5,250,069	5,419,896	5,194,030
Flooring NA segment	3,594,976		3,823,654	3,938,639
Flooring ROW segment	4,194,447		3,925,246	3,666,617
Corporate and intersegment eliminations	1,288,259		217,884	299,837
Total	$	14,327,751	13,386,680	13,099,123
Geographic net sales:
United States	$	5,530,407	5,822,593	6,103,789
Europe	2,486,770		2,532,239	2,582,692
Russia	385,830		385,395	349,220
Other	1,149,190		1,230,445	947,933
Total	$	9,552,197	9,970,672	9,983,634
Long-lived assets: (1)
United States	$	3,303,197	3,391,676	3,485,046
Belgium	1,808,571		1,645,104	1,663,470
Other	2,130,292		2,232,164	2,072,353
Total	$	7,242,060	7,268,944	7,220,869
Net sales by product categories:
Ceramic & Stone	$	3,457,203	3,686,645	3,621,193
Carpet & Resilient	3,735,888		3,921,769	3,903,698
Laminate & Wood	1,538,967		1,501,077	1,553,032
Other (2)	820,139		861,181	905,711
Total	$	9,552,197	9,970,672	9,983,634
Net sales:
Global Ceramic segment	$	3,432,756	3,631,142	3,552,856
Flooring NA segment	3,594,075		3,843,714	4,029,148
Flooring ROW segment	2,525,366		2,495,816	2,401,630
Total	$	9,552,197	9,970,672	9,983,634

(1)Long-lived assets are composed of property, plant and equipment - net, and goodwill.

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

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

	2020		2019	2018
Operating income (loss)(1):
Global Ceramic segment	$	167,731	335,639	439,152
Flooring NA segment	147,442		177,566	356,842
Flooring ROW segment	366,934		353,666	340,642
Corporate and intersegment eliminations	(46,105)		(39,647)	(41,310)
Total	$	636,002	827,224	1,095,326
Depreciation and amortization:
Global Ceramic segment	$	215,488	211,679	189,904
Flooring NA segment	214,599		204,689	184,455
Flooring ROW segment	164,701		145,417	135,350
Corporate	12,719		14,667	12,056
Total	$	607,507	576,452	521,765
Capital expenditures (excluding acquisitions):
Global Ceramic segment	$	121,418	244,026	281,125
Flooring NA segment	186,179		148,820	262,676
Flooring ROW segment	113,378		147,118	232,949
Corporate	4,582		5,498	17,360
Total	$	425,557	545,462	794,110

(1)During the second quarter of 2020, the Company revised the methodology it uses to estimate and allocate corporate general and administrative expenses to its operating segments to better align usage of corporate resources allocated to the Company segments. The updated allocation methodology had no impact on the Company’s consolidated statements of operations. This change was applied retrospectively, and segment operating income for all comparative periods has been updated to reflect this change.

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MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

(19) Quarterly Financial Data (Unaudited)

The supplemental quarterly financial data are as follows:

	Quarters Ended
	March 28, 2020		June 27, 2020	September 26, 2020	December 31, 2020
Net sales	$	2,285,763	2,049,800	2,574,870	2,641,764
Gross profit	616,440		369,967	706,199	738,084
Net earnings (loss)	110,514		(48,257)	205,117	248,222
Basic earnings (loss) per share	1.54		(0.68)	2.88	3.50
Diluted earnings (loss) per share	1.54		(0.68)	2.87	3.49

	Quarters Ended
	March 30, 2019		June 29, 2019	September 28, 2019	December 31, 2019
Net sales	$	2,442,490	2,584,485	2,519,185	2,424,512
Gross profit	624,927		736,618	691,691	622,807
Net earnings	121,585		202,441	155,518	264,667
Basic earnings per share	1.68		2.80	2.16	3.69
Diluted earnings per share	1.67		2.79	2.15	3.68

81

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), which have been designed to provide reasonable assurance that such controls and procedures will meet their objectives, as of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures were effective at a reasonable assurance level for the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). The Company maintains internal control over financial reporting designed 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, internal control over financial reporting determined to be effective provides only reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of management, including the Company's Principal Executive Officer and Principal Financial Officer, the Company conducted an evaluation of the effectiveness of the design and operation of the Company's internal control over financial reporting as of December 31, 2020.  In conducting this evaluation, the Company used the framework set forth in the report titled “Internal Control - Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on the results of this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2020. 

The effectiveness of the Company's internal control over financial reporting as of December 31, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their audit report which is included herein.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Company’s management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Item 9B.Other Information

    None

82

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders under the following headings: “Election of Directors—Director, Director Nominee and Executive Officer Information,” “—Nominees for Director,” “—Continuing Directors,” “—Contractual Obligations with respect to the Election of Directors”, “—Executive Officers,” “—Meetings and Committees of the Board of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Audit Committee” and “Corporate Governance.” The Company has adopted the Mohawk Industries, Inc. Standards of Conduct and Ethics, which applies to all of its directors, officers and employees. The standards of conduct and ethics are publicly available on the Company’s website at http://www.mohawkind.com and will be made available in print to any stockholder who requests them without charge. If the Company makes any substantive amendments to the standards of conduct and ethics, or grants any waiver, including any implicit waiver, from a provision of the standards required by regulations of the Commission to apply to the Company’s chief executive officer, chief financial officer or chief accounting officer, the Company will disclose the nature of the amendment or waiver on its website. The Company may elect to also disclose the amendment or waiver in a report on Form 8-K filed with the SEC. The Company has adopted the Mohawk Industries, Inc. Board of Directors Corporate Governance Guidelines, which are publicly available on the Company’s website and will be made available to any stockholder who requests it.

Item 11. Executive Compensation

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders under the following headings: “Compensation Discussion and Analysis,” “Executive Compensation—Summary Compensation Table,” “—Grants of Plan Based Awards,” “—Outstanding Equity Awards at Year End,” “—Option Exercises and Stock Vested,” “—Nonqualified Deferred Compensation,” “—Certain Relationships and Related Transactions,” “—Compensation Committee Interlocks and Insider Participation,” “—Compensation Committee Report” and “Director Compensation.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders under the following headings: “Executive Compensation—Equity Compensation Plan Information,” and “—Principal Stockholders of the Company.”

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders under the following heading: “Election of Directors—Meetings and Committees of the Board of Directors,” and “Executive Compensation—Certain Relationships and Related Transactions.”

Item 14.Principal Accounting Fees and Services

The information required by this item is incorporated by reference to information contained in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders under the following heading: “Audit Committee—Principal Accountant Fees and Services” and “Election of Directors—Meetings and Committees of the Board of Directors.”

83

    PART IV

Item 15.Exhibits, Financial Statement Schedules

(a) 1. Consolidated Financial Statements

The Consolidated Financial Statements of Mohawk Industries, Inc. and subsidiaries listed in Part II, Item 8 of this Form 10-K are incorporated by reference into this item.

2. Consolidated Financial Statement Schedules

Schedules not listed above have been omitted because they are not applicable or the required information is included in the consolidated financial statements or notes thereto.

3. Exhibits

The exhibit number for the exhibit as originally filed is included in parentheses at the end of the description.

Mohawk Exhibit Number	Description
*2.1	Agreement and Plan of Merger dated as of December 3, 1993 and amended as of January 17, 1994 among Mohawk, AMI Acquisition Corp., Aladdin and certain Shareholders of Aladdin. (Incorporated herein by reference to Exhibit 2.1(a) in the Company’s Registration Statement on Form S-4, Registration No. 333-74220.)
*3.1	Restated Certificate of Incorporation of Mohawk, as amended. (Incorporated herein by reference to Exhibit 3.1 in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.)
*3.2	Restated Bylaws of Mohawk. (Incorporated herein by reference to Exhibit 3.1 in the Company’s Report on Form 8-K dated February 19, 2019.)
*4.1	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.)
*4.2	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.)
*4.3	Second Supplemental Indenture, dated as of June 9, 2015, by and among Mohawk Industries, Inc., as Issuer, U.S. Bank National Association, as Trustee, Elavon Financial Services Limited, UK Branch, as initial Paying Agent and Elavon Financial Services Limited, as initial Registrar (Incorporated herein by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K dated June 9, 2015.)
*4.4	Third Supplemental Indenture, dated as of May 14, 2020, by and between Mohawk Industries, Inc. and U.S. Bank National Association, as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on May 18, 2020.)
*4.5	Indenture, dated as of September 11, 2017, by and among Mohawk Capital Finance S.A., as issuer, Mohawk Industries, Inc., as parent guarantor and U.S. Bank National Association, as trustee. (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated September 11, 2017.)
*4.6	First Supplemental Indenture, dated as of September 11, 2017, by and among Mohawk Capital Finance S.A., as issuer, Mohawk Industries, Inc., as parent guarantor, U.S. Bank National Association, as trustee, initial registrar and transfer agent and Elavon Financial Services DAC, UK Branch, as initial paying agent and calculation agent. (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated September 11, 2017.)
*4.7	Second Supplemental Indenture, dated as of May 18, 2018, by and among Mohawk Capital Finance S.A., as issuer, Mohawk Industries, Inc., as parent guarantor, U.S. Bank National Association, as trustee, registrar and transfer agent and Elavon Financial Services DAC, UK Branch, as paying agent and calculation agent. (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated May 18, 2018.)

84

*4.8	Third Supplemental Indenture, dated as of September 4, 2019, by and among Mohawk Capital Finance S.A., as issuer, Mohawk Industries, Inc., as parent guarantor, U.S. Bank National Association, as trustee, registrar and transfer agent and Elavon Financial Services DAC, as paying agent. (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 4, 2019.)
*4.9	Fourth Supplemental Indenture, dated as of June 12, 2020, by and among Mohawk Capital Finance S.A., as issuer, Mohawk Industries, Inc., as parent guarantor, U.S. Bank National Association, as trustee, registrar and transfer agent and Elavon Financial Services DAC, as paying agent. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on June 12, 2020.)
*10.1	Registration Rights Agreement by and among Mohawk and the former shareholders of Aladdin. (Incorporated herein by reference to Exhibit 10.32 of the Company’s Annual Report on Form 10-K (File No. 001-13697) for the fiscal year ended December 31, 1993.)
*10.2	Waiver Agreement between Alan S. Lorberbaum and Mohawk dated as of March 23, 1994 to the Registration Rights Agreement dated as of February 25, 1994 between Mohawk and those other persons who are signatories thereto. (Incorporated herein by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-13697) for the quarter ended July 2, 1994.)
*10.3	Second Amended and Restated Credit Facility, dated October 18, 2019, by and among the Company and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, swing line lender, and an L/C issuer, and the other lenders party thereto. (Incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated October 18, 2019.)
Exhibits Related to Executive Compensation Plans, Contracts and other Arrangements:
*10.4	First Amendment to Second Amended and Restated Credit Agreement, dated as of April 7, 2020, by and among the Company and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, swing line lender, and an L/C issuer, and the other lenders party thereto. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on April 13, 2020.)
*10.5	Second Amendment to Second Amended and Restated Credit Agreement, dated as of May 7, 2020, by and among the Company and certain of its subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on May 7, 2020.)
*10.6	Credit Agreement, dated as of April 7, 2020, by and among the Company, as borrower, certain of its domestic subsidiaries, as guarantors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 13, 2020.)
*10.7	First Amendment to Credit Agreement, dated as of May 7, 2020, by and among the Company, the guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 7, 2020.)
*10.8	Service Agreement dated December 18, 2018, by and between Mohawk International Services BVBA and Comm. V. “Bernard Thiers”. (Incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.)
*10.9	Employment Agreement dated December 29, 2018, by and between Mohawk Carpet, LLC and Paul F. De Cock (Incorporated by reference to Exhibit 10.22 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.)
*10.10	General Release and Separation Agreement, dated May 1, 2020, by and between Glenn Landau and Mohawk Industries, Inc. (Incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the period ended June 27, 2020.)
*10.11	The Mohawk Industries, Inc. Senior Management Deferred Compensation Plan, as amended and restated as of January 1, 2015. (Incorporated herein by reference to Exhibit 10.19 in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2015.)
*10.12	Mohawk Industries, Inc. Non-Employee Director Stock Compensation Plan (Incorporated herein by reference to Exhibit 10.22 in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.)
*10.13	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.)

85

*10.14	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.)
*10.15	Mohawk Industries, Inc. 2017 Incentive Plan (incorporated herein by reference to Annex B of the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-13697) filed with the Securities and Exchange Commission on April 6, 2017.)
21	Subsidiaries of the Registrant.
22	Subsidiary Guarantors.
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.
95.1	Mine Safety Disclosure pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act
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.

86

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Mohawk Industries, Inc.
	By:	/s/    JEFFREY S. LORBERBAUM
February 24, 2021		Jeffrey S. Lorberbaum,
		Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

February 24, 2021	/s/    JEFFREY S. LORBERBAUM
	Jeffrey S. Lorberbaum,
	Chairman and Chief Executive Officer (principal executive officer)

February 24, 2021	/s/    FRANK H. BOYKIN
	Frank Boykin,
	Chief Financial Officer (principal financial officer)

February 24, 2021	/s/    JAMES F. BRUNK
	James F. Brunk,
	Senior Vice President and Corporate Controller (principal accounting officer)

February 24, 2021	/s/    FILIP BALCAEN
	Filip Balcaen, Director

February 24, 2021	/s/    BRUCE C. BRUCKMANN
	Bruce C. Bruckmann, Director

February 24, 2021	/s/ JOHN M. ENGQUIST
	John M. Engquist, Director

February 24, 2021	/s/  JOSEPH A. ONORATO
	Joseph A. Onorato, Director

February 24, 2021	/s/    WILLIAM H. RUNGE III
	William Henry Runge III Director

February 24, 2021	/s/    KAREN A. SMITH BOGART
	Karen A. Smith Bogart, Director

February 24, 2021	/s/    W. CHRISTOPHER WELLBORN
	W. Christopher Wellborn, Director

87

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Subsidiary Name	Jurisdiction
A&S Energie NV	Belgium
A&U Energie NV	Belgium
Aladdin Manufacturing Corporation	DE
Aladdin Manufacturing of Alabama, LLC	AL
Aladdin Manufacturing Of New York, LLC	NY
Avelgem Green Power CVBA	Belgium
Avon Pacific Holdings Ltd	New Zealand
B&M NV	Belgium
Berghoef GmbH	Germany
Berghoef-Hout B.V.	Netherlands
BGE Mexico, S. de R. L. de C.V.	Mexico
Bienes Raices y Materiales del Centro, S. de R.L. de C.V.	Mexico
Canterbury Spinners Ltd	New Zealand
Carpet Foundation Ltd	New Zealand
Cevotrans BV	Netherlands
Céramus Bahia S/A – Produtos Cerâmicos	Brazil
Dal Italia LLC	DE
Dal-Elit, LLC	TX
Dal-Tile Chile Comercial Limitada	Chile
Dal-Tile Colombia S.A.S.	Colombia
Dal-Tile Corporation	PA
Dal-Tile Distribution, Inc.	DE
Dal-Tile Group Inc.	DE
Dal-Tile I, LLC	DE
Dal-Tile Industrias, S. de R.L. de C.V.	Mexico
Dal-Tile International Inc.	DE
Dal-Tile Mexico Comercial S. de R.L. de C.V.	Mexico
Dal-Tile Mexico, S. de R.L. de C.V.	Mexico
Dal-Tile of Canada ULC	BC, Canada
Dal-Tile Operaciones Mexico S. De R.L. De C.V.	Mexico
Dal-Tile Perú SRL	Peru
Dal-Tile Puerto Rico, Inc.	Puerto Rico
Dal-Tile Services, Inc.	DE
Dal-Tile Shared Services, Inc.	DE
Dal-Tile Tennessee, LLC	DE
DT Mex Holdings, LLC	DE
DTM/CM Holdings, LLC	DE
Eliane Ceramic Tiles (U.S.A.), Inc.	TX

Eliane Revestimentos Ceramicos Ltda.	Brazil
Emil Group Asia Limited	Hong Kong
Emil Russia OOO	Russian Federation
Emilamerica, Inc.	DE
Emilceramica India Pvt Ltd.	India
Emilceramica S.r.l	Italy
Emilgermany GmbH	Germany
Everel s.r.o.	Czechia
F.I.L.S. Investments Unlimited Company	Ireland
Feltex Carpets Ltd	New Zealand
Feltex Carpets Pty Ltd	Australia
Feltex New Zealand Ltd	New Zealand
Flooring Foundation Ltd	New Zealand
Flooring Industries Limited S.à r.l.	Luxembourg
Flooring XL B.V.	Netherlands
Floorscape Limited	New Zealand
Floorsome GmbH	Germany
Godfrey Hirst & Co Pty Ltd	Australia
Godfrey Hirst Australia Pty Ltd	Australia
Godfrey Hirst NZ Ltd	New Zealand
International Flooring Systems S.à r.l.	Luxembourg
International Vinyl Company - Vostok OOO	Russian Federation
Irkutsk-Kerama ZAO	Russian Federation
IVC BV	Belgium
IVC Far-East Trading (Shanghai) Co. Ltd.	China
IVC France S.à r.l.	France
IVC Green Power BV	Belgium
IVC Group GmbH	Germany
IVC GROUP LIMITED	United Kingdom
IVC Luxembourg S.à r.l.	Luxembourg
IVC Rus OOO	Russian Federation
IVC US, Inc.	GA
KAI Keramica Ltd	Greece
KAI Mining EOOD	Bulgaria
Kerama Baltics OOO	Latvia
Kerama Marazzi Ukraine OOO	Ukraine
KERAMA-SPB. OOO	Russian Federation
Khan Asparuh - Transport EOOD	Bulgaria
Khan Asparuh AD	Bulgaria
Khan Omurtag AD	Bulgaria
Koninklijke Peitsman B.V.	Netherlands
Management Co EAD	Bulgaria
Marazzi Acquisition S.r.l.	Italy
Marazzi France Trading S.A.S.	France
Marazzi Group S.r.l.	Italy

Marazzi Group Trading (Shanghai) Co. Ltd.	China
Marazzi Iberia S.L.U.	Spain
Marazzi Middle East FZ LLC	Dubai
Marazzi Schweiz S.A.G.L.	Switzerland
MG China Trading Ltd.	Hong Kong
MI Finance SRL	Barbados
Mohawk Assurance Services, Inc.	GA
Mohawk Canada Corporation	NS, Canada
Mohawk Capital Finance S.A.	Luxembourg
Mohawk Capital Luxembourg SA	Luxembourg
Mohawk Carpet Distribution, Inc.	DE
Mohawk Carpet Transportation Of Georgia, LLC	DE
Mohawk Carpet, LLC	DE
Mohawk Commercial, Inc.	DE
Mohawk ESV, Inc.	DE
Mohawk Europe BV	Belgium
Mohawk Factoring II, Inc.	DE
Mohawk Factoring, LLC	DE
Mohawk Foreign Acquisitions S.à r.l.	Luxembourg
Mohawk Foreign Funding S.a.r.l	Luxembourg
Mohawk Foreign Investments, Inc.	DE
Mohawk Global Activities S. à r.l.	Luxembourg
Mohawk Global Financing S.à r.l.	Luxembourg
Mohawk Global Holdings S.à r.l.	Luxembourg
Mohawk Global Investments S.à r.l.	Luxembourg
Mohawk Holdings International B.V.	Netherlands
Mohawk International (Europe) S.à r.l.	Luxembourg
Mohawk International (Hong Kong) Limited	Hong Kong
Mohawk International Capital N.V.	Netherlands
Mohawk International Financing S.a.r.l	Luxembourg
Mohawk International Holdings (DE), LLC	DE
Mohawk International Holdings S.à r.l.	Luxembourg
Mohawk International Luxembourg S.à r.l.	Luxembourg
Mohawk International Netherlands B.V.	Netherlands
Mohawk International Services BV	Belgium
Mohawk KAI Luxembourg Holding S.à r.l.	Luxembourg
Mohawk Luxembourg Capital S.A.	Luxembourg
Mohawk Luxembourg Financing S.à r.l.	Luxembourg
Mohawk Luxembourg Holdings S.à r.l.	Luxembourg
Mohawk Luxembourg Investments S.à r.l.	Luxembourg
Mohawk Luxembourg Pacific S.à r.l.	Luxembourg
Mohawk Marazzi International BV	Netherlands
Mohawk Marazzi Russia BV	Netherlands
Mohawk Operaciones Mexicali S. de R.L. de C.V.	Mexico
Mohawk Operations Luxembourg S.à r.l.	Luxembourg

Mohawk Pacific Investments S.à r.l.	Luxembourg
MOHAWK PARTNERSHIPS (EUROPE) S.C.S.	Luxembourg
Mohawk Resources, LLC	DE
Mohawk Singapore Private Limited	Singapore
Mohawk Trading (Shanghai) Co., Ltd	China
Mohawk United International B.V.	Netherlands
Mohawk Vinyl Financing S.à r.l.	Luxembourg
Molber Beheer B.V.	Netherlands
Monarch Ceramic Tile, Inc.	TX
Orelshtamp OOO	Russian Federation
Pergo Holding BV	Netherlands
Pergo India Pvt Ltd	India
Polcolorit S.A.	Poland
Premium Floors Australia Pty Limited	Australia
Recubrimientos Interceramica, S. de R.L. de C.V.	Mexico
RR Apex, LLC	DE
S.C. KAI Ceramics SRL	Romania
SIBIR KERAMA OOO	Russian Federation
Stroyagromekhzapchast ChaO	Ukraine
Stroytrans OAO Orelstroy	Russian Federation
Summit Wool Spinners Ltd	New Zealand
The Flooring Federation Ltd	New Zealand
Tiles Co OOD	Bulgaria
Unilin (Malaysia) Sdn. Bhd.	Malaysia
Unilin ApS	Denmark
Unilin Arauco Pisos Ltda.	Brazil
Unilin Beheer BV	Netherlands
Unilin BV	Belgium
Unilin Distribution Ukraine LLC	Ukraine
Unilin Distribution, Ltd.	United Kingdom
Unilin Finland OY	Finland
Unilin Flooring India Private Limited	India
Unilin Flooring SAS	France
Unilin GmbH	Germany
Unilin Holding BV	Belgium
Unilin Insulation BV	Netherlands
Unilin Insulation GmbH	Germany
Unilin Insulation SAS	France
Unilin Insulation Sury SAS	France
Unilin Italia S.R.L.	Italy
Unilin Nordic AB	Sweden
Unilin North America, LLC	DE
Unilin Norway AS	Norway
Unilin OOO	Russian Federation
Unilin Panels SAS	France

Unilin Resins BV	Belgium
Unilin s.r.o.	Czechia
Unilin SAS	France
Unilin Spain SL	Spain
Unilin Swiss GmbH	Switzerland
World International, Inc.	Barbados
Xtratherm Limited	Ireland
Xtratherm SRL	Belgium
Xtratherm UK Limited	United Kingdom
YENISEI-KERAMA OOO	Russian Federation
YUGRA-KERAMA OOO	Russian Federation

Certain subsidiaries are omitted pursuant to Item 601(b)(21)(ii) of Regulation S-K.

EX-22

EXHIBIT 22

LIST OF SUBSIDIARY ISSUERS OF GUARANTEED SECURITIES

Mohawk Capital Finance S.A., a 100% wholly-owned subsidiary of Mohawk Industries, Inc. (the “Company”), has issued the debt securities listed below that are fully and unconditionally guaranteed by the Company.

•Floating Rate Notes due 2021

•1.750% Senior Notes due 2027

From time to time, Mohawk Capital Finance S.A. may issue additional debt securities that are fully and unconditionally guaranteed by the Company.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Mohawk Industries, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-219716 and No. 333-238010) on Form S-3 and (No. 333-219717, No. 333-143370, No. 333-181363, No. 333-213078 and No. 333-249879) on Form S-8, of Mohawk Industries, Inc. of our reports dated February 24, 2021, with respect to the consolidated balance sheets of Mohawk Industries, Inc. and subsidiaries as of December 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements), and the effectiveness of internal control over financial reporting as of December 31, 2020, which reports appear in the December 31, 2020 annual report on Form 10-K of Mohawk Industries, Inc. Our report refers to a change to the method of accounting for leases as of January 1, 2019 due to the adoption of ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases).

/s/ KPMG LLP

Atlanta, Georgia

February 24, 2021

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey S. Lorberbaum, certify that:

1		I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
2		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5		The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2021

/s/ Jeffrey S. Lorberbaum

Jeffrey S. Lorberbaum

Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Frank H. Boykin, certify that:

1		I have reviewed this annual report on Form 10-K of Mohawk Industries, Inc.;
2		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5		The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2021

/s/ Frank H. Boykin

Frank H. Boykin

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Statement of Chief Executive Officer of

MOHAWK INDUSTRIES, INC.

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

§ 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of Mohawk Industries, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey S. Lorberbaum, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

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

February 24, 2021

EX-32.2

EXHIBIT 32.2

Statement of Chief Financial Officer of

MOHAWK INDUSTRIES, INC.

