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CLB Agenda 12/20/2017 Caear t 0u- . tY COLLIER COUNTY CONTRACTORS' LICENSING BOARD AGENDA December 20, 2017 9:00 A.M. COLLIER COUNTY GOVERNMENT CENTER ADMINISTRATIVE BUILDING BOARD OF COUNTY COMMISSIONERS CHAMBERS ANY PERSON WHO DECIDES TO APPEAL A DECISION OF THIS BOARD WILL NEED A RECORD OF THE PROCEEDINGS PERTAINING THERETO, AND THEREFORE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THAT TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. I. ROLL CALL: II. ADDITIONS OR DELETIONS: III. APPROVAL OF AGENDA: IV. APPROVAL OF MINUTES: A. SEPTEMBER 8, 2017 EMERGENCY MEETING B. OCTOBER 18, 2017 V. PUBLIC COMMENTS: A. VI. DISCUSSION: A.ELECTION OF CHAIRMAN AND VICE CHAIR-2018 TERM VII. REPORTS: A. TEMPORARY LICENSE AFTER HURRICANE IRMA B. CITATIONS AFTER HURRICANE IRMA VIII. NEW BUSINESS: A. ORDERS OF THE BOARD B. VICTORIA MALONEY-CONTESTING CITATION(S) 10992 C. ELIZABETH GREESON -COMPARISON OF EXAMINATION D. STEVEN A. GRILLO-CONTESTING CIATION(S) 11067 Cort+inlet -{-c� Scan. 01M.t4 r� IX. OLD BUSINESS: A. X. PUBLIC HEARINGS: A. XI. NEXT MEETING DATE: WEDNESDAY, JANUARY 17, 2018 ADMINISTRATIVE BUILDING THIRD FLOOR IN COMMISSIONER'S CHAMBERS 3299 E. TAMIAMI TRAIL NAPLES, FL 34112 September 8,2017 MINUTES OF THE EMERGENCY MEETING OF THE COLLIER COUNTY CONTRACTORS' LICENSING BOARD September 8, 2017 Naples, Florida LET IT BE REMEMBERED that the Collier County Contractors' Licensing Board, having conducted business herein, met on this date at 9:00 AM in EMERGENCY SESSION in Conference Room #609, Collier County Growth Management Department, 2800 N. Horseshoe Drive, Naples, Florida, with the following Members present: Chairman: Richard Joslin Members: Kyle Lantz Terry Jerulle Matthew Nolton Patrick White Excused: Michael Boyd, Vice Chair Elle Hunt Robert Meister ALSO PRESENT: Everildo Ybaceta— Supervisor, Contractors' Licensing Office 1 September 8,2017 Any person who decided to appeal a decision of this Board will need a record of the proceedings and may need to ensure that a verbatim record of said proceedings is made, which record includes the testimony and evidence upon which any Appeal is to be made. I. ROLL CALL: Chairman Richard Joslin opened the meeting at 9:00 AM and read the procedures to be followed to appeal a decision of the Board. Roll Call was taken; a quorum was established; five (5)voting members were present. II. AGENDA-ADDITIONS OR DELETIONS: (None) III. APPROVAL OF AGENDA: (None) IV. APPROVAL OF MINUTES—AUGUST 16,2017 (The minutes were not available.) V. PUBLIC COMMENT: (None) VI. DISCUSSION: (None) VII. REPORTS: (None) VIII. NEW BUSINESS: A. Authorization for Emergency Restricted Certificates of Competency. Chairman Joslin noted the purpose of the meeting was for the Board to discuss and authorize the issuance of restricted Certificates of Competency on an Emergency Basis to tree trimming and debris-removal Contractors due to the threat of Hurricane Irma 2 September 8,2017 striking Florida. The Board was to determine whether or not to extend the duration of the Certificates for an additional thirty or sixty days. Everildo Ybaceta, Contractors' Licensing Office Supervisor, read the following statement into the record: Section 22-190: "Emergency Restricted Certificates of Competency" In the event of a declaration of a State of Emergency in Collier County by the Collier County Board of Commissioners or in the City of Naples by the City Council, in which substantial damage has occurred to buildings and structures so as to cause a shortage of available persons and firms/entities in the contracting trades for which there are Collier County/City Certificates of Competency,the Contractors' Licensing Board hereby authorizes the County Manager to: (1) Declare an emergency contracting trade shortage of tree trimming and debris-removal Contractors. This declaration shall be for a period of time not to exceed sixty (60) days. (2) Authorize the Contractors' Licensing Supervisor to prepare and regulate the election of contractors from other jurisdictions whose licensing requirements are substantially comparable to those licensed in Collier County and issue temporary licenses to those Contractors for a period of time not to exceed sixty (60) days. The Contractors selected must be licensed in jurisdictions who testing and licensing requirements have been pre-determined by the Contractors' Licensing Board to be substantially comparable to the Collier County requirements. Discussion: • Chairman Joslin confirmed the Emergency Certificates of Competency would be valid for sixty days only and would be restricted to tree trimming and debris removal Contractors. Chairman Joslin moved to approve granting Certificates of Competency on an Emergency Basis for a period of sixty (60) days to out-of-state Contractors who could prove their licensing requirements were comparable to Collier County requirements. The Certificates would be restricted to Tree-Trimming Contractors and Debris- Removal Contractors. Kyle Lantz offered a Second in support of the motion. Carried unanimously, S—0. There was further discussion among the members concerning whether sixty days would be sufficient should Collier County sustain significant damage due to Hurricane Irma. It 3 September 8,2017 was unknown at the time of the Emergency Board Meeting which path the storm might take. It was presumed Irma would enter the State of Florida through the Keys. Both Terry Jerulle and Kyle Lantz suggested the Board should meet again closer to the expiration date of the Emergency Certificates to determine how much debris remained to be removed and if the Emergency Certificates should be extended for an additional thirty or sixty days. It was noted the next regular meeting of the Board was scheduled for October 18th which would allow the members enough time to review the situation and determine if the licenses should be extended. There was consensus among the members to meet on October 18th. IX. OLD BUSINESS: (None) X. PUBLIC HEARING: (None) NEXT MEETING DATE: WEDNESDAY, OCTOBER 18,2017 BCC Chambers, 3rd Floor—Administrative Building"F, Government Complex, 3301 E. Tamiami Trail,Naples, FL There being no further business for the good of the County,the meeting was adjourned by order of the Chairman at 10:15 AM. COLLIER COUNTY CONTRACTORS' LICENSING BOARD RICHARD JOSLIN, Chairman The Minutes were approved by the Chairman on , 2017, "as submitted" [ I - OR- "as amended" [ ] 4 October 18,2017 MINUTES OF THE COLLIER COUNTY CONTRACTORS' LICENSING BOARD October 18, 2017 Naples, Florida LET IT BE REMEMBERED that the Collier County Contractors' Licensing Board, having conducted business herein, met on this date at 9:00 AM in REGULAR SESSION in Administrative Building "F," 3rd Floor, Collier County Government Complex, Naples, Florida, with the following Members present: Chairman: Richard Joslin Members: Elle Hunt Kyle Lantz Terry Jerulle Robert Meister Matthew Nolton Excused: Michael Boyd, Vice Chair Patrick White ALSO PRESENT: Everildo Ybaceta— Supervisor, Contractors' Licensing Office Kevin Noell, Esq. —Assistant Collier County Attorney Jed Schenck, Esq. —Attorney for the Contractors' Licensing Board Reggie Smith— Contractors' Licensing Compliance Officer 1 October 18,2017 Any person who decided to appeal a decision of this Board will need a record of the proceedings and may need to ensure that a verbatim record of said proceedings is made, which record includes the testimony and evidence upon which any Appeal is to be made. I. ROLL CALL: Chairman Richard Joslin opened the meeting at 9:01 AM and read the procedures to be followed to appeal a decision of the Board. Roll Call was taken; a quorum was established; five (5)voting members were present. II. AGENDA-ADDITIONS OR DELETIONS: III. APPROVAL OF AGENDA: Kyle Lantz moved to approve the Agenda as amended. Elle Hunt offered a Second in support of the motion. Carried unanimously, 5—0. IV. APPROVAL OF MINUTES—AUGUST 16,2017: Kyle Lantz asked if minutes would be available for the Emergency Meeting. Everildo Ybaceta, Supervisor—Contractors' Licensing Office, replied, "Yes." Kyle Lantz moved to approve the Minutes of the August 169, 2017 meeting as submitted. Terry Jerulle offered a Second in support of the motion. Carried unanimously, 5—0. V. PUBLIC COMMENT: (None) VI. DISCUSSION: Chairman Joslin noted the Board Members had received a document to review. Jed Schenck,Attorney for the Board,stated: This Memorandum was drafted in response to the August 2017 meeting. There was an action taken on a Citation and I advised the Board to modify the language a bit. It caused some confusion, so I wanted to follow up— to clarify the guidance I gave you and the reasons behind it in case you had some questions or if there's still some confusion. Chairman Joslin: To make a long story short—you indicated in the Memorandum that the appropriate terminology when we made the motion... would be to ... the term"correct" was better to use than the word, "abate?" Attorney Schenck: The circumstance in the August meeting was an unlicensed contractor who was advertising, but he was seeking a State license. The Ordinance allows you to "abate" a fine down to $300 from $1,000 when you apply for a County license. That's the 2 October 18,2017 nuance in it and that was the reasoning—I wanted to be more consistent with the language of the Ordinance and the Statute. Chairman Joslin: If he was applying for a County license,then the fine that was imposed would have dropped down to $300 and he would have had to pay that. Attorney Schenck: Again,that's within the discretion of the Board as well. You used the same authority in Section 489 (Florida Statutes) to bring the amount down to zero or dismiss it. Chairman Joslin: And that ties into the minutes from last month that I mentioned because in the original motion that I made to grant his license, I didn't state that it was dismissed. So,the minutes probably should be changed—or can it stand as it is? Assistant County Attorney Kevin Noell: Essentially, it's technical distinction because the Contractors' Licensing Office essentially agrees with the withdrawal of the Citation that was before the Board ... essentially, we agree with that ... so whether the Board had dismissed it and we had no objection to the "withdrawal," I think it's a distinction without really a legal difference. And, certainly, we can't go back and change the minutes —the minutes are what the minutes are ... if there were errors in what we thought we said, or something like that ... so I don't think that's necessary. Chairman Joslin: In the future then, if the terminology should come up —we are going to "dismiss"a Citation rather than"withdraw" it. Assistant County Attorney Noell: That's correct. The Board would dismiss citations and if the Contractors' Licensing Office Supervisor felt it was appropriate to withdraw it, so the Board would not consider it,then that is a decision that he would make. Chairman Joslin: I have one more question: When the Ordinance was written or when we revised it to reduce the fines in certain cases, one of the words that I thought was important was it said to have all items abated—for example, if they came in to apply for a license—"prior" to coming to the meeting. In that case on that day, it had not been done until I think Elle Hunt brought up the fact about the advertising—that there were still things out there on Facebook—still out in the world. And then he did it right here [removed the advertising] which, in my opinion,was not"prior"to the hearing. So,if we're going to get the terminology correct ... which way was correct ... in the way we approached it or are they supposed to have their information done prior to walking up to the podium? Assistant County Attorney Noell: I would say that the level of abatement is, in fact, a determination made by the Board as far as the effort made. The distinction in my mind in the matter that you are referring to from the last meeting — all the steps that he took to reasonably abate it versus something that was inadvertently out there — this it was overlooked but it was not a purposeful and willful non-abatement, so I would say the determination on whether the abatement was sufficient prior to the hearing would be a Board determination. I had no issue with what happened last month — with finding something or having something brought to his attention that was inadvertent or overlooked that was corrected right away. Chairman Joslin: Okay. That's all I have. Kyle Lantz: I'm just curious. For Staff— exactly what procedures are in place and how everything going is going with out-of-State, non-normal County licensed contractors coming into town. I'm kind of curious as to —we authorized the issuances of temporary licenses and I'm just curious as to exactly what is being done now and how the program is working. I think there is confusion among the Board Members as to exactly what we 3 October 18,2017 authorized and I'm curious. You read something in the newspaper, but you