UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2015 
MOHAWK INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

 	

Delaware	 	01-13697	 	52-1604305	
(State or Other
Jurisdiction of
Incorporation)	 	(Commission File
Number)	 	(IRS Employer
Identification No.)	

 	

 	 	
160 South Industrial Blvd., Calhoun, Georgia	 	30701	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s telephone number, including area code (706) 629-7721
 
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see  General Instruction A.2. below):
¨   Written communication pursuant to Rule 425 under Securities Act (17 CFR 230.425)
¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act CFR 240.14d-2(b))
¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act CFR 240.17R 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.
The following information, including the Exhibit attached hereto, is being furnished pursuant to this Item 2.02 and shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On November 5, 2015, Mohawk Industries, Inc., issued a press release announcing its third quarter financial results. A copy of the press release is attached hereto and hereby incorporated by reference as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press release dated November 5, 2015.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	

 	 	 	 	 	 	Mohawk Industries, Inc.	
Date:	 	November 5, 2015	 	By:	 	/s/ James F. Brunk	
 	 	 	 	 	 	James F. Brunk	
 	 	 	 	 	 	V.P. & Corporate Controller	

INDEX TO EXHIBITS

 	

Exhibit	 	 	 	
 	 	 	
99.1	 	Press release dated	November 5, 2015	

Exhibit 99.1

NEWS RELEASE	

For Release:        Immediately
            
Contact:         Frank H. Boykin, Chief Financial Officer (706) 624-2695

MOHAWK INDUSTRIES ANNOUNCES RECORD THIRD QUARTER EARNINGS

QUARTERLY ADJUSTED EPS 22% INCREASE OVER PRIOR YEAR

Calhoun, Georgia, November 5, 2015 - Mohawk Industries, Inc. (NYSE:MHK) today announced 2015 third quarter net earnings of $215 million and diluted earnings per share (EPS) of $2.89. Excluding restructuring and acquisition charges, net earnings were $222 million and EPS was $2.98, a 22% increase over last year’s third quarter adjusted EPS and the highest adjusted quarterly EPS in the company’s history. Net sales for the third quarter of 2015 were $2.2 billion, up 8% versus the prior year’s third quarter or a 15% increase on a constant currency exchange rate basis. For the third quarter of 2014, net sales were $2.0 billion, net earnings were $151 million and EPS was $2.06; excluding restructuring and acquisition charges, net earnings were $179 million and EPS was $2.44.
For the nine months ending October 3, 2015, net sales were $6.1 billion, an increase of approximately 4% versus prior year or an increase of approximately 11% on a constant currency exchange rate basis. Net earnings and EPS for the nine-month period were $424 million and $5.73, respectively. Net earnings excluding restructuring and acquisition charges were $546 million and adjusted EPS was $7.38, an increase of 26% over the nine-month period adjusted EPS result in 2014. For the nine-months ending September 27, 2014, net sales were $5.9 billion, net earnings were $385 million and EPS was $5.25; excluding restructuring and acquisition charges, net earnings and EPS were $431 million and $5.88.
Commenting on Mohawk Industries’ third quarter performance, Jeffrey S. Lorberbaum, Chairman and CEO, stated, “In addition to our record earnings per share, our adjusted operating income reached a record level at $309 million, up 30% over the same quarter last year. All segments contributed to our sales and operating income improvements. Our new segment structure that we announced last quarter has benefited our performance, enabling us to optimize our regional businesses by enhancing our product offerings, manufacturing assets and distribution strategies. During the period, we made significant progress in aligning our IVC acquisition with our European and U.S. flooring businesses and our KAI