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

§ 906 of the Sarbanes-Oxley Act of 2002

In connection with the annual report of Mohawk Industries, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank H. Boykin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

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

February 24, 2021

EX-95.1

Exhibit 95.1

Mine Safety Disclosure

The following disclosures are provided pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which requires certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”).

Mine Safety Information

Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, may be reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned.

The following table includes information required by the Act for the twelve months ended December 31, 2020.

Mine (Federal Mine Safety and Health Administration (MSHA) ID)	Total # of Significant & Substantial violations under §104(a)	Total # of orders under §104(b)	Total # of unwarrantable failure citations and orders under §104(d)	Total # of violations under §110(b)(2)	Total # of orders under §107(a)	Total dollar value of proposed assessments from MSHA ($ in thousands)	Total # of mining related fatalities	Received Notice of Pattern of Violations under §104(e) (yes/no)?	Received Notice of Potential to have Pattern under §104(e) (yes/no)?	Total # of Legal Actions Pending with the Mine Safety and Health Review Commission as of the Last Day of Period	Legal Actions Initiated or Resolved During Period
TP Claims 1&2/Rosa Blanca (4100867)	2	—	—	—	—	(a)	—	No	No	—	—
Allamore Mill (4100869)	8	—	—	—	—	(a)	—	No	No	—	—
Wild Horse Plant (4101527)	—	—	—	—	—	(a)	—	No	No	—	—

(a) The total dollar value of proposed assessments from MSHA is $1 for two locations.

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COVER PAGE - USD ($)	12 Months Ended
	Dec. 31, 2020	Feb. 17, 2021	Jun. 26, 2020
Entity Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	01-13697
Entity Registrant Name	MOHAWK INDUSTRIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-1604305
Entity Address, Address Line One	160 S. Industrial Blvd.
Entity Address, City or Town	Calhoun
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30701
City Area Code	706
Local Phone Number	629-7721
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 5,539,743,229
Entity Common Stock, Shares Outstanding		70,226,354
Documents Incorporated by Reference	Portions of the definitive Proxy Statement for the 2021 Annual Meeting of Stockholders-Part III.
Entity Central Index Key	0000851968
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Common Stock, $.01 par value
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	MHK
Security Exchange Name	NYSE
Floating Rate Notes due 2021
Entity Information [Line Items]
Title of 12(b) Security	Floating Rate Notes due 2021
No Trading Symbol Flag	true
Security Exchange Name	NYSE
2.000% Senior Notes due 2022
Entity Information [Line Items]
Title of 12(b) Security	2.000% Senior Notes due 2022
No Trading Symbol Flag	true
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 768,625	$ 134,785
Short-term investments	571,741	42,500
Receivables, net	1,709,493	1,526,619
Inventories	1,913,020	2,282,328
Prepaid expenses	369,432	415,546
Other current assets	31,343	27,679
Total current assets	5,363,654	4,429,457
Property, plant and equipment, net	4,591,229	4,698,917
Right of use operating lease assets	323,138	323,003
Goodwill	2,650,831	2,570,027
Tradenames	727,268	702,732
Other intangible assets subject to amortization, net	224,339	226,147
Deferred income taxes and other non-current assets	447,292	436,397
Total assets	14,327,751	13,386,680
Current liabilities:
Short-term debt and current portion of long-term debt	377,255	1,051,498
Accounts payable and accrued expenses	1,895,951	1,559,140
Current operating lease liabilities	98,042	101,945
Total current liabilities	2,371,248	2,712,583
Deferred income taxes	493,668	473,886
Long-term debt, less current portion	2,356,887	1,518,388
Non-current operating lease liabilities	234,726	228,155
Other long-term liabilities	330,064	327,220
Total liabilities	5,786,593	5,260,232
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $.01 par value; 60 shares authorized; no shares issued	0	0
Common stock, $.01 par value; 150,000 shares authorized; 77,624 and 78,980 shares issued in 2020 and 2019, respectively	776	790
Additional paid-in capital	1,885,142	1,868,250
Retained earnings	7,559,191	7,232,337
Accumulated other comprehensive loss	(695,145)	(765,824)
Shareholder's equity before treasury stock	8,749,964	8,335,553
Less: treasury stock at cost; 7,346 and 7,348 shares in 2020 and 2019, respectively	215,648	215,712
Total Mohawk Industries, Inc. stockholders’ equity	8,534,316	8,119,841
Nonredeemable noncontrolling interests	6,842	6,607
Total stockholders’ equity	8,541,158	8,126,448
Total liabilities and shareholders' equity	$ 14,327,751	$ 13,386,680

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Consolidated Balance Sheets - Parenthetical - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Stockholders’ equity:
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	60,000	60,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	150,000,000	150,000,000
Common stock, shares issues (in shares)	77,624,000	78,980,000
Treasury stock, shares (in shares)	7,346,000	7,348,000

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Net sales	$ 9,552,197	$ 9,970,672	$ 9,983,634
Cost of sales	7,121,507	7,294,629	7,145,564
Gross profit	2,430,690	2,676,043	2,838,070
Selling, general and administrative expenses	1,794,688	1,848,819	1,742,744
Operating income	636,002	827,224	1,095,326
Interest expense	52,379	41,272	38,827
Other expense (income) net	(751)	36,407	7,298
Earnings before income taxes	584,374	749,545	1,049,201
Income tax expense	68,647	4,974	184,346
Net earnings including noncontrolling interests	515,727	744,571	864,855
Net earnings attributable to noncontrolling interests	132	360	3,151
Net earnings attributable to Mohawk Industries, Inc.	$ 515,595	$ 744,211	$ 861,704
Basic earnings per share attributable to Mohawk Industries, Inc.
Basic earnings per share attributable to Mohawk Industries, Inc. (usd per share)	$ 7.24	$ 10.34	$ 11.53
Weighted-average common shares outstanding—basic (in shares)	71,214	71,986	74,413
Diluted earnings per share attributable to Mohawk Industries, Inc.
Diluted earnings per share attributable to Mohawk Industries, Inc. (usd per share)	$ 7.22	$ 10.30	$ 11.47
Weighted-average common shares outstanding—diluted (in shares)	71,401	72,264	74,773

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net earnings including noncontrolling interests	$ 515,727	$ 744,571	$ 864,855
Other comprehensive income (loss):
Foreign currency translation adjustments	72,956	28,996	(237,339)
Pension prior service cost and actuarial loss (gain), net of tax	(2,174)	(3,210)	1,094
Other comprehensive income (loss)	70,782	25,786	(236,245)
Comprehensive income	586,509	770,357	628,610
Comprehensive income (loss) attributable to noncontrolling interests	235	360	(13)
Comprehensive income attributable to Mohawk Industries, Inc.	$ 586,274	$ 769,997	$ 628,623

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Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Redeemable Noncontrolling Interest	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Nonredeemable Noncontrolling Interests
Beginning balance at Dec. 31, 2017	$ 7,067,009		$ 29,463	$ 818	$ 1,828,131	$ 6,004,506		$ (558,527)	$ (215,766)	$ 7,847
Beginning balance (in shares) at Dec. 31, 2017				81,771					(7,350)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee and director stock plans	(8,377)			$ 2	(8,400)				$ 21
Shares issued under employee and director stock plans (in shares)				191					1
Stock-based compensation expense	31,382				31,382
Repurchases of common stock	(274,144)			$ (23)		(274,121)
Repurchases of common stock (in shares)				(2,306)
Accretion of redeemable noncontrolling interest	(3,892)		3,892			(3,892)
Net earnings attributable to noncontrolling interests	677		2,474							677
Purchase of redeemable noncontrolling interest and noncontrolling interest, net of taxes	0		(33,884)		1,060					(1,060)
Currency translation adjustment on noncontrolling interests	(1,219)		(1,945)							(1,219)
Currency translation adjustment	(234,175)							(234,175)
Prior pension and post-retirement benefit service cost and actuarial gain (loss)	1,094							1,094
Net earnings	861,704					861,704
Ending balance at Dec. 31, 2018	7,440,059		0	$ 797	1,852,173	6,588,197		(791,608)	$ (215,745)	6,245
Ending balance (in shares) at Dec. 31, 2018				79,656					(7,349)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee and director stock plans	(7,509)			$ 1	(7,543)				$ 33
Shares issued under employee and director stock plans (in shares)				130					1
Stock-based compensation expense	23,620				23,620
Repurchases of common stock	(100,079)			$ (8)		(100,071)
Repurchases of common stock (in shares)				(806)
Net earnings attributable to noncontrolling interests	360									360
Currency translation adjustment on noncontrolling interests	2									2
Currency translation adjustment	28,994							28,994
Prior pension and post-retirement benefit service cost and actuarial gain (loss)	(3,210)							(3,210)
Net earnings	744,211					744,211
Ending balance at Dec. 31, 2019	8,126,448	$ (131)	0	$ 790	1,868,250	7,232,337	$ (131)	(765,824)	$ (215,712)	6,607
Ending balance (in shares) at Dec. 31, 2019				78,980					(7,348)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee and director stock plans	(2,740)			$ 1	(2,805)				$ 64
Shares issued under employee and director stock plans (in shares)				152					2
Stock-based compensation expense	19,697				19,697
Repurchases of common stock	(188,625)			$ (15)		(188,610)
Repurchases of common stock (in shares)				(1,508)
Net earnings attributable to noncontrolling interests	132									132
Currency translation adjustment on noncontrolling interests	103									103
Currency translation adjustment	72,853							72,853
Prior pension and post-retirement benefit service cost and actuarial gain (loss)	(2,174)							(2,174)
Net earnings	515,595					515,595
Ending balance at Dec. 31, 2020	$ 8,541,158		$ 0	$ 776	$ 1,885,142	$ 7,559,191		$ (695,145)	$ (215,648)	$ 6,842
Ending balance (in shares) at Dec. 31, 2020				77,624					(7,346)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net earnings	$ 515,727	$ 744,571	$ 864,855
Adjustments to reconcile net earnings to net cash provided by operating activities:
Restructuring	103,695	90,341	58,991
Depreciation and amortization	607,507	576,452	521,765
Deferred income taxes	22,324	(107,842)	88,456
Loss (gain) on disposal of property, plant and equipment	6,296	1,608	(205)
Stock-based compensation expense	19,697	23,620	31,382
Impairment of net investment in a manufacturer and distributor of ceramic tile in China	0	59,906	0
Changes in operating assets and liabilities, net of effects of acquisitions:
Receivables, net	(54,977)	81,953	13,856
Inventories	357,516	7,212	(255,391)
Accounts payable and accrued expenses	255,466	(52,065)	(69,847)
Other assets and prepaid expenses	(55,084)	3,625	(79,482)
Other liabilities	(8,328)	(10,620)	6,964
Net cash provided by operating activities	1,769,839	1,418,761	1,181,344
Cash flows from investing activities:
Additions to property, plant and equipment	(425,557)	(545,462)	(794,110)
Acquisitions, net of cash acquired	0	(81,082)	(568,960)
Purchases of short-term investments	(1,187,891)	(581,500)	(664,133)
Redemption of short-term investments	658,650	592,000	695,000
Net cash used in investing activities	(954,798)	(616,044)	(1,332,203)
Cash flows from financing activities:
Payments on Senior Credit Facilities	(633,134)	(488,978)	(813,182)
Proceeds from Senior Credit Facilities	617,883	448,587	809,287
Payments on commercial paper	(4,890,991)	(15,168,820)	(16,756,404)
Proceeds from commercial paper	4,195,353	14,540,177	16,988,398
Proceeds from Floating Rate Notes	0	331,325	353,649
Payment on Floating Rate Notes	0	(331,325)	0
Proceeds from Senior Notes issuance	1,062,240	0	0
Repayments on Senior Notes	(326,904)	0	0
Proceeds from Term Loan Facility	500,000	0	0
Repayment on Term Loan Facility	(500,000)	0	0
Payments of other debt and financing costs	(4,799)	(4,294)	(69,569)
Debt issuance costs	(11,413)	(3,028)	(890)
Purchase of redeemable noncontrolling and noncontrolling interest	0	0	(34,944)
Purchase of Mohawk common stock	(188,625)	(100,080)	(274,144)
Change in outstanding checks in excess of cash	(4,256)	(4,664)	5,753
Shares redeemed for taxes	(3,539)	(8,777)	(9,925)
Net cash (used in) provided by financing activities	(188,185)	(789,877)	198,029
Effect of exchange rate changes on cash and cash equivalents	6,984	2,895	(13,004)
Net change in cash and cash equivalents	633,840	15,735	34,166
Cash and cash equivalents, beginning of year	134,785	119,050	84,884
Cash and cash equivalents, end of year	$ 768,625	$ 134,785	$ 119,050

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a) Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile (“LVT”) and sheet vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(b) The COVID-19 Pandemic

During 2020, the Company experienced certain disruptions to its business and further disruptions may occur that could materially affect the Company’s ability to obtain supplies, manufacture its products or deliver inventory in a timely manner. Future disruptions may result in lost revenue, additional costs or impairments to goodwill or other assets. Although we believe that we can manage our exposure to these risks, there is no guarantee that we will be able to do so in the future. The Company continues to follow the recommendations of local health authorities to minimize exposure risk for its employees, suppliers, customers and other stakeholders. The Company has implemented business continuity plans during the crisis and is attempting to minimize the pandemic’s impact, but it may be unable to adequately respond to further outbreaks in particular geographies and its operations may be materially impacted. The extent to which the COVID-19 pandemic may impact the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including the successful implementation of vaccination programs and the continued fiscal support currently provided by governments. Accordingly, the COVID-19 pandemic and the related global reaction could have a material adverse effect on the Company’s business, results of operations and financial condition.

(c) Cash and Cash Equivalents

The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2020, the Company had cash and cash equivalents of $768,625 of which $436,948 was held outside the United States. As of December 31, 2019, the Company had cash and cash equivalents of $134,785 of which $110,033 was held outside the United States.

(d) Short-term Investments

The Company invests in high quality credit instruments. At December 31, 2020, such investments consisted of a short-duration bond fund and managed income fund. At December 31, 2019, amounts consisted solely of investments in the Company's commercial paper by its wholly-owned captive insurance company. Such investments are not insured by the Federal Deposit Insurance Corporation.

The Company's investment in the short-duration bond fund and managed income fund is classified as an equity security, recorded at fair value based on the closing market price of the security. The Company recognizes dividends, realized and unrealized gains and losses to other expense (income), net in the statement of operations.

(e) Fair Value

Accounting principles generally accepted in the U.S. define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

(f) Accounts Receivable and Revenue Recognition

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

The Company accounts for incremental costs of obtaining a contract as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.

The Company accounts for shipping and handling activities performed after control has been transferred as a fulfillment cost in cost of sales.

(g) Inventories

The Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or net realizable value. Cost has been determined using the FIFO method. Costs included in inventory include raw materials, direct and indirect labor and employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence.

(h) Property, Plant and Equipment

Property, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 15-40 years for buildings and improvements, 3-25 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

(i) Accounting for Business Combinations

The Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.

(j) Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 350, Intangibles-Goodwill and Other, the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis on the first day of the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). The Company 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’s judgments and assumptions using the discounted cash flows and comparable company market valuation approaches. The Company has identified Global Ceramic, Flooring NA, and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted on the first day of the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The impairment tests for indefinite lived intangible assets may be completed through an assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts.  If the qualitative assessment indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative impairment test is not required.  If a quantitative test is necessary, the Company estimates the fair value of the intangible asset and compares it to its carrying amount.  If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company may also elect to bypass the qualitative assessment and perform a quantitative impairment test in any period.  If the Company elects to perform a quantitative impairment test, it may resume the qualitative assessment in subsequent periods. 

The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, applicable discount rate and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. 

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

(k) Leases

The Company measures right of use (“ROU”) assets and lease liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost.

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expensed as incurred. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 10 years.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of the Company’s leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

(l) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(m) Financial Instruments

The Company’s financial instruments consist primarily of short-term investments, receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The Company has a wholly-owned captive insurance company that may periodically invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon level two fair value hierarchy. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

(n) Advertising Costs and Vendor Consideration

Advertising and promotion expenses are charged to earnings during the period in which they are incurred. Advertising and promotion expenses included in selling, general, and administrative expenses were $105,974 in 2020, $130,207 in 2019 and $116,854 in 2018.

Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising. Co-op advertising expenses, classified as a selling, general and administrative expense, were $16,087 in 2020, $11,418 in 2019 and $13,332 in 2018. 

(o) Product Warranties

The Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

(p) Impairment of Long-Lived Assets

The Company reviews its long-lived asset groups, which include intangible assets such as patents and customer relationships subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

(q) Foreign Currency Translation

The Company’s subsidiaries that operate outside the United States generally use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

(r) Hedges of Net Investments in Non-U.S. Operations

The Company has numerous investments outside the United States. The net assets of these subsidiaries are exposed to changes and volatility in currency exchange rates. The Company uses foreign currency denominated debt to hedge its non-U.S. net investments against adverse movements in exchange rates. The gains and losses on the Company’s net investments in its non-U.S. operations are economically offset by losses and gains on its foreign currency borrowings. The Company designated its €500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the years ended December 31, 2020, December 31, 2019 and December 31, 2018 the change in the U.S. dollar value of the Company’s euro denominated debt was an increase of $54,907 ($41,708 net of taxes), a decrease of $12,049 ($9,153 net of taxes) and a decrease of $27,948 ($20,376 net of taxes), respectively, which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase in the U.S. dollar value of the Company’s debt partially offsets the euro-to-dollar translation of the Company’s net investment in its European operations.

(s) Earnings per Share (“EPS”)

Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method. There were no common stock options and unvested restricted shares (units) that were excluded from the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2020, 2019 and 2018.

Computations of basic and diluted earnings per share are presented in the following table:

	2020		2019	2018
Net earnings attributable to Mohawk Industries, Inc.	$	515,595	744,211	861,704
Accretion of redeemable noncontrolling interest(a)	—		—	(3,892)
Net earnings available to common stockholders	$	515,595	744,211	857,812
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding—basic	71,214		71,986	74,413
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net	187		278	360
Weighted-average common shares outstanding-diluted	71,401		72,264	74,773
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	7.24	10.34	11.53
Diluted	$	7.22	10.30	11.47

(a) Represents the accretion of the Company’s redeemable noncontrolling interest to redemption value. The holder put this option to the Company on December 20, 2018 for $33,884.

(t) Stock-Based Compensation

The Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards’ estimated lives for fixed awards with ratable vesting provisions.

(u) Employee Benefit Plans

The Company has 401(k) retirement savings plans (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 60 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $56,241 and $13,509 in 2020, $57,354 and $23,008 in 2019 and $55,796 and $22,689 in 2018, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans. The Company’s projected benefit obligation and plan assets as of December 31, 2020 were $86,722 and $68,413, respectively. The Company’s projected benefit obligation and plan assets as of December 31, 2019 were $73,510 and $60,040, respectively. As of December 31, 2020, the funded status of the Non-U.S. Plans was a liability of $18,309 of which $7,005 was recorded in accumulated other comprehensive income, for a net liability of $11,304 recorded in other long-term liabilities within the consolidated balance sheets. As of December 31, 2019, the funded status of the Non-U.S. Plans was a liability of $13,470 of which $8,303 was recorded in accumulated other comprehensive income, for a net liability of $5,167 recorded in other long-term liabilities within the consolidated balance sheets.

(v) Comprehensive Income (Loss)

Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested. The Company presents currency translation adjustments on noncontrolling interests separately from currency translation adjustments on controlling interests in accumulated other comprehensive income (loss) within stockholders’ equity.

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2020, 2019 and 2018 are as follows:

	Foreign currency translation adjustments		Pensions and post-retirement benefits	Total
Balance as of December 31, 2017	$	(547,927)	(10,600)	(558,527)
Current period other comprehensive income (loss) before reclassifications	(234,175)		1,094	(233,081)
Balance as of December 31, 2018	(782,102)		(9,506)	(791,608)
Current period other comprehensive income (loss) before reclassifications	28,994		(3,210)	25,784
Balance as of December 31, 2019	(753,108)		(12,716)	(765,824)
Current period other comprehensive income (loss) before reclassifications	72,853		(2,174)	70,679
Balance as of December 31, 2020	$	(680,255)	(14,890)	(695,145)

(w) Self-Insurance Reserves

The Company is self-insured in the U.S. for various levels of general liability, automobile liability, workers’ compensation and employee medical coverage. Insurance reserves are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on the Company’s results of operations and financial condition.

The Company has a wholly-owned captive insurance company, Mohawk Assurance Services, Inc. (“MAS”). MAS insures the retained portion of the Company’s U.S. general liability, automobile liability, and workers’ compensation exposures. In the fourth quarter of 2020, the Company also moved pandemic, terrorism and medical coverage to MAS.

(x) Fiscal Year

The Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

(y) Recent Accounting Pronouncements

- Effective in Future Years

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which simplified the accounting for income taxes in several areas by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes. The amendment is effective commencing January 1, 2021 for the Company. The Company evaluated the impact that this accounting standards update will have on its consolidated financial statements and does not expect the adoption of this guidance to have a significant impact to the financial statements.

- Recently Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further amended by additional accounting standards updates issued by the FASB.  The new standard replaced the incurred loss impairment methodology for recognizing credit losses with a new methodology that requires recognition of lifetime expected credit losses when a financial asset is originated or purchased, even if the risk of loss is remote. The new methodology (referred to as the current expected credit losses model, or "CECL") applies to most financial assets measured at amortized cost, including trade receivables, and requires consideration of a broader range of reasonable and supportable information to estimate expected credit losses.  The Company adopted the new standard on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.    

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350): Simplifying the test for goodwill impairment. The amendments remove the second step of the current goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The Company adopted the new standard in the fourth quarter of 2019. The effect of adopting the new standard was not material.

In February 2016, the FASB issued a new standard ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases). ASC 842 was issued to increase transparency and comparability among organizations by requiring the recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The adoption of ASC 842 had a material impact on the Company’s condensed consolidated balance sheets, but did not have a material impact on the Company’s condensed consolidated statements of operations or cashflow. The most significant impact was the recognition of ROU assets of $328,169 and lease liabilities for operating leases of $332,286 at January 1, 2019, based on the present value of the future minimum rental payments for existing operating leases. The difference in the balances is due to deferred rent, tenant incentive allowances and prepaid amounts taken into account for adoption. The Company’s accounting for finance leases remained substantially unchanged. See Note 12, Leases.

On January 1, 2019, the Company adopted the new accounting standard, ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. The effect of adopting the new standard was not material.

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Acquisitions

12 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

2019 Acquisitions

During 2019, the Company acquired two hard surface flooring distribution companies based in the Netherlands and the Czech Republic for $76,237, which resulted in allocations of goodwill of $38,366 and intangible assets subject to amortization of $12,789. The results have been included in the Flooring ROW segment and are not material to the Company’s consolidated results of operations.    

2018 Acquisitions

On November 16, 2018, the Company completed its purchase of Eliane S/A Revestimentos Ceramicos (“Eliane”), one of the largest ceramic tile companies in Brazil. Pursuant to the purchase agreement, the Company (i) acquired the entire issued share capital of Eliane and (ii) acquired $99,037 of net indebtedness of Eliane, with total cash consideration paid of $148,302. The Company’s acquisition of Eliane resulted in allocations of goodwill of $33,019, indefinite-lived tradename intangible assets of $32,238 and intangible assets subject to amortization of $5,818. The majority of the goodwill is deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include product, sales and manufacturing synergies. Eliane’s results of operations have been included in the consolidated financial statements since the date of acquisition in the Global Ceramic reporting segment.

On July 2, 2018, the Company completed its acquisition of Godfrey Hirst Group, the leading flooring company in Australia and New Zealand, further extending Mohawk’s global position. The total value of the acquisition was $400,894. The Company’s acquisition of Godfrey Hirst Group resulted in allocations of goodwill of $88,655, indefinite-lived tradename intangible assets of $58,671 and intangible assets subject to amortization of $43,635. The goodwill is deductible for tax purposes. The factors contributing to the recognition of the amount of goodwill include product, sales and manufacturing synergies. The Godfrey Hirst Group’s results have been included in the condensed consolidated financial statements since the date of acquisition in the Flooring NA and Flooring ROW segments.

During the first quarter of 2018, the Company completed the acquisition of three hard surface distribution businesses in the Flooring ROW segment for $24,610, resulting in a goodwill allocation of $12,874 and intangibles subject to amortization of $7.

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Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Contract liabilities

The Company historically records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying condensed consolidating balance sheets. The Company had contract liabilities of $39,466 and $34,959 as of December 31, 2020 and December 31, 2019, respectively.

Performance obligations

Substantially all of the Company’s revenue is recognized at a point in time when the product is either shipped or received from the Company's facilities and control of the product is transferred to the customer.  Accordingly, in any period, the Company does not recognize a significant amount of revenue from performance obligations satisfied or partially satisfied in prior periods and the amount of such revenue recognized during the years ended December 31, 2020, 2019, and 2018 was immaterial.