don't really know what's going on—so I'm curious. Everildo Ybaceta: In the Emergency Meeting, we authorized emergency contracting for tree removal/tree trimming licenses. Since then we have issued almost 500 of these temporary licenses which are good for, I believe, 180 days ... Assistant County Attorney Noell: Sixty. Everildo Ybaceta: For 60 days. That is still in place and it's still being used. We had some contractors just come in this week and apply for them. I am in discussion to see if I can bring that up again to—maybe we can bring that Order up and maybe rescind it. Kyle Lantz: I was under the impression that we authorized work for not just tree trimming but for other stuff as well. Everildo Ybaceta: We gave the County Manager authorization to also relax certain requirements for other contractors which would have been for roofers —but they must be in-state contractors—they must come in and register with us ... they cannot be out-of-state roofers. They also relaxed the requirements for General Contractors,Building Contractors and Residential Contractors to do roofing. They don't have to sub out — they can do it themselves. Chairman Joslin: And it also applies to the sixty-day period? Everildo Ybaceta: That was under the Emergency Order. Kyle Lantz: So the only trades that got relaxed were roofing and tree removal? Everildo Ybaceta: Yes, sir. Kyle Lantz: How is it going? You can't drive around town and not see an out-of-state contractor doing work, so how is ...? Everildo Ybaceta: It's been very active. We have issued quite a few citations for unlicensed contracting to out-of-state contractors. I can bring you the numbers at the next Board meeting. We have one that has shown up on the news specifically—he did get issued six Citations and he returned half of the money back and the other half— the customer didn't want to release him from the contract—he wanted the work done. So,the gentleman came in with an in-state contractor who got registered and he is now on that payroll with that contractor to do the work. Kyle Lantz: And do we have a means of collecting — if somebody comes in from New York and does work and gets a Citation—if they say, `I'm not paying it' — do we have a means in place for collecting that? Everildo Ybaceta: No, sir. Kyle Lantz: No? Chairman Joslin: We do not? Everildo Ybaceta: It is a Citation that goes on the person. Chairman Joslin: Does that follow them to their home state or wherever they're from? Everildo Ybaceta: It follows them on their drivers' license. Kyle Lantz: What does that mean—they can't renew their drivers' license? Everildo Ybaceta: That's a good question but,no. It just means that a lien is imposed on their person. Kyle Lantz: But it doesn't"do"anything? Chairman Joslin: Wow. Assistant County Attorney Noell: Well, essentially, and obviously, we're constrained. There's only so many tools in our tool box. 4 October 18,2017 Kyle Lantz: I'm not trying to complain--- I just want—I want to know what it is. I don't care what the policy is ... you know, I'm not trying to criticize—I just want to know if it does anything. Assistant County Attorney Noell: And it's not a policy— it's the law. It's just that we have constraints within the law—what we can and can't do. In situations where someone is given a Citation and they have a$1,000 fine imposed on them,there are mechanics where we could pursue a formal judgment and then set up appearing in a Court in New York or at some destination and ... Kyle Lantz: So we spend ten thousand dollars to collect a one thousand dollar fine? Assistant County Attorney Noell: And that's part of the constraints —that's part of the reality of it. And that is only as good, also, as the assets that would be available to the Sheriffs Department in that jurisdiction to force a sale to recover the$1,000. There is that stewardship of the tax dollar that we're certainly considerate of but for those that—we'll certainly enforce it to the Florida extent that we can and, if appropriate, we'll bring in the Sheriffs Department and they will do a criminal investigation as well. Kyle Lantz: And have we seen many repeat offenders? Everildo Ybaceta: No, sir. Kyle Lantz: No. Chairman Joslin: That we know of—probably. Elle Hunt: I have a question in regard how to report price gouging. Considering it's a known issue in FEMA-designated areas,how are we,the County,advising the residents on how to report that from contractors? Assistant County Attorney Noell: And really, my understanding is ... and that's not my area of legal expertise obviously, but my understanding that price gouging on any of the essentials—food,water,things of that nature—I would always recommend that they contact the Attorney General's office to file a complaint. It's my understanding that they investigate those. Elle Hunt: But not for the contractors. Assistant County Attorney Noell: I think the market dictates the pricing — supply and demand—that's our good old capitol system. But I don't believe — I could be wrong on this—but I don't believe that the law and the mechanisms dealing with price gouging relate to contracted things like roofs and windows and things like that. I think it is water—you know, things that we need for immediate daily living. You might want to look at the Attorney General's website for more recent information. Elle Hunt: Okay. Terry Jerulle: Just so we are clear: we enacted Emergency Restricted Certificates of Competency right before the storm. When does that end? Everildo Ybaceta: We are in discussion with my Directors and my Administrators to see if we can bring it back, so we can end it. Assistant County Attorney Noell: That's one thing that I would look at—and I was there for that meeting. And I'll be happy to review those minutes. If it was given—if the Board's direction was a sixty-day time limit of discretion ... Terry Jerulle: I want to say 60 or 90 ... I just don't recall ... I didn't make notes and ... it was sixty days from the day that we voted ... correct? Chairman Joslin: Right. Terry Jerulle: Even if it was 60—it would be 60 days from the day that we voted. 5 October 18,2017 Assistant County Attorney Noell: I believe — and I'll have to look at the Order of the Board—because it may be 60 days from the date the Order was executed. I believe it was from the day you voted, but I need to look at that before I could give you ... Terry Jerulle: And you're looking at putting it on the Agenda for the next Board meeting —so we can vote on whether to continue it or not. Everildo Ybaceta: I can certainly do that. Chairman Joslin: Will the next meeting take us over the 60-day period? That was done in September—on September 5th—so it would take us over the 60 days. So in that period of time between the next meeting and September 5th when it started, we are going to be over that sixty-day window. I thought it was 90 days, if I recall,but ... Assistant County Attorney Noell: Do you recall if the vote of the Board was to give the County Manager or his designee 60 days—a sixty-day discretionary ...? Chairman Joslin: It seems like—if I remember—there was a question because we thought the sixty days wouldn't be long enough. I thought we extended it to ninety or ... but I'm trying to pick it apart now because there were a lot of things going on ... Assistant County Attorney Noell: What I'm getting at is whether it was 60 or 90, the Board put in the direct time frame —unless there is another provision in there —that says something ... ninety days and continuing until ... ? Chairman Joslin: Oh, no—I don't think so. I believe that if it was going to be changed, then it was going to be brought back again and extended or whatever we had to do at that time. Assistant County Attorney Noell: And that Order was self-executing and in ninety days, it automatically expired. Chairman Joslin: I believe so. Assistant County Attorney Noell: And that's what would happen—it would not need to come back before the Board for a new vote to withdraw or to further deny that discretion to the County Manager's Office. It automatically ends at 90 days. Chairman Joslin: Right. And if we had to extend it or if we wanted to extend it, it would have to come back again to analyze and find out how we did and what's going on — and then maybe add another 30 or 60 days ... depending on how severe the storm was. At that time,we didn't know. I'm in...considering that we probably need some more time because I don't think we're cleaned up yet. There is still a lot of damage out there that I've seen. But that's not saying it will happen. Terry Jerulle: The other part of that—it states in the Code that in the event of a State of Emergency, but declared by the Collier County Board of County Commissioners, which I think they did—correct? Everildo Ybaceta: Yes, sir. Terry Jerulle: Is it still in effect? Everildo Ybaceta: Yes, sir. As far as I know—yes, sir. Terry Jerulle: The State of Emergency is still in effect. Kyle Lantz: And on another topic, there were some newspaper articles in The Naples Daily News that were taking about making sure to hire a licensed contractor — going into detail about that — and they went on to describe different contractor licenses that were required—specifically roofing licenses—and the article ran a couple of different times,and it was wrong. And I have yet to see a correction. And I'm wondering if... I mean,people 6 • October 18,2017 are still hiring out there—but for someone to say that you need a different roofing license for asphalt or a different roofing license for tile or a different roofing license for metal — some how they got that information. I can't imagine they just made it up—but if they did, it would have been nice if the Department sent a correction out or sent a Public Notice out —sent something out to correct it. Obviously, whoever the reporter is—is wrong, but they are relying the information to the world who feels that this is the law. It would be nice if we could—I know its later now, but people are still hiring contractors left and right—and it would be nice if we put out a press release that explains the licensing law and what the different licenses are or something to that effect. Everildo Ybaceta: Our Public Information Office has put out information and sometimes has requested that some information be changed because they were incorrect. Whether that goes out into the newspaper or not — that's something completely different. Sometimes they take it and they do run a different article explaining it and sometimes they just leave it alone and they move on. Kyle Lantz: And we don't follow through? Everildo Ybaceta: We try—it's just the news is going to go where it's going to go. Elle Hunt: We need to hold the newspaper accountable for accurate information — especially when they are talking to our constituents here. Everildo Ybaceta: I can definitely talk to our Public Information Office ... Elle Hunt: And maybe they can talk to the editors of these TV stations and/or newspapers to ensure that accuracy because we've got people who flew in to see their homes and check on their homes and they are getting misinformation. We can't allow that. We need to be diligent about accountability. Everildo Ybaceta: Okay. Chairman Joslin: I think a meeting of the minds probably would be in line, you know, with the news channels, with the media, with the newspaper — that way the information gets out to the right people in the right way. Elle Hunt: Through a press release — that would be fine because that way, it's in our words. Kyle Lantz: The newspaper article made it appear that they were quoting information from somebody in Collier County and it ran a couple of different times when The Naples Daily News website refreshed,it was very clear that—from their perspective—that was the direction they were given from Collier County. Maybe they got bad information from the County or maybe someone made it up but either way, it clearly needs to be corrected. Terry Jerulle: You can't expect the County to read every article in every paper so maybe we should—whoever sees it, should cut it out and ... Kyle Lantz: It appeared a month and a half ago ... Terry Jerulle: Okay. Chairman Joslin noted he was relieved to see the Board Members because the situation could have been so much worse. VII. REPORTS: (None) Chairman Joslin noted Robert Meister was present. (Quorum was increased to six (6) voting members.) 