acquisition with our European ceramic operations. We are introducing products to take advantage of the unique capabilities and customer relationships of each organization. As we leverage the strength of these businesses, we anticipate greater market penetration and continued earnings growth in the future.”
“For the quarter, our Global Ceramic segment sales were up 2% as reported. On a constant exchange rate basis, sales grew 11% and adjusted operating income rose 15% versus prior year with adjusted operating margin increasing to 15% as a result of improved productivity, volume, price and mix and the KAI acquisition partially offset by currency headwinds. Our U.S. ceramic sales continued to improve, as we increased our investments in new products, additional sales representatives and new service centers and galleries. The residential new construction sector remains the strongest part of our U.S. ceramic business. To satisfy increased demand in the U.S. market, we have begun importing ceramic tile from both our Russian and Bulgarian businesses, leveraging our global footprint to optimize our profitability. Growth in the Mexican ceramic market remains strong as we improved our position, and we are adding new sales representatives to expand our distribution base in all channels. In Europe, our ceramic sales are outpacing the market. We are benefiting from the upgraded assets at our manufacturing facilities, which are increasing our competitiveness and yielding more differentiated products, such as 3-dimensional wall tiles, hexagons and brick visuals. Our Bulgarian ceramic business is increasing its product mix, improving its manufacturing and expanding sales outside the local market. Though Russia is in a recession, we are increasing our share of the ceramic market. Our sales in Russia grew on a local basis, though our margin contracted as inflation outpaced our price increases.
“During the quarter, our Flooring North America segment’s sales were up 8% over last year with adjusted operating income increasing 41%. The adjusted operating margin increased to almost 14% due to improved volume, productivity, input costs and the IVC acquisition partially offset by price and mix. The new structure of our North American carpet and hard surface businesses is improving our performance as we leverage the strength of our brands, marketing strategies and customer relationships across all categories. During the period, we increased our investments in sales personnel, merchandising and promotions in both carpet and hard surfaces categories to enhance our position in the marketplace. In our carpet business, we are beginning to see improved margin from our recent product introductions and the expansion of our Karastan customer base. Our commercial carpet margins continue to expand with the introduction of more stylized products, improved manufacturing efficiencies and enhanced service. We are improving our efficiency and reducing costs by closing two commercial carpet plants and consolidating the operations. Our rug sales and margins were up during the period as our new product introductions gained traction in the market. Sales of our hard surface products are growing faster than carpet across all channels, with builder and commercial sectors expanding the fastest. Our sheet vinyl and LVT sales

continue to grow, and we are introducing new Mohawk branded products from IVC to expand our vinyl offering in all channels.
“For the quarter, our Flooring Rest of the World segment’s sales rose 24% as reported or 41% on a constant exchange rate with adjusted operating income improving 48% over the prior year. The adjusted operating margin increased to almost 16% due to improved volume, input costs and the IVC acquisition partially offset by currency headwinds. Our laminate sales increased during the period, and our new product collection is one of our most successful ever due to its differentiated features and performance benefits such as our water resistant technology that is unique to the marketplace. Our wood sales improved along with our mix as we enhanced our Quick-Step and Pergo products with matt finishes, rustic visuals and brushed planks. Our vinyl business also improved with significant growth in LVT. We are introducing new LVT sizes with embossing, enhanced scratch resistance and superior click installation systems to add more value to our offering and participate in the commercial sector. As our Russian sheet vinyl business declined, we increased sales in other geographies to fully utilize our capacity. Our non-flooring product categories are up slightly with improving margins due to some relief in material costs. One of our chip board lines experienced an unplanned stop and will be down for four weeks, impacting operating income by approximately $3-4 million in our fourth quarter.
“Mohawk’s performance benefited from strategic acquisitions, new investments in sales and operations and improved manufacturing and logistics. The U.S. residential and commercial flooring markets have improved throughout 2015, with hard surface sales growing faster. Looking to the fourth quarter, we anticipate that the U.S. economy will continue its gradual growth. We expect year-over-year margin growth to continue in all segments as a result of our strategies and acquisitions. We are selectively increasing our SG&A relative to sales to optimize future market share. Our recent acquisitions are being integrated into our businesses and are positively impacting our earnings. The costs associated with new plant start-ups, interruption of our board production and four fewer days will be absorbed in the period. Taking all these factors into account, our guidance for the fourth quarter is $2.66 - $2.75 per share, which would be a 17 -21% increase over 2014, excluding any restructuring charges. Our fourth quarter earnings guidance would have been approximately $0.15 per share higher on a constant exchange rate relative to last year.”

ABOUT MOHAWK INDUSTRIES

Mohawk Industries is the leading global flooring manufacturer that creates products to enhance residential and commercial spaces around the world. Mohawk’s vertically integrated manufacturing and distribution processes provide competitive advantages in the production of carpet, rugs, ceramic tile, laminate, wood,

stone and vinyl flooring. Our industry-leading innovation has yielded products and technologies that differentiate our brands in the marketplace and satisfy all remodeling and new construction requirements. Our brands are among the most recognized in the industry and include American Olean, Bigelow, Daltile, Durkan, IVC, Karastan, Lees, Marazzi, Mohawk, Pergo, Unilin and Quick-Step. During the past decade, Mohawk 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 and the United States.