Costs to obtain a contract

The Company historically incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying condensed consolidated balance sheets. Capitalized costs to obtain contracts were $59,847 and $69,039 as of December 31, 2020 and December 31, 2019, respectively. Straight-line amortization expense recognized during 2020 related to these capitalized costs was $68,201.

Revenue disaggregation

The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories during the years ended December 31, 2020, 2019 and 2018, respectively:

December 31, 2020	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,050,470	3,477,556	2,381	5,530,407
Europe	699,715		1,506	1,785,549	2,486,770
Russia	262,846		50	122,934	385,830
Other	419,725		114,963	614,502	1,149,190
Total	$	3,432,756	3,594,075	2,525,366	9,552,197
Product Categories
Ceramic & Stone	$	3,425,672	31,531	—	3,457,203
Carpet & Resilient	7,084		2,871,050	857,754	3,735,888
Laminate & Wood	—		691,494	847,473	1,538,967
Other(1)	—		—	820,139	820,139
Total	$	3,432,756	3,594,075	2,525,366	9,552,197

December 31, 2019	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,131,029	3,688,691	2,873	5,822,593
Europe	711,762		6,922	1,813,555	2,532,239
Russia	269,142		66	116,187	385,395
Other	519,209		148,035	563,201	1,230,445
Total	$	3,631,142	3,843,714	2,495,816	9,970,672
Product Categories
Ceramic & Stone	$	3,631,142	55,503	—	3,686,645
Carpet & Resilient	—		3,136,474	785,295	3,921,769
Laminate & Wood	—		651,737	849,340	1,501,077
Other(1)	—		—	861,181	861,181
Total	$	3,631,142	3,843,714	2,495,816	9,970,672

December 31, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,251,233	3,851,267	1,289	6,103,789
Europe	714,315		6,487	1,861,890	2,582,692
Russia	245,867		2	103,351	349,220
Other	341,441		171,392	435,100	947,933
Total	$	3,552,856	4,029,148	2,401,630	9,983,634
Product Categories
Ceramic & Stone	$	3,552,856	68,337	—	3,621,193
Carpet & Resilient	—		3,258,029	645,669	3,903,698
Laminate & Wood	—		702,782	850,250	1,553,032
Other(1)	—		—	905,711	905,711
Total	$	3,552,856	4,029,148	2,401,630	9,983,634

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

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Restructuring, Acquisition Transaction and Integration-Related Costs

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring, Acquisition Transaction and Integration-Related Costs

Restructuring, Acquisition Transaction and Integration-Related Costs

The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost-reduction/productivity initiatives. For example:

•In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•In connection with the Company’s cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions including accelerated depreciation ("Asset write-downs") and workforce reductions.     

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2020, 2019 and December 31, 2018, respectively (in thousands):

	2020		2019	2018
Cost of sales
Restructuring costs(1)	$	101,230	84,844	43,733
Acquisition integration-related costs	1,153		3,458	3,330
Restructuring and acquisition integration-related costs	$	102,383	88,302	47,063
Selling, general and administrative expenses
Restructuring costs(1)	$	24,127	5,497	15,259
Acquisition transaction-related costs	213		1,502	4,977
Acquisition integration-related costs	2,127		5,871	11,351
Restructuring, acquisition transaction and integration-related costs	$	26,467	12,870	31,587

(1) The restructuring costs for 2020, 2019 and 2018 primarily relate to the Company’s actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as well as actions related to the Company’s recent acquisitions. The Company currently estimates that it will incur additional restructuring costs of approximately $18,000 primarily related to accelerated depreciation and period closure costs mainly in its Flooring North America segment.

The restructuring activity for the years ended December 31, 2020 and 2019, respectively is as follows (in thousands):

	Lease impairments		Asset write-downs	Severance	Other restructuring costs	Total
Balance as of December 31, 2018	$	397	—	7,866	250	8,513
Provision
Global Ceramic segment	—		—	5,264	—	5,264
Flooring NA segment	—		37,820	2,617	33,975	74,412
Flooring ROW segment	—		3,936	4,615	2,099	10,650
Corporate	—		—	15	—	15
Total provision for the Year 2019	—		41,756	12,511	36,074	90,341
Cash payments	(376)		—	(16,113)	(19,165)	(35,654)
Non-cash items	—		(41,756)	(142)	(17,043)	(58,941)
Balance as of December 31, 2019	21		—	4,122	116	4,259
Provision
Global Ceramic segment	2,239		19,963	13,987	6,927	43,116
Flooring NA segment	227		32,902	4,660	13,809	51,598
Flooring ROW segment	—		12,913	5,746	6,391	25,050
Corporate	—		3,685	1,908	—	5,593
Total provision for the Year 2020	2,466		69,463	26,301	27,127	125,357
Cash payments	(21)		—	(20,001)	(18,425)	(38,447)
Non-cash items	(2,466)		(69,463)	1,154	(8,089)	(78,864)
Balance as of December 31, 2020	$	—	—	11,576	729	12,305
2019 provision amounts recorded in:
Cost of sales	$	—	41,756	8,273	34,815	84,844
Selling, general and administrative expenses	—		—	4,238	1,259	5,497
Total provision for the Year 2019	$	—	41,756	12,511	36,074	90,341
2020 provision amounts recorded in:
Cost of sales	$	—	64,415	13,949	22,866	101,230
Selling, general and administrative expenses	2,466		5,048	12,352	4,261	24,127
Total provision for the Year 2020	$	2,466	69,463	26,301	27,127	125,357

The Company generally expects the remaining severance and other restructuring costs to be paid over the next year.

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Fair Value

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

For publicly-traded investment securities, consisting of the Company’s money market, short-duration bond fund and managed income fund, fair value is determined on the basis of quoted market prices and, accordingly, such investments are classified as Level 1. The Company’s wholly-owned captive insurance company may also invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon the Level 2 fair value hierarchy.

Items Measured at Fair Value

The following table presents the items measured at fair value as of December 31, 2020 and December 31, 2019:

	Fair Value
	December 31, 2020		December 31, 2019
Cash and cash equivalents:
Money market fund (Level 1)	$	197,835	—
Short-term investments:
Short-term investments (Level 1) (1)	571,741		—
Commercial paper (Level 2)	—		42,500

(1) The Company's short-term investments are in a short-duration bond fund and a managed income fund that are designed to deliver current income consistent with the preservation of capital through investing in high-and medium grade fixed income securities. The investments are readily convertible into cash.

The fair values and carrying values of the Company’s debt are disclosed in Note 10 - Long-Term Debt.

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Receivables, net

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Receivables, net

Receivables, net

	December 31, 2020		December 31, 2019
Customers, trade	$	1,591,503	1,491,592
Income tax receivable	112,580		8,428
Other	89,092		88,520
	1,793,175		1,588,540
Less: allowance for discounts, returns, claims and doubtful accounts(1)	83,682		61,921
Receivables, net	$	1,709,493	1,526,619

(1) The Company adopted the new standard, ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to net sales or costs and expenses	Deductions(1)	Balance at end of year
2018	$	86,103	4,240	317,716	333,341	74,718
2019	74,718		382	387,253	400,432	61,921
2020	61,921		—	384,403	362,642	83,682

(1) Represents charge-offs, net of recoveries.

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Inventories

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories

The components of inventories are as follows:

	December 31, 2020		December 31, 2019
Finished goods	$	1,372,234	1,610,742
Work in process	126,231		144,639
Raw materials	414,555		526,947
Total inventories	$	1,913,020	2,282,328

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Company conducted its annual impairment assessment on the first day of the fourth quarter of 2020 and determined the fair values of its reporting units and trademarks exceeded their carrying values. As a result, no impairment was indicated. 

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic		Flooring NA	Flooring ROW	Total
Balances as of December 31, 2018
Goodwill	$	1,564,987	874,198	1,409,206	3,848,391
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,033,057		531,144	956,765	2,520,966
Goodwill recognized during the period	13,197		—	49,619	62,816
Currency translation during the period	5,392		—	(19,147)	(13,755)
Balances as of December 31, 2019
Goodwill	1,583,576		874,198	1,439,678	3,897,452
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,051,646		531,144	987,237	2,570,027
Goodwill recognized during the period	—		—	(9,642)	(9,642)
Currency translation during the period	(4,085)		—	94,531	90,446
Balances as of December 31, 2020
Goodwill	1,579,491		874,198	1,524,567	3,978,256
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	$	1,047,561	531,144	1,072,126	2,650,831

Intangible assets:

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2018	$	707,380
Intangible assets acquired during the year(1)	(874)
Currency translation during the year	(3,774)
Balance as of December 31, 2019	702,732
Currency translation during the year	24,536
Balance as of December 31, 2020	$	727,268

(1) Includes adjustments on previously acquired intangible assets.

	Customer relationships		Patents	Other	Total
Intangible assets subject to amortization:
Balances as of December 31, 2018	$	244,628	4,495	5,307	254,430
Intangible assets acquired during the year	2,092		—	—	2,092
Amortization during the year	(25,527)		(2,156)	70	(27,613)
Currency translation during the year	(2,752)		(111)	101	(2,762)
Balances as of December 31, 2019	218,441		2,228	5,478	226,147
Intangible assets acquired during the year	12,789		—	—	12,789
Amortization during the year	(26,612)		(2,195)	(84)	(28,891)
Currency translation during the year	13,921		111	262	14,294
Balances as of December 31, 2020	$	218,539	144	5,656	224,339

	December 31, 2020
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	645,206	12,789	41,800	481,256	218,539
Patents	249,100		—	24,470	273,426	144
Other	6,631		—	314	1,289	5,656
Total	$	900,937	12,789	66,584	755,971	224,339

	December 31, 2019
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	651,014	2,092	(7,900)	426,765	218,441
Patents	254,483		—	(5,383)	246,872	2,228
Other	6,534		—	97	1,153	5,478
Total	$	912,031	2,092	(13,186)	674,790	226,147

	Years Ended December 31,
	2020		2019	2018
Amortization expense	$	28,891	27,613	30,745

Estimated amortization expense for the years ending December 31 are as follows:

2021	$	29,429
2022	28,634
2023	26,998
2024	26,264
2025	26,064

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Following is a summary of property, plant and equipment:

	December 31, 2020		December 31, 2019
Land	$	484,450	469,837
Buildings and improvements	1,856,859		1,790,781
Machinery and equipment	5,987,272		5,602,474
Furniture and fixtures	164,027		163,017
Leasehold improvements	103,172		103,755
Construction in progress	309,486		366,144
	8,905,266		8,496,008
Less: accumulated depreciation	4,314,037		3,797,091
Net property, plant and equipment	$	4,591,229	4,698,917

Additions to property, plant and equipment included capitalized interest of $6,362, $7,214 and $10,684 in 2020, 2019 and 2018, respectively. Depreciation expense was $574,095, $544,733 and $487,411 for 2020, 2019 and 2018, respectively. Included in property, plant and equipment are finance leases with a cost of $58,170 and $35,271 and accumulated depreciation of $12,498 and $5,664 as of December 31, 2020 and 2019, respectively.

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Long-Term Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Senior Credit Facility

On October 18, 2019, the Company amended and restated its $1,800,000 senior credit facility, extending the maturity from March 26, 2022 to October 18, 2024 (as amended and restated, the “Senior Credit Facility”). The Senior Credit Facility marginally reduced the commitment fee and modified certain negative covenants to provide the Company with additional flexibility, including flexibility to make acquisitions and incur additional indebtedness. The restatement also renewed the Company’s option to extend the maturity of the Senior Credit Facility up to two times for an additional one-year period each.

At the Company’s election, revolving loans under the Senior Credit Facility bear interest at annual rates equal to either (a) LIBOR for 1, 2, 3 or 6 month periods, as selected by the Company, plus an applicable margin ranging between 1.00% and 1.75% (1.125% as of December 31, 2020), or (b) the higher of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.5%, or the Eurocurrency Rate (as defined in the Senior Credit Facility) rate plus 1.0%, plus an applicable margin ranging between 0.00% and 0.75% (0.125% as of December 31, 2020). The Company also pays a commitment fee to the lenders under the Senior Credit Facility on the average amount by which the aggregate commitments of the lenders exceed utilization of the Senior Credit Facility ranging from 0.09% to 0.20% per annum (0.11% as of December 31, 2020). The applicable margins and the commitment fee are determined based on whichever of the Company’s Consolidated Net Leverage Ratio or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

The obligations of the Company and its subsidiaries in respect of the Senior Credit Facility are unsecured.

The Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, subsidiary indebtedness, fundamental changes, asset dispositions, dividends and other similar restricted payments, transactions with affiliates, future negative pledges, and changes in the nature of the Company’s business. The limitations contain customary exceptions or, in certain cases, do not apply as long as the Company is in compliance with the financial ratio requirements and is not otherwise in default. The Senior Credit Facility originally required the Company to maintain a Consolidated Interest Coverage Ratio of at least 3.00 to 1.00 and a Consolidated Net Leverage Ratio of no more than 3.75 to 1.00, each as of the last day of any fiscal quarter. However, on May 7, 2020 the Company amended the Senior Credit Facility to temporarily increase the minimum Consolidated Net Leverage Ratio to 4.75 to 1.00 and to increase the amount of certain adjustments to Net Income that are permitted to calculate the ratio. The relief provided by the amendment is in effect for the fiscal quarters ending on September 26, 2020 through (and including) the fiscal quarter ending December 31, 2021.

The Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

In 2019, the Company paid financing costs of $2,264 in connection with the amendment and restatement of its Senior Credit Facility. These costs were deferred and, along with previously unamortized costs of $3,405 are being amortized over the term of the Senior Credit Facility.

As of December 31, 2020, amounts utilized under the Senior Credit Facility included zero borrowings and $787 of standby letters of credit related to various insurance contracts and foreign vendor commitments. Any outstanding borrowings under the Company's U.S. and European commercial paper programs reduce availability under the Senior Credit Facility. The Company has utilized $787 under the Senior Credit Facility resulting in a total of $1,799,213 available as of December 31, 2020.

Commercial Paper

On February 28, 2014 and July 31, 2015, the Company established programs for the issuance of unsecured commercial paper in the United States and Eurozone capital markets, respectively. Commercial paper issued under the U.S. and European programs will have maturities ranging up to 397 and 183 days, respectively. None of the commercial paper notes may be voluntarily prepaid or redeemed by the Company and all rank pari passu with all of the Company’s other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company.

The Company uses its Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount outstanding under all of the Company’s commercial paper programs may not exceed $1,800,000 (less any amounts drawn on the Senior Credit Facility) at any time.

The proceeds from the issuance of commercial paper notes will be available for general corporate purposes. As of December 31, 2020, there was zero outstanding under the U.S. commercial paper program and the European program.     

Senior Notes

On June 12, 2020, Mohawk Capital Finance S.A. (“Mohawk Finance”), an indirect wholly-owned finance subsidiary of the Company, completed the issuance and sale of €500,000 aggregate principal amount of 1.750% Senior Notes (“1.750% Senior Notes”) due June 12, 2027. The 1.750% Senior Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 1.750% Senior Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. Interest on the 1.750% Senior Notes is payable annually in cash on June 12 of each year, commencing on June 12, 2021. The Company paid financing costs of $4,400 in connection with the 1.750% Senior Notes. These costs were deferred and are being amortized over the term of the 1.750% Senior Notes.

On May 14, 2020, the Company completed the issuance and sale of $500,000 aggregate principal amount of 3.625% Senior Notes (“3.625% Senior Notes”) due May 15, 2030. The 3.625% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 3.625% Senior Notes is payable semi-annually in cash on May 15 and November 15 of each year, commencing on November 15, 2020. The Company paid financing costs of $5,476 in connection with the 3.625% Senior Notes. These costs were deferred and are being amortized over the term of the 3.625% Senior Notes.     

On September 4, 2019, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due September 4, 2021 (“2021 Floating Rate Notes”). The 2021 Floating Rate Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2021 Floating Rate Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bear interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.2% (but in no event shall the interest rate be less than zero). Interest on the 2021 Floating Rate Notes is payable quarterly on December 4, March 4, June 4, and September 4 of each year. Mohawk Finance received an issuance premium of €744 and paid financing cost of $754 in connection with the 2021 Floating Rate Notes. The issuance premium and financing costs have been deferred and are being amortized over the term of the 2021 Floating Rate Notes.

On May 18, 2018, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due May 18, 2020 (“2020 Floating Rate Notes”). The 2020 Floating Rate Notes were senior unsecured obligations of Mohawk Finance and ranked pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2020 Floating Rate Notes were fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bore interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.3% (but in no event would the interest rate be less than zero). Interest on the 2020 Floating Rate Notes was payable quarterly on August 18, November 18, February 18, and May 18 of each year. Mohawk Finance paid financing costs of $890 in connection with the 2020 Floating Rate Notes. These costs were deferred and amortized over the term of the 2020 Floating Rate Notes. On May 18, 2020, the Company paid the remaining €300,000 outstanding principal of the 2020 Floating Rate Notes utilizing cash on hand and borrowings under its commercial paper programs.

On September 11, 2017, Mohawk Finance completed the issuance and sale of €300,000 aggregate principal amount of its Floating Rate Notes due September 11, 2019 (“2019 Floating Rate Notes”). The 2019 Floating Rate Notes were senior unsecured obligations of Mohawk Finance and ranked pari passu with all of Mohawk Finance’s other existing and future senior unsecured indebtedness. The 2019 Floating Rate Notes were fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. These notes bore interest at a rate per annum, reset quarterly, equal to three-month EURIBOR plus 0.3% (but in no event would the interest rate be less than zero). Interest on the 2019 Floating Rate Notes was payable quarterly on September 11, December 11, March 11, and June 11 of each year. Mohawk Finance paid financing costs of $911 in connection with the 2019 Floating Rate Notes. These costs were deferred and amortized over the term of the 2019 Floating Rate Notes. On September 11, 2019, the Company paid the remaining €300,000 outstanding principal of the 2019 Floating Rate Notes utilizing cash on hand and borrowings under its European commercial paper program.

On June 9, 2015, the Company issued €500,000 aggregate principal amount of 2.00% Senior Notes (“2.00% Senior Notes”) due January 14, 2022. The 2.00% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 2.00% Senior Notes is payable annually in cash on January 14 of each year, commencing on January 14, 2016. The Company paid financing costs of $4,218 in connection with the 2.00% Senior Notes. These costs were deferred and are being amortized over the term of the 2.00% Senior Notes.

On January 31, 2013, the Company issued $600,000 aggregate principal amount of 3.85% Senior Notes (“3.85% Senior Notes”) due February 1, 2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pari passu with all of the Company’s existing and future unsecured indebtedness. Interest on the 3.85% Senior Notes is payable semi-annually in cash on February 1 and August 1 of each year. The Company paid financing costs of $6,000 in connection with the 3.85% Senior Notes. These costs were deferred and are being amortized over the term of the 3.85% Senior Notes.

As defined in the related agreements, the Company’s senior notes contain covenants, representations and warranties and events of default, subject to exceptions, and restrictions on the Company’s financial and business operations, including limitations on liens, restrictions on entering into sale and leaseback transactions, fundamental changes, and a provision allowing the holder of the notes to require repayment upon a change of control triggering event.

Term Loan

On April 7, 2020, the Company entered into a credit agreement that provided for a $500,000 delayed draw term loan facility (the “Term Loan Facility”). On April 15, 2020, the Company borrowed the full amount on the Term Loan Facility, the proceeds of which could be used for funding working capital and general corporate purposes of the Company. The principal amount of the Term Loan Facility was to be repaid in a single installment on April 6, 2021. The Company could prepay all or a portion of the Term Loan Facility from time to time, plus accrued and unpaid interest. The obligations of the Company and its subsidiaries in respect of the Term Loan Facility were unsecured. The Term Loan Facility was subject to the same affirmative and negative covenants that are applicable to the Senior Credit Facility. The Company recorded financing costs of $1,088 in connection with the Term Loan Facility. On May 15, 2020, the Company prepaid the entire outstanding balance on the Term Loan Facility utilizing cash on hand and proceeds from the 3.625% Senior Notes and associated financing costs were written off in the quarter ending June 27, 2020.    

The fair values and carrying values of the Company’s debt instruments are detailed as follows:

	At December 31, 2020			At December 31, 2019
	Fair Value		Carrying Value	Fair Value	Carrying Value
1.750% Senior Notes, payable June 12, 2027; interest payable annually	$	635,664	615,006	—	—
3.625% Senior Notes, payable May 15, 2030; interest payable semi-annually	561,890		500,000	—	—
3.85% Senior Notes, payable February 1, 2023; interest payable semi-annually	638,844		600,000	627,144	600,000
2.00% Senior Notes, payable January 14, 2022; interest payable annually	624,680		615,006	580,235	560,099
2020 Floating Rate Notes, payable May 18, 2020; interest payable quarterly	—		—	336,066	336,059
2021 Floating Rate Notes, payable September 04, 2021; interest payable quarterly	368,738		369,004	335,965	336,059
U.S. commercial paper	—		—	317,000	317,000
European commercial paper	—		—	376,946	376,946
Five-year Senior unsecured Credit Facility, due October 18, 2024	—		—	16,803	16,803
Finance leases and other	46,302		46,302	30,049	30,049
Unamortized debt issuance costs	(11,176)		(11,176)	(3,129)	(3,129)
Total debt	2,864,942		2,734,142	2,617,079	2,569,886
Less current portion of long term debt and commercial paper	376,989		377,255	1,051,498	1,051,498
Long-term debt, less current portion	$	2,487,953	2,356,887	1,565,581	1,518,388

The fair values of the Company’s debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

The aggregate maturities of total debt as of December 31, 2020 are as follows(1):

2021	$	377,208
2022	622,832
2023	607,116
2024	5,459
2025	4,131
Thereafter	1,128,572
	$	2,745,318

(1) Debt maturity table excludes deferred loan costs.

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Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2020		December 31, 2019
Outstanding checks in excess of cash	$	5,672	9,924
Accounts payable, trade	1,016,897		824,956
Accrued expenses	566,052		461,035
Product warranties	54,692		49,184
Accrued interest	30,403		21,050
Accrued compensation and benefits	222,235		192,991
Total accounts payable and accrued expenses	$	1,895,951	1,559,140

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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

Leases

Effective January 1, 2019 the Company adopted ASC 842, which requires recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet, based on the present value of the future minimum rental payments for existing operating leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11.

Certain of the Company’s leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of the Company’s leases contain residual value guarantees and none of the Company’s agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage.

The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists mainly of operating leases.

The components of lease costs for the twelve months ended December 31, 2020 and December 31, 2019 are as follows:    

	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Cost of Goods Sold		Selling, General and Administrative	Total		Cost of Goods Sold	Selling, General and Administrative	Total
Operating lease costs
Fixed	$	25,067	102,504	127,571		30,002	97,988	127,990
Short-term	11,633		16,021	27,654		9,725	13,933	23,658
Variable	8,285		30,036	38,321		8,123	29,852	37,975
Sub-leases	(411)		(741)	(1,152)		(311)	(537)	(848)
	$	44,574	147,820	192,394		47,539	141,236	188,775
	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Depreciation and Amortization		Interest	Total		Depreciation and Amortization	Interest	Total
Finance lease costs
Amortization of leased assets	$	6,423	—	6,423		4,015	—	4,015
Interest on lease liabilities	—		690	690		—	491	491
	$	6,423	690	7,113		4,015	491	4,506
Net lease costs				$	199,507			193,281

Rental expense under fixed operating leases was $143,513 in 2018.

Supplemental balance sheet information related to leases is as follows:

	Classification	At December 31, 2020		At December 31, 2019
Assets
Operating Leases
Right of use operating lease assets	Right of use operating lease assets	$	323,138	323,003
Finance Leases
Property, plant and equipment, gross	Property, plant and equipment	58,170		35,271
Accumulated depreciation	Accumulated depreciation	(12,498)		(5,664)
Property, plant and equipment, net	Property, plant and equipment, net	45,672		29,607
Total lease assets		$	368,810	352,610
Liabilities
Operating Leases
Other current	Current operating lease liabilities	$	98,042	101,945
Non-current	Non-current operating lease liabilities	234,726		228,155
Total operating liabilities		332,768		330,100
Finance Leases
Short-term debt	Short-term debt and current portion of long-term debt	8,025		4,835
Long-term debt	Long-term debt, less current portion	38,098		25,214
Total finance liabilities		46,123		30,049
Total lease liabilities		$	378,891	360,149

Maturities of lease liabilities as of December 31, 2020 are as follows:

Year ending December 31,	Finance Leases		Operating Leases	Total
2021	$	8,830	113,151	121,981
2022	8,399		88,607	97,006
2023	7,632		60,118	67,750
2024	5,870		38,785	44,655
2025	4,453		26,837	31,290
Thereafter	14,599		27,454	42,053
Total lease payments	49,783		354,952	404,735
Less imputed interest	3,660		22,184
Present value, Total	$	46,123	332,768

The Company had approximately $12,375 of leases that commenced after December 31, 2020 that created rights and obligations to the Company. These leases are not included in the above maturity schedule.