7 October 18,2017 VIII. NEW BUSINESS: A. Orders of the Board: Kyle Lantz moved to approve authorizing the Chairman to sign the Orders of the Board. Terry Jerulle offered a Second in support of the motion. Carried unanimously, 6—0. (Note: The individuals who testified in the following cases in under Item VIII, "New Business,"were first sworn in by the Attorney for the Board.) B. John Parker Oglesby—Contesting Citations#14822, 14824, 14826, 14827, 14828, and 14830 Citation Number: 14822 (Unlicensed General Contracting) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Engage in the business or act in the capacity of a Contractor, or advertise self or business organization as available to engage in the business or act in the capacity of a Contractor without being duly registered or certified Citation Number: 14824 (Unlicensed General Contracting) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Engage in the business or act in the capacity of a Contractor, or advertise self or business organization as available to engage in the business or act in the capacity of a Contractor without being duly registered or certified Citation Number: 14826 (Unlicensed General Contracting) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Engage in the business or act in the capacity of a Contractor, or advertise self or business organization as available to engage in the business or act in the capacity of a Contractor without being duly registered or certified Citation Number: 14827 (Commenced Work without Obtaining a Permit) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Commence or perform work for which a Building Permit is required pursuant to an adopted State Minimum Building Code or without such Permit being in effect 8 October 18,2017 Citation Number: 14828 (Unlicensed General Contracting) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Engage in the business or act in the capacity of a Contractor, or advertise self or business organization as available to engage in the business or act in the capacity of a Contractor without being duly registered or certified Citation Number: 14830 (Unlicensed General Contracting) Date Issued: June 28, 2017 Amount of Fine: $2,000 Violation: Engage in the business or act in the capacity of a Contractor, or advertise self or business organization as available to engage in the business or act in the capacity of a Contractor without being duly registered or certified Chairman Joslin noted Mr. Oglesby was appearing before the Board because he was contesting the six Citations that he received. He asked Mr. Oglesby to explain what happened and why. John Parker Oglesby: • It was at the Outdoor Resort Mobile Home Park in Chokoloskee. • His parents had owned the park at one time and he has worked there for"all my life almost, ever since 1979." • He was rebuilding some docks and stated, "They do, like, a permitting process within their-selves to be approved." • Some of the mobile homes are located on a retention pond. • "In any case,they do that within their-self and that had to pass the Board's approval, or whatever, to do a remodel of the dock." • He admitted to repairing the docks. • "To my understanding, I'm supposed to have a County permit to do the work as well as the permit within the park itself." • "I live in Everglades City and I have just a regular, registered license for the City of Everglades, but it doesn't cover Collier County or anywhere else. I got the license back in '98 through a grandfathering clause where they were doing away with ... if you had did work like all your life and could prove that you did it ... find people and get affidavits from the people you worked for—I did all of that and met the requirements, but it was through a grandfathering clause, so I didn't take a test. But I guess then they changed to where you can't register your license in most places now unless you have a testing score." • "But, yes, sir, that's what I was doing and, you know, I'm just a small person just trying to put a daughter through college and make a living. I don't want to do anything wrong or harm anybody, but you know, obviously, I was doing wrong." Chairman Joslin called Joseph Nourse, Licensing Compliance Officer, to testify. 9 October 18,2017 Chairman Joslin asked Mr.Nourse to explain what he saw, what he found, and why Mr. Oglesby was appearing before the Board. Joseph Nourse: • He received a complaint from Collier County's Code Enforcement concerning unpermitted and unlicensed sea wall repairs taking place at the Outdoor Report Mobile Home Park on the island of Chokoloskee. • He made al site visit and met with the Park's manager—the property manager for the entire Park—who stated that John Parker Oglesby was the contractor who was doing the work. • He met with Mr. Oglesby to discuss the issues: (1) that he was not a licensed contractor outside of Everglades City. • He took photographs of five docks and showed them to Myron Jacobs,the Chief Structural Inspector, who stated that each dock would require a permit. • No permits were present and five were required. • He issued a total of ten Citations: five for Unlicensed Contracting and five for working without obtaining a permit. Kyle Lantz: Mr. Oglesby is only challenging six of the ten Citations. Joseph Nourse: No, sir. He's challenging the six because four of them have been withdrawn. Kyle Lantz: Withdrawn by the County? Joseph Nourse: I'll let my Supervisor answer that. Everildo Ybaceta: Some of the Citations were withdrawn because in researching the property,we found that the areas that were being worked on were `common areas' and should have been covered by one permit. It was not something that the Officer knew—it was a zoning issue that we found through extensive research. It should have been one permit, so we withdrew four of the Citations. Kyle Lantz: So all five docks should have been on one permit? Everildo Ybaceta: Yes, sir. Kyle Lantz: So then why did we not make it one case of Contracting without a License? Why is it still five cases? Everildo Ybaceta: At the time, the owners of the mobile homes thought they were also the owners of the docks. Mr. Oglesby had five contracts with the various owners when he should have had one contract with the Homeowners Association. Those are actually the Citations that are here to be discussed. Elle Hunt: That still seems like a conflict to me. I'm not understanding—because if he can't contract with the homeowners since they don't own the right to enter into a contract, then the contract--in itself-- is void. I know it's a grey area but I'm wondering why we didn't consolidate them considering they are,technically, void contracts? Everildo Ybaceta: I didn't want to. Elle Hunt: Okay—so you're saying it could go both ways ...? Everildo Ybaceta: Yes,ma'am. Assistant County Attorney Noelle: And,just for the record, could you swear in the Contracting Licensing Office Supervisor who provided testimony for the County? 10 October 18,2017 (Mr. Ybaceta was sworn in by the Attorney for the Board.) Elle Hunt: Considering you were just sworn in, has anything that you said prior to being sworn in—would that testimony be changed now? Everildo Ybaceta: No,ma'am. Elle Hunt: Thank you. Chairman Joslin: So we're looking then at the six individual Citations for each individual job -- not as a group? Joseph Nourse: Yes, sir. Chairman Joslin: Okay—just making sure. Has the work been completed yet? Joseph Nourse: Not to my knowledge. John Oglesby: No because what I've done,too, is I have a company that's actually taking over the situation now, Carter Docks, and we did go—and they are letting me work for their company to help them with the docks. But we did get the proper permits and everything that we do need, and I live in Everglades City so—we went through—I don't know—it was like a month or so before we got everything done to get the permits, so we were getting ready to pursue the work and then the storm hit [Hurricane Irma], and I had 3-1/2 foot of water come in my home, so we lost everything. My whole house is gutted out right now and I haven't been able to work since three days before the storm. I trying to get my own house to where I can move back in ...to have a place to live for my wife and my daughter. So we are getting ready now to proceed with trying to get those finished up. Chairman Joslin: The way that I see it,the contract that was started—in the beginning —was contracted through yourself? Correct? John Oglesby: Yes, sir. Chairman Joslin: Has the contract now changed over to the new ... John Oglesby: Yes, sir. Chairman Joslin: ... permittee? John Oglesby: Yes, sir. Chairman Joslin: So Outdoor Resorts now has a contract with your new qualifier ... John Oglesby: Yes, sir. Chairman Joslin: .... the company that you're going to work for as an employee? John Oglesby: Yes, sir. Everildo Ybaceta: Carter Docks did come in and apply. They received the permits for the dock work—all of them. It was a little bit of an extensive process because we also had to go for a special treatment of the outer docks—they had to go through Planning and Zoning. They did pick them up and they are issued. They are active permits ... permit. Chairman Joslin: So there's one permit for all six of these—five—five Citations? Elle Hunt: So we can consider it properly permitted as of today? Joseph Nourse: Yes, ma'am. Kyle Lantz: And was there a double permit fee assessed to that for after-the-fact, or no? Everildo Ybaceta: No, because it was a different contractor. There weren't double fees because the permit was issued to a different contractor. Kyle Lantz: But it was still after the fact, or no? 11 • October 18,2017 Everildo Ybaceta: Yes, sir,but we can't penalize the new contractor coming in. Kyle Lantz: Okay. So that clause is specifically against the contractor and not against a job site. Everildo Ybaceta: Right. Chairman Joslin questioned John Oglesby: Q. I have a couple of questions regarding the job. A. Yes, sir. Q. I see that there's a lot of work that I assume that you did yourself before the new contractor was involved? A. Yes, sir. Q. As far as the other contractor goes, has he accepted the work that you had already begun? A. Yes, sir. He looked at it and we, actually, overdid the work. Just to show you for instance,the work that I had done there—it looks just like and is just as perfect as ... the docks and decks on both sides were destroyed by the storm. He came down and he and I looked—after the Hurricane—and he said he could not believe that the structures had stayed perfectly, so yes, sir,he has definitely approved them. Q. So,this work was done, or the majority of the work was done before the storm hit? A. Yes. Q. And now that the storm has passed, your work is still in place -- is what you're saying? A. Yes, sir. Kyle Lantz questioned Officer Nourse: Q. There's a mention in here ["Code Cade Details"] that, "I informed Mr. Oglesby that he should know this because he has been issued Citations for Unlicensed General Contracting and commencing work without permits in the past." But we weren't provided any—at least I couldn't find any information on that. Can you enlighten me a little bit on his past experience? A. He had been issued a Citation in the past for pretty much the same thing— Unlicensed General Contracting and commencing work without a permit, I believe, on Chokoloskee. I did have a copy of the Citation,but I no longer seem to have it. My file package got passed around because this has been going on for quite a bit. There were a lot of hands involved because this was originally $20,000 in fines. And due to no oversight on my own, I went by the information I had available but there is some obscure note that was buried somewhere on a set of blue prints that we all should have been aware of—that this was all one parcel and not five individual parcels. A lot of people have been involved in this—trying to correct that—but it's not a mistake on my part—I had to go to with the information that was available and that [information] was not available. Q. No, I'm just curious. I'm not saying you made a mistake—I'm just curious as to— (directing his comment to Mr. Oglesby)—maybe you can explain? John Oglesby responded: I can explain,yes, sir. What that was—is—it was doing pavers on a lot in there and there's a company that does pavers called"Accurate 12 • October 18,2017 Pavers." So,they were actually who was doing the work—I actually got them to do the work for the homeowner because I'd been in there working all these years. So obviously I was doing wrong but it didn't kind of feel like it because I had a licensed contractor who was doing the paver job. Q. How long ago was this? A. Ten or twelve years ago—something like that. Q. So, it was a long time ago and not in the recent past? Joseph Nourse: Yes, sir, many years ago. The fine was $300. John Oglesby: I think—come to fine out—that you don't really have to have a permit if you're pavers or cement that abutting a County street or something like that. I guess it was really a misunderstanding, you know, with the whole thing back then. Yes, sir, that did happen and that's the truth—that's just what is was about. Kyle Lantz continued: Q: So one of the issues, personally, that I have is you are not a licensed contractor in Collier County. You do have a registered license for Everglades City. In my opinion, you clearly don't understand the law and how it applies. One of the things that we all push for—people tend to not come in here because they don't build a structure correctly. That's not why they come in here. I mean, you built a dock and the dock is still standing—you did a good job. Most people know how to build. What they don't know are the laws and nuances—the stupid crap that every builder in the world says, `that's ridiculous administrative stuff.' Well,that administrative stuff is what gets everybody in trouble. A. Yes, sir. Q. You can attest to that—it got you in trouble ten years ago and it got you in trouble two months ago ... and you're still trying to dig your way out of it. That's why we want you to take the test. Because taking the test gives us something to show that you might know the laws. A. Yes, sir. Q. And saying, `I didn't know that I needed a permit,' is—to me—not a valid excuse for not having one. And because you're already a licensed Registered Contractor— damn it—you should know that you need a permit. You should not be able to say, 'Oh, gee, I'm so stupid—I got a permit from the Association and they said it was okay.' You can't use that defense—that's ridiculous. I can't see, 'Gee, I just authorized someone—I bought a vacant lot and just authorized someone to build a house on it, and because I say it was OK, the contractor should be able to build it.' I mean, you must take some personal responsibility—you can't plead ignorance. A. Ido. Q. To say, `I didn't know,' —that's ridiculous ... especially when you're already licensed. And you'd better know ... if you have a license in Everglades City ... would you do that in Everglades City without a permit? Probably not. A. Yea, right—we get them there, too—yeah. Q. To use that arguments is a cop-out and, in my opinion,that's a cop-out—you should know better. There's no getting around that. A. Right. 