Certain of the statements in the immediately preceding paragraphs, particularly 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.” 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 raw material prices and other input costs; inflation and deflation in consumer markets; 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, product and other claims; litigation; and other risks identified in Mohawk’s SEC reports and public announcements.

Conference call Friday, November 6, 2015 at 11:00 AM Eastern Time
The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for International/Local. Conference ID # 53645820. A replay will be available until Friday, December 4, 2015 by dialing 855-859-2056 for US/local calls and 404-537-3406 for International/Local calls and entering Conference ID # 53645820.

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
MOHAWK INDUSTRIES, INC. AND SUBSIDIARIES	 	 	 	 	 	 	 	
(Unaudited)	 	 	 	 	 	 	 	
Consolidated Statement of Operations	 	Three Months Ended	Nine Months Ended	
(Amounts in thousands, except per share data)	 	October 3, 2015	 	September 27, 2014	October 3, 2015	 	September 27, 2014	
 	 	 	 	 	 	 	 	
Net sales	 	$	2,150,656	
 	 	1,990,658	
 	6,073,566	
 	 	5,852,000	
 	
Cost of sales	 	1,489,252	
 	 	1,434,236	
 	4,285,090	
 	 	4,239,411	
 	
    Gross profit	 	661,404	
 	 	556,422	
 	1,788,476	
 	 	1,612,589	
 	
Selling, general and administrative expenses	 	372,670	
 	 	342,729	
 	1,200,152	
 	 	1,045,913	
 	
Operating income	 	288,734	
 	 	213,693	
 	588,324	
 	 	566,676	
 	
Interest expense	 	19,319	
 	 	34,786	
 	52,606	
 	 	77,584	
 	
Other expense (income), net	 	4,249	
 	 	(2,374	)	6,094	
 	 	961	
 	
    Earnings from continuing operations before income taxes	 	265,166	
 	 	181,281	
 	529,624	
 	 	488,131	
 	
Income tax expense	 	49,463	
 	 	30,021	
 	104,643	
 	 	102,957	
 	
        Net earnings including noncontrolling interest	 	215,703	
 	 	151,260	
 	424,981	
 	 	385,174	
 	
Net earnings attributable to noncontrolling interest	 	798	
 	 	(6	)	1,238	
 	 	77	
 	
Net earnings attributable to Mohawk Industries, Inc.	 	$	214,905	
 	 	151,266	
 	423,743	
 	 	385,097	

Basic earnings per share attributable to Mohawk Industries, Inc.	 	 	 	 	 	
Basic earnings per share attributable to Mohawk Industries, Inc.	 	$	2.91	
 	 	2.08	
 	5.77	
 	 	5.29	
 	
Weighted-average common shares outstanding - basic	 	73,915	
 	 	72,864	
 	73,384	
 	 	72,814	

Diluted earnings per share attributable to Mohawk Industries, Inc.	 	 	 	 	 	
Diluted earnings per share attributable to Mohawk Industries, Inc.	 	$	2.89	
 	 	2.06	
 	5.73	
 	 	5.25	
 	
Weighted-average common shares outstanding - diluted	 	74,438	
 	 	73,376	
 	73,907	
 	 	73,332	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Financial Information	 	 	 	 	 	 	 	 	
(Amounts in thousands)	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	$	94,955	
 	 	85,167	
 	 	268,622	
 	 	249,905	
 	
Capital expenditures	 	$	123,648	
 	 	141,883	
 	 	352,070	
 	 	391,580	

 	
 	 	 	 	 	 	 	 	
Consolidated Balance Sheet Data	 	 	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	October 3, 2015	 	September 27, 2014	
ASSETS	 	 	 	 	
Current assets:	 	 	 	 	
    Cash and cash equivalents	 	$	110,716	
 	 	105,569	
 	