Lease term and discount rate are as follows:

	At December 31, 2020		At December 31, 2019
Weighted Average Remaining Lease Term
Operating Leases	4.5 years		4.3 years
Finance Leases	7.7 years		8.4 years
Weighted Average Discount Rate
Operating Leases	2.8	%	3.3	%
Finance Leases	1.4	%	1.4	%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended
	December 31, 2020		December 31, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	124,708	127,213
Operating cash flows from finance leases	690		349
Financing cash flows from finance leases	6,386		3,975
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	110,036		133,959
Finance leases	18,248		20,464
Amortization:
Amortization of right of use operating lease assets(1)	113,898		109,884

(1) Amortization of Right of use operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.

Leases

Leases

Effective January 1, 2019 the Company adopted ASC 842, which requires recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet, based on the present value of the future minimum rental payments for existing operating leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11.

Certain of the Company’s leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of the Company’s leases contain residual value guarantees and none of the Company’s agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes and charges based on usage.

The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists mainly of operating leases.

The components of lease costs for the twelve months ended December 31, 2020 and December 31, 2019 are as follows:    

	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Cost of Goods Sold		Selling, General and Administrative	Total		Cost of Goods Sold	Selling, General and Administrative	Total
Operating lease costs
Fixed	$	25,067	102,504	127,571		30,002	97,988	127,990
Short-term	11,633		16,021	27,654		9,725	13,933	23,658
Variable	8,285		30,036	38,321		8,123	29,852	37,975
Sub-leases	(411)		(741)	(1,152)		(311)	(537)	(848)
	$	44,574	147,820	192,394		47,539	141,236	188,775
	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Depreciation and Amortization		Interest	Total		Depreciation and Amortization	Interest	Total
Finance lease costs
Amortization of leased assets	$	6,423	—	6,423		4,015	—	4,015
Interest on lease liabilities	—		690	690		—	491	491
	$	6,423	690	7,113		4,015	491	4,506
Net lease costs				$	199,507			193,281

Rental expense under fixed operating leases was $143,513 in 2018.

Supplemental balance sheet information related to leases is as follows:

	Classification	At December 31, 2020		At December 31, 2019
Assets
Operating Leases
Right of use operating lease assets	Right of use operating lease assets	$	323,138	323,003
Finance Leases
Property, plant and equipment, gross	Property, plant and equipment	58,170		35,271
Accumulated depreciation	Accumulated depreciation	(12,498)		(5,664)
Property, plant and equipment, net	Property, plant and equipment, net	45,672		29,607
Total lease assets		$	368,810	352,610
Liabilities
Operating Leases
Other current	Current operating lease liabilities	$	98,042	101,945
Non-current	Non-current operating lease liabilities	234,726		228,155
Total operating liabilities		332,768		330,100
Finance Leases
Short-term debt	Short-term debt and current portion of long-term debt	8,025		4,835
Long-term debt	Long-term debt, less current portion	38,098		25,214
Total finance liabilities		46,123		30,049
Total lease liabilities		$	378,891	360,149

Maturities of lease liabilities as of December 31, 2020 are as follows:

Year ending December 31,	Finance Leases		Operating Leases	Total
2021	$	8,830	113,151	121,981
2022	8,399		88,607	97,006
2023	7,632		60,118	67,750
2024	5,870		38,785	44,655
2025	4,453		26,837	31,290
Thereafter	14,599		27,454	42,053
Total lease payments	49,783		354,952	404,735
Less imputed interest	3,660		22,184
Present value, Total	$	46,123	332,768

The Company had approximately $12,375 of leases that commenced after December 31, 2020 that created rights and obligations to the Company. These leases are not included in the above maturity schedule.

Lease term and discount rate are as follows:

	At December 31, 2020		At December 31, 2019
Weighted Average Remaining Lease Term
Operating Leases	4.5 years		4.3 years
Finance Leases	7.7 years		8.4 years
Weighted Average Discount Rate
Operating Leases	2.8	%	3.3	%
Finance Leases	1.4	%	1.4	%

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended
	December 31, 2020		December 31, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	124,708	127,213
Operating cash flows from finance leases	690		349
Financing cash flows from finance leases	6,386		3,975
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	110,036		133,959
Finance leases	18,248		20,464
Amortization:
Amortization of right of use operating lease assets(1)	113,898		109,884

(1) Amortization of Right of use operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company recognized compensation expense for all share-based payments granted for the years ended December 31, 2020, 2019 and 2018 based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the options’ or other awards’ estimated lives for fixed awards with ratable vesting provisions.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through December 31, 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. The grant date fair value of restricted stock and RSUs is equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

On May 19, 2017, the Company’s stockholders approved the 2017 Long-Term Incentive Plan (“2017 Plan”), which allows the Company to reserve up to a maximum of 3,000 shares of common stock for issuance upon the grant or exercise of awards under the 2017 Plan. No additional awards may be granted under the 2012 Plan after May 19, 2017.

Restricted Stock Plans

A summary of the Company’s RSUs under the Company’s long-term incentive plans as of December 31, 2020, and changes during the year then ended is presented as follows:

	Shares	Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2019	362	$	158.13
Granted	192	120.36
Released	(146)	203.05
Forfeited	(33)	140.69
Restricted Stock Units outstanding, December 31, 2020	375	$	122.84	1.4	$	52,822
Expected to vest as of December 31, 2020	361			1.4	$	50,895

The Company recognized stock-based compensation costs related to the issuance of RSUs of $19,697 ($14,576, net of taxes), $23,620 ($17,479, net of taxes) and $31,382 ($24,436, net of taxes) for the years ended December 31, 2020, 2019 and 2018, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $17,706 as of December 31, 2020, and will be recognized as expense over a weighted-average period of approximately 1.60 years.

Additional information relating to the Company’s RSUs under the Company’s long-term incentive plans are as follows:

	2020	2019	2018
Restricted Stock Units outstanding, January 1	362	446	555
Granted	192	187	136
Released	(146)	(230)	(235)
Forfeited	(33)	(41)	(10)
Restricted Stock Units outstanding, December 31	375	362	446
Expected to vest as of December 31	361	356	440

During 2020, 2019 and 2018, a total of 1 shares were awarded each year to certain non-employee directors in lieu of cash for their annual retainers.

The Company has not granted stock options since the year ended December 31, 2012. At December 31, 2020, there were fully vested options to acquire 63 shares outstanding, with a weighted average remaining contractual term of less than one year.

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Other Expense (Income)

12 Months Ended

Dec. 31, 2020

Other Nonoperating Income (Expense) [Abstract]

Other Expense (Income)

Other Expense (Income)

Following is a summary of other expense (income):

	2020		2019	2018
Foreign currency losses (gains), net	$	7,815	(7,190)	9,613
Release of indemnification asset	—		(304)	4,606
Impairment of joint venture in Brazil	3,599		—	—
Dividend income	(2,976)		—	—
Impairment of net investment in a manufacturer and distributor of Ceramic tile in China(1)	—		59,906	—
All other, net	(9,189)		(16,005)	(6,921)
Total other expense (income), net	$	(751)	36,407	7,298

(1) During 2019, the Company determined that its net investment in a manufacturer and distributor of ceramic tile in China was impaired and therefore recorded a net impairment charge of $59,906.

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Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Following is a summary of earnings before income taxes for United States and foreign operations:

	2020		2019	2018
United States	$	94,829	163,764	387,564
Foreign	489,545		585,781	661,637
Earnings before income taxes	$	584,374	749,545	1,049,201

Income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 consists of the following:

	2020		2019	2018
Current income taxes:
U.S. federal	$	(33,821)	19,936	22,700
State and local	7,794		12,659	14,521
Foreign	72,350		80,221	58,669
Total current	46,323		112,816	95,890
Deferred income taxes:
U.S. federal	14,533		11,993	54,983
State and local	112		15,371	19,076
Foreign	7,679		(135,206)	14,397
Total deferred	22,324		(107,842)	88,456
Total income tax expense	$	68,647	4,974	184,346

The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. Approximately 16% of the Company’s current year earnings before income taxes was generated in the United States. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Brazil, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Russia, Spain, the United Kingdom and Ukraine. The effective tax rates that the Company accrues in these jurisdictions vary widely, but they are generally lower than the Company’s overall effective tax rate. The Company’s domestic effective tax rates for the years ended December 31, 2020, 2019 and 2018 were (12.0)%, 36.6%, and 28.7%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2020, 2019 and 2018 were 16.3%, (9.4)%, and 11.0%, respectively. The difference in rates applicable in foreign jurisdictions results from a number of factors, including lower statutory rates, historical loss carry-forwards, financing arrangements, and other factors. The Company’s effective tax rate has been and will continue to be impacted by the geographical dispersion of the Company’s earnings and losses. To the extent that domestic earnings increase while the foreign earnings remain flat or decrease, or increase at a lower rate, the Company’s effective tax rate will increase.

Income tax expense (benefit) attributable to earnings before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:

	2020		2019	2018
Income taxes at statutory rate	$	122,719	157,404	220,332
State and local income taxes, net of federal income tax benefit	8,081		22,185	22,315
Foreign income taxes(a)	(57,898)		(17,276)	(39,915)
Change in valuation allowance	35,381		(21,975)	2,472
European Restructuring(b)	—		(136,194)	—
Loss on previously taxed earnings	(10,346)		—	—
Carryback rate differential(c)	(33,739)		—	—
Transition Tax	—		—	28,201
Transition tax planning initiatives	—		—	(18,706)
Tax contingencies and audit settlements, net	6,779		6,686	(31,874)
Other, net	(2,330)		(5,856)	1,521
	$	68,647	4,974	184,346

(a) Foreign income taxes include statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) The Company implemented select operational, administrative and financial restructurings that centralized certain business processes and intangible assets in various European jurisdictions into a new entity.

(c) The CARES Act permits the Company to carry back its 2020 U.S. taxable loss to a tax year before the corporate income tax rate was lowered by the Tax Cuts and Jobs Act.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are presented below:

	2020		2019
Deferred tax assets:
Accounts receivable	$	14,384	7,063
Inventories	44,597		50,585
Employee benefits	39,526		36,068
Accrued expenses and other	103,892		67,638
Deductible state tax and interest benefit	4,042		3,665
Intangibles	152,499		146,953
Lease liabilities	91,359		86,717
Federal, foreign and state net operating losses and credits	433,822		376,375
Gross deferred tax assets	884,121		775,064
Valuation allowance	(267,838)		(232,196)
Net deferred tax assets	616,283		542,868
Deferred tax liabilities:
Inventories	(17,403)		(12,885)
Plant and equipment	(489,240)		(510,952)
Intangibles	(197,009)		(182,424)
Right of use assets	(87,351)		(83,271)
Prepaids	(56,140)		—
Other liabilities	(46,121)		(24,220)
Gross deferred tax liabilities	(893,264)		(813,752)
Net deferred tax liability	$	(276,981)	(270,884)

The Company evaluates its ability to realize the tax benefits associated with deferred tax assets by analyzing its forecasted taxable income using both historic and projected future operating results, the reversal of existing temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The valuation allowance as of December 31, 2020, and 2019 is $267,838 and $232,196, respectively. The valuation allowance as of December 31, 2020 relates to the net deferred tax assets of certain of the Company’s foreign subsidiaries as well as certain state net operating losses and tax credits. The total change in the 2020 valuation allowance was an increase of $35,642 related to tax rate changes, foreign currency translation, and other activities. The total change in the 2019 valuation allowance was a decrease of $115,590, which includes $148,240 related to the tax liability resulting from the European Restructuring, with remaining $32,650 related to tax rate changes, foreign currency translation, and other activities.

Management believes it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of valuation allowances, based upon the expected reversal of deferred tax liabilities and the level of historic and forecasted taxable income over periods in which the deferred tax assets are deductible.

As of December 31, 2020, the Company has state net operating loss carry forwards and state tax credits with potential tax benefits of $57,613, net of federal income tax benefit; these carry forwards expire over various periods based on taxing jurisdiction. A valuation allowance totaling $29,919 has been recorded against these state deferred tax assets as of December 31, 2020. In addition, as of December 31, 2020, the Company has credits and net operating loss carry forwards in the U.S. with potential tax benefits of $10,179 and in various foreign jurisdictions with potential tax benefits of $1,710,619. A valuation allowance of $5,881 and $232,038, respectively, has been recorded against these deferred tax assets as of December 31, 2020. As a result of the redemption of hybrid instruments in response to changes in global tax regimes, the Company has an ASC 740-10 liability of $1,344,589 for the full tax effected loss on the hybrid instrument in the Tax Uncertainties section below. This ASC 740-10-45 liability is recorded as a reduction to the related deferred tax asset in the financial statements as a result of management’s determination that it is not more likely than not that the benefit will be realized.

As of December 31, 2019, the Company had recognized $134,754 of income tax expense on foreign earnings of approximately $2,126,617. Due to the impact of the COVID-19 pandemic, the Company made a one-time distribution of $1,742,539 of previously taxed earnings during the current year to address short term liquidity needs in the US. The tax effects related to this distribution were not material to the Company’s income tax expense. Notwithstanding the one-time distribution and the new territorial tax regime created by the Tax Cuts and Jobs Act passed in 2017, the Company has no intentions or plans to repatriate additional foreign earnings and continues to assert that historical earnings of its foreign subsidiaries as of December 31, 2020 are permanently reinvested. Should the remaining earnings be distributed in the form of dividends in the future, the Company might be subject to withholding taxes (possibly offset by U.S. foreign tax credits) in various foreign jurisdictions, but the Company would not expect incremental U.S. federal or state taxes to be accrued on these previously taxed earnings.

Tax Uncertainties

In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing jurisdictions. Accordingly, the Company accrues liabilities when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken in its tax returns or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with ASC 740-10. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense (benefit). Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s consolidated financial position but could possibly be material to the Company’s consolidated results of operations or cash flow in any given quarter or annual period.

As of December 31, 2020, the Company’s gross amount of unrecognized tax benefits is $1,388,391, excluding interest and penalties. If the Company were to prevail on all uncertain tax positions, $33,144 of the unrecognized tax benefits would affect the Company’s effective tax rate, exclusive of any benefits related to interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020		2019
Balance as of January 1	$	1,260,970	1,330,713
Additions based on tax positions related to the current year (a)	1,694		2,302
Additions for tax positions of acquired companies	—		2,094
Additions for tax positions of prior years	7,663		4,744
Transition tax planning initiatives	—		—
Reductions resulting from the lapse of the statute of limitations	(1,239)		(2,729)
Reductions due to Luxembourg tax rate change	—		(46,841)
Settlements with taxing authorities	(497)		(1,929)
Effects of foreign currency translation	119,800		(27,384)
Balance as of December 31	$	1,388,391	1,260,970

(a)The tax effected loss was adjusted for tax rate and foreign currency translation changes in 2020, resulting in an updated balance of $1,344,589 as of December 31, 2019. This $1,344,589 of unrecognized benefit is presented as a reduction to the related deferred tax asset in the balance sheet.

As of December 31, 2020 and 2019, the Company has $11,485 and $12,555, respectively, accrued for the payment of interest and penalties, excluding the federal tax benefit of interest deductions where applicable. During the years ended December 31, 2020, 2019 and 2018, the Company accrued interest and penalties through income tax expense of $(695), $5,368 and $(1,085), respectively.

The Company believes that its unrecognized tax benefits could decrease by $8,575 within the next twelve months. The Internal Revenue Service has completed its audit of the Company’s 2014 & 2015 tax years, therefore Federal income tax matters related to years prior to 2016 has been effectively settled. Various other state and foreign income tax returns are open to examination for various years.

Belgian Tax Matter

Between 2012 and 2014, the Company received assessments from the Belgian tax authority for the calendar years 2005 through 2010 in the amounts of €46,135, €38,817, €39,635, €30,131, €25,486 and €43,117 respectively, including penalties, but excluding interest. The Belgian tax authority denied the Company’s formal protests against these assessments and the Company brought all six years before the Court of First Appeal in Bruges. The Court of First Appeal in Bruges ruled in favor of the Company on January 27, 2016, with respect to the calendar years ending December 31, 2005 and December 31, 2009; and on June 13, 2018, the Court of First Appeal in Bruges ruled in favor of the Company with respect to the calendar years ending December 31, 2006, December 31, 2007, December 31, 2008 and December 31, 2010. The Belgian tax authority has lodged its Notification of Appeal for all six years with the Ghent Court of Appeal. On September 17, 2019, the Company pled its case to the Ghent Court of Special (Tax) Appeals and on October 1, 2019, the Court ruled in favor of the Company, re-confirming the rulings of the Court of First Appeals in Bruges with respect to the calendar years ending December 31, 2005 and December 31, 2009. On March 12, 2020, the Belgian tax authority filed another revised assessment for the calendar year ending December 31, 2009, with the Ghent Court.

In March 2019, the Company received assessments from the Belgian tax authority for tax years 2011 through 2017 which were, as a result of the positive ruling of the Ghent Court of Appeal, cancelled in January 2020.

On March 10, 2020, a new notice of change was received for the year ending December 31, 2016, resulting in a tax assessment in the amount of €67,959, including penalties, but excluding interest, against which the Company filed a protest on April 10, 2020. On December 22, 2020, a tax assessment for the year ending December 31, 2017, was received in the amount of €17,655, including penalties, but excluding interest, against which the company will file a protest in 2021. These notices of change/tax assessments from the Belgian tax authority represent a change in position in which it intends to apply new rules applicable as of 2018 to the Company's open tax years going back to 2009.

On October 22, 2020, a notice of change was received by the Company’s licensing subsidiary in Luxembourg, against which the Company will file a protest. The notice covers the years ending December 31, 2013 to December 31, 2018 and is based on the same facts underlying the original actions that were unsuccessfully tried and appealed by the Belgian government. In December 2020, the Company received assessments for the years ending December 31, 2013 and 2017, in the amount of €45,466 and €65,152, respectively, including penalties, but excluding interest, against which the company will file a protest in 2021. In view of the allegations made against the Company’s licensing subsidiary in Luxembourg, the tax assessment received in the amount of €67,959 for the year ending December 31, 2016, was cancelled on January 27, 2021.

The Company continues to disagree with the views of the Belgian tax authority on all matters referenced above and will persist in its vigorous defense. Nevertheless, on May 24, 2016, the tax collector representing the Belgian tax authorities imposed a lien on the Company’s properties in Wielsbeke (Ooigemstraat and Breestraat), Oostrozebeke (Ingelmunstersteenweg) and Desselgem (Waregemstraat) included in the Flooring ROW segment. The purpose of the lien is to provide security for payment should the Belgian tax authority prevail on its appeal. The lien does not interfere with the Company’s operations at these properties.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company had approximately $787 and $22,787 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31, 2020 and 2019, respectively that expire within two years.

The Company is involved in litigation from time to time in the regular course of its business. Except as noted below and in Note 15, Income Taxes Belgian Tax Matter, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Perfluorinated Compounds (“PFCs”) Litigation

In September 2016, the Water Works and Sewer Board of the City of Gadsden, Alabama (the “Gadsden Water Board”) filed an individual complaint in the Circuit Court of Etowah County, Alabama against certain manufacturers, suppliers, and users of chemicals containing specific PFCs, including the Company. In May 2017, the Water Works and Sewer Board of the Town of Centre, Alabama (the “Centre Water Board”) filed a similar complaint in the Circuit Court of Cherokee County, Alabama. The Gadsden Water Board and the Centre Water Board both seek monetary damages and injunctive relief claiming that their water supplies contain excessive amounts of PFCs. Certain defendants, including the Company, filed dispositive motions in each case arguing that the Alabama state courts lack personal jurisdiction over them. These motions were denied. In June and September 2018, certain defendants, including the Company, petitioned the Alabama Supreme Court for Writs of Mandamus directing each lower court to enter an order granting the defendants’ dispositive motions on personal jurisdiction grounds. The Alabama Supreme Court denied the petitions on December 20, 2019.  Certain defendants, including the Company, filed an Application for Rehearing with the Alabama Supreme Court asking the Court to reconsider its December 2019 decision. The Alabama Supreme Court denied the application for rehearing. On August 21, 2020, certain defendants, including the Company, petitioned the Supreme Court of the United States for review of the matter. On January 19, 2021, the Supreme Court denied the defendants’ petition for review.

In December 2019, the City of Rome, Georgia (“Rome”) filed a complaint in the Superior Court of Floyd County, Georgia that is similar to the Gadsden Water Board and Centre Water Board complaints, again seeking monetary damages and injunctive relief related to PFCs.  Also in December 2019, Jarrod Johnson filed a putative class action in the Superior Court of Floyd County, Georgia purporting to represent all water subscribers with the Rome (Georgia) Water and Sewer Division and/or the Floyd County (Georgia) Water Department and seeking to recover, among other things, damages in the form of alleged increased rates and surcharges incurred by ratepayers for the costs associated with eliminating certain PFCs from their drinking water.  In January 2020, defendant 3M Company removed the class action to federal court. The Company has filed motions to dismiss in both of these cases. On December 17, 2020, the Superior Court of Floyd County denied the Company’s motion to dismiss in the Rome case.

The Company denies all liability in these matters and intends to defend them vigorously.

Putative Securities Class Action

On January 3, 2020, the Company and certain of its executive officers were named as defendants in a putative shareholder class action lawsuit filed in the United States District Court for the Northern District of Georgia (the "Securities Class Action"). The complaint alleges that defendants violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements and that the officers are control persons under Section 20(a) of the Securities Exchange Act of 1934. The complaint is filed on behalf of shareholders who purchased shares of the Company’s common stock between April 28, 2017 and July 25, 2019 (“Class Period”). On June 29, 2020, an amended complaint was filed in the Securities Class Action against Mohawk and its CEO Jeff Lorberbaum, based on the same claims and the same Class Period. The amended complaint alleges that the Company (1) engaged in fabricating revenues by attempting delivery to customers that were closed and recognizing these attempts as sales; (2) overproduced product to report higher operating margins and maintained significant inventory that was not salable; and (3) valued certain inventory improperly or improperly delivered inventory with knowledge that it was defective and customers would return it. On October 27, 2020, defendants filed a motion to dismiss the amended complaint. The Company intends to vigorously defend against the claims.

Government Subpoenas

As previously disclosed, on June 25, 2020, the Company received subpoenas issued by the U.S. Attorney’s Office for the Northern District of Georgia (the “USAO”) and the U.S. Securities and Exchange Commission (the “SEC”) relating to matters similar to the allegations of wrongdoing raised by the Securities Class Action. The Company’s Audit Committee, with the assistance of outside legal counsel, conducted a thorough internal investigation into these allegations. The Audit Committee has completed the investigation and concluded that the allegations of wrongdoing are without merit. The USAO and SEC investigations are ongoing, and the Company is cooperating fully with those authorities. The Company will continue to vigorously defend against the allegations of wrongdoing in the Securities Class Action and does not believe they have merit.

Delaware State Court Action

The Company and certain of its present and former executive officers were named as defendants in a putative state securities class action lawsuit filed in the Superior Court of the State of Delaware on January 30, 2020. The complaint alleges that defendants violated Sections 11 and 12 of the Securities Act of 1933. The complaint is filed on behalf of shareholders who purchased shares of the Company’s common stock in Mohawk Industries Retirement Plan 1 and Mohawk Industries Retirement Plan 2 between April 27, 2017 and July 25, 2019. On March 27, 2020, the Court granted a temporary stay of the litigation pending the earlier of either the close of fact discovery or the deadline to appeal the dismissal of the related Securities Class Action pending in the United States District Court for the Northern District of Georgia.  The stay may be lifted according to the terms set forth in the Court’s Order to Stay Litigation. The Company intends to vigorously defend against the claims.