13 • October 18,2017 Chairman Joslin: Everglades City and Chokoloskee are still under the Collier County Ordinance—right? I mean supervision as far as getting permits and all that? Everildo Ybaceta: Chokoloskee is. Chairman Joslin: The permit still would have come through Collier County—not Chokoloskee or Everglades City or whatever. Each one must have a main permit from Collier County. Everildo Ybaceta: Yes, sir. Chairman Joslin: Okay. In essence, we're talking about five Citations—correct? Each for$2,000 in fines? Everildo Ybaceta: Yes, sir. Chairman Joslin: Six? Kyle Lantz: Well, five for one thing and ... Chairman Joslin: And one for the sixth thing ... okay. Terry Jerulle: So six Citations at$2,000 a piece—we're talking $12,000? Total fines of$12,000? Six Citations at$2,000 each—correct? We're saying $12,000. Chairman Joslin: Yes. Terry Jerulle: And he's contesting each one individually or as a whole or ...? Joseph Nourse: Sir,before we do that—each of you has an evidence package. I'd like to submit the evidence package. Terry Jerulle: That would be a good idea. Chairman Joslin: Do we need a motion? Terry Jerulle moved to approve submitting the packet as evidence. Elle Hunt offered a Second in support of the motion. Kyle Lantz: Have we ever done that when it's not a case? Chairman Joslin: There's kind of more to it than just the Citations—there more's to it —involved than just the paperwork—I think it would be a good idea to submit it all. There's a motion and a second ... any discussion? Attorney Schenck: For clarification, is there additional information that you have that was not included in our packet? Joseph Nourse: Just the past Citation—which seems to have disappeared from my packet. Attorney Schenck: But you don't have it so you're not submitting it? Joseph Nourse: No. Attorney Schenck: There's no additional evidence that needs to be entered at this time. Chairman Joslin: Okay, I have a motion and a second and we'll label this as Exhibit "A"—just for the sake of giving it a name and put it into evidence. Chairman Joslin called for a vote on the motion. Carried unanimously, 6—0. Chairman Joslin: On one of these pages there was a Stop Work Order—is that correct? 14 October 18,2017 Joseph Nourse: There are a total of five, one on each site. Chairman Joslin asked if the Stop Work Orders was issued before or after the Citations were issued—trying to establish a time line. Joseph Nourse confirmed the Stop Work Orders were posted on the same day that the Citations were issued. Chairman Joslin: So he was notified that he shouldn't work on this job anymore? Joseph Nourse: Yes, sir. Chairman Joslin: Okay. Kyle Lantz: Personally, I think there are two separate issues. One is working without a permit. In my opinion, it is a$2,000 fine and will continue to be a$2,000 fine because he clearly did that. The other issue is contracting without a license. I feel that it is not five separate Citations—if he needed only one permit,there should be only one Citation. I still feel the Citation should be upheld—but only one should be. In my opinion,he should be fined $2,000 for working without a permit and$2,000 for contracting without a license. Elle Hunt: Does the County have a different opinion on that? Everildo Ybaceta: No, ma'am. Joseph Nourse: No, ma'am. If I had had the information at the time of how the properties were labeled with the parcel numbers, that's how it would have been done. Elle Hunt: Okay. Chairman Joslin asked Staff for clarification of the number of Citations the Board should consider, i.e., six Citations issued by the County with$12,000 in fines or Mr. Lantz's suggestion of only two Citations and total fines of$4,000. Assistant County Attorney Noell: We could do—whatever is the Board's pleasure. First,may I ask a question of Mr. Oglesby. Q. Sir, are you in agreement that you are guilty of two of the Citations? A. Yes, sir. Q. And you agree that if the County withdrew four of those Citations that you would accept guilt and make payments of$2,000 for each of the remaining two Citations? Is that right? A. Yes, sir. Assistant County Attorney Noell: Whatever the Board's pleasure is—I think probably the best way to do that is for the Board to dismiss four of the Citations. if that is the Board's decision, and vote on that, then accept the two—or the County could withdraw four of the Citations. Elle Hunt: Why wouldn't the County just withdraw the four? It should come to the Board as the County prefers us to opine on it. Assistant County Attorney Noell: Absolutely. One of the things that we discussed in this process—just for the Board's understanding—one of the things that we are working through is the checks and balances that are in place. Once a Citation is issued, and that ball starts rolling, so to speak, the `check' in place is to make sure the right decision is made on whether something should be withdrawn or not. I'm working closing with the Contractors' Licensing Office Supervisor on issues like this to bring to the County 15 October 18,2017 Attorney's Office for legal review on the sufficiency of withdrawing the Citations—so we just have the checks and balances in place for the future. Terry Jerulle: So as of today, what is the County's recommendation? Everildo Ybaceta: I would recommend the two Citations, one for unlicensed contracting and one for working without a permit. Chairman Joslin: I would like some input from the Board's Attorney. In the Ordinance, I believe it says that we can keep the fines in place or we can add to it. But can we reduce a fine once it comes before us? Attorney Schenck: You can, Mr. Chairman. It is within the discretion of the Board weigh the testimony and the evidence presented by the Respondent and by the County's Staff. In your deliberations, it is within the Board's discretion. Chairman Joslin: Okay. So, we can accept the fact that Staff wants to withdraw four of the Citations and we can uphold only the two remaining? Correct? Okay. Chairman Joslin asked for comments from the Board's members. Terry Jerulle: Mr. Oglesby, if someone were to make a motion deleting four of the fines, so to speak, and keeping two—and adding that you take a test ... John Oglesby: I was in the process of doing the County thing—I got all the paperwork to do that and then the storm hit and it's kind of prolonged it. But I'm going to do that to get the County license or try my best ... Terry Jerulle: But I'm thinking of making it contingent upon reducing the other fines. John Oglesby: That I will do that? Terry Jerulle: Yes. John Oglesby: Oh,yes, yes. Terry Jerulle: That you will do that, and you will pass it. Not just take and fail it and be done with it. You're going to pursue it until at which point, you will pass. John Oglesby: Yes, sir. I'm going to pass it in some way. Yes, I'll keep 'till I pass it, yes, sir. Terry Jerulle: And on the coattails of Mr. Lantz—you're out there bidding on work on that dock, correct--without a license and without a permit? If somebody else were to give a proposal to do that dock,they would include those items. And they would not be competitive with you. John Oglesby: I agree,yeah. Terry Jerulle: If you don't like the idea of a license and permit, change it. But you should play by the rules that everybody else plays by. John Oglesby: Right. Yes, sir. Chairman Joslin: Is the test that we're talking about the General Contractor's test? Everildo Ybaceta: You applied for a Residential Building Contractor's License, yes. Kyle Lantz: He can't get reciprocity from the County? Everildo Ybaceta: No, not from Everglades City. Kyle Lantz: It's just not an option in general or ...? Everildo Ybaceta: Because he has not taken any tests,there is no reciprocity. 16 October 18,2017 Chairman Joslin: Right—I can understand that. Back then, he was grandfathered in rather than having to take a test. He didn't go through the procedures that we go through today. So now it's time to take the test and be done with it. Elle Hunt: The requirements are different. Chairman Joslin: And you understand this something that you will do? John Oglesby: Yes, sir. Chairman Joslin: Because we're going to put it into the motion, if there is a motion, that this is something you will have to do. Otherwise,the fines are going to come back to haunt you—you will have to pay the rest of the fines. Okay. Is this something that Staff agrees to? Assistant County Attorney Noell: I don't believe under our Ordinance—I believe the power that the Board has under our Ordinance is either to uphold the Citations or to dismiss the Citations. If you uphold the Citations,then it's a$2,000 fine for each Citation. If the Board fmds that only two Citations should have been issued, they can then dismiss the four as being legally insufficient or that you agree with the challenger to the Citations. The Ordinance doesn't allow a provision for an abatement on a second or more offense. On the first offense, it does—where you can apply for a license and the fine is reduced from $1,000 to $300. But on a second offense,the Ordinance doesn't provide for it. But I would, of course, defer to your attorney as far as legal advice and things of that nature. Chairman Joslin: Okay. So, I guess we can uphold both Citations and we can dismiss four,but can we add into that—as a penalty for the two—that he does take and pass the Residential Building Contractor's licensing test? Elle Hunt: I think that the one where he was contracting without a license—requiring him to take and pass the Residential Building Contractor's License test here and dropping the fine from $2,000 to $300 .... Chairman Joslin: No,no—we can't drop it because it's already a second offense ... Elle Hunt: Okay ... Attorney Schenck: Hopefully, I won't confuse the Board because we're getting into the area of abatement. If the County decides to withdraw four—let's propose—the County can do that now and the Board can recognize that the four have been withdrawn. Elle Hunt: Or we can dismiss them. Attorney Schenck explained the Board could dismiss four Citation and then deal with the two remaining violations. The next issue would be to assess the penalties. Under the Ordinance,the Board could reduce a fine but only for a first offense. Since the Citations before the Board were second offenses, their discretion was narrowed. By adding a condition that the Respondent was required to take and pass an exam—it was akin to the abatement process, but the Board could still assess fines. Chairman Joslin suggested the Board should first dismiss the four Citations and then handle the remaining two individually, deciding on each separately. Kyle Lantz expressed concern over dismissing the Citations before decisions were made concerning the two remaining Citations.. Elle Hunt noted four were duplicate Citations—for Unlicensed Contracting. They could be dismissed but one would remain, together with the Citation for working without a Permit. She suggested the Board should complete its acquisition of 17 October 18,2017 testimony and data before discussing how to proceed and then making the motions. Attorney Schenck suggested another option: to rule on the two Citations that the Board found to be in violation and then dismiss the others or the County could withdraw them. Elle Hunt suggested two motions would be appropriate. Kyle Lantz agreed with the suggestions. Elle Hunt asked John Oglesby if he had any additional testimony to share with the Board. John Oglesby: What I would like to ask—as it stands right