    Receivables, net	 	1,340,650	
 	 	1,209,557	
 	
    Inventories	 	1,621,154	
 	 	1,640,487	
 	
    Prepaid expenses and other current assets	 	273,775	
 	 	275,981	
 	
    Deferred income taxes	 	152,899	
 	 	137,220	
 	
        Total current assets	 	3,499,194	
 	 	3,368,814	
 	
Property, plant and equipment, net	 	3,046,491	
 	 	2,772,722	
 	
Goodwill	 	2,280,722	
 	 	1,668,520	
 	
Intangible assets, net	 	918,655	
 	 	746,304	
 	
Deferred income taxes and other non-current assets	 	319,420	
 	 	145,100	
 	
    Total assets	 	$	10,064,482	
 	 	8,701,460	
 	
LIABILITIES AND STOCKHOLDERS' EQUITY	 	 	 	 	
Current liabilities:	 	 	 	 	
Current portion of long-term debt and commercial paper	 	$	1,927,815	
 	 	583,495	
 	
Accounts payable and accrued expenses	 	1,371,969	
 	 	1,247,862	
 	
        Total current liabilities	 	3,299,784	
 	 	1,831,357	
 	
Long-term debt, less current portion	 	1,263,176	
 	 	1,806,821	
 	
Deferred income taxes and other long-term liabilities	 	723,489	
 	 	486,764	
 	
        Total liabilities	 	5,286,449	
 	 	4,124,942	
 	
Redeemable noncontrolling interest	 	22,150	
 	 	—	
 	
Total stockholders' equity	 	4,755,883	
 	 	4,576,518	
 	
    Total liabilities and stockholders' equity	 	$	10,064,482	
 	 	8,701,460	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment Information	 	Three Months Ended	 	As of or for the Nine Months Ended	
(Amounts in thousands)	 	October 3, 2015	 	September 27, 2014	 	October 3, 2015	 	September 27, 2014	
 	 	 	 	 	 	 	 	 	
Net sales:	 	 	 	 	 	 	 	 	
    Global Ceramic	 	$	791,538	
 	 	779,842	
 	 	2,301,168	
 	 	2,271,660	
 	
    Flooring NA	 	955,099	
 	 	886,317	
 	 	2,722,347	
 	 	2,562,560	
 	
    Flooring ROW	 	404,026	
 	 	326,146	
 	 	1,050,390	
 	 	1,021,951	
 	
    Intersegment sales	 	(7	)	 	(1,647	)	 	(339	)	 	(4,171	)	
        Consolidated net sales	 	$	2,150,656	
 	 	1,990,658	
 	 	6,073,566	
 	 	5,852,000	

Operating income (loss):	 	 	 	 	 	 	 	 	
    Global Ceramic	 	$	120,055	
 	 	101,254	
 	 	326,571	
 	 	268,320	
 	
    Flooring NA	 	125,910	
 	 	83,623	
 	 	145,861	
 	 	207,578	
 	
    Flooring ROW	 	55,471	
 	 	35,046	
 	 	153,164	
 	 	113,909	
 	
    Corporate and eliminations	 	(12,702	)	 	(6,230	)	 	(37,272	)	 	(23,131	)	
        Consolidated operating income	 	$	288,734	
 	 	213,693	
 	 	588,324	
 	 	566,676	

Assets:	 	 	 	 	 	 	 	 	
    Global Ceramic	 	 	 	 	 	$	3,938,242	
 	 	3,788,164	
 	
    Flooring NA	 	 	 	 	 	3,195,904	
 	 	2,641,171	
 	
    Flooring ROW	 	 	 	 	 	2,699,255	
 	 	2,033,718	
 	
    Corporate and eliminations	 	 	 	 	 	231,081	
 	 	238,407	
 	
        Consolidated assets	 	 	 	 	 	$	10,064,482	
 	 	8,701,460	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted Diluted Earnings Per Share Attributable to Mohawk Industries, Inc.	 	 	 	 	
(Amounts in thousands, except per share data)	 	 	 	 	 	 	 	
 	Three Months Ended	 	Nine Months Ended	
 	October 3, 2015	 	September 27, 2014	 	October 3, 2015	 	September 27, 2014	
Net earnings attributable to Mohawk Industries, Inc.	$	214,905	
 	 	151,266	
 	 	423,743	
 	 	385,097	
 	
Adjusting items:	 	 	 	 	 	 	 	
Restructuring, acquisition and integration-related and other costs	12,770	
 	 	14,013	
 	 	43,784	
 	 	36,907	
 	
Acquisitions purchase accounting (inventory step-up)	7,160	
 	 	—	
 	 	13,316	
 	 	—	
 	