Derivative Actions

The Company and certain of its executive officers and directors were named as defendants in certain derivative actions filed in the United States District Court for the Northern District of Georgia on May 18, 2020 and August 6, 2020, respectively. The complaints allege that defendants breached their fiduciary duties to the Company by causing the Company to issue materially false and misleading statements. The complaints are filed on behalf of the Company and seek to remedy fiduciary duty breaches occurring from April 28, 2017 – July 25, 2019. On July 20, 2020, the Court granted a temporary stay of the litigation. Other shareholders of record have jointly moved to intervene in the derivative actions to stay the proceedings. The Court has not yet ruled on the motion to intervene. On October 21, 2020, the Court entered an Order consolidating the derivative actions and appointing Lead Counsel. The consolidated action will remain stayed pending the earlier of either the Securities Class Action defendants filing an answer to the operative complaint or the deadline to appeal the dismissal of the Securities Class Action. The Company intends to vigorously defend against the claims.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and the Company is unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

The Company is subject to various federal, state, local and foreign environmental health and safety laws and regulations, including those governing air emissions, wastewater discharges, the use, storage, treatment, recycling and disposal of solid and hazardous materials and finished product, and the cleanup of contamination associated therewith. Because of the nature of the Company’s business, the Company has incurred, and will continue to incur, costs relating to compliance with such laws and regulations. The Company is involved in various proceedings relating to environmental matters and is currently engaged in environmental investigation, remediation and post-closure care programs at certain sites. The Company has provided accruals for such activities that it has determined to be both probable and reasonably estimable. The Company does not expect that the ultimate liability with respect to such activities will have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

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Consolidated Statements of Cash Flows Information

12 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Information [Abstract]

Consolidated Statements of Cash Flows Information

Consolidated Statements of Cash Flows Information

Supplemental disclosures of cash flow information are as follows:

	2020		2019	2018
Net cash paid (received) during the years for:
Interest	$	44,584	45,241	46,186
Income taxes	$	106,891	123,974	196,193
Supplemental schedule of non-cash investing and financing activities:
Unpaid property plant and equipment in accounts payable and accrued expenses	$	90,767	104,823	101,389
Fair value of net assets acquired in acquisition	$	—	107,290	831,760
Liabilities assumed in acquisition	—		(31,053)	(257,515)
	$	—	76,237	574,245

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Segment Reporting

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has three reporting segments: the Global Ceramic segment, the Flooring NA segment and the Flooring ROW segment. The Global Ceramic segment designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone, quartz, porcelain slab countertops and other products, which it distributes primarily in North America, Europe, South America and Russia through its network of regional distribution centers and Company-operated service centers using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through Company-operated service centers, independent distributors, home center retailers, tile and flooring retailers and contractors. The Flooring NA segment designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, laminate, resilient (includes sheet vinyl and LVT) and wood flooring, which it distributes through its network of regional distribution centers and satellite warehouses using company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through various selling channels, including independent floor covering retailers, distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, commercial contractors and commercial end users. The Flooring ROW segment designs, manufactures, sources, licenses and markets laminate, wood flooring, roofing elements, insulation boards, medium-density fiberboard (“MDF”), chipboards, other wood products, sheet vinyl and LVT, which it distributes primarily in Europe, Australia, New Zealand and Russia through various selling channels, which include retailers, company-operated distributors, independent distributors and home centers.

The accounting policies for each operating segment are consistent with the Company’s policies for the consolidated financial statements. Amounts disclosed for each segment are prior to any elimination or consolidation entries. Corporate general and administrative expenses attributable to each segment are estimated and allocated accordingly. Segment performance is evaluated based on operating income. No single customer accounted for more than 10% of net sales for the years ended December 31, 2020, 2019 or 2018.

Segment information is as follows:

	2020		2019	2018
Assets:
Global Ceramic segment	$	5,250,069	5,419,896	5,194,030
Flooring NA segment	3,594,976		3,823,654	3,938,639
Flooring ROW segment	4,194,447		3,925,246	3,666,617
Corporate and intersegment eliminations	1,288,259		217,884	299,837
Total	$	14,327,751	13,386,680	13,099,123
Geographic net sales:
United States	$	5,530,407	5,822,593	6,103,789
Europe	2,486,770		2,532,239	2,582,692
Russia	385,830		385,395	349,220
Other	1,149,190		1,230,445	947,933
Total	$	9,552,197	9,970,672	9,983,634
Long-lived assets: (1)
United States	$	3,303,197	3,391,676	3,485,046
Belgium	1,808,571		1,645,104	1,663,470
Other	2,130,292		2,232,164	2,072,353
Total	$	7,242,060	7,268,944	7,220,869
Net sales by product categories:
Ceramic & Stone	$	3,457,203	3,686,645	3,621,193
Carpet & Resilient	3,735,888		3,921,769	3,903,698
Laminate & Wood	1,538,967		1,501,077	1,553,032
Other (2)	820,139		861,181	905,711
Total	$	9,552,197	9,970,672	9,983,634
Net sales:
Global Ceramic segment	$	3,432,756	3,631,142	3,552,856
Flooring NA segment	3,594,075		3,843,714	4,029,148
Flooring ROW segment	2,525,366		2,495,816	2,401,630
Total	$	9,552,197	9,970,672	9,983,634

(1)Long-lived assets are composed of property, plant and equipment - net, and goodwill.

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

	2020		2019	2018
Operating income (loss)(1):
Global Ceramic segment	$	167,731	335,639	439,152
Flooring NA segment	147,442		177,566	356,842
Flooring ROW segment	366,934		353,666	340,642
Corporate and intersegment eliminations	(46,105)		(39,647)	(41,310)
Total	$	636,002	827,224	1,095,326
Depreciation and amortization:
Global Ceramic segment	$	215,488	211,679	189,904
Flooring NA segment	214,599		204,689	184,455
Flooring ROW segment	164,701		145,417	135,350
Corporate	12,719		14,667	12,056
Total	$	607,507	576,452	521,765
Capital expenditures (excluding acquisitions):
Global Ceramic segment	$	121,418	244,026	281,125
Flooring NA segment	186,179		148,820	262,676
Flooring ROW segment	113,378		147,118	232,949
Corporate	4,582		5,498	17,360
Total	$	425,557	545,462	794,110

(1)During the second quarter of 2020, the Company revised the methodology it uses to estimate and allocate corporate general and administrative expenses to its operating segments to better align usage of corporate resources allocated to the Company segments. The updated allocation methodology had no impact on the Company’s consolidated statements of operations. This change was applied retrospectively, and segment operating income for all comparative periods has been updated to reflect this change.

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

The supplemental quarterly financial data are as follows:

	Quarters Ended
	March 28, 2020		June 27, 2020	September 26, 2020	December 31, 2020
Net sales	$	2,285,763	2,049,800	2,574,870	2,641,764
Gross profit	616,440		369,967	706,199	738,084
Net earnings (loss)	110,514		(48,257)	205,117	248,222
Basic earnings (loss) per share	1.54		(0.68)	2.88	3.50
Diluted earnings (loss) per share	1.54		(0.68)	2.87	3.49

	Quarters Ended
	March 30, 2019		June 29, 2019	September 28, 2019	December 31, 2019
Net sales	$	2,442,490	2,584,485	2,519,185	2,424,512
Gross profit	624,927		736,618	691,691	622,807
Net earnings	121,585		202,441	155,518	264,667
Basic earnings per share	1.68		2.80	2.16	3.69
Diluted earnings per share	1.67		2.79	2.15	3.68

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation

Mohawk Industries, Inc. (“Mohawk” or the “Company”), a term which includes the Company and its subsidiaries, is a leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. The Company’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood, stone, luxury vinyl tile (“LVT”) and sheet vinyl flooring.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash And Cash Equivalents

Cash and Cash Equivalents The Company considers investments with an original maturity of three months or less when purchased to be cash equivalents.

Short-term Investments

Short-term Investments

The Company invests in high quality credit instruments. At December 31, 2020, such investments consisted of a short-duration bond fund and managed income fund. At December 31, 2019, amounts consisted solely of investments in the Company's commercial paper by its wholly-owned captive insurance company. Such investments are not insured by the Federal Deposit Insurance Corporation.

The Company's investment in the short-duration bond fund and managed income fund is classified as an equity security, recorded at fair value based on the closing market price of the security. The Company recognizes dividends, realized and unrealized gains and losses to other expense (income), net in the statement of operations.

Fair Value

Fair Value

Accounting principles generally accepted in the U.S. define fair value as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. As the basis for evaluating such inputs, a three-tier value hierarchy prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

Accounts Receivable and Revenue Recognition

Accounts Receivable and Revenue Recognition

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

The Company accounts for incremental costs of obtaining a contract as an expense when incurred in selling, general and administrative expenses if the amortization period is less than one year.

The Company accounts for shipping and handling activities performed after control has been transferred as a fulfillment cost in cost of sales.

Inventories

InventoriesThe Company accounts for all inventories on the first-in, first-out (“FIFO”) method. Inventories are stated at the lower of cost or net realizable value. Cost has been determined using the FIFO method. Costs included in inventory include raw materials, direct and indirect labor and employee benefits, depreciation, general manufacturing overhead and various other costs of manufacturing. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence.

Property, Plant And Equipment

Property, Plant and EquipmentProperty, plant and equipment are stated at cost, including capitalized interest. Depreciation is calculated on a straight-line basis over the estimated remaining useful lives, which are 15-40 years for buildings and improvements, 3-25 years for machinery and equipment, the shorter of the estimated useful life or lease term for leasehold improvements and 3-7 years for furniture and fixtures.

Accounting for Business Combinations

Accounting for Business CombinationsThe Company accounts for business combinations under the acquisition method of accounting which requires it to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 350, Intangibles-Goodwill and Other, the Company tests goodwill and other intangible assets with indefinite lives for impairment on an annual basis on the first day of the fourth quarter (or on an interim basis if an event occurs that might reduce the fair value of the reporting unit below its carrying value). The Company 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’s judgments and assumptions using the discounted cash flows and comparable company market valuation approaches. The Company has identified Global Ceramic, Flooring NA, and Flooring ROW as its reporting units for the purposes of allocating goodwill and intangibles as well as assessing impairments. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as 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 continued 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.

The impairment evaluation for indefinite lived intangible assets, which for the Company are its trademarks, is conducted on the first day of the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that an asset might be impaired. The impairment tests for indefinite lived intangible assets may be completed through an assessment of qualitative factors to determine the existence of events or circumstances that would indicate that it is not more likely than not that the fair value of these assets is less than their carrying amounts.  If the qualitative assessment indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts, a quantitative impairment test is not required.  If a quantitative test is necessary, the Company estimates the fair value of the intangible asset and compares it to its carrying amount.  If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company may also elect to bypass the qualitative assessment and perform a quantitative impairment test in any period.  If the Company elects to perform a quantitative impairment test, it may resume the qualitative assessment in subsequent periods. 

The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable to ownership of the trademarks. Significant judgments inherent in this analysis include assumptions about appropriate sales growth rates, royalty rates, applicable discount rate and the amount of expected future cash flows. The judgments and assumptions used in the estimate of fair value are generally consistent with past performance and are also consistent with the projections and assumptions that are used in current operating plans. Such assumptions are subject to change as a result of changing economic and competitive conditions. The determination of fair value is highly sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of the trademarks. Estimated cash flows are sensitive to changes in the economy among other things. 

Intangible assets that do not have indefinite lives are amortized based on average lives, which range from 7-16 years.

Leases

Leases

The Company measures right of use (“ROU”) assets and lease liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s credit spread adjusted for current market factors and foreign currency rates. The Company also made a policy election to determine its incremental borrowing rate, at the initial application date, using the total lease term and the total minimum rental payments, as the Company believes this rate is more indicative of the implied financing cost.

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for service centers, warehouses, showrooms, and machinery and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet and expensed as incurred. The Company enters into lease contracts ranging from 1 to 60 years with a majority of the Company’s lease terms ranging from 1 to 10 years.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from 3 to 10 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. An insignificant number of the Company’s leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Income Taxes

Income TaxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

Financial Instruments

Financial InstrumentsThe Company’s financial instruments consist primarily of short-term investments, receivables, accounts payable, accrued expenses and long-term debt. The carrying amounts of receivables, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments. The Company has a wholly-owned captive insurance company that may periodically invest in the Company’s commercial paper. These short-term commercial paper investments are classified as trading securities and carried at fair value based upon level two fair value hierarchy. The carrying amount of the Company’s floating rate debt approximates its fair value based upon level two fair value hierarchy. Interest rates that are currently available to the Company for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s long-term debt.

Advertising Costs and Vendor Consideration

Advertising Costs and Vendor ConsiderationAdvertising and promotion expenses are charged to earnings during the period in which they are incurred.Vendor consideration, generally cash, is classified as a reduction of net sales, unless specific criteria are met regarding goods or services that the Company may receive in return for this consideration. The Company makes various payments to customers, including rebates, slotting fees, advertising allowances, buy-downs and co-op advertising. All of these payments reduce gross sales with the exception of co-op advertising.

Product Warranties

Product WarrantiesThe Company warrants certain qualitative attributes of its flooring products. The Company has recorded a provision for estimated warranty and related costs, based on historical experience and periodically adjusts these provisions to reflect actual experience.

Impairment of Long-Lived Assets

Impairment of Long-Lived AssetsThe Company reviews its long-lived asset groups, which include intangible assets such as patents and customer relationships subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated by these asset groups. If such asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Assets held for sale are reported at the lower of the carrying amount or fair value less estimated costs of disposal and are no longer depreciated.

Foreign Currency Translation

Foreign Currency TranslationThe Company’s subsidiaries that operate outside the United States generally use their local currency as the functional currency. The functional currency is translated into U.S. Dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity, within accumulated other comprehensive income (loss). Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of operations.

Hedges of Net Investments in Non-U.S. Operations

Hedges of Net Investments in Non-U.S. OperationsThe Company has numerous investments outside the United States. The net assets of these subsidiaries are exposed to changes and volatility in currency exchange rates. The Company uses foreign currency denominated debt to hedge its non-U.S. net investments against adverse movements in exchange rates. The gains and losses on the Company’s net investments in its non-U.S. operations are economically offset by losses and gains on its foreign currency borrowings. The Company designated its €500,000 2.00% Senior Notes borrowing as a net investment hedge of a portion of its European operations. For the years ended December 31, 2020, December 31, 2019 and December 31, 2018 the change in the U.S. dollar value of the Company’s euro denominated debt was an increase of $54,907 ($41,708 net of taxes), a decrease of $12,049 ($9,153 net of taxes) and a decrease of $27,948 ($20,376 net of taxes), respectively, which is recorded in the foreign currency translation adjustment component of accumulated other comprehensive income (loss). The increase in the U.S. dollar value of the Company’s debt partially offsets the euro-to-dollar translation of the Company’s net investment in its European operations.

Earnings Per Share ("EPS")

Earnings per Share (“EPS”)Basic net earnings per share (“EPS”) is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.Dilutive common stock options are included in the diluted EPS calculation using the treasury stock method. There were no common stock options and unvested restricted shares (units) that were excluded from the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2020, 2019 and 2018.

Stock-Based Compensation

Stock-Based CompensationThe Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with ASC 718-10, “Stock Compensation”. Compensation expense is generally recognized on a straight-line basis over the awards’ estimated lives for fixed awards with ratable vesting provisions.

Employee Benefit Plans

Employee Benefit PlansThe Company has 401(k) retirement savings plans (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 60 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $56,241 and $13,509 in 2020, $57,354 and $23,008 in 2019 and $55,796 and $22,689 in 2018, respectively. The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Flooring ROW segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans.

Comprehensive Income (Loss)

Comprehensive Income (Loss)Comprehensive income (loss) includes foreign currency translation of assets and liabilities of foreign subsidiaries, effects of exchange rate changes on intercompany balances of a long-term nature and pensions. The Company does not provide income taxes on currency translation adjustments, as earnings from foreign subsidiaries are considered to be indefinitely reinvested. The Company presents currency translation adjustments on noncontrolling interests separately from currency translation adjustments on controlling interests in accumulated other comprehensive income (loss) within stockholders’ equity.

Self-Insurance Reserves

Self-Insurance ReservesThe Company is self-insured in the U.S. for various levels of general liability, automobile liability, workers’ compensation and employee medical coverage. Insurance reserves are calculated on an undiscounted basis based on actual claim data and estimates of incurred but not reported claims developed utilizing historical claim trends. Projected settlements and incurred but not reported claims are estimated based on pending claims and historical trends and data. Though the Company does not expect them to do so, actual settlements and claims could differ materially from those estimated. Material differences in actual settlements and claims could have an adverse effect on the Company’s results of operations and financial condition. The Company has a wholly-owned captive insurance company, Mohawk Assurance Services, Inc. (“MAS”). MAS insures the retained portion of the Company’s U.S. general liability, automobile liability, and workers’ compensation exposures. In the fourth quarter of 2020, the Company also moved pandemic, terrorism and medical coverage to MAS.

Fiscal Year

Fiscal YearThe Company ends its fiscal year on December 31. Each of the first three quarters in the fiscal year ends on the Saturday nearest the calendar quarter end with a thirteen week fiscal quarter.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

- Effective in Future Years

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which simplified the accounting for income taxes in several areas by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes. The amendment is effective commencing January 1, 2021 for the Company. The Company evaluated the impact that this accounting standards update will have on its consolidated financial statements and does not expect the adoption of this guidance to have a significant impact to the financial statements.

- Recently Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further amended by additional accounting standards updates issued by the FASB.  The new standard replaced the incurred loss impairment methodology for recognizing credit losses with a new methodology that requires recognition of lifetime expected credit losses when a financial asset is originated or purchased, even if the risk of loss is remote. The new methodology (referred to as the current expected credit losses model, or "CECL") applies to most financial assets measured at amortized cost, including trade receivables, and requires consideration of a broader range of reasonable and supportable information to estimate expected credit losses.  The Company adopted the new standard on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.    

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350): Simplifying the test for goodwill impairment. The amendments remove the second step of the current goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. The Company adopted the new standard in the fourth quarter of 2019. The effect of adopting the new standard was not material.

In February 2016, the FASB issued a new standard ASU 2016-02, Leases, and subsequently issued additional ASUs amending this ASU (collectively ASC 842, Leases). ASC 842 was issued to increase transparency and comparability among organizations by requiring the recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted the provisions of ASC 842 on January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The adoption of ASC 842 had a material impact on the Company’s condensed consolidated balance sheets, but did not have a material impact on the Company’s condensed consolidated statements of operations or cashflow. The most significant impact was the recognition of ROU assets of $328,169 and lease liabilities for operating leases of $332,286 at January 1, 2019, based on the present value of the future minimum rental payments for existing operating leases. The difference in the balances is due to deferred rent, tenant incentive allowances and prepaid amounts taken into account for adoption. The Company’s accounting for finance leases remained substantially unchanged. See Note 12, Leases.

On January 1, 2019, the Company adopted the new accounting standard, ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The standard permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. The effect of adopting the new standard was not material.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Computations of Basic and Diluted Earnings Per Share

Computations of basic and diluted earnings per share are presented in the following table:

	2020		2019	2018
Net earnings attributable to Mohawk Industries, Inc.	$	515,595	744,211	861,704
Accretion of redeemable noncontrolling interest(a)	—		—	(3,892)
Net earnings available to common stockholders	$	515,595	744,211	857,812
Weighted-average common shares outstanding-basic and diluted:
Weighted-average common shares outstanding—basic	71,214		71,986	74,413
Add weighted-average dilutive potential common shares—options to purchase common shares and RSUs, net	187		278	360
Weighted-average common shares outstanding-diluted	71,401		72,264	74,773
Earnings per share attributable to Mohawk Industries, Inc.
Basic	$	7.24	10.34	11.53
Diluted	$	7.22	10.30	11.47

(a) Represents the accretion of the Company’s redeemable noncontrolling interest to redemption value. The holder put this option to the Company on December 20, 2018 for $33,884

Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component, net of tax, for years ended December 31, 2020, 2019 and 2018 are as follows:

	Foreign currency translation adjustments		Pensions and post-retirement benefits	Total
Balance as of December 31, 2017	$	(547,927)	(10,600)	(558,527)
Current period other comprehensive income (loss) before reclassifications	(234,175)		1,094	(233,081)
Balance as of December 31, 2018	(782,102)		(9,506)	(791,608)
Current period other comprehensive income (loss) before reclassifications	28,994		(3,210)	25,784
Balance as of December 31, 2019	(753,108)		(12,716)	(765,824)
Current period other comprehensive income (loss) before reclassifications	72,853		(2,174)	70,679
Balance as of December 31, 2020	$	(680,255)	(14,890)	(695,145)

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Revenue from Contracts with Customers (Tables)

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Summary of Disaggregated Revenue

The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories during the years ended December 31, 2020, 2019 and 2018, respectively:

December 31, 2020	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,050,470	3,477,556	2,381	5,530,407
Europe	699,715		1,506	1,785,549	2,486,770
Russia	262,846		50	122,934	385,830
Other	419,725		114,963	614,502	1,149,190
Total	$	3,432,756	3,594,075	2,525,366	9,552,197
Product Categories
Ceramic & Stone	$	3,425,672	31,531	—	3,457,203
Carpet & Resilient	7,084		2,871,050	857,754	3,735,888
Laminate & Wood	—		691,494	847,473	1,538,967
Other(1)	—		—	820,139	820,139
Total	$	3,432,756	3,594,075	2,525,366	9,552,197

December 31, 2019	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,131,029	3,688,691	2,873	5,822,593
Europe	711,762		6,922	1,813,555	2,532,239
Russia	269,142		66	116,187	385,395
Other	519,209		148,035	563,201	1,230,445
Total	$	3,631,142	3,843,714	2,495,816	9,970,672
Product Categories
Ceramic & Stone	$	3,631,142	55,503	—	3,686,645
Carpet & Resilient	—		3,136,474	785,295	3,921,769
Laminate & Wood	—		651,737	849,340	1,501,077
Other(1)	—		—	861,181	861,181
Total	$	3,631,142	3,843,714	2,495,816	9,970,672

December 31, 2018	Global Ceramic segment		Flooring NA segment	Flooring ROW segment	Total
Geographical Markets
United States	$	2,251,233	3,851,267	1,289	6,103,789
Europe	714,315		6,487	1,861,890	2,582,692
Russia	245,867		2	103,351	349,220
Other	341,441		171,392	435,100	947,933
Total	$	3,552,856	4,029,148	2,401,630	9,983,634
Product Categories
Ceramic & Stone	$	3,552,856	68,337	—	3,621,193
Carpet & Resilient	—		3,258,029	645,669	3,903,698
Laminate & Wood	—		702,782	850,250	1,553,032
Other(1)	—		—	905,711	905,711
Total	$	3,552,856	4,029,148	2,401,630	9,983,634

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

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Restructuring, Acquisition Transaction and Integration-Related Costs (Tables)

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

Restructuring, acquisition transaction and integration-related costs consisted of the following during the year ended December 31, 2020, 2019 and December 31, 2018, respectively (in thousands):

	2020		2019	2018
Cost of sales
Restructuring costs(1)	$	101,230	84,844	43,733
Acquisition integration-related costs	1,153		3,458	3,330
Restructuring and acquisition integration-related costs	$	102,383	88,302	47,063
Selling, general and administrative expenses
Restructuring costs(1)	$	24,127	5,497	15,259
Acquisition transaction-related costs	213		1,502	4,977
Acquisition integration-related costs	2,127		5,871	11,351
Restructuring, acquisition transaction and integration-related costs	$	26,467	12,870	31,587

(1) The restructuring costs for 2020, 2019 and 2018 primarily relate to the Company’s actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as well as actions related to the Company’s recent acquisitions. The Company currently estimates that it will incur additional restructuring costs of approximately $18,000 primarily related to accelerated depreciation and period closure costs mainly in its Flooring North America segment.

Schedule of Restructuring and Related Costs

The restructuring activity for the years ended December 31, 2020 and 2019, respectively is as follows (in thousands):

	Lease impairments		Asset write-downs	Severance	Other restructuring costs	Total
Balance as of December 31, 2018	$	397	—	7,866	250	8,513
Provision
Global Ceramic segment	—		—	5,264	—	5,264
Flooring NA segment	—		37,820	2,617	33,975	74,412
Flooring ROW segment	—		3,936	4,615	2,099	10,650
Corporate	—		—	15	—	15
Total provision for the Year 2019	—		41,756	12,511	36,074	90,341
Cash payments	(376)		—	(16,113)	(19,165)	(35,654)
Non-cash items	—		(41,756)	(142)	(17,043)	(58,941)
Balance as of December 31, 2019	21		—	4,122	116	4,259
Provision
Global Ceramic segment	2,239		19,963	13,987	6,927	43,116
Flooring NA segment	227		32,902	4,660	13,809	51,598
Flooring ROW segment	—		12,913	5,746	6,391	25,050
Corporate	—		3,685	1,908	—	5,593
Total provision for the Year 2020	2,466		69,463	26,301	27,127	125,357
Cash payments	(21)		—	(20,001)	(18,425)	(38,447)
Non-cash items	(2,466)		(69,463)	1,154	(8,089)	(78,864)
Balance as of December 31, 2020	$	—	—	11,576	729	12,305
2019 provision amounts recorded in:
Cost of sales	$	—	41,756	8,273	34,815	84,844
Selling, general and administrative expenses	—		—	4,238	1,259	5,497
Total provision for the Year 2019	$	—	41,756	12,511	36,074	90,341
2020 provision amounts recorded in:
Cost of sales	$	—	64,415	13,949	22,866	101,230
Selling, general and administrative expenses	2,466		5,048	12,352	4,261	24,127
Total provision for the Year 2020	$	2,466	69,463	26,301	27,127	125,357

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Fair Value (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements

The following table presents the items measured at fair value as of December 31, 2020 and December 31, 2019:

	Fair Value
	December 31, 2020		December 31, 2019
Cash and cash equivalents:
Money market fund (Level 1)	$	197,835	—
Short-term investments:
Short-term investments (Level 1) (1)	571,741		—
Commercial paper (Level 2)	—		42,500

(1) The Company's short-term investments are in a short-duration bond fund and a managed income fund that are designed to deliver current income consistent with the preservation of capital through investing in high-and medium grade fixed income securities. The investments are readily convertible into cash.