now, my life is kind of in turmoil because my house got destroyed and I don't have a place to live—I'm living in a borrowed 24-foot travel trailer. My intentions are—I do want to try to keep working in this field that I'm working in because that's what I've done for most of my life. But— and I do appreciate any consideration that you Board members can do for me—but if it's —just say, for instance,that a year from now or two months from now or whatever, we're not even sure if we're going to live down here—if I'm going to stay doing this or if I'm going to go work for somebody else. I guess in my mind—my intentions—right now, I do want to foresee what I'm doing with Mr. Evvy—is to try to get the County's - license—to do that and in the midst of that, if I can't pass the test or if I just decide that I don't want to do carpenter work no more—that I want to go work for somebody else, or move to somewhere else and we do the agreement—for whatever we come out to agree on here—I wouldn't want something to happen if I—if it said in there that I had to pass this test and I didn't, then all of these fines would come back on me and the,you know, I'd be stuck with all of these fines again. And maybe I'm understanding it wrong to what you were saying but I just wanted to ask you guys that. Chairman Joslin: I think what you must understand is that right now, you are getting a favor—to a degree anyway—because of the four that the Board is willing to dismiss or, at this moment,may dismiss. For us to put a stipulation on you for something that you have done wrong—not only once, but twice—even though it was a long time ago, the same thing happened. It doesn't tell us that you were really trying to do things correctly. There is a penalty involved. Now, I know the hurricane has had some impact on your livelihood—there's no doubt—but this happened before the hurricane unfortunately. And we have people out there who have found this problem to have happened, so I'm not sure what you're asking for other than sympathy as far as what we're going to do. I think the right thing to do is to try to get you to come into compliance with the license that will allow you to do the work that you want to do, and you said you've done all your life. Now I'm not saying you can or can't pass the test but it's something that I think you should probably try to do. John Oglesby: Yeah,right—I'm definitely going to try but ... Elle Hunt: You can also see it this way ... if we chose not to go down this path and instead just enforce the two, you would have a fine of$4,000. John Oglesby: Yes, ma'am. Elle Hunt: By the Board offering a way to abate one of those and lower the fine is only a benefit. If you choose not to utilize that, you would still owe the $4,000. But you would have an opportunity to come into compliance to the Board's position and become a functioning member of Collier County's contractors. If you look at it that way, it's not 18 • October 18,2017 a penalty for you to not take the test, it's a benefit that we would be offering to bring you into compliance and help you to move forward here. John Oglesby: Okay. Yeah, and I understand that—maybe I understood it wrong earlier ... I guess ... I know I would have to the $4,000 fine. I guess ... Elle Hunt: You agreed to it with the County. John Oglesby: Yes,ma'am. I guess what I was meaning is if I decided I didn't want to do this occupation anymore would the fines that y'all dismissed come back ... Chairman Joslin: Oh, no. John Oglesby: ... okay ... that's what ... Chairman Joslin: When I mentioned that, it was before the County said it was willing to dismiss four of the violations. In which case, if they had not,then yes—that could come back to haunt you. But under the circumstances, if we dismiss the four—then you are responsible for the two. John Oglesby: Okay, I understand. Yes, sir. Chairman Joslin: Now if you pay those two and then take the test and don't pass it, there's nothing that will come back to hurt you. Whatever you decide to do, the fines have got to be paid. John Oglesby: Yes, sir, I understand. Chairman Joslin: If the fines aren't paid—that may come back to haunt you. John Oglesby: Yes, sir, I understand. Elle Hunt: Does the County have anything else to share with the Board? Everildo Ybaceta: No, ma'am. Kyle Lantz moved to approve upholding Citation #14827, "Commencing Work without a Permit,"and Citation #14830, "Unlicensed General Contracting." He also moved to approve dismissing Citations #14822, #14824, #14826, and#14828. The total fines will be Four Thousand Dollars ($4,000.00). Matthew Nolton offered a Second in support of the Motion. Discussion: • Chairman Joslin asked if the motion should include language about taking and passing the test. • Kyle Lantz noted the Board did not have the power to do that. Chairman Joslin called for a vote on the motion. Carried unanimously, 6—0. Chairman Joslin again explained to Mr. Oglesby that the total amount of the fines was $4,000 and whether he decided to take the test or not was his choice. C. Marius Sacacian, d/b/a "Old Naples Tile and Granite"—Review of Application Chairman Joslin noted Mr. Sacacian was before the Board for a review of his application for a Tile & Marble Contractor's License. Elle Hunt explained to Mr. Sacacian that his previous application had been incomplete because he had not answered Items 2 and 3 on that application. She stated he was 19 October 18,2017 required to submit a complete application to obtain a license. There are a variety of questions. On Page 2, Items#2 and#3 were blank on his last application. She further stated Mr. Sacacian was instructed to return to the Board with a complete application. The purpose of the hearing was for the Board to review the new application. Mr. Sacacian did not seem to understand the purpose of the hearing. He appeared to be agitated and wanted to know why she would asked him before why the Board should give him a license. Elle Hunt and Chairman Joslin stated they did not understand Mr. Sacacian's comment. Mr. Sacacian stated he appeared last month for the first time for a review of his credit. He stated Elle Hunt had asked him then why the Board should give a license to him when she didn't know him. He thought she had no reason to ask such a question especially"in front of these people" (indicating the other applicants in attendance). Elle Hunt stated the transcript of the previous meeting was available to the Board. "We can affirm the fact that you were told to come back because the application for a license was incomplete—regardless of whether or not we knew you at that time,you were told that you had an incomplete license application." Mr. Sacacian: Maybe. Terry Jerulle: It's not"maybe"—she is right. She also has the right to ask you why we should give you a license. And you have the right to respond. It's a simple question. Mr. Sacacian: Let me tell you why I should have a license? Terry Jerulle: I don't think she asked that this time. Chairman Joslin: What license are you applying for? Marius Sacacian: Tile and marble. Kyle Lantz: We had a case here about a year ago with Olde Naples Tile &Marble where we had a customer who was sold a flooring job. The flooring job was not to his specifications or another independent party's specifications. The person who sold the job—he was under the impression he was an employee of Olde Naples Tile&Marble which is the company that you said you worked for. It was also you, personally, who sold him the job and Marius Sacacian: I'm sorry ...please say again ... I person ... Kyle Lantz: You sold the job to him. He hired you to do the work—according to the customer,he hired you to do the work. Marius Sacacian: Thank you. Kyle Lantz: According to your wife,he hired you to do the work. Marius Sacacian: No ... (Pointing and shaking his finger at the Board) Elle Hunt: Yes. Kyle Lantz: Well,that's what we have on testimony. So, hopefully, you can clarify some of this. I just wanted to tell you what is in my head—you can tell me if I'm wrong, completely wrong—lost... so what is in my head and what has been documented here was ---the case came to us ... Marius Sacacian: First, she asks me why I should have the license or no? Kyle Lantz: ... can I finish talking? 20 October 18,2017 Assistant County Attorney Noell: Sir,you need to let the Board members finish speaking. Sir,—if they have a question, it is your choice if you're going to respond to it or not. But your position is not to question the Board. Mr. Lantz is addressing you and he is asking you a question about your application. Marius Sacacian: I think I just came to get my license. Kyle Lantz: The particular case we had—we were told by the homeowner that he contracted with you as Olde Naples Tile & Marble to do a job. The job was not to his specifications and he brought in an independent party who said it was not to local specifications or accepted standards. And he had been talking to you about getting the job fixed. You—as a representative of Olde Naples Tile &Marble. Olde Naples Tile & Marble came to us and said that he did not contract with Olde Naples Tile & Marble— he contracted with you personally. His checks were written to you personally, signed on the back with your signature as you. So,Naples Tile & Marble—their defense was that he didn't hire them—even though you worked for them—he hired Marius Sacacian direct. You never got repercussions from that to my knowledge ... I might be wrong ... but I'm wondering if you can enlighten me on—if my information is incorrect—people swore to us, under oath,that: (a)they contracted with you, and (b)you had nothing to do with Naples Tile &Marble. I want to know if I'm correct or incorrect. Before we start our discussion, I want to make sure that we all have the same basic facts and we have something we agree upon. We all feel one thing and I'm gathering from your body language that you don't agree with what we feel. So, I want to know if you can explain the events that occurred with that case. Marius Sacacian: Yes, sir. First, I will tell you I believe you are incorrect. You are saying somebody—a customer says Olde Naples Tile&Marble did a job ... right? And you suspend -- guys suspend the license for Olde Naples Tile &Marble with absolutely no reason. Tile &Marble is my wife's company. And by the way, the license was suspended two months ago before she come here. For Michael Ossorio ... I see the movie ...the video ... he said you should never pay the fee ... the fines ... to renew the license because her license was suspended two months before for no reason even she paid the fee. And then—she thought it was a glitch in the computer. I think it was maybe corruption in the government. Chairman Joslin: Excuse me? Marius Sacacian: I believe it was corruption in the government. Kyle Lantz: She was noticed to come because we suspended the license. Marius Sacacian: I am proving to him what happened with the people in the government. Chairman Joslin: Mr. Sacacian, we go by the testimony and evidence that is brought before us. Marius Sacacian: You—yes ... Chairman Joslin: Your wife was here and gave testimony during the whole instance that we were going through. We listened to her very closely. This is the reason why the license was suspended. Because it was before you—when you were contracting the job, you weren't the license holder—you weren't Olde Naples Tile &Marble ... you just worked for the company. 21 October 18,2017 Marius Sacacian: I never work from the time whenever somebody complained about me or her—I never worked for Olde Naples Tile &Marble. She showed to you I was not on the payroll. She showed to you I sold the shares before—long time before— Elle Hunt: She did claim that you were on the payroll as an employee. Marius Sacacian: No, she never ... Elle Hunt: We have this on sworn testimony and she submitted an IRS form showing both you and your daughter as employees of that company. Marius Sacacian: Right on the daughter ... you misunderstand. Elle Hunt: No, we are not misunderstanding. Marius Sacacian: She got the paper from payroll at that time. I mean, she can prove now again. Elle Hunt: I am telling you what she swore to on testimony back in April—April 20, 2016—that both you and your daughter were employees of the company. So,what you're telling us today is that was factually wrong. Marius Sacacian: Absolute. Elle Hunt: You are claiming that you were not an employee of a licensed contracting company as of that Citation? Marius Sacacian: Olde Naples Tile &Marble—you are talking about? Elle Hunt: Yes. Marius Sacacian: Yes, I was employed for somebody else. Elle Hunt: So,by saying that, are we to assume that you were doing work as an unlicensed contractor? Marius Sacacian: No I never ... (unintelligible ...) Elle Hunt: I'm not talking about for her or for anybody else. I'm asking you a very specific question .... Marius Sacacian: You're the lawyer ... can I ask a question for the customer? Elle Hunt: No,he's not up here and we're not asking ... Marius Sacacian: He says I put tile in his house ... I never ... (Other comments overlapping from Board members) Chairman Joslin: Whoa... one at a time—let's knock it down to one at a time. Elle Hunt: You are claiming that you've never done any unlicensed contracting work? Marius Sacacian: You are correct, yes, ma'am. Kyle Lantz: Did you sell the job or did you ... Marius Sacacian: I did not sell the job ... Kyle Lantz: So, did he write a check to you? Marius Sacacian: Correct. Kyle Lantz: For what? Marius Sacacian: For 20 by 20 tile. Can you ask him what tile he has in his house? Kyle Lantz: I'm confused. He wrote a check---you supplied the tile? Marius Sacacian: Correct. So, I need to buy the tile—20 by 20—she got the invoice. Kyle Lantz: Okay. So, the checks that he wrote were for supplying tile—had nothing to do with the installation. Marius Sacacian: Nothing to do with installation. Kyle Lantz: So you personally sold him the tile? Marius Sacacian: Yes. Kyle Lantz: As a business? 