Legal settlement and reserves	—	
 	 	10,000	
 	 	127,000	
 	 	10,000	
 	
Bond redemption	—	
 	 	15,450	
 	 	—	
 	 	15,450	
 	
Deferred loan costs	—	
 	 	1,080	
 	 	651	
 	 	1,080	
 	
Income taxes	(12,940	)	 	(12,792	)	 	(62,984	)	 	(17,412	)	
 Adjusted net earnings attributable to Mohawk Industries, Inc.	$	221,895	
 	 	179,017	
 	 	545,510	
 	 	431,122	

Adjusted diluted earnings per share attributable to Mohawk Industries, Inc.	$	2.98	
 	 	2.44	
 	 	7.38	
 	 	5.88	
 	
Weighted-average common shares outstanding - diluted	74,438	
 	 	73,376	
 	 	73,907	
 	 	73,332	

 	
 	 	 	 	
Reconciliation of Total Debt to Net Debt	 	
(Amounts in thousands)	 	
 	October 3, 2015	
Current portion of long-term debt and commercial paper	$	1,927,815	
 	
Long-term debt, less current portion	1,263,176	
 	
Less: Cash and cash equivalents	110,716	
 	
  Net Debt	$	3,080,275	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of Operating Income to Adjusted EBITDA	 	 	 	 	 	 	
(Amounts in thousands)	 	 	 	 	 	 	 	 	Trailing Twelve	
 	 	Three Months Ended	 	Months Ended	
 	 	December 31, 2014	 	April 4, 2015	 	July 4, 2015	 	October 3, 2015	 	October 3, 2015	
Operating income	$	206,120	
 	 	43,774	
 	 	255,816	
 	 	288,734	
 	 	794,444	
 	
Other (expense) income	(9,737	)	 	1,083	
 	 	(2,928	)	 	(4,249	)	 	(15,831	)	
Net (earnings) loss attributable to non-controlling interest	(212	)	 	(158	)	 	(282	)	 	(798	)	 	(1,450	)	
Depreciation and amortization	95,665	
 	 	85,656	
 	 	88,011	
 	 	94,955	
 	 	364,287	
 	
  EBITDA	291,836	
 	 	130,355	
 	 	340,617	
 	 	378,642	
 	 	1,141,450	
 	
Restructuring, acquisition and integration-related and other costs	21,859	
 	 	8,169	
 	 	17,275	
 	 	11,690	
 	 	58,993	
 	
Acquisitions purchase accounting (inventory step-up)	—	
 	 	—	
 	 	6,156	
 	 	7,160	
 	 	13,316	
 	
Legal settlement and reserves	—	
 	 	125,000	
 	 	—	
 	 	—	
 	 	125,000	
 	
   Adjusted EBITDA	$	313,695	
 	
 	263,524	
 	 	364,048	
 	 	397,492	
 	 	1,338,759	

Net Debt to Adjusted EBITDA	 	 	 	 	 	 	 	 	2.3	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of Net Sales to Net Sales on a Constant Exchange Rate	 	 	 	 	 	 	 	
(Amounts in thousands)	 	 	 	 	 	 	 	
 	 	Three Months Ended	Nine Months Ended	
 	 	October 3, 2015	 	September 27, 2014	October 3, 2015	 	September 27, 2014	
Net sales	 	$	2,150,656	
 	 	1,990,658	
 	6,073,566	
 	 	5,852,000	
 	
Adjustment to net sales on a constant exchange rate	 	131,068	
 	 	—	
 	408,745	
 	 	—	
 	
  Net sales on a constant exchange rate	 	$	2,281,724	
 	 	1,990,658	
 	6,482,311	
 	 	5,852,000	

 	
 	 	 	 	 	 	 	 	
Reconciliation of 2015 Net Sales to Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume	 	 	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
 	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	2,150,656	
 	 	1,990,658	
 	
Adjustment to net sales on a constant exchange rate	 	131,068	
 	 	—	
 	
Less: 2015 Q3 impact of acquisition volume	 	(178,560	)	 	—	
 	
  2015 proforma net sales on a constant exchange rate excluding acquisition volume	 	$	2,103,164	
 	 	1,990,658	

 	
 	 	 	 	 	 	 	 	
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
Global Ceramic	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	791,538	
 	 	779,842	
 	