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Receivables, net (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Net Components Of Receivables

	December 31, 2020		December 31, 2019
Customers, trade	$	1,591,503	1,491,592
Income tax receivable	112,580		8,428
Other	89,092		88,520
	1,793,175		1,588,540
Less: allowance for discounts, returns, claims and doubtful accounts(1)	83,682		61,921
Receivables, net	$	1,709,493	1,526,619

(1) The Company adopted the new standard, ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, on January 1, 2020 using a modified retrospective transition approach, with the cumulative impact being immaterial to the financial statements.

Allowances For Discounts, Returns, Claims And Doubtful Accounts

The following table reflects the activity of allowances for discounts, returns, claims and doubtful accounts for the years ended December 31:

	Balance at beginning of year		Acquisitions	Additions charged to net sales or costs and expenses	Deductions(1)	Balance at end of year
2018	$	86,103	4,240	317,716	333,341	74,718
2019	74,718		382	387,253	400,432	61,921
2020	61,921		—	384,403	362,642	83,682

(1) Represents charge-offs, net of recoveries.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Net Components of Inventories

The components of inventories are as follows:

	December 31, 2020		December 31, 2019
Finished goods	$	1,372,234	1,610,742
Work in process	126,231		144,639
Raw materials	414,555		526,947
Total inventories	$	1,913,020	2,282,328

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the components of intangible assets:

Goodwill:

	Global Ceramic		Flooring NA	Flooring ROW	Total
Balances as of December 31, 2018
Goodwill	$	1,564,987	874,198	1,409,206	3,848,391
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,033,057		531,144	956,765	2,520,966
Goodwill recognized during the period	13,197		—	49,619	62,816
Currency translation during the period	5,392		—	(19,147)	(13,755)
Balances as of December 31, 2019
Goodwill	1,583,576		874,198	1,439,678	3,897,452
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	1,051,646		531,144	987,237	2,570,027
Goodwill recognized during the period	—		—	(9,642)	(9,642)
Currency translation during the period	(4,085)		—	94,531	90,446
Balances as of December 31, 2020
Goodwill	1,579,491		874,198	1,524,567	3,978,256
Accumulated impairment losses	(531,930)		(343,054)	(452,441)	(1,327,425)
	$	1,047,561	531,144	1,072,126	2,650,831

Schedule of Indefinite Life Assets Not Subject to Amortization

	Tradenames
Indefinite life assets not subject to amortization:
Balance as of December 31, 2018	$	707,380
Intangible assets acquired during the year(1)	(874)
Currency translation during the year	(3,774)
Balance as of December 31, 2019	702,732
Currency translation during the year	24,536
Balance as of December 31, 2020	$	727,268

(1) Includes adjustments on previously acquired intangible assets.

Schedule of Intangible Assets Subject to Amortization

	Customer relationships		Patents	Other	Total
Intangible assets subject to amortization:
Balances as of December 31, 2018	$	244,628	4,495	5,307	254,430
Intangible assets acquired during the year	2,092		—	—	2,092
Amortization during the year	(25,527)		(2,156)	70	(27,613)
Currency translation during the year	(2,752)		(111)	101	(2,762)
Balances as of December 31, 2019	218,441		2,228	5,478	226,147
Intangible assets acquired during the year	12,789		—	—	12,789
Amortization during the year	(26,612)		(2,195)	(84)	(28,891)
Currency translation during the year	13,921		111	262	14,294
Balances as of December 31, 2020	$	218,539	144	5,656	224,339

	December 31, 2020
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	645,206	12,789	41,800	481,256	218,539
Patents	249,100		—	24,470	273,426	144
Other	6,631		—	314	1,289	5,656
Total	$	900,937	12,789	66,584	755,971	224,339

	December 31, 2019
	Cost		Acquisitions	Currency translation	Accumulated amortization	Net Value
Customer Relationships	$	651,014	2,092	(7,900)	426,765	218,441
Patents	254,483		—	(5,383)	246,872	2,228
Other	6,534		—	97	1,153	5,478
Total	$	912,031	2,092	(13,186)	674,790	226,147

Amortization Expense

	Years Ended December 31,
	2020		2019	2018
Amortization expense	$	28,891	27,613	30,745

Schedule of Expected Amortization Expense

Estimated amortization expense for the years ending December 31 are as follows:

2021	$	29,429
2022	28,634
2023	26,998
2024	26,264
2025	26,064

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment

Following is a summary of property, plant and equipment:

	December 31, 2020		December 31, 2019
Land	$	484,450	469,837
Buildings and improvements	1,856,859		1,790,781
Machinery and equipment	5,987,272		5,602,474
Furniture and fixtures	164,027		163,017
Leasehold improvements	103,172		103,755
Construction in progress	309,486		366,144
	8,905,266		8,496,008
Less: accumulated depreciation	4,314,037		3,797,091
Net property, plant and equipment	$	4,591,229	4,698,917

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The fair values and carrying values of the Company’s debt instruments are detailed as follows:

	At December 31, 2020			At December 31, 2019
	Fair Value		Carrying Value	Fair Value	Carrying Value
1.750% Senior Notes, payable June 12, 2027; interest payable annually	$	635,664	615,006	—	—
3.625% Senior Notes, payable May 15, 2030; interest payable semi-annually	561,890		500,000	—	—
3.85% Senior Notes, payable February 1, 2023; interest payable semi-annually	638,844		600,000	627,144	600,000
2.00% Senior Notes, payable January 14, 2022; interest payable annually	624,680		615,006	580,235	560,099
2020 Floating Rate Notes, payable May 18, 2020; interest payable quarterly	—		—	336,066	336,059
2021 Floating Rate Notes, payable September 04, 2021; interest payable quarterly	368,738		369,004	335,965	336,059
U.S. commercial paper	—		—	317,000	317,000
European commercial paper	—		—	376,946	376,946
Five-year Senior unsecured Credit Facility, due October 18, 2024	—		—	16,803	16,803
Finance leases and other	46,302		46,302	30,049	30,049
Unamortized debt issuance costs	(11,176)		(11,176)	(3,129)	(3,129)
Total debt	2,864,942		2,734,142	2,617,079	2,569,886
Less current portion of long term debt and commercial paper	376,989		377,255	1,051,498	1,051,498
Long-term debt, less current portion	$	2,487,953	2,356,887	1,565,581	1,518,388

Schedule of Maturities of Long-Term Debt

The aggregate maturities of total debt as of December 31, 2020 are as follows(1):

2021	$	377,208
2022	622,832
2023	607,116
2024	5,459
2025	4,131
Thereafter	1,128,572
	$	2,745,318

(1) Debt maturity table excludes deferred loan costs.

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Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Components of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are as follows:

	December 31, 2020		December 31, 2019
Outstanding checks in excess of cash	$	5,672	9,924
Accounts payable, trade	1,016,897		824,956
Accrued expenses	566,052		461,035
Product warranties	54,692		49,184
Accrued interest	30,403		21,050
Accrued compensation and benefits	222,235		192,991
Total accounts payable and accrued expenses	$	1,895,951	1,559,140

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Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Components of Lease Expense

The components of lease costs for the twelve months ended December 31, 2020 and December 31, 2019 are as follows:    

	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Cost of Goods Sold		Selling, General and Administrative	Total		Cost of Goods Sold	Selling, General and Administrative	Total
Operating lease costs
Fixed	$	25,067	102,504	127,571		30,002	97,988	127,990
Short-term	11,633		16,021	27,654		9,725	13,933	23,658
Variable	8,285		30,036	38,321		8,123	29,852	37,975
Sub-leases	(411)		(741)	(1,152)		(311)	(537)	(848)
	$	44,574	147,820	192,394		47,539	141,236	188,775
	Twelve Months Ended December 31, 2020					Twelve Months Ended December 31, 2019
	Depreciation and Amortization		Interest	Total		Depreciation and Amortization	Interest	Total
Finance lease costs
Amortization of leased assets	$	6,423	—	6,423		4,015	—	4,015
Interest on lease liabilities	—		690	690		—	491	491
	$	6,423	690	7,113		4,015	491	4,506
Net lease costs				$	199,507			193,281

Rental expense under fixed operating leases was $143,513 in 2018.

Lease term and discount rate are as follows:

	At December 31, 2020		At December 31, 2019
Weighted Average Remaining Lease Term
Operating Leases	4.5 years		4.3 years
Finance Leases	7.7 years		8.4 years
Weighted Average Discount Rate
Operating Leases	2.8	%	3.3	%
Finance Leases	1.4	%	1.4	%

Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases is as follows:

	Classification	At December 31, 2020		At December 31, 2019
Assets
Operating Leases
Right of use operating lease assets	Right of use operating lease assets	$	323,138	323,003
Finance Leases
Property, plant and equipment, gross	Property, plant and equipment	58,170		35,271
Accumulated depreciation	Accumulated depreciation	(12,498)		(5,664)
Property, plant and equipment, net	Property, plant and equipment, net	45,672		29,607
Total lease assets		$	368,810	352,610
Liabilities
Operating Leases
Other current	Current operating lease liabilities	$	98,042	101,945
Non-current	Non-current operating lease liabilities	234,726		228,155
Total operating liabilities		332,768		330,100
Finance Leases
Short-term debt	Short-term debt and current portion of long-term debt	8,025		4,835
Long-term debt	Long-term debt, less current portion	38,098		25,214
Total finance liabilities		46,123		30,049
Total lease liabilities		$	378,891	360,149

Maturity of Operating Lease Liabilities

Maturities of lease liabilities as of December 31, 2020 are as follows:

Year ending December 31,	Finance Leases		Operating Leases	Total
2021	$	8,830	113,151	121,981
2022	8,399		88,607	97,006
2023	7,632		60,118	67,750
2024	5,870		38,785	44,655
2025	4,453		26,837	31,290
Thereafter	14,599		27,454	42,053
Total lease payments	49,783		354,952	404,735
Less imputed interest	3,660		22,184
Present value, Total	$	46,123	332,768

Maturity of Finance Lease Liabilities

Maturities of lease liabilities as of December 31, 2020 are as follows:

Year ending December 31,	Finance Leases		Operating Leases	Total
2021	$	8,830	113,151	121,981
2022	8,399		88,607	97,006
2023	7,632		60,118	67,750
2024	5,870		38,785	44,655
2025	4,453		26,837	31,290
Thereafter	14,599		27,454	42,053
Total lease payments	49,783		354,952	404,735
Less imputed interest	3,660		22,184
Present value, Total	$	46,123	332,768

Supplemental Cash Flow Information

Supplemental cash flow information related to leases was as follows:

	Twelve Months Ended
	December 31, 2020		December 31, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	124,708	127,213
Operating cash flows from finance leases	690		349
Financing cash flows from finance leases	6,386		3,975
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	110,036		133,959
Finance leases	18,248		20,464
Amortization:
Amortization of right of use operating lease assets(1)	113,898		109,884

(1) Amortization of Right of use operating lease assets during the period is reflected in Other assets and prepaid expenses on the Consolidated Statements of Cash Flows.

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Summary of RSUs Under the Long-Term Incentive Plans

A summary of the Company’s RSUs under the Company’s long-term incentive plans as of December 31, 2020, and changes during the year then ended is presented as follows:

	Shares	Weighted average grant date fair value		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2019	362	$	158.13
Granted	192	120.36
Released	(146)	203.05
Forfeited	(33)	140.69
Restricted Stock Units outstanding, December 31, 2020	375	$	122.84	1.4	$	52,822
Expected to vest as of December 31, 2020	361			1.4	$	50,895

Additional Information for RSUs Under the Long-Term Incentive Plans

Additional information relating to the Company’s RSUs under the Company’s long-term incentive plans are as follows:

	2020	2019	2018
Restricted Stock Units outstanding, January 1	362	446	555
Granted	192	187	136
Released	(146)	(230)	(235)
Forfeited	(33)	(41)	(10)
Restricted Stock Units outstanding, December 31	375	362	446
Expected to vest as of December 31	361	356	440

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Other Expense (Income) (Tables)

12 Months Ended

Dec. 31, 2020

Other Nonoperating Income (Expense) [Abstract]

Summary of Other Expense (Income)

Following is a summary of other expense (income):

	2020		2019	2018
Foreign currency losses (gains), net	$	7,815	(7,190)	9,613
Release of indemnification asset	—		(304)	4,606
Impairment of joint venture in Brazil	3,599		—	—
Dividend income	(2,976)		—	—
Impairment of net investment in a manufacturer and distributor of Ceramic tile in China(1)	—		59,906	—
All other, net	(9,189)		(16,005)	(6,921)
Total other expense (income), net	$	(751)	36,407	7,298

(1) During 2019, the Company determined that its net investment in a manufacturer and distributor of ceramic tile in China was impaired and therefore recorded a net impairment charge of $59,906.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Earnings (Loss) From Continuing Operations Before Income Taxes

Following is a summary of earnings before income taxes for United States and foreign operations:

	2020		2019	2018
United States	$	94,829	163,764	387,564
Foreign	489,545		585,781	661,637
Earnings before income taxes	$	584,374	749,545	1,049,201

Income Tax Expense (Benefit)

Income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 consists of the following:

	2020		2019	2018
Current income taxes:
U.S. federal	$	(33,821)	19,936	22,700
State and local	7,794		12,659	14,521
Foreign	72,350		80,221	58,669
Total current	46,323		112,816	95,890
Deferred income taxes:
U.S. federal	14,533		11,993	54,983
State and local	112		15,371	19,076
Foreign	7,679		(135,206)	14,397
Total deferred	22,324		(107,842)	88,456
Total income tax expense	$	68,647	4,974	184,346

Reconciliation Of Income Tax Expense (Benefit)

Income tax expense (benefit) attributable to earnings before income taxes differs from the amounts computed by applying the U.S. statutory federal income tax rate to earnings before income taxes as follows:

	2020		2019	2018
Income taxes at statutory rate	$	122,719	157,404	220,332
State and local income taxes, net of federal income tax benefit	8,081		22,185	22,315
Foreign income taxes(a)	(57,898)		(17,276)	(39,915)
Change in valuation allowance	35,381		(21,975)	2,472
European Restructuring(b)	—		(136,194)	—
Loss on previously taxed earnings	(10,346)		—	—
Carryback rate differential(c)	(33,739)		—	—
Transition Tax	—		—	28,201
Transition tax planning initiatives	—		—	(18,706)
Tax contingencies and audit settlements, net	6,779		6,686	(31,874)
Other, net	(2,330)		(5,856)	1,521
	$	68,647	4,974	184,346

(a) Foreign income taxes include statutory rate differences, financing arrangements, withholding taxes, local income taxes, notional deductions, and other miscellaneous items.

(b) The Company implemented select operational, administrative and financial restructurings that centralized certain business processes and intangible assets in various European jurisdictions into a new entity.

(c) The CARES Act permits the Company to carry back its 2020 U.S. taxable loss to a tax year before the corporate income tax rate was lowered by the Tax Cuts and Jobs Act.

Deferred Tax Assets And Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are presented below:

	2020		2019
Deferred tax assets:
Accounts receivable	$	14,384	7,063
Inventories	44,597		50,585
Employee benefits	39,526		36,068
Accrued expenses and other	103,892		67,638
Deductible state tax and interest benefit	4,042		3,665
Intangibles	152,499		146,953
Lease liabilities	91,359		86,717
Federal, foreign and state net operating losses and credits	433,822		376,375
Gross deferred tax assets	884,121		775,064
Valuation allowance	(267,838)		(232,196)
Net deferred tax assets	616,283		542,868
Deferred tax liabilities:
Inventories	(17,403)		(12,885)
Plant and equipment	(489,240)		(510,952)
Intangibles	(197,009)		(182,424)
Right of use assets	(87,351)		(83,271)
Prepaids	(56,140)		—
Other liabilities	(46,121)		(24,220)
Gross deferred tax liabilities	(893,264)		(813,752)
Net deferred tax liability	$	(276,981)	(270,884)

Reconciliation Of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020		2019
Balance as of January 1	$	1,260,970	1,330,713
Additions based on tax positions related to the current year (a)	1,694		2,302
Additions for tax positions of acquired companies	—		2,094
Additions for tax positions of prior years	7,663		4,744
Transition tax planning initiatives	—		—
Reductions resulting from the lapse of the statute of limitations	(1,239)		(2,729)
Reductions due to Luxembourg tax rate change	—		(46,841)
Settlements with taxing authorities	(497)		(1,929)
Effects of foreign currency translation	119,800		(27,384)
Balance as of December 31	$	1,388,391	1,260,970

(a)The tax effected loss was adjusted for tax rate and foreign currency translation changes in 2020, resulting in an updated balance of $1,344,589 as of December 31, 2019. This $1,344,589 of unrecognized benefit is presented as a reduction to the related deferred tax asset in the balance sheet.

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Consolidated Statements of Cash Flows Information (Tables)

12 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Disclosures of Cash Flow Information

Supplemental disclosures of cash flow information are as follows:

	2020		2019	2018
Net cash paid (received) during the years for:
Interest	$	44,584	45,241	46,186
Income taxes	$	106,891	123,974	196,193
Supplemental schedule of non-cash investing and financing activities:
Unpaid property plant and equipment in accounts payable and accrued expenses	$	90,767	104,823	101,389
Fair value of net assets acquired in acquisition	$	—	107,290	831,760
Liabilities assumed in acquisition	—		(31,053)	(257,515)
	$	—	76,237	574,245

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Summary of Segment Information

Segment information is as follows:

	2020		2019	2018
Assets:
Global Ceramic segment	$	5,250,069	5,419,896	5,194,030
Flooring NA segment	3,594,976		3,823,654	3,938,639
Flooring ROW segment	4,194,447		3,925,246	3,666,617
Corporate and intersegment eliminations	1,288,259		217,884	299,837
Total	$	14,327,751	13,386,680	13,099,123
Geographic net sales:
United States	$	5,530,407	5,822,593	6,103,789
Europe	2,486,770		2,532,239	2,582,692
Russia	385,830		385,395	349,220
Other	1,149,190		1,230,445	947,933
Total	$	9,552,197	9,970,672	9,983,634
Long-lived assets: (1)
United States	$	3,303,197	3,391,676	3,485,046
Belgium	1,808,571		1,645,104	1,663,470
Other	2,130,292		2,232,164	2,072,353
Total	$	7,242,060	7,268,944	7,220,869
Net sales by product categories:
Ceramic & Stone	$	3,457,203	3,686,645	3,621,193
Carpet & Resilient	3,735,888		3,921,769	3,903,698
Laminate & Wood	1,538,967		1,501,077	1,553,032
Other (2)	820,139		861,181	905,711
Total	$	9,552,197	9,970,672	9,983,634
Net sales:
Global Ceramic segment	$	3,432,756	3,631,142	3,552,856
Flooring NA segment	3,594,075		3,843,714	4,029,148
Flooring ROW segment	2,525,366		2,495,816	2,401,630
Total	$	9,552,197	9,970,672	9,983,634

(1)Long-lived assets are composed of property, plant and equipment - net, and goodwill.

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

	2020		2019	2018
Operating income (loss)(1):
Global Ceramic segment	$	167,731	335,639	439,152
Flooring NA segment	147,442		177,566	356,842
Flooring ROW segment	366,934		353,666	340,642
Corporate and intersegment eliminations	(46,105)		(39,647)	(41,310)
Total	$	636,002	827,224	1,095,326
Depreciation and amortization:
Global Ceramic segment	$	215,488	211,679	189,904
Flooring NA segment	214,599		204,689	184,455
Flooring ROW segment	164,701		145,417	135,350
Corporate	12,719		14,667	12,056
Total	$	607,507	576,452	521,765
Capital expenditures (excluding acquisitions):
Global Ceramic segment	$	121,418	244,026	281,125
Flooring NA segment	186,179		148,820	262,676
Flooring ROW segment	113,378		147,118	232,949
Corporate	4,582		5,498	17,360
Total	$	425,557	545,462	794,110

(1)During the second quarter of 2020, the Company revised the methodology it uses to estimate and allocate corporate general and administrative expenses to its operating segments to better align usage of corporate resources allocated to the Company segments. The updated allocation methodology had no impact on the Company’s consolidated statements of operations. This change was applied retrospectively, and segment operating income for all comparative periods has been updated to reflect this change.

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Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of Supplemental Quarterly Financial Data

The supplemental quarterly financial data are as follows:

	Quarters Ended
	March 28, 2020		June 27, 2020	September 26, 2020	December 31, 2020
Net sales	$	2,285,763	2,049,800	2,574,870	2,641,764
Gross profit	616,440		369,967	706,199	738,084
Net earnings (loss)	110,514		(48,257)	205,117	248,222
Basic earnings (loss) per share	1.54		(0.68)	2.88	3.50
Diluted earnings (loss) per share	1.54		(0.68)	2.87	3.49

	Quarters Ended
	March 30, 2019		June 29, 2019	September 28, 2019	December 31, 2019
Net sales	$	2,442,490	2,584,485	2,519,185	2,424,512
Gross profit	624,927		736,618	691,691	622,807
Net earnings	121,585		202,441	155,518	264,667
Basic earnings per share	1.68		2.80	2.16	3.69
Diluted earnings per share	1.67		2.79	2.15	3.68

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Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jan. 01, 2019 USD ($)	Jun. 09, 2015 EUR (€)
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 768,625	$ 134,785
Capitalized contract costs, amortization period	1 year
Advertising and promotion expenses	$ 105,974	130,207	$ 116,854
Co-op advertising expenses	$ 16,087	11,418	13,332
Minimum eligible service period (days)	60 days
Employer matching contribution, percent of match	50.00%
Maximum percentage of employee salary company matches at disclosed ratio	6.00%
Employee contributions	$ 56,241	57,354	55,796
Employer contributions to employee benefit plan	13,509	23,008	22,689
Projected benefit obligation	86,722	73,510
Projected plan assets	68,413	60,040
Funded status of plan	18,309	13,470
Right-of-use asset	323,138	323,003
Lease liability	332,768	330,100
Accounting Standards Update 2016-02
Significant Accounting Policies [Line Items]
Right-of-use asset				$ 328,169
Lease liability				$ 332,286
Accumulated other comprehensive income (loss)
Significant Accounting Policies [Line Items]
Funded status of plan	7,005	8,303
Other noncurrent liabilities
Significant Accounting Policies [Line Items]
Funded status of plan	$ 11,304	5,167
2.00% senior notes due January 14, 2022
Significant Accounting Policies [Line Items]
Aggregate principal amount of debts | €					€ 500,000,000
Interest rate percentage	2.00%				2.00%
Change in U.S. dollar value of euro denominated debt	$ 54,907	12,049	27,948
Change in U.S. dollar value of euro denominated debt, net of tax	$ 41,708	9,153	$ 20,376
Minimum
Significant Accounting Policies [Line Items]
Finite intangible assets useful life (years)	7 years
Term of lease contracts (in years)	1 year
Term of lease contracts, majority (in years)	1 year
Lease extensions (in years)	3 years
Minimum | Buildings and improvements
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	15 years
Minimum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	3 years
Minimum | Furniture and fixtures
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	3 years
Maximum
Significant Accounting Policies [Line Items]
Finite intangible assets useful life (years)	16 years
Term of lease contracts (in years)	60 years
Term of lease contracts, majority (in years)	10 years
Lease extensions (in years)	10 years
Maximum | Buildings and improvements
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	40 years
Maximum | Machinery and equipment
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	25 years
Maximum | Furniture and fixtures
Significant Accounting Policies [Line Items]
Estimated useful lives of property, plant and equipment, minimum (years)	7 years
Non-US
Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 436,948	$ 110,033

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Summary of Significant Accounting Policies - Computations Of Basic And Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended								12 Months Ended
	Dec. 20, 2018	Dec. 31, 2020	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Dec. 31, 2019	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Net earnings attributable to Mohawk Industries, Inc.		$ 248,222	$ 205,117	$ (48,257)	$ 110,514	$ 264,667	$ 155,518	$ 202,441	$ 121,585	$ 515,595	$ 744,211	$ 861,704
Accretion of redeemable noncontrolling interest										0	0	(3,892)
Net earnings available to common stockholders										$ 515,595	$ 744,211	$ 857,812
Weighted-average common shares outstanding-basic (in shares)										71,214	71,986	74,413
Add weighted-average dilutive potential common shares - options and RSU’s to purchase common shares, net (in shares)										187	278	360
Weighted-average common shares outstanding-diluted (in shares)										71,401	72,264	74,773
Basic earnings per share (usd per share)		$ 3.50	$ 2.88	$ (0.68)	$ 1.54	$ 3.69	$ 2.16	$ 2.80	$ 1.68	$ 7.24	$ 10.34	$ 11.53
Diluted earnings per share (usd per share)		$ 3.49	$ 2.87	$ (0.68)	$ 1.54	$ 3.68	$ 2.15	$ 2.79	$ 1.67	$ 7.22	$ 10.30	$ 11.47
Put option of redeemable noncontrolling interest	$ 33,884											$ 0