22 October 18,2017 Marius Sacacian: I work for her sister before and she like me. She said can you help us, and I say no problem. Terry Jerulle: Whose sister? Marius Sacacian: The sister of... his sister ... (gesturing to the audience) Terry Jerulle: His sister. Marius Sacacian: That's why she asked me ... I said I don't do installation, but I recommend people and I can bring the people who did the installation for him. Kyle Lantz: So he paid the installers directly. Marius Sacacian: I hope so. I don't ask them. Terry Jerulle: What company did you sell the tile under? Marius Sacacian: Me—my name. I had the leftover tile, so I sold to him. Terry Jerulle: So, no company? Marius Sacacian: No company, sir, no. Chairman Joslin: I'm going to read something to you and I want you to tell me if it's the truth or not because this came from the minutes on the day this case came before us. This was the Case in Chief when the County brought this case before us. It was brought in by Karen Clements, Licensing Compliance Officer, and Tom Arico who was the witness on behalf of the County. She asked him questions. [The following is an excerpt from Page 6 of the Minutes of the April 20, 2016 Contractors' Licensing Board meeting.] " Q. When you called Olde Naples Tile &Marble, did Mario Sacacian come out to your home? A. Yes, I met him at a neighbor's house and he came out an hour or so later. Q. And did he give you a business card? A. That is correct, and he was wearing an Olde Naples Tile &Marble tee-shirt. Q. Is Exhibit E-18 the contract with Olde Naples Tile &Marble which was originally for 18 x 18 tile but then was changed-- correct? A. Yes. " Chairman Joslin: These statements that we printed out—verbatim and under oath— tells us that you were at that job. You contracted the job and you were speaking to the homeowner. I don't know what you're thinking about saying you never worked for Olde Naples tile. Why did you wear their tee-shirt? Marius Sacacian: I no wear a tee-shirt? Chairman Joslin: That's what it says, and they have a picture of you. Marius Sacacian: You asked me if they got my business card—right—that's what it says? I never give my business card. Chairman Joslin: You were wearing an Olde Naples Tile &Marble tee-shirt. Marius Sacacian: You have the business card—right. I want to inspect the business card. Chairman Joslin: I have no idea about a business card. 23 October 18,2017 Elle Hunt: It does say there as a business card. So,you're saying that somehow the consumer stole a business card from someone? Marius Sacacian: No. Elle Hunt: How did he acquire it? Marius Sacacian: The government take it. Elle Hunt: The government ...? Marius Sacacian: Yes ... the business card and apply to the whatever invoice or ... yes, ma'am. Elle Hunt: How did the government get your business card? Marius Sacacian: Very simple. You can go to where I work and get it from the company or whatever. Elle Hunt: So you have a business card for a company that you don't work for? Marius Sacacian: I don't have a business card. Elle Hunt: So you're telling me that the government printed up ... Marius Sacacian: No,they don't print ... they get a business card and it say Naples Tile&Marble and maybe they see my name over there and they put it in the file or whatever was ... Kyle Lantz: Then maybe there's a business card at Olde Naples Tile &Marble with you name on it? Marius Sacacian: Well, yes but that was before ... that was before. I worked for several years ago, yes, sir, yes. I do have the business card from a long time ago. Elle Hunt: You worked at Olde Naples Tile &Marble through 2016. During this period,there is the affidavit from your wife ... Marius Sacacian: I was not working. I can prove to you that I was not working and ... Elle Hunt: You wife just signed a notarized copy here in your application before us today. Marius Sacacian: I can bring it to you to show it to you—I never was working at the time and I was my company. Elle Hunt: Your wife is saying otherwise and she's calling you a managing agent. This is your current application that you have ... Kyle Lantz: Are you saying that your application today is false? Elle Hunt: Yeah—this is your application. Marius Sacacian: What is this application? Elle Hunt: (Showing the document to him)Your application has a notarized copy from your wife saying that you not only worked for her but that you were a"managing agent" of Olde Naples Tile&Marble through 2016. Marius Sacacian: Correct but I not at the time that I do .... Elle Hunt: It says 2016. As far as we know,that's December 31, 2016. That is exactly the time frame that we are talking about—this is April of 2016. Marius Sacacian: I have the paper and to show it to you ... when the man believe I did the job ... I never did the job. And by the way, ask him when I .... ask him, there are five people here. (Turning away from the podium) Did you see me to put in tile in your home? Terry Jerulle: Sir, we're talking about the application that you submitted. You are asking us to approve your license based upon the application that you submitted. 24 October 18,2017 Marius Sacacian: Yes, sir. Terry Jerulle: You just provided testimony that you were not working for Olde Naples Tile&Marble in 2016. The application that you gave us states otherwise. Marius Sacacian: I will bring it to you—to prove to you. Terry Jerulle: But do you understand what I just ... Marius Sacacian: I understand ... Terry Jerulle: Do you understand what I just said because I don't think you do. I'm trying to help you here. Marius Sacacian: (Mumbled response) Terry Jerulle: You just said you didn't work for Olde Naples Tile & Marble in 2016— correct? Marius Sacacian: I don't say ... I worked but not at the time ... I don't exactly what kind of months. I will prove to you that whatever happened with them, I was not on payroll and I was not in the company. So please believe me—I bring you the paper. Terry Jerulle: But you just brought us this paper. You just submitted on your application, a paper signed by your wife and notarized that you worked for the company then. Elle Hunt: As a managing agent—not even as an employee. Kyle Lantz: I don't think we need to go on and discuss it. Chairman Joslin: The application is not correct. Kyle Lantz: I mean,we can agree to disagree. Assistant County Attorney Noell: If I may, I have a few questions whenever appropriate on behalf of the County. Mr. Noell questioned Marius Sacacian: Q. Sir, my name is Kevin Noell and I am an Assistant County Attorney. Do you recognize the gentleman sitting in the back with the glasses on his forehead? Is that right? A. Yes, sir. Q. You recognize him to be Mr. Arico? A. (Asked Mr.Noell to repeat—difficulty hearing the question) Q. Do you recognize him to be Mr. Arico? A. Sorico? Q. Mr. Arico? A. The supervisor? Q. Let me ask it this way. How do you recognize that gentleman? A. I sold him some tile. Q. You sold him the tile? A. Yes, sir. Q. Did you or anyone on your behalf perform tile installation work at his residence? A. No, sir. Absolutely,no. Q. Did he write you a check made out to "Mario?" A. Yes, sir. Q. What did he write you a check for? A. If you read it there—you can read it for yourself—20 by 20 tile. I have the invoice. 25 October 18,2017 Q. Did you or anyone working under your direction not complete the installation of the tile? A. Nobody worked on my direction. I know the people, but they did not work on my direction. I got a name here. And they know—he's a friend of him and they ask him to go and with the family. Q. They check that he wrote was for final payment of the tile that you dropped off? A. Yeah, I think so ... from what I remember. Q. Later,though, a Claim of Lien was filed against his property. A. Correct—that's correct. Q. What was that for? A. Because the City—they asked me to fix the tile and I fixed the tile. And I go there, okay, and I know Mr. ... what's his name ... the man before Q. Mr. Ossorio? A. Yeah—Ossorio—he asked me to fix the tile and I did fix the tile. But he never pays me. He never pays me. Q. Do you know why he asked you? Why did Mr. Ossorio call you out of the blue and asked you to fix the tile? A. I was playing tennis before one night with him right before the day. Q. I'm sorry? A. I was playing tennis with him before and he was talking to me. Q. Okay. And at that point ... A. Do a favor for him. Q. Do a favor. So,your testimony is—and at that point, you weren't licensed to do tile work personally ... is that right? A. Yes, sir, I was not licensed to do that, absolutely, no. Q. So,your testimony under oath here today is that the Contractors' Licensing Office Supervisor ask you ... A. Correct. Q. ... to personally as an unlicensed individual to go and do work at this gentleman's house. Is that right? A. Yes, sir. Q. Who filed the Claim of Lien against Mr. Arico's house? A. I don't know exactly ... maybe the company ... I don't remember exactly? Q. What is "the company"? A. Olde Naples Tile &Marble. Q. And, sir, you were a managing partner of that company—correct? A. Not at that time. No correct,no correct. Q. Under"Sunbiz,"do you understand what that is? A. (Mr. Sacacian indicated he did not understand.) Q. Under the corporation's documents,you were still a managing member in 2016, correct? A. Back in 2016, there were 12 months, I was right before—I was out of the business by then. Q. Okay. Have you filed for bankruptcy—personally? A. I did file, yes, sir. Q. And what year was that? 26 • October 18,2017 A. I'm sorry, guys, I got a tumor on my brain—I don't remember everything. I don't know. I don't remember, sir, I don't remember. Q. Did you tell either the homeowner or Mike Ossorio,the Contractor Licensing Supervisor at the time, that you were done doing any work on this job—you were going to file bankruptcy and go to Las Vegas? A. I like to go to Las Vegas, by the way. But I filed bankruptcy maybe two years before this happening—long time before. This had nothing to do with the bankruptcy. Q. Did you have a plan that you talked to Mr. Ossorio,the Contractors Licensing Supervisor at that time, did you have a plan with him to mitigate the damage that was done as far as the installation—the deficient work that was done? A. Listen—for me what I see does seem bad—not everything to be changed. And he says, 'if you want to change a couple of tiles,' and I say, `okay, I can change a couple of tiles,' which I did it. Q. And when you went over to his residence—to this gentleman's residence ... A. Yes, sir. Q. ... and what type of work did you do again? A. Fixing the tiles. Q. How did you do that? A. Chip it out with a hammer. Q. Okay. Did you do any other work in fixing ... ? A. Not me. Q. Okay. And how much was he supposed to pay you for that tile work that you performed? A. I think it was $500, I believe. Q. And you were doing that on behalf of yourself—is that right? A. All right ... because people asked me to help the people. Q. Okay. I don't have any other questions for this gentleman. Elle Hunt questioned Marius Sacacian: Q. I'm a little unclear. You just said that you did some tile work ... A. Repair. Q. ... tile repair—on you own— A. Yes,ma'am. Q. ... outside of Olde Naples Tile & Marble ... A. Yes, ma'am ... 100%and I can prove ... Q. Were you a licensed contractor at that time? A. Say again. Q. Were you a licensed contractor at that ... A. No,ma'am, no. I was not. Q. You were doing unlicensed work? A. Absolute,no. You're right. Assistant County Attorney Noell: Just for the Board's information, later during this proceeding, if the members wish to speak to the homeowner, he is present and can provide any testimony as to the character of the Applicant for your consideration. 