Adjustment to segment net sales on a constant exchange rate	 	75,785	
 	 	—	
 	
  Segment net sales on a constant exchange rate	 	$	867,323	
 	 	779,842	

 	
 	 	 	 	 	 	 	 	
Reconciliation of 2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume	 	 	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
Global Ceramic	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	791,538	
 	 	779,842	
 	
Adjustment to segment net sales on a constant exchange rate	 	75,785	
 	 	—	
 	
Less: 2015 Q3 impact of acquisition volume	 	(26,827	)	 	—	
 	
  2015 Segment pro forma net sales on a constant exchange rate excluding acquisition volume	 	$	840,496	
 	 	779,842	

 	
 	 	 	 	 	 	 	 	
Reconciliation of 2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume	 	 	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
Flooring NA	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	955,099	
 	 	886,317	
 	
Adjustment to segment net sales on a constant exchange rate	 	—	
 	 	—	
 	
Less: 2015 Q3 impact of acquisition volume	 	(37,779	)	 	—	
 	
  2015 Segment pro forma net sales on a constant exchange rate excluding acquisition volume	 	$	917,320	
 	 	886,317	

 	
 	 	 	 	 	 	 	 	
Reconciliation of Segment Net Sales to Segment Net Sales on a Constant Exchange Rate	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
Flooring ROW	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	404,026	
 	 	326,146	
 	
Adjustment to segment net sales on a constant exchange rate	 	55,283	
 	 	—	
 	
  Segment net sales on a constant exchange rate	 	$	459,309	
 	 	326,146	

 	
 	 	 	 	 	 	 	 	
Reconciliation of 2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant Exchange Rate Excluding 2015 Q3 Acquisition Volume	 	 	 	 	
(Amounts in thousands)	 	 	 	 	
 	 	Three Months Ended	
Flooring ROW	 	October 3, 2015	 	September 27, 2014	
Net sales	 	$	404,026	
 	 	326,146	
 	
Adjustment to segment net sales on a constant exchange rate	 	55,283	
 	 	—	
 	
Less: 2015 Q3 impact of acquisition volume	 	(113,955	)	 	—	
 	
  2015 Segment pro forma net sales on a constant exchange rate excluding acquisition volume	 	$	345,354	
 	 	326,146	

 	
 	 	 	 	 	 	 	
Reconciliation of Gross Profit to Adjusted Gross Profit	 	 	 	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Gross Profit	$	661,404	
 	 	556,422	
 	
Adjustments to gross profit:	 	 	 	
Restructuring, acquisition and integration-related and other costs	7,291	
 	 	7,261	
 	
Acquisitions purchase accounting (inventory step-up)	7,160	
 	 	—	
 	
  Adjusted gross profit	$	675,855	
 	 	563,683	
 	
Adjusted gross profit as a percent of net sales	31.4	%	 	28.3	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Selling, general and administrative expenses	$	372,670	
 	 	342,729	
 	
Adjustment to selling, general and administrative expenses:	 	 	 	
Restructuring, acquisition and integration-related and other costs	(5,479	)	 	(6,752	)	
Legal settlement and reserves	—	
 	 	(10,000	)	
Adjusted selling, general and administrative expenses	$	367,191	
 	 	325,977	
 	
Adjusted selling, general and administrative expenses as a percent of net sales	17.1	%	 	16.4	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Operating Income to Adjusted Operating Income	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Operating income	$	288,734	
 	 	213,693	
 	
Adjustments to operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	12,770	
 	 	14,013	
 	
Legal settlement and reserves	—	
 	 	10,000	
 	
Acquisitions purchase accounting (inventory step-up)	7,160	
 	 	—	
 	
Adjusted operating income	$	308,664	
 	 	237,706	
 	
Adjusted operating income as a percent of net sales	14.4	%	 	11.9	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Adjusted Operating Income on a Constant Exchange Rate	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Operating income	$	288,734	
 	 	213,693	
 	
Adjustments to operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	12,770	
 	 	14,013	
 	
Legal settlement and reserves	—	
 	 	10,000	
 	
Acquisitions purchase accounting (inventory step-up)	7,160	
 	 	—	
 	
Adjustment to operating income on a constant exchange rate	21,392	
 	 	—	
 	
   Adjusted operating income on a constant exchange rate	$	330,056	
 	 	237,706	

 	
 	 	 	 	 	 	 	