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Summary of Significant Accounting Policies - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 8,126,448	$ 7,440,059	$ 7,067,009
Ending balance	8,541,158	8,126,448	7,440,059
Foreign currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(753,108)	(782,102)	(547,927)
Current period other comprehensive income (loss) before reclassifications	72,853	28,994	(234,175)
Ending balance	(680,255)	(753,108)	(782,102)
Pensions and post-retirement benefits
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(12,716)	(9,506)	(10,600)
Current period other comprehensive income (loss) before reclassifications	(2,174)	(3,210)	1,094
Ending balance	(14,890)	(12,716)	(9,506)
AOCI including portion attributable to noncontrolling interest
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(765,824)	(791,608)	(558,527)
Current period other comprehensive income (loss) before reclassifications	70,679	25,784	(233,081)
Ending balance	$ (695,145)	$ (765,824)	$ (791,608)

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Acquisitions - Narrative (Details) $ in Thousands			3 Months Ended	12 Months Ended
	Nov. 16, 2018 USD ($)	Jul. 02, 2018 USD ($)	Mar. 31, 2018 USD ($) business	Dec. 31, 2019 USD ($) business	Dec. 31, 2020 USD ($)	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Preliminary goodwill allocation				$ 2,570,027	$ 2,650,831	$ 2,520,966
Distribution Companies in the Netherlands and Czech Republic
Business Acquisition [Line Items]
Purchase agreement price				76,237
Preliminary goodwill allocation				38,366
Intangible assets subject to amortization				$ 12,789
Eliane S/A Revestimentos Ceramicos
Business Acquisition [Line Items]
Purchase agreement price	$ 148,302
Preliminary goodwill allocation	33,019
Intangible assets subject to amortization	5,818
Acquired indebtedness	99,037
Godfrey Hirst Group
Business Acquisition [Line Items]
Purchase agreement price		$ 400,894
Preliminary goodwill allocation		88,655
Intangible assets subject to amortization		43,635
Tradenames | Eliane S/A Revestimentos Ceramicos
Business Acquisition [Line Items]
Indefinite-lived tradename intangible asset	$ 32,238
Tradenames | Godfrey Hirst Group
Business Acquisition [Line Items]
Indefinite-lived tradename intangible asset		$ 58,671
Flooring ROW
Business Acquisition [Line Items]
Number of acquisitions | business			3	2
Purchase agreement price			$ 24,610
Preliminary goodwill allocation			12,874
Intangible assets subject to amortization			$ 7

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Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Contract liability	$ 39,466	$ 34,959
Capitalized contract cost	59,847	$ 69,039
Amortization of capitalized contract costs	$ 68,201

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Revenue from Contracts with Customers - Summary of Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Dec. 31, 2019	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Net sales	$ 2,641,764	$ 2,574,870	$ 2,049,800	$ 2,285,763	$ 2,424,512	$ 2,519,185	$ 2,584,485	$ 2,442,490	$ 9,552,197	$ 9,970,672	$ 9,983,634
Ceramic & Stone
Disaggregation of Revenue [Line Items]
Net sales									3,457,203	3,686,645	3,621,193
Carpet & Resilient
Disaggregation of Revenue [Line Items]
Net sales									3,735,888	3,921,769	3,903,698
Laminate & Wood
Disaggregation of Revenue [Line Items]
Net sales									1,538,967	1,501,077	1,553,032
Other
Disaggregation of Revenue [Line Items]
Net sales									820,139	861,181	905,711
United States
Disaggregation of Revenue [Line Items]
Net sales									5,530,407	5,822,593	6,103,789
Europe
Disaggregation of Revenue [Line Items]
Net sales									2,486,770	2,532,239	2,582,692
Russia
Disaggregation of Revenue [Line Items]
Net sales									385,830	385,395	349,220
Other
Disaggregation of Revenue [Line Items]
Net sales									1,149,190	1,230,445	947,933
Operating segments | Global Ceramic segment
Disaggregation of Revenue [Line Items]
Net sales									3,432,756	3,631,142	3,552,856
Operating segments | Global Ceramic segment | Ceramic & Stone
Disaggregation of Revenue [Line Items]
Net sales									3,425,672	3,631,142	3,552,856
Operating segments | Global Ceramic segment | Carpet & Resilient
Disaggregation of Revenue [Line Items]
Net sales									7,084	0	0
Operating segments | Global Ceramic segment | Laminate & Wood
Disaggregation of Revenue [Line Items]
Net sales									0	0	0
Operating segments | Global Ceramic segment | Other
Disaggregation of Revenue [Line Items]
Net sales									0	0	0
Operating segments | Global Ceramic segment | United States
Disaggregation of Revenue [Line Items]
Net sales									2,050,470	2,131,029	2,251,233
Operating segments | Global Ceramic segment | Europe
Disaggregation of Revenue [Line Items]
Net sales									699,715	711,762	714,315
Operating segments | Global Ceramic segment | Russia
Disaggregation of Revenue [Line Items]
Net sales									262,846	269,142	245,867
Operating segments | Global Ceramic segment | Other
Disaggregation of Revenue [Line Items]
Net sales									419,725	519,209	341,441
Operating segments | Flooring NA segment
Disaggregation of Revenue [Line Items]
Net sales									3,594,075	3,843,714	4,029,148
Operating segments | Flooring NA segment | Ceramic & Stone
Disaggregation of Revenue [Line Items]
Net sales									31,531	55,503	68,337
Operating segments | Flooring NA segment | Carpet & Resilient
Disaggregation of Revenue [Line Items]
Net sales									2,871,050	3,136,474	3,258,029
Operating segments | Flooring NA segment | Laminate & Wood
Disaggregation of Revenue [Line Items]
Net sales									691,494	651,737	702,782
Operating segments | Flooring NA segment | Other
Disaggregation of Revenue [Line Items]
Net sales									0	0	0
Operating segments | Flooring NA segment | United States
Disaggregation of Revenue [Line Items]
Net sales									3,477,556	3,688,691	3,851,267
Operating segments | Flooring NA segment | Europe
Disaggregation of Revenue [Line Items]
Net sales									1,506	6,922	6,487
Operating segments | Flooring NA segment | Russia
Disaggregation of Revenue [Line Items]
Net sales									50	66	2
Operating segments | Flooring NA segment | Other
Disaggregation of Revenue [Line Items]
Net sales									114,963	148,035	171,392
Operating segments | Flooring ROW segment
Disaggregation of Revenue [Line Items]
Net sales									2,525,366	2,495,816	2,401,630
Operating segments | Flooring ROW segment | Ceramic & Stone
Disaggregation of Revenue [Line Items]
Net sales									0	0	0
Operating segments | Flooring ROW segment | Carpet & Resilient
Disaggregation of Revenue [Line Items]
Net sales									857,754	785,295	645,669
Operating segments | Flooring ROW segment | Laminate & Wood
Disaggregation of Revenue [Line Items]
Net sales									847,473	849,340	850,250
Operating segments | Flooring ROW segment | Other
Disaggregation of Revenue [Line Items]
Net sales									820,139	861,181	905,711
Operating segments | Flooring ROW segment | United States
Disaggregation of Revenue [Line Items]
Net sales									2,381	2,873	1,289
Operating segments | Flooring ROW segment | Europe
Disaggregation of Revenue [Line Items]
Net sales									1,785,549	1,813,555	1,861,890
Operating segments | Flooring ROW segment | Russia
Disaggregation of Revenue [Line Items]
Net sales									122,934	116,187	103,351
Operating segments | Flooring ROW segment | Other
Disaggregation of Revenue [Line Items]
Net sales									$ 614,502	$ 563,201	$ 435,100

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Restructuring, Acquisition Transaction and Integration-Related Costs - Schedule of Restructuring Reserve by Type of Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
Restructuring	$ 125,357	$ 90,341
Estimated remaining restructuring costs	18
Cost of sales
Restructuring Cost and Reserve [Line Items]
Restructuring	101,230	84,844	$ 43,733
Acquisition integration-related costs	1,153	3,458	3,330
Restructuring, acquisition transaction and integration-related costs	102,383	88,302	47,063
Selling, general and administrative expenses
Restructuring Cost and Reserve [Line Items]
Restructuring	24,127	5,497	15,259
Acquisition transaction-related costs	213	1,502	4,977
Acquisition integration-related costs	2,127	5,871	11,351
Restructuring, acquisition transaction and integration-related costs	$ 26,467	$ 12,870	$ 31,587

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Restructuring, Acquisition Transaction and Integration-Related Costs - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Restructuring Reserve [Roll Forward]
Beginning balance	$ 4,259	$ 8,513
Provision	125,357	90,341
Cash payments	(38,447)	(35,654)
Non-cash items	(78,864)	(58,941)
Ending balance	12,305	4,259	$ 8,513
Cost of sales
Restructuring Reserve [Roll Forward]
Provision	101,230	84,844	43,733
Selling, general and administrative expenses
Restructuring Reserve [Roll Forward]
Provision	24,127	5,497	15,259
Lease impairments
Restructuring Reserve [Roll Forward]
Beginning balance	21	397
Provision	2,466	0
Cash payments	(21)	(376)
Non-cash items	(2,466)	0
Ending balance	0	21	397
Lease impairments | Cost of sales
Restructuring Reserve [Roll Forward]
Provision	0	0
Lease impairments | Selling, general and administrative expenses
Restructuring Reserve [Roll Forward]
Provision	2,466	0
Asset write-downs
Restructuring Reserve [Roll Forward]
Beginning balance	0	0
Provision	69,463	41,756
Cash payments	0	0
Non-cash items	(69,463)	(41,756)
Ending balance	0	0	0
Asset write-downs | Cost of sales
Restructuring Reserve [Roll Forward]
Provision	64,415	41,756
Asset write-downs | Selling, general and administrative expenses
Restructuring Reserve [Roll Forward]
Provision	5,048	0
Severance
Restructuring Reserve [Roll Forward]
Beginning balance	4,122	7,866
Provision	26,301	12,511
Cash payments	(20,001)	(16,113)
Non-cash items	1,154	(142)
Ending balance	11,576	4,122	7,866
Severance | Cost of sales
Restructuring Reserve [Roll Forward]
Provision	13,949	8,273
Severance | Selling, general and administrative expenses
Restructuring Reserve [Roll Forward]
Provision	12,352	4,238
Other restructuring costs
Restructuring Reserve [Roll Forward]
Beginning balance	116	250
Provision	27,127	36,074
Cash payments	(18,425)	(19,165)
Non-cash items	(8,089)	(17,043)
Ending balance	729	116	$ 250
Other restructuring costs | Cost of sales
Restructuring Reserve [Roll Forward]
Provision	22,866	34,815
Other restructuring costs | Selling, general and administrative expenses
Restructuring Reserve [Roll Forward]
Provision	4,261	1,259
Corporate
Restructuring Reserve [Roll Forward]
Provision	5,593	15
Corporate | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	0	0
Corporate | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	3,685	0
Corporate | Severance
Restructuring Reserve [Roll Forward]
Provision	1,908	15
Corporate | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	0	0
Operating segments | Global Ceramic
Restructuring Reserve [Roll Forward]
Provision	43,116	5,264
Operating segments | Global Ceramic | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	2,239	0
Operating segments | Global Ceramic | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	19,963	0
Operating segments | Global Ceramic | Severance
Restructuring Reserve [Roll Forward]
Provision	13,987	5,264
Operating segments | Global Ceramic | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	6,927	0
Operating segments | Flooring NA
Restructuring Reserve [Roll Forward]
Provision	51,598	74,412
Operating segments | Flooring NA | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	227	0
Operating segments | Flooring NA | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	32,902	37,820
Operating segments | Flooring NA | Severance
Restructuring Reserve [Roll Forward]
Provision	4,660	2,617
Operating segments | Flooring NA | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	13,809	33,975
Operating segments | Flooring ROW
Restructuring Reserve [Roll Forward]
Provision	25,050	10,650
Operating segments | Flooring ROW | Lease impairments
Restructuring Reserve [Roll Forward]
Provision	0	0
Operating segments | Flooring ROW | Asset write-downs
Restructuring Reserve [Roll Forward]
Provision	12,913	3,936
Operating segments | Flooring ROW | Severance
Restructuring Reserve [Roll Forward]
Provision	5,746	4,615
Operating segments | Flooring ROW | Other restructuring costs
Restructuring Reserve [Roll Forward]
Provision	$ 6,391	$ 2,099

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Fair Value - Schedule of Fair Value Measurements (Details) - Fair value, recurring - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Level 1 | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	$ 571,741	$ 0
Level 2 | Commercial paper (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	42,500
Money market funds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents, fair value disclosure	$ 197,835	$ 0

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Receivables, net - Net Components Of Receivables (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Receivables [Abstract]
Customers, trade	$ 1,591,503	$ 1,491,592
Income tax receivable	112,580	8,428
Other	89,092	88,520
Receivables, gross	1,793,175	1,588,540
Less: allowance for discounts, returns, claims and doubtful accounts	83,682	61,921
Receivables, net	$ 1,709,493	$ 1,526,619

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Receivables, net - Allowances For Discounts, Returns, Claims And Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of year	$ 61,921	$ 74,718	$ 86,103
Acquisitions	0	382	4,240
Additions charged to net sales or costs and expenses	384,403	387,253	317,716
Deductions	362,642	400,432	333,341
Balance at end of year	$ 83,682	$ 61,921	$ 74,718

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Inventories - Net Components of Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 1,372,234	$ 1,610,742
Work in process	126,231	144,639
Raw materials	414,555	526,947
Total inventories	$ 1,913,020	$ 2,282,328

XML

Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Goodwill [Line Items]
Goodwill, impairment loss	$ 0
Goodwill [Roll Forward]
Goodwill, beginning balance	3,897,452,000	$ 3,848,391,000
Accumulated impairments losses, beginning balance	(1,327,425,000)	(1,327,425,000)
Goodwill	2,650,831,000	2,570,027,000	$ 2,520,966,000
Goodwill recognized during the period	(9,642,000)	62,816,000
Currency translation during the period	90,446,000	(13,755,000)
Goodwill, ending balance	3,978,256,000	3,897,452,000
Accumulated impairments losses, ending balance	(1,327,425,000)	(1,327,425,000)
Goodwill, net, ending balance	2,650,831,000	2,570,027,000	2,520,966,000
Global Ceramic
Goodwill [Roll Forward]
Currency translation during the period	(4,085,000)
Flooring NA
Goodwill [Roll Forward]
Currency translation during the period	0
Flooring ROW
Goodwill [Roll Forward]
Goodwill				$ 12,874,000
Currency translation during the period	94,531,000
Goodwill, net, ending balance				$ 12,874,000
Operating segments | Global Ceramic
Goodwill [Roll Forward]
Goodwill, beginning balance	1,583,576,000	1,564,987,000
Accumulated impairments losses, beginning balance	(531,930,000)	(531,930,000)
Goodwill	1,047,561,000	1,051,646,000	1,033,057,000
Goodwill recognized during the period	0	13,197,000
Currency translation during the period		5,392,000
Goodwill, ending balance	1,579,491,000	1,583,576,000
Accumulated impairments losses, ending balance	(531,930,000)	(531,930,000)
Goodwill, net, ending balance	1,047,561,000	1,051,646,000	1,033,057,000
Operating segments | Flooring NA
Goodwill [Roll Forward]
Goodwill, beginning balance	874,198,000	874,198,000
Accumulated impairments losses, beginning balance	(343,054,000)	(343,054,000)
Goodwill	531,144,000	531,144,000	531,144,000
Goodwill recognized during the period	0	0
Currency translation during the period		0
Goodwill, ending balance	874,198,000	874,198,000
Accumulated impairments losses, ending balance	(343,054,000)	(343,054,000)
Goodwill, net, ending balance	531,144,000	531,144,000	531,144,000
Operating segments | Flooring ROW
Goodwill [Roll Forward]
Goodwill, beginning balance	1,439,678,000	1,409,206,000
Accumulated impairments losses, beginning balance	(452,441,000)	(452,441,000)
Goodwill	1,072,126,000	987,237,000	956,765,000
Goodwill recognized during the period	(9,642,000)	49,619,000
Currency translation during the period		(19,147,000)
Goodwill, ending balance	1,524,567,000	1,439,678,000
Accumulated impairments losses, ending balance	(452,441,000)	(452,441,000)
Goodwill, net, ending balance	$ 1,072,126,000	$ 987,237,000	$ 956,765,000

XML

Goodwill and Other Intangible Assets - Schedule of Indefinite Life Assets Not Subject to Amortization (Details) - Tradenames - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite life assets not subject to amortization, beginning balance	$ 702,732	$ 707,380
Intangible assets acquired during the year		(874)
Currency translation during the year	24,536	(3,774)
Indefinite life assets not subject to amortization, ending balance	$ 727,268	$ 702,732

XML

Goodwill and Other Intangible Assets - Schedule of Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	$ 226,147	$ 254,430
Intangible assets acquired during the year	12,789	2,092
Amortization during the year	(28,891)	(27,613)	$ (30,745)
Currency translation during the year	14,294	(2,762)
Intangible assets subject to amortization, ending balance	224,339	226,147	254,430
Customer relationships
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	218,441	244,628
Intangible assets acquired during the year	12,789	2,092
Amortization during the year	(26,612)	(25,527)
Currency translation during the year	13,921	(2,752)
Intangible assets subject to amortization, ending balance	218,539	218,441	244,628
Patents
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	2,228	4,495
Intangible assets acquired during the year	0	0
Amortization during the year	(2,195)	(2,156)
Currency translation during the year	111	(111)
Intangible assets subject to amortization, ending balance	144	2,228	4,495
Other
Finite-lived Intangible Assets [Roll Forward]
Intangible assets subject to amortization, beginning balance	5,478	5,307
Intangible assets acquired during the year	0	0
Amortization during the year	(84)	70
Currency translation during the year	262	101
Intangible assets subject to amortization, ending balance	$ 5,656	$ 5,478	$ 5,307

XML

Goodwill and Other Intangible Assets - Net Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets, Net:
Cost	$ 900,937	$ 912,031
Acquisitions	12,789	2,092
Currency translation	66,584	(13,186)
Accumulated amortization	755,971	674,790
Net Value	224,339	226,147	$ 254,430
Customer relationships
Intangible Assets, Net:
Cost	645,206	651,014
Acquisitions	12,789	2,092
Currency translation	41,800	(7,900)
Accumulated amortization	481,256	426,765
Net Value	218,539	218,441	244,628
Patents
Intangible Assets, Net:
Cost	249,100	254,483
Acquisitions	0	0
Currency translation	24,470	(5,383)
Accumulated amortization	273,426	246,872
Net Value	144	2,228	$ 4,495
Other
Intangible Assets, Net:
Cost	6,631	6,534
Acquisitions	0	0
Currency translation	314	97
Accumulated amortization	1,289	1,153
Net Value	$ 5,656	$ 5,478

XML

Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 28,891	$ 27,613	$ 30,745

XML

Goodwill and Other Intangible Assets - Schedule of Expected Amortization Expense (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021	$ 29,429
2022	28,634
2023	26,998
2024	26,264
2025	$ 26,064

XML

Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	$ 8,905,266	$ 8,496,008
Less: accumulated depreciation	4,314,037	3,797,091
Net property, plant and equipment	4,591,229	4,698,917
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	484,450	469,837
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	1,856,859	1,790,781
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	5,987,272	5,602,474
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	164,027	163,017
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	103,172	103,755
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, at cost	$ 309,486	$ 366,144

XML

Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Capitalized interest included in property, plant and equipment	$ 6,362	$ 7,214	$ 10,684
Depreciation expense	574,095	544,733	$ 487,411
Finance leases	58,170	35,271
Finance leases, accumulated depreciation	$ 12,498	$ 5,664

XML

Long-Term Debt - Senior Credit Facility (Details)		12 Months Ended
	Oct. 18, 2019 USD ($)	Dec. 31, 2020 USD ($)	May 07, 2020	Dec. 31, 2019 USD ($)
Senior Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility	$ 1,800,000,000
Additional maturity period extended	1 year
Commitment fee percentage		0.11%
Unamortized financing costs	$ 3,405,000
Utilized borrowings under credit facility		$ 787,000
Available amount under credit facility		1,799,213,000
Senior Credit Facility | Minimum
Line of Credit Facility [Line Items]
Commitment fee percentage	0.09%
Consolidated interest coverage ratio	3.00
Senior Credit Facility | Maximum
Line of Credit Facility [Line Items]
Commitment fee percentage	0.20%
Consolidated net leverage ratio	3.75		4.75
Senior Credit Facility | Borrowings
Line of Credit Facility [Line Items]
Utilized borrowings under credit facility		0
Senior Credit Facility | Standby letters of credit related to various insurance contracts and foreign vendor commitments
Line of Credit Facility [Line Items]
Utilized borrowings under credit facility		$ 787,000
Senior Credit Facility | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Basis spread on debt instrument		1.125%
Senior Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum
Line of Credit Facility [Line Items]
Basis spread on debt instrument	1.00%
Senior Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum
Line of Credit Facility [Line Items]
Basis spread on debt instrument	1.75%
Senior Credit Facility | Federal Funds Effective Swap Rate
Line of Credit Facility [Line Items]
Basis spread on debt instrument	0.50%
Senior Credit Facility | Monthly LIBOR
Line of Credit Facility [Line Items]
Basis spread on debt instrument	1.00%	0.125%
Senior Credit Facility | Monthly LIBOR | Minimum
Line of Credit Facility [Line Items]
Basis spread on debt instrument	0.00%
Senior Credit Facility | Monthly LIBOR | Maximum
Line of Credit Facility [Line Items]
Basis spread on debt instrument	0.75%
2019 Senior Secured Credit Facility Amendment
Line of Credit Facility [Line Items]
Unamortized financing costs				$ 2,264,000

XML

Long-Term Debt - Commercial Paper (Details) - USD ($)	Jul. 31, 2015	Feb. 28, 2014	Dec. 31, 2020	Dec. 31, 2019	Oct. 18, 2019
United States | Commercial Paper
Line of Credit Facility [Line Items]
Maximum borrowing capacity under credit facility					$ 1,800,000,000
United States | Maximum | Commercial Paper
Line of Credit Facility [Line Items]
Maturity period of debt		397 days
Europe | Commercial Paper
Line of Credit Facility [Line Items]
Maturity period of debt	183 days
Carrying Value | United States
Line of Credit Facility [Line Items]
Commercial paper			$ 0	$ 317,000,000
Carrying Value | Europe
Line of Credit Facility [Line Items]
Commercial paper			$ 0	$ 376,946,000

XML

Long-Term Debt - Senior Notes and Term Loan (Details)									12 Months Ended
	Jun. 12, 2020 USD ($)	May 14, 2020 USD ($)	Apr. 07, 2020 USD ($)	Sep. 04, 2019 USD ($)	May 18, 2018 USD ($)	Sep. 11, 2017 USD ($)	Jun. 09, 2015 USD ($)	Jan. 31, 2013 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 12, 2020 EUR (€)	Sep. 04, 2019 EUR (€)	May 18, 2018 EUR (€)	Sep. 11, 2017 EUR (€)	Jun. 09, 2015 EUR (€)
Debt Instrument [Line Items]
Debt issuance costs									$ 11,413,000	$ 3,028,000	$ 890,000
Secured Debt
Debt Instrument [Line Items]
Debt issuance costs			$ 1,088,000
Securitization agreement, maximum borrowing capacity			$ 500,000,000
1.750% senior notes due June 12, 2027
Debt Instrument [Line Items]
Aggregate principal amount of debts | €												€ 500,000,000
Interest rate percentage									1.75%			1.75%
Debt issuance costs	$ 4,400,000
3.625% senior notes, payable May 15, 2030; interest payable semi-annually
Debt Instrument [Line Items]
Aggregate principal amount of debts		$ 500,000,000
Interest rate percentage		3.625%							3.625%
Debt issuance costs		$ 5,476,000
Floating rate notes due September 04, 2021
Debt Instrument [Line Items]
Aggregate principal amount of debts | €													€ 300,000,000
Debt issuance costs				$ 754,000
Issuance premium received | €													€ 744,000
Floating rate notes due May 18, 2020
Debt Instrument [Line Items]
Aggregate principal amount of debts | €														€ 300,000,000
Debt issuance costs					$ 890,000
Floating rate notes due September 04, 2021
Debt Instrument [Line Items]
Aggregate principal amount of debts | €															€ 300,000,000
Debt issuance costs						$ 911,000
2.00% senior notes due January 14, 2022
Debt Instrument [Line Items]
Aggregate principal amount of debts | €																€ 500,000,000
Interest rate percentage									2.00%							2.00%
Debt issuance costs							$ 4,218,000
3.85% senior notes due February 1, 2023
Debt Instrument [Line Items]
Aggregate principal amount of debts								$ 600,000,000
Interest rate percentage								3.85%	3.85%
Debt issuance costs								$ 6,000,000
Euro Interbank Offered Rate (EURIBOR) | Floating rate notes due September 04, 2021
Debt Instrument [Line Items]
Basis spread on debt instrument				0.20%
Euro Interbank Offered Rate (EURIBOR) | Floating rate notes due May 18, 2020
Debt Instrument [Line Items]
Basis spread on debt instrument					0.30%
Euro Interbank Offered Rate (EURIBOR) | Floating rate notes due September 04, 2021
Debt Instrument [Line Items]
Basis spread on debt instrument						0.30%