27 October 18,2017 Elle Hunt questioned Marius Sacacian: Q. So,what was the lien put on for? A. Because the customer didn't want to pay for fixing the tile. Q. Okay. So, at what point did Olde Naples Tile & Marble continue the work? A. Have no idea. Q. When you stopped? A. I don't work for Naples --why don't you understand me—I work for myself. Q. I understand that. But considering that you have done some of the tile work in regard to this repair, are you ... A. Not repair ... to fix it. I fix the tile and I was done. Let me make this something simple for you guys. You guys believe I'm guilty for something—you've never seen me before in my life. Why not give me the license and I can help the guy? I help you. Q. You've admitted to doing unlicensed tile ... A. You give me the license and I fix it. If you give me the license, I can help the guy. Q. You've admitted to doing unlicensed fixing of tile. A. Yes, ma'am. Q. But we should give you a license, even though you have been doing ... A. What is it you say to the other guy? If you go back to study to get a license ... and this is what you tell to this guy here. You can do work with the license—right? That's what you tell the guy. To back to get the license. (Chairman Joslin attempted to question Mr. Sacacian but was interrupted.) A. Excuse me. You got—one,two, six people—and it's very hard for me to answer because you guys think about--you try to get me down, not to lift me up. Chairman Joslin: No, we're just asking questions regarding what you are doing— coming before us now. Chairman Joslin questioned the Applicant: Q. Did you have a conversation with Mr. Ossorio regarding going back and making a repair to Mr. Arico's tile when it happened? Didn't he ask you to go back,try to fix it, and make the gentleman happy at that time—and you refused? A. If I remember—yeah—he asked me if I can go fix for him. Q. So as a licensed contractor—if you were licensed at the time—Mr. Ossorio was nice enough to ask you to go back and try to make the gentleman happy and you refused. In which case,then,the man ended up with a$1,600 lien against his property. And Karin Sacacian testified that you were working there for her under her supervision as part of the company. You were part of the company. There are too many avenues here that don't set right with me. I don't think at this moment I am going to honor this packet because it is incomplete—I think you are not telling the whole truth—and I'm going to end this quick. I will ask one of my constituents to make a motion and we will bottom line this. I still think you need to come back before us with a completed package that is correct. A. You asked me who did—somebody else did the job 28 October 18,2017 Q. We asked you all the questions we needed to ask you, I believe. Attorney Schenck asked if the County or the Applicant had any witnesses to testify before the Board. Elle Hunt stated the Board's only concern should be the application currently before them. She did not need to hear testimony from any witnesses. Assistant County Attorney Noell noted the County had the right,procedurally, to present witnesses before the Board as part of its consideration of the application. He mentioned consideration of the Applicant's moral character should be part of the decision-making process. He called Tom Arico to testify on the issues of character and work performance. Assistant County Attorney Noell questioned the Witness, Tom Arico: Q. Did you hire that gentlemen(pointing to Marius Sacacian) and pay him to perform an initial tile installation at your house? A. Yes. Q. Was the work done in a defective manner? A. Yes. Q. What deficiencies did you observe with the work that he performed at your residence? A. The tile was very uneven. I couldn't move my furniture—it was just a lousy job. Q. Was the tile raised in areas? A. Yes. Q. Did you pay him for that work? A. Yes. Q. Did you write a check to "Mario"personally? A. Yes. Q. Did you then try to have him come back out to repair that work? A. Yes. Q. Did he come back and repair the work? A. After I went to Michael Ossorio. Q. When you were dealing with"Mario,"was he wearing an Olde Naples Tile& Marble shirt? A. Yes,he was. Q. Is there anything else—any conversations that you had with him—trying to get him to come back to report the work? A. Repeated phone calls. Q. Did he respond to any of those phone calls? A. To a lot of them,no. Q. I don't have any other questions. Assistant County Attorney Noell stated the Board members or the Applicant could also question Mr. Arico. Mr. Arico asked to make a statement: "He said he sold me the tile—he didn't. I bought it from a different company for $4,700. He did not sell any tile to me." 29 October 18,2017 Elle Hunt: Did you write a separate check to that company? Tom Arico: Yes or I put it on my credit card—I don't remember. Marius Sacacian asked if Mr. Arico could show the Board the invoice that he"made for him"and"you paid me the money. Tom Arico: Yes. Marius Sacacian: Please, can you show them now? (Mr.Arico handed a document to Assistant County Attorney Noell who reviewed it and returned it to Mr.Arico.) Marius Sacacian: Can you read to me what it says there—or somebody? Tom Arico: It says "850 yards at 10.25 equals $1,900. Remove carpet(18 x 18)." I called him when I went to this tile place that his wife owns—we talked to him, and she talked to him. First, she told me that the company was owned by somebody in Miami. I didn't know that his wife owned part of it until later. We asked Mario if he could put this other tile in for the same price and Mario said, 'Yeah—no problem—don't worry about it.' Chairman Joslin: What is the paper that you're holding, sir? Tom Arico: This is the contract. (The document was displayed on the overhead projector.) Chairman Joslin: Is that something we should put into evidence? Marius Sacacian: Can I ask him what size of the tile is in his house? Elle Hunt: Do you have a question for the homeowner? Marius Sacacian: No, I have a question for you guys. Chairman Joslin explained to Mr. Sacacian that he should direct his questions to Mr. Arico who had just testified and not to the members of the Board. Marius Sacacian: Do you have the same size of the tile in the house? Tom Arico: No, because we called you and we verified that you would install the other tile— 12 x 16 or whatever it is—for the same price. The girl, Janelle who works for your wife,but said she works for someone in Miami, called you and talked to you. Marius Sacacian: Did you ever see me install one piece of the tile in your house? Tom Arico: Yes. Kyle Lantz: You testified that you installed tile in his house. Marius Sacacian: Do you remember Shalom? And Carlos Gomez? Tom Arico: Yes. Marius Sacacian: Did he work for you in the house? Install the tile for you? Tom Arico: Both. Marius Sacacian: They install the tile for him. Not me. I not install the tile—he tells you. 30 October 18,2017 Tom Arico: No, you did, too. Marius Sacacian: I never install one tile. They both people install the tile, but they don't work for ... Elle Hunt explained to Mr. Sacacian that he should question Mr. Arico but not make statements. Terry Jerulle: Do you have any further questions for the homeowner? Marius Sacacian: No, I don't think so. Chairman Joslin asked the members of the Board if they had any questions for either Tom Arico or Marius Sacacian. (There were none.) (Mr.Arico was excused.) Kyle Lantz moved to approve denying the application of Marius Sacacian for a Tile & Marble Contractor's license. Elle Hunt offered a Second in support of the motion. Attorney Schenck: Before you begin discussion, I would like to read into the record the standard for the Board under Collier County's Ordinance, Chapter 489, for making a determination of lack of moral character. The Board may deny, it has the discretion to deny, a Certificate of Competency to an Applicant based upon lack of moral character if there is a substantial connection between the lack of good moral character and the Applicant's professional responsibilities as a certified Contractor. Attorney Schenck: If the Board makes that finding, it has to be supported by clear and convincing evidence. Examples of evidence that would support such a finding would be fraud, crimes of moral turpitude,willful violations of the County's building codes, false statements on applications. Those are the types of findings that you would make to support the lack of moral character. Assistant County Attorney Noell: I would like to make sure that he [Marius Sacacian] did not have any additional testimony to provide to the Board. I don't know if he was asked that. Chairman Joslin: Mr. Sacacian, do you have anything that you want to enter into evidence or anything that you want to say regarding this application? Marius Sacacian: Yes, correct. I want to prove to you—I got a paper I was not working Olde Naples Tile & Marble at the time. I got payroll, I got time share which has nothing to do with Olde Naples Tile &Marble. I don't know I need. You try to put me down. Chairman Joslin: You can before us to support your application to try to get a license. Marius Sacacian: I passed the test—84%. That's what you said—that's what I did. I don't come—if you tell me, I can bring you. Whatever you need to help you understand —it has nothing to do with me. The only thing what she said, I was working with no license to fix the tile. That is right. 31 October 18,2017 Chairman Joslin: In that case then, we could open up one more avenue I suppose as a ... doing things correctly—would be to ask the Applicant to withdraw the application and bring back more evidence, if he has it—if that's the case. Or we can act on the motion under discussion ... re-apply ... Kyle Lantz: Personally, if he was involved with Olde Naples Tile & Marble or not,that will not change my opinion. Elle Hunt: It won't change mine either—considering the current information that he submitted within his application. Elle Hunt directed her comments to Marius Sacacian: Today's vote is based on what you supplied to us today in your application and my position is based on what you have submitted. Marius Sacacian: I have another question,please. Chairman Joslin: One second—I'm just bringing up the avenues of possibilities of what we can and can't do. I think the lack of moral character is not going to change, in my opinion. I think that we are definitely in the process of ending up the discussion and then we vote. Assistant County Attorney Noell: On behalf of the County, if there is any more— anything else that he wishes to present to the Board at this time or any other evidence, I would just ask that that is exhausted before deliberations are made. He asked: Sir, is there anything else that you want to testify to the Board about concerning your application? Marius Sacacian: Yes. Like you guys bring somebody he says against me—he says— and you say—you never changed my opinion—against me—okay. If I bring some witness—of when I work with them—and testify how good I am—how nice I am—then you may change your ... opinion. Can I bring some witness for me? Elle Hunt: I want to make my opinion very clear here. It's not an opinion against you —I'm opining based on your application that you have submitted today, as well as information that we have regarding the prior actions that you executed upon. Not whether or not you are a good or bad person—that's irrelevant. Marius Sacacian: But you judge me like I'm a bad installer .... Elle Hunt: Pardon me? I didn't understand that. Marius Sacacian: Okay—you guys try to prove me—I was a bad installer—where I did a bad job for somebody. I want to bring people to say how good installer I am. It makes sense to bring maybe five, six people. Elle Hunt: I don't have an opinion on you being a good or bad installer—that isn't affecting my opinion. The fact that you have done unlicensed contracting work is more of an issue and you've admitted you didn't have a license when you've done the work ... fixing the tile. So, I can't imagine you bringing somebody in that would not speak to your own testimony. That isn't logical to me. Marius Sacacian: I can bring people when I did the job before. Elle Hunt: Then you've done a great job, but you are still an unlicensed contractor. Marius Sacacian: Oh, before—before I was but not Chairman Joslin: We're not asking you to bring something later—we're asking for testimony for what you brought before us today. Okay? Is there anything else that you can give us—hand us—talk to us. As far as bringing it back tomorrow or the next day, 32 • October 18,2017 that's down the road. We're asking for it now. If there's nothing else, then I'm going to call for the vote. Marius Sacacian: Yeah—I'm okay. Chairman Joslin: Thank you. If there is no further discussion, I will call for a vote ... Terry Jerulle: I have a question. What is the County's credit score that is required? Everildo Ybaceta: 660. Marius Sacacian: I have a question. Olde Naples Tile & Granite—working for the last three and a half—never had any complaint. This company—my company—working for three and a half and never having any complaint. And I work under somebody else license to be correct. Kyle Lantz: And what does Olde Naples Tile & Granite do? Do people subcontract to you? Marius Sacacian: No,no subcontract ... I work for them but is my company—my company. They no subcontract me. I work for the company. Kyle Lantz: So, somebody who has a company sells a tile job. They do the installation and they hire Olde Naples Tile& Granite to do the installation underneath them? Marius Sacacian: That's correct, sir. Kyle Lantz: Okay. Perfect. He's a subcontractor. And is Olde Naples Tile & Granite currently licensed? Elle Hunt and Kyle Lantz asked Mr. Sacacian if Olde Naples Tile & Granite was licensed or had a licensed Contractor as a Qualifier. The question was asked several times. Mr. Sacacian seemed confused. He responded that the company was not licensed that's why he came to get a license and"you guys won't give it to me." Chairman Joslin: So, your testimony is that Olde Naples Tile & Granite is an unlicensed company right now unless we give you a license? Marius Sacacian: Yes. Chairman Joslin: You can't do any work as a subcontractor. Marius Sacacian: I don't work as a subcontractor. They hire me—my name—Marius. Chairman Joslin: But you go to work—you're on the payroll—and you get a paycheck. Okay. Matthew Nolton: When you get a check—is the check made out in your name or is it made out in ... Marius Sacacian: My name—to me. Chairman Joslin: Okay. Marius Sacacian: (mumbled ....) Chairman Joslin: Okay—one last time. No further conversation—no further discussion. Chairman Joslin called for the vote on the motion to deny the application for a Tile and Marble Contractor's license. Carried unanimously, 6—0. Chairman Joslin explained to Mr. Sacacian that the Board would not give him a license today. Mr. Sacacian asked if he could come back again and the Chairman replied that he could come back whenever he liked. Assistant County Attorney Noell instructed Mr. Sacacian to contact the Contractors' Licensing Office Supervisor to re-apply. 