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
Global Ceramic	October 3, 2015	 	September 27, 2014	
Operating income	$	120,055	
 	 	101,254	
 	
Adjustments to segment operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	118	
 	 	4,248	
 	
Acquisitions purchase accounting (inventory step-up)	949	
 	 	—	
 	
  Adjusted segment operating income	$	121,122	
 	 	105,502	
 	
Adjusted operating income as a percent of net sales	15.3	%	 	13.5	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
Global Ceramic	October 3, 2015	 	September 27, 2014	
Operating income	$	120,055	
 	 	101,254	
 	
Adjustments to segment operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	118	
 	 	4,248	
 	
Acquisitions purchase accounting (inventory step-up)	949	
 	 	—	
 	
Adjustment to operating income on a constant exchange rate	12,701	
 	 	—	
 	
  Adjusted segment operating income on a constant exchange rate	$	133,823	
 	 	105,502	

 	
 	 	 	 	 	 	 	
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
Flooring NA	October 3, 2015	 	September 27, 2014	
Operating income	$	125,910	
 	 	83,623	
 	
Adjustments to segment operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	5,148	
 	 	10,578	
 	
Acquisitions purchase accounting (inventory step-up)	1,527	
 	 	—	
 	
  Adjusted segment operating income	$	132,585	
 	 	94,201	
 	
Adjusted operating income as a percent of net sales	13.9	%	 	10.6	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
Flooring ROW	October 3, 2015	 	September 27, 2014	
Operating income	$	55,471	
 	 	35,046	
 	
Adjustments to segment operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	4,030	
 	 	8,437	
 	
Acquisitions purchase accounting (inventory step-up)	4,683	
 	 	—	
 	
  Adjusted segment operating income	$	64,184	
 	 	43,483	
 	
Adjusted operating income as a percent of net sales	15.9	%	 	13.3	%	

 	
 	 	 	 	 	 	 	
Reconciliation of Segment Operating Income to Adjusted Segment Operating Income on a Constant Exchange Rate	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
Flooring ROW	October 3, 2015	 	September 27, 2014	
Operating income	$	55,471	
 	 	35,046	
 	
Adjustments to segment operating income:	 	 	 	
Restructuring, acquisition and integration-related and other costs	4,030	
 	 	8,437	
 	
Acquisitions purchase accounting (inventory step-up)	4,683	
 	 	—	
 	
Adjustment to operating income on a constant exchange rate	8,691	
 	 	—	
 	
Adjusted segment operating income on a constant exchange rate	$	72,875	
 	 	43,483	

 	
 	 	 	 	 	 	 	
Reconciliation of Earnings from Continuing Operations Including Noncontrolling Interest Before Income Taxes to Adjusted Earnings from Continuing Operations Including Noncontrolling Interest Before Income Taxes	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Earnings before income taxes	$	265,166	
 	 	181,281	
 	
Noncontrolling interest	(798	)	 	6	
 	
Adjustments from continuing operations before income taxes:	 	 	 	
Restructuring, acquisition and integration-related & other costs	12,770	
 	 	14,013	
 	
Acquisitions purchase accounting (inventory step-up)	7,160	
 	 	—	
 	
Legal settlement and reserves	—	
 	 	10,000	
 	
Bond redemption	—	
 	 	15,450	
 	
Deferred loan costs	—	
 	 	1,080	
 	
Adjusted earnings before income taxes	$	284,298	
 	 	221,830	

 	
 	 	 	 	 	 	 	
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense	 	 	 	
(Amounts in thousands)	 	 	 	
 	Three Months Ended	
 	October 3, 2015	 	September 27, 2014	
Income tax expense	$	49,463	
 	 	30,021	
 	
Income tax effect of adjusting items	12,940	
 	 	12,792	
 	
  Adjusted income tax expense	$	62,403	
 	 	42,813	

Adjusted income tax rate	21.9	%	 	19.3	%	

The Company believes it is useful for itself and investors to review, as applicable, both GAAP and the above non-GAAP measures in order to assess the performance of the Company's business for planning and forecasting in subsequent periods. In particular, the Company believes excluding the impact of restructuring, acquisition, integration-related and other costs, legal settlement and reserves, and acquisitions purchase accounting (inventory step-up) is useful because it allows investors to evaluate our performance for different periods on a more comparable basis.