XML

Long-Term Debt - Fair Value and Carrying Value of Debt Instruments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Jun. 12, 2020	May 14, 2020	Dec. 31, 2019	Jun. 09, 2015	Jan. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Less current portion of long term debt and commercial paper	$ 377,255			$ 1,051,498
Long-term debt, less current portion	$ 2,745,318
1.750% senior notes due June 12, 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate percentage	1.75%	1.75%
3.625% senior notes, payable May 15, 2030; interest payable semi-annually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate percentage	3.625%		3.625%
3.85% senior notes due February 1, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate percentage	3.85%					3.85%
2.00% senior notes due January 14, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate percentage	2.00%				2.00%
Five-year senior unsecured credit facility, due October 18, 2024 | Senior Secured Credit Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Maturity period of debt	5 years
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance leases and other	$ 46,302			30,049
Unamortized debt issuance costs	(11,176)			(3,129)
Total debt	2,864,942			2,617,079
Less current portion of long term debt and commercial paper	376,989			1,051,498
Long-term debt, less current portion	2,487,953			1,565,581
Fair Value | 1.750% senior notes due June 12, 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	635,664			0
Fair Value | 3.625% senior notes, payable May 15, 2030; interest payable semi-annually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	561,890			0
Fair Value | 3.85% senior notes due February 1, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	638,844			627,144
Fair Value | 2.00% senior notes due January 14, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	624,680			580,235
Fair Value | Floating rate notes due May 18, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0			336,066
Fair Value | Floating rate notes due September 04, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	368,738			335,965
Fair Value | Five-year senior unsecured credit facility, due October 18, 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0			16,803
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Finance leases and other	46,302			30,049
Unamortized debt issuance costs	(11,176)			(3,129)
Total debt	2,734,142			2,569,886
Less current portion of long term debt and commercial paper	377,255			1,051,498
Long-term debt, less current portion	2,356,887			1,518,388
Carrying Value | 1.750% senior notes due June 12, 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	615,006			0
Carrying Value | 3.625% senior notes, payable May 15, 2030; interest payable semi-annually
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	500,000			0
Carrying Value | 3.85% senior notes due February 1, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	600,000			600,000
Carrying Value | 2.00% senior notes due January 14, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	615,006			560,099
Carrying Value | Floating rate notes due May 18, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0			336,059
Carrying Value | Floating rate notes due September 04, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	369,004			336,059
Carrying Value | Five-year senior unsecured credit facility, due October 18, 2024
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable	0			16,803
United States | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial paper	0			317,000
United States | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial paper	0			317,000
Europe | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial paper	0			376,946
Europe | Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Commercial paper	$ 0			$ 376,946

XML

Long-Term Debt - Aggregate Maturities Of Long-Term Debt (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Disclosure [Abstract]
2021	$ 377,208
2022	622,832
2023	607,116
2024	5,459
2025	4,131
Thereafter	1,128,572
Aggregate maturities of long-term debt	$ 2,745,318

XML

Accounts Payable and Accrued Expenses - Components of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Outstanding checks in excess of cash	$ 5,672	$ 9,924
Accounts payable, trade	1,016,897	824,956
Accrued expenses	566,052	461,035
Product warranties	54,692	49,184
Accrued interest	30,403	21,050
Accrued compensation and benefits	222,235	192,991
Total accounts payable and accrued expenses	$ 1,895,951	$ 1,559,140

XML

Leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2020
Leases [Abstract]
Rent expense under operating leases	$ 143,513
Amount of leases not yet commenced		$ 12,375

XML

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Operating lease costs
Fixed	$ 127,571	$ 127,990
Short-term	27,654	23,658
Variable	38,321	37,975
Sub-leases	(1,152)	(848)
Operating lease costs	192,394	188,775
Finance lease costs
Amortization of leased assets	6,423	4,015
Interest on lease liabilities	690	491
Finance lease costs	7,113	4,506
Net lease costs	199,507	193,281
Cost of Sales
Operating lease costs
Fixed	25,067	30,002
Short-term	11,633	9,725
Variable	8,285	8,123
Sub-leases	(411)	(311)
Operating lease costs	44,574	47,539
Selling, general and administrative expenses
Operating lease costs
Fixed	102,504	97,988
Short-term	16,021	13,933
Variable	30,036	29,852
Sub-leases	(741)	(537)
Operating lease costs	147,820	141,236
Depreciation and Amortization
Finance lease costs
Amortization of leased assets	6,423	4,015
Interest on lease liabilities	0	0
Finance lease costs	6,423	4,015
Interest
Finance lease costs
Amortization of leased assets	0	0
Interest on lease liabilities	690	491
Finance lease costs	$ 690	$ 491

XML

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Operating Leases
Right of use operating lease assets	$ 323,138	$ 323,003
Finance Leases
Property, plant and equipment, gross	58,170	35,271
Accumulated depreciation	(12,498)	(5,664)
Property, plant and equipment, net	45,672	29,607
Total lease assets	$ 368,810	352,610
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Operating Leases
Other current	$ 98,042	101,945
Non-current	234,726	228,155
Total operating liabilities	332,768	330,100
Finance Leases
Short-term debt	8,025	4,835
Long-term debt	38,098	25,214
Total finance liabilities	46,123	30,049
Total lease liabilities	$ 378,891	$ 360,149
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtCurrent
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtNoncurrent

XML

Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Finance Leases
2021	$ 8,830
2022	8,399
2023	7,632
2024	5,870
2025	4,453
Thereafter	14,599
Total lease payments	49,783
Less imputed interest	3,660
Present value, Total	46,123	$ 30,049
Operating Leases
2021	113,151
2022	88,607
2023	60,118
2024	38,785
2025	26,837
Thereafter	27,454
Total lease payments	354,952
Less imputed interest	22,184
Present value, Total	332,768	$ 330,100
Total
2021	121,981
2022	97,006
2023	67,750
2024	44,655
2025	31,290
Thereafter	42,053
Total lease payments	$ 404,735

XML

Leases - Lease Term and Discount Rate (Details)	Dec. 31, 2020	Dec. 31, 2019
Weighted Average Remaining Lease Term
Operating Leases	4 years 6 months	4 years 3 months 18 days
Finance Leases	7 years 8 months 12 days	8 years 4 months 24 days
Weighted Average Discount Rate
Operating Leases	2.80%	3.30%
Finance Leases	1.40%	1.40%

XML

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$ 124,708	$ 127,213
Operating cash flows from finance leases	690	349
Financing cash flows from finance leases	6,386	3,975
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	110,036	133,959
Finance leases	18,248	20,464
Amortization of right of use operating lease assets	$ 113,898	$ 109,884

XML

Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	May 19, 2017	May 09, 2012
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Fully vested options (in shares)	63,000
Options outstanding, weighted average remaining contractual term (years)	1 year
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Recognized stock-based compensation costs	$ 19,697	$ 23,620	$ 31,382
Recognized stock-based compensation costs, net of tax	14,576	$ 17,479	$ 24,436
Pre-tax unrecognized compensation expense	$ 17,706
Recognized expense over a weighted-average period, years	1 year 7 months 6 days
2012 Long-Term Incentive Plan
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Common stock reserved for issuance (in shares)					3,200,000
Additional awards available to be granted (in shares)				0
2012 Long-Term Incentive Plan | Stock Options Plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Option awards contractual term (years)	10 years
2012 Long-Term Incentive Plan | Minimum | Stock Options Plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	3 years
2012 Long-Term Incentive Plan | Minimum | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	3 years
2012 Long-Term Incentive Plan | Maximum | Stock Options Plans
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	5 years
2012 Long-Term Incentive Plan | Maximum | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Vesting period (years)	5 years
2017 Long-Term Incentive Plan
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Common stock reserved for issuance (in shares)				3,000
Non-employee director
Share Based Compensation Arrangement by Share Based Payment Award [Line Items]
Options granted (in shares)	1	1	1

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Stock-Based Compensation - Summary of RSUs Under the Long-Term Incentive Plans (Details) - 2007 and 2012 Incentive plan - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Shares
Restricted Stock Units outstanding, beginning balance (in shares)	362	446	555
Granted (in shares)	192	187	136
Released (in shares)	(146)	(230)	(235)
Forfeited (in shares)	(33)	(41)	(10)
Restricted Stock Units outstanding, ending balance (in shares)	375	362	446
Expected to vest as of December 31, 2020 (in shares)	361	356	440
Weighted average grant date fair value
Restricted Stock Units outstanding, beginning balance (usd per share)	$ 158.13
Granted (usd per share)	120.36
Released (usd per share)	203.05
Forfeited (usd per share)	140.69
Restricted Stock Units outstanding, ending balance (usd per share)	$ 122.84	$ 158.13
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Ending balance, weighted average remaining contractual term (years)	1 year 4 months 24 days
Expected to vest, weighted average remaining contractual term (years)	1 year 4 months 24 days
Ending balance, aggregate intrinsic value	$ 52,822
Expected to vest, aggregate intrinsic value	$ 50,895

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Stock-Based Compensation - Additional Information for RSU's Under The Long-Term Incentive Plans (Details) - 2007 and 2012 Incentive plan - Restricted Stock Units (RSUs) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Shares
Restricted Stock Units outstanding, beginning balance (in shares)	362	446	555
Granted (in shares)	192	187	136
Released (in shares)	(146)	(230)	(235)
Forfeited (in shares)	(33)	(41)	(10)
Restricted Stock Units outstanding, ending balance (in shares)	375	362	446
Expected to vest at end of year (in shares)	361	356	440

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Other Expense (Income) - Summary of Other Expense (Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other Nonoperating Income (Expense) [Abstract]
Foreign currency losses (gains), net	$ 7,815	$ (7,190)	$ 9,613
Release of indemnification asset	0	(304)	4,606
Impairment of joint venture in Brazil	3,599	0	0
Dividend income	(2,976)	0	0
Impairment of net investment in a manufacturer and distributor of Ceramic tile in China	0	59,906	0
All other, net	(9,189)	(16,005)	(6,921)
Total other expense (income), net	$ (751)	$ 36,407	$ 7,298

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Income Taxes - Earnings (Loss) From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
United States	$ 94,829	$ 163,764	$ 387,564
Foreign	489,545	585,781	661,637
Earnings before income taxes	$ 584,374	$ 749,545	$ 1,049,201

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Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current income taxes:
Current income taxes: U.S. federal	$ (33,821)	$ 19,936	$ 22,700
Current income taxes: State and local	7,794	12,659	14,521
Current income taxes: Foreign	72,350	80,221	58,669
Total current income taxes	46,323	112,816	95,890
Deferred income taxes:
Deferred income taxes: U.S. federal	14,533	11,993	54,983
Deferred income taxes: State and local	112	15,371	19,076
Deferred income taxes: Foreign	7,679	(135,206)	14,397
Total deferred income taxes	22,324	(107,842)	88,456
Income tax expense (benefit)	$ 68,647	$ 4,974	$ 184,346

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Income Taxes - Narrative (Details) € in Thousands, $ in Thousands				12 Months Ended			36 Months Ended
	Dec. 22, 2020 EUR (€)	Oct. 22, 2020 EUR (€)	Mar. 10, 2020 EUR (€)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2014 EUR (€)
Income Taxes [Line Items]
Percentage of earnings from continuing operations before income taxes attributable to the United States				16.00%
Valuation allowance against deferred tax asset				$ 267,838	$ 232,196
Increase (decrease) in the valuation allowance				35,642	(115,590)
Net operating loss carryforwards and tax credit				433,822	376,375
Net operating loss carryforwards in the U.S.				10,179
Net operating loss carryforwards in various foreign jurisdictions				1,710,619
Repatriation transition tax expense					134,754
Accumulated earnings					2,126,617
Distribution of previously taxed earnings				1,742,539
Gross unrecognized tax benefits				1,388,391	1,260,970	$ 1,330,713
Unrecognized tax benefits that would impact effective tax rate				33,144
Interest and penalties				11,485	12,555
Accrued/(reversed) interest and penalties				(695)	5,368	$ (1,085)
Expected decrease in unrecognized tax benefits within next twelve months				$ 8,575
Luxembourg
Income Taxes [Line Items]
Net operating loss carryforwards in various foreign jurisdictions					$ 1,344,589
Domestic tax authority
Income Taxes [Line Items]
Effective income tax rate				(12.00%)	36.60%	28.70%
Foreign tax authority
Income Taxes [Line Items]
Effective income tax rate				16.30%	(9.40%)	11.00%
Foreign tax authority | Tax year 2005 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							€ 46,135
Foreign tax authority | Tax year 2006 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							38,817
Foreign tax authority | Tax year 2007 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							39,635
Foreign tax authority | Tax year 2008 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							30,131
Foreign tax authority | Tax year 2009 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							25,486
Foreign tax authority | Tax year 2010 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €							€ 43,117
Foreign tax authority | Tax Year 2016 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €			€ 67,959
Foreign tax authority | Tax year 2017 | Luxembourg
Income Taxes [Line Items]
Foreign tax assessment | €		€ 65,152
Foreign tax authority | Tax year 2017 | Belgium
Income Taxes [Line Items]
Foreign tax assessment | €	€ 17,655
Foreign tax authority | Tax year 2013 | Luxembourg
Income Taxes [Line Items]
Foreign tax assessment | €		€ 45,466
State
Income Taxes [Line Items]
Net operating loss carryforwards and tax credit				$ 57,613
Tax Rate Changes, Foreign Currency Translations, and Other Activities
Income Taxes [Line Items]
Increase (decrease) in the valuation allowance					$ 32,650
State deferred tax assets
Income Taxes [Line Items]
Valuation allowance against deferred tax asset				29,919
Operating Loss Carryforward, Domestic
Income Taxes [Line Items]
Valuation allowance against deferred tax asset				5,881
Operating Loss Carryforward, Foreign Jurisdiction
Income Taxes [Line Items]
Valuation allowance against deferred tax asset				$ 232,038
Restructuring Charges
Income Taxes [Line Items]
Increase (decrease) in the valuation allowance					$ 148,240

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Income Taxes - Reconciliation Of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income taxes at statutory rate	$ 122,719	$ 157,404	$ 220,332
State and local income taxes, net of federal income tax benefit	8,081	22,185	22,315
Foreign income taxes	(57,898)	(17,276)	(39,915)
Change in valuation allowance	35,381	(21,975)	2,472
European Restructuring	0	(136,194)	0
Loss on previously taxed earnings	(10,346)	0	0
Carryback rate differential	(33,739)	0	0
Transition Tax	0	0	28,201
Transition tax planning initiatives	0	0	(18,706)
Tax contingencies and audit settlements	6,779	6,686	(31,874)
Other, net	(2,330)	(5,856)	1,521
Income tax expense (benefit)	$ 68,647	$ 4,974	$ 184,346

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Income Taxes - Deferred Tax Assets And Deferred Tax Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Accounts receivable	$ 14,384	$ 7,063
Inventories	44,597	50,585
Employee benefits	39,526	36,068
Accrued expenses and other	103,892	67,638
Deductible state tax and interest benefit	4,042	3,665
Intangibles	152,499	146,953
Lease liabilities	91,359	86,717
Federal, foreign and state net operating losses and credits	433,822	376,375
Gross deferred tax assets	884,121	775,064
Valuation allowance	(267,838)	(232,196)
Net deferred tax assets	616,283	542,868
Inventories	(17,403)	(12,885)
Plant and equipment	(489,240)	(510,952)
Intangibles	(197,009)	(182,424)
Right of use assets	(87,351)	(83,271)
Prepaids	(56,140)	0
Other liabilities	(46,121)	(24,220)
Gross deferred tax liabilities	(893,264)	(813,752)
Net deferred tax liability	$ (276,981)	$ (270,884)

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Income Taxes - Reconciliation Of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
Balance as of January 1	$ 1,260,970	$ 1,330,713
Additions based on tax positions related to the current year	1,694	2,302
Additions for tax positions of acquired companies	0	2,094
Additions for tax positions of prior years	7,663	4,744
Transition tax planning initiatives	0	0
Reductions resulting from the lapse of the statute of limitations	(1,239)	(2,729)
Reductions due to Luxembourg tax rate change	0	(46,841)
Settlements with taxing authorities	(497)	(1,929)
Effects of foreign currency translation	119,800
Effects of foreign currency translation		(27,384)
Balance as of December 31	$ 1,388,391	$ 1,260,970

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Commitments and Contingencies - Narrative (Details) - Standby letters of credit related to various insurance contracts and foreign vendor commitments - Senior Secured Credit Facility - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Commitments And Contingencies [Line Items]
Standby letters of credit for various insurance contracts and commitments to foreign vendors	$ 787	$ 22,787
Maximum
Commitments And Contingencies [Line Items]
Expiration period for standby letters of credit	2 years

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Consolidated Statements of Cash Flows Information - Schedule of Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Supplemental Cash Flow Information [Abstract]
Interest	$ 44,584	$ 45,241	$ 46,186
Income taxes	106,891	123,974	196,193
Supplemental schedule of non-cash investing and financing activities:
Unpaid property plant and equipment in accounts payable and accrued expenses	90,767	104,823	101,389
Fair value of net assets acquired in acquisition	0	107,290	831,760
Liabilities assumed in acquisition	0	(31,053)	(257,515)
Noncash investing and financing activities, total	$ 0	$ 76,237	$ 574,245

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Segment Reporting - Summary of Segment Information (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020 USD ($)	Sep. 26, 2020 USD ($)	Jun. 27, 2020 USD ($)	Mar. 28, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 28, 2019 USD ($)	Jun. 29, 2019 USD ($)	Mar. 30, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reporting segments | segment									3
Assets	$ 14,327,751				$ 13,386,680				$ 14,327,751	$ 13,386,680	$ 13,099,123
Net sales	2,641,764	$ 2,574,870	$ 2,049,800	$ 2,285,763	2,424,512	$ 2,519,185	$ 2,584,485	$ 2,442,490	9,552,197	9,970,672	9,983,634
Long-lived assets	7,242,060				7,268,944				7,242,060	7,268,944	7,220,869
Operating income (loss)									636,002	827,224	1,095,326
Depreciation and amortization									607,507	576,452	521,765
Capital expenditures (excluding acquisitions)									425,557	545,462	794,110
Ceramic & Stone
Segment Reporting Information [Line Items]
Net sales									3,457,203	3,686,645	3,621,193
Carpet & Resilient
Segment Reporting Information [Line Items]
Net sales									3,735,888	3,921,769	3,903,698
Laminate & Wood
Segment Reporting Information [Line Items]
Net sales									1,538,967	1,501,077	1,553,032
Other
Segment Reporting Information [Line Items]
Net sales									820,139	861,181	905,711
United States
Segment Reporting Information [Line Items]
Net sales									5,530,407	5,822,593	6,103,789
Long-lived assets	3,303,197				3,391,676				3,303,197	3,391,676	3,485,046
Europe
Segment Reporting Information [Line Items]
Net sales									2,486,770	2,532,239	2,582,692
Russia
Segment Reporting Information [Line Items]
Net sales									385,830	385,395	349,220
Belgium
Segment Reporting Information [Line Items]
Long-lived assets	1,808,571				1,645,104				1,808,571	1,645,104	1,663,470
Other
Segment Reporting Information [Line Items]
Net sales									1,149,190	1,230,445	947,933
Long-lived assets	2,130,292				2,232,164				2,130,292	2,232,164	2,072,353
Operating segments | Global Ceramic
Segment Reporting Information [Line Items]
Assets	5,250,069				5,419,896				5,250,069	5,419,896	5,194,030
Net sales									3,432,756	3,631,142	3,552,856
Operating income (loss)									167,731	335,639	439,152
Depreciation and amortization									215,488	211,679	189,904
Capital expenditures (excluding acquisitions)									121,418	244,026	281,125
Operating segments | Global Ceramic | Ceramic & Stone
Segment Reporting Information [Line Items]
Net sales									3,425,672	3,631,142	3,552,856
Operating segments | Global Ceramic | Carpet & Resilient
Segment Reporting Information [Line Items]
Net sales									7,084	0	0
Operating segments | Global Ceramic | Laminate & Wood
Segment Reporting Information [Line Items]
Net sales									0	0	0
Operating segments | Global Ceramic | Other
Segment Reporting Information [Line Items]
Net sales									0	0	0
Operating segments | Global Ceramic | Europe
Segment Reporting Information [Line Items]
Net sales									699,715	711,762	714,315
Operating segments | Global Ceramic | Russia
Segment Reporting Information [Line Items]
Net sales									262,846	269,142	245,867
Operating segments | Flooring NA
Segment Reporting Information [Line Items]
Assets	3,594,976				3,823,654				3,594,976	3,823,654	3,938,639
Net sales									3,594,075	3,843,714	4,029,148
Operating income (loss)									147,442	177,566	356,842
Depreciation and amortization									214,599	204,689	184,455
Capital expenditures (excluding acquisitions)									186,179	148,820	262,676
Operating segments | Flooring NA | Ceramic & Stone
Segment Reporting Information [Line Items]
Net sales									31,531	55,503	68,337
Operating segments | Flooring NA | Carpet & Resilient
Segment Reporting Information [Line Items]
Net sales									2,871,050	3,136,474	3,258,029
Operating segments | Flooring NA | Laminate & Wood
Segment Reporting Information [Line Items]
Net sales									691,494	651,737	702,782
Operating segments | Flooring NA | Other
Segment Reporting Information [Line Items]
Net sales									0	0	0
Operating segments | Flooring NA | Europe
Segment Reporting Information [Line Items]
Net sales									1,506	6,922	6,487
Operating segments | Flooring NA | Russia
Segment Reporting Information [Line Items]
Net sales									50	66	2
Operating segments | Flooring ROW
Segment Reporting Information [Line Items]
Assets	4,194,447				3,925,246				4,194,447	3,925,246	3,666,617
Net sales									2,525,366	2,495,816	2,401,630
Operating income (loss)									366,934	353,666	340,642
Depreciation and amortization									164,701	145,417	135,350
Capital expenditures (excluding acquisitions)									113,378	147,118	232,949
Operating segments | Flooring ROW | Ceramic & Stone
Segment Reporting Information [Line Items]
Net sales									0	0	0
Operating segments | Flooring ROW | Carpet & Resilient
Segment Reporting Information [Line Items]
Net sales									857,754	785,295	645,669
Operating segments | Flooring ROW | Laminate & Wood
Segment Reporting Information [Line Items]
Net sales									847,473	849,340	850,250
Operating segments | Flooring ROW | Other
Segment Reporting Information [Line Items]
Net sales									820,139	861,181	905,711
Operating segments | Flooring ROW | Europe
Segment Reporting Information [Line Items]
Net sales									1,785,549	1,813,555	1,861,890
Operating segments | Flooring ROW | Russia
Segment Reporting Information [Line Items]
Net sales									122,934	116,187	103,351
Corporate and intersegment eliminations
Segment Reporting Information [Line Items]
Assets	$ 1,288,259				$ 217,884				1,288,259	217,884	299,837
Operating income (loss)									(46,105)	(39,647)	(41,310)
Corporate
Segment Reporting Information [Line Items]
Depreciation and amortization									12,719	14,667	12,056
Capital expenditures (excluding acquisitions)									$ 4,582	$ 5,498	$ 17,360

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Quarterly Financial Data - Schedule of Supplemental Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 26, 2020	Jun. 27, 2020	Mar. 28, 2020	Dec. 31, 2019	Sep. 28, 2019	Jun. 29, 2019	Mar. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 2,641,764	$ 2,574,870	$ 2,049,800	$ 2,285,763	$ 2,424,512	$ 2,519,185	$ 2,584,485	$ 2,442,490	$ 9,552,197	$ 9,970,672	$ 9,983,634
Gross profit	738,084	706,199	369,967	616,440	622,807	691,691	736,618	624,927	2,430,690	2,676,043	2,838,070
Net earnings	$ 248,222	$ 205,117	$ (48,257)	$ 110,514	$ 264,667	$ 155,518	$ 202,441	$ 121,585	$ 515,595	$ 744,211	$ 861,704
Basic earnings per share (usd per share)	$ 3.50	$ 2.88	$ (0.68)	$ 1.54	$ 3.69	$ 2.16	$ 2.80	$ 1.68	$ 7.24	$ 10.34	$ 11.53
Diluted earnings per share (usd per share)	$ 3.49	$ 2.87	$ (0.68)	$ 1.54	$ 3.68	$ 2.15	$ 2.79	$ 1.67	$ 7.22	$ 10.30	$ 11.47

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Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201613Member