33 October 18,2017 D. Allen Work, d/b/a Screens N' Cages—Waiver of Exams (Note: This case was not heard by the Board.) IX. OLD BUSINESS: (None) X. PUBLIC HEARING: (None) Comment by Terry Jerulle: • When people attend a hearing where hats, is there some sort of rule or etiquette? • Attorney Schenck was not aware of any policy but noted that people generally remove their hats. • It was suggested the Chair could make a specific request—silence cell phones and remove hats. Chairman Joslin reminded Staff that the Board would expect the minutes from the Emergency Meeting. Elle Hunt announced the November 15th meeting would be her last as a member of the Board. NEXT MEETING DATE: WEDNESDAY,NOVEMBER 15,2017 BCC Chambers, 3rd Floor—Administrative Building"F, Government Complex, 3301 E. Tamiami Trail,Naples, FL There being no further business for the good of the County, the meeting was adjourned by order of the Chairman at 11:00 AM. COLLIER COUNTY CONTRACTORS' LICENSING BOARD RICHARD JOSLIN, Chairman The Minutes were approved by the Chairman on , 2017, "as submitted" [ ] - OR- "as amended" [ 34 TEMPORARY LICENSE AFTER HURRICANE IRMA LICENSE# TYPE OF LICENSE COMPANY NAME QUALIFIER LCC20170001831 LANDSCAPING- A& B TREE SERVICE WOMACK, JOSEPH J. LCC20170001794 LANDSCAPING A&H AFFORDABLE TREE SERVICE BRYON, MIKE LCC20170002071 LANDSCAPING A CUT ABOVE TREE SERVICE AND HARDSCAPE SUITER, MICHEAL J. LCC20170001994 LANDSCAPING A PLUS TREE&LANDSCAPE SERVICE INC GIBSON,TIMOTHY R LCC20170001571 LANDSCAPING A PLUS TREE SERVICE INC SANCHEZ,YAIDIEL LCC20170001790 LANDSCAPING A TAYLOR TREE CO TAYLOR, MAYNARD RAYMOND LCC20170001788 LANDSCAPING Al TRE CARE RICO, JOSE NAVARRO LCC20170001715 LANDSCAPING ACTION TREE SERVICE SORRELLS, SCOTTY D. 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Sz 0 m "-• - CD CD 0 0 - 5 wa a' • Pd Pd 0 0 051 C CD CD i _ N AD CD P. p p CD CDD' CCD NO NO 0 2. 0 0 CCD eft- 00 ".3' "S 0 r"7 et et "i et "i "i "3 co) N 0- _ ,• N N N 0, CD CD (D 0 0 0 r CD ateD (D 0 C C CD J J C CCD C CD J m CD m m K "s .1 1 K K K K �• to 0 0 to to (n CD CD CD CD C) CO — C3l 0.) OD N - - Cb N C mG) moo 0- cn -o mJC m o � z —IF D D cm m0OyC13OpD - OCH > O000) 00 � omrr_ rnomOmoO 0 - -� O < mzzO * r o> zmzzm TJ < OOZUDi HZDz > K m r n Z 73 0 -1 - 0 0 7J m 7J 7JO Co N CO 00 co 11 CD � aq � CDm cn CD Contested Violation CASE # CEUL20170014569 Complainant: Kathleen Kamin Violator: Victoria Maloney (dba) A New Creation Interiors By Victoria, Inc. TABLE OF CONTENTS El / E6 — Case Detail Report (placed in WORD format for viewing) for current Violation. E7 — E14 Case Detail Report (City View System) for current Violation. E15 — Preliminary Compliant Form of Kathleen Kamin E16 / E17 — Copies of Checks Paid to Maloney/A New Creation E18 / E19 — Copy of GENERAL REMOLDELING CONTRACT between A New Creation Interiors and Kathleen Kamin E20 — Copy of LIST OF EXPENSES E21 / E22 — Copy of Business Card — A New Creation Interiors E23 / E24 — Copy of CONTRACT between Brian Pascal/ Build All Inc. and A New Creation Interiors E25 / E26 - State of Florida, Division of Corporations, Florida Profit Corporation Detail - A New Creation Interiors By Victoria, Inc E27 — Copy of "Licensee Details", DBPR for Brian Pascal/ Build All Inc. E28 - Copy of "Licensee Details", Collier County for Brian Pascal/ Build All Inc. E29 / E30 — Copy of Citation # 10992 issued to Victoria Maloney WITNESSES: 1. Kathleen Kamin HARDCOPY IN "WORD" FORMAT OF CITY VIEW NARRATIVE FOR CASE # CEUL20170014569 Complainant: Kathleen Kamin Violator: Victoria Maloney (dba) A New Creation Interiors By Victoria, Inc. 09/01/2017 On the date of September 1, 2017, I (Jack Gumph) received a written complaint reference a homeowner entering into a contractual agreement for construction work with a design decorating firm not carrying a certificate of competency through the state or County of Collier. The complainant was listed as Kathy Kamin (239-566-1722), 7864 Gardner Dr., Naples, FL 343109. The written complaint indicated that Ms. Kamin had entered into a contractual agreement for construction remodeling work at her owned residence (7864 Gardner Dr.) with a company identified as A New Creation Interiors By Victoria, Inc. This company is a "Design/Decorating" firm owned by a Victoria Maloney. The contract with "New Creation Interiors" was signed on the date of 08/12/2017 whereby a check from the personal account of Ms. Kamin was issued to Victoria Maloney in the amount of $35,000.00. Ms. Kamin indicated that she is concerned because there has been no activity on the permitting process for the work. Contact with the complainant forthcoming for additional information. On the date of September 5, 2017, I (Jack Gumph) telephoned the complainant, Ms. Kathy Kamin (239-566-1722) reference additional information on her referral. Ms. Kamin related that she had enlisted the services of Victoria Maloney as referred by a friend in June of 2017. She (Ms. Kamin) spoke with Victoria Maloney by phone and met several times about the renovation project at her home. On the date of August 1, 2017, she (Ms. Kamin) wrote a personal check to Victoria Maloney in the amount of $200.00 for consultation fees. On the date of August 1 12, 2017, she (Ms. Kamin) entered into a written contract with Victoria Maloney/ A New Creation Interiors entitled "General Remodeling Contract". The total amount for the contract was documented in the amount of "A budget range: $75,000.00 to $85,000.00". On that date (08/12/2017), Ms. Kamin wrote a check to "A New Creation Interiors" in the amount of $35,000.00. As per the contract, this amount was documented for: "To begin project— including permit— contractors work and purchasing of necessary materials". (NOTE: it should be noted that I received a copy of the contract document & checks with the original complaint from). Ms. Kamin explained to Victoria Maloney that she (Ms. Kamin) wanted an itemized budget for each facet of the renovation, for example, cost of flooring, granite, tile etc. She (Ms. Kamin) was subsequently introduced (by Victoria Maloney) to the contractor who was to work with Victoria Maloney on the project. His name was Brian Pascal and reiterated to Ms. Kamin that he would be getting the permit and working on the project with Victoria Maloney. Ms. Kamin went on to relate that she was feeling an uneasiness because Victoria Maloney was not providing the itemized budget she had requested and Ms. Kamin feared that she (Victoria Maloney) might not be able to meet the stated budget. Ms. Kamin spoke to Victoria Maloney who advised that she (Victoria Maloney) was still getting "bids" from contractors on the flooring, granite, tile etc. to come in under budget (NOTE: it should be noted that it was Victoria Maloney who was bidding out to subcontractors, not contractor, Brian Pascal). Ms. Kamin stated at one point she inquired of Victoria if she (Kathy Kamin) would be paying the contractor for these services however, Victoria Maloney told her that "if they're not working for me, then how do I get paid". Ms. Kamin stated that she finally contacted the Collier County Contractors Licensing section who advised to complete the written complaint. Ms. Kamin stated it would be her desire to terminate the contract with Victoria Maloney, receive a full refund and move on to another contractor. 2 I had previously researched the computer database networks of the Florida Department of Business and Professional Regulation (DBPR) and Collier County Contractor Licensing and found no listing for A New Creation Interiors or Victoria Maloney. I did find a listing in the Florida Division of Corporations for company: A NEW CREATION INTERIORS BY VICTORIA, INC which listed the Registered Agent and President as Victoria Maloney. I had previously, the opportunity to examine the copy of the written contract between Kathy Kamin and Victoria Maloney/A New Creation Interiors entitled "General Remodeling Contract", dated August 12, 2017. The contract was printed on Letterhead of "ANCI, A New Creation Interiors". The contract listed the Client as: Kathy Kamin with address of 7864 Gardner Dr., Naples, FL. The contract listed the Designer as: Victoria Maloney/ A New Creation Interiors and Remodeling Corporation: A New Creation Interiors By Victoria, Inc. The contract listed the Contractor as: Brian Pascal, CBC1255774, Bonded and Insured. The contract went on to stipulate 9 separate sections of work to be completed to include: 1. Demolition 2. Plumbing 3. Electrical 4. Frame & Drywall 5. Glass Doors & Millwork 6. Tile-Granite Flooring 7. Painting 8. Designer Services 9. Permit This contract involved the complete renovation of a kitchen and two bathrooms of the home at 7864 Gardner Dr. This included all demolition, new cabinets, countertops, plumbing, electrical, drywall, carpentry-trim, tile flooring, and painting. The cost breakdown of the contract was listed as follows: 3 1. $35,000.00 to begin project— including permit—contractor's work and purchasing of necessary materials. 2. $20,000.00—Two to Three weeks into project— possibly sooner covering partial costs of cabinetry and flooring. 3. $20,000.00—As necessary to cover costs and expenses 4. $10,000.00— Balance to be paid upon completion. I observed the signature of Kathy Kamin, dated 8/12/2017. On the date of September 27, 2017, I met with Victoria Maloney for a scheduled appointment at the Collier County Contractor Licensing offices. At that time, I inquired of Victoria Maloney information related to her contract with Kathy Kamin for the renovation job and information on the contractor/client relationship. Victoria Maloney related that she (Victoria Maloney) was the party who drafted the written contract with Kathy Kamin. Ms. Maloney went on to state that she knew Kathy Kamin was waiting on the itemized budget, but she (Victoria Maloney) was still getting the bids from the flooring contractor for the flooring tile work. The itemized list was now complete (provided a copy). When asked about who the subcontractors would be working for, Victoria Maloney related that "they need to be working for me, that's how I get paid". I then asked about the working relationship with the contractor listed on the written contract. Victoria Maloney advised me his name is Brian Pascal and he is a licensed contractor and would be working for her on the project. (NOTE: It should be noted that I previously researched contractor Brian Pascal and found him to be a state licensed Building Contractor, # CBC1255774 listed under company name, Build All Inc.). Ms. Maloney went on to state that she will be using Brian Pascal to obtain the permit and various other contractual items. Victoria Maloney then presented me with a written contract (unsigned) between herself and Brian Pascal/ Build All Inc. for the renovation at Ms. Kamin's address. I did observe the document which was on the Letterhead of "Build All Inc.". The contract was dated 08/11/2017. The contract was listed to: Victoria Maloney/ A New Creation Interiors By Victoria, 4 Inc. The contract job address was listed as: 7864 Gardner Dr, Naples, FL 34103. The contract stated: This contract is between Build All Inc. and A New Creation Interiors By Victoria, Inc. The contract listed scope of work as follows: 1. Demolition 2. Frame & Drywall 3. Millwork CONTRACT TOTAL was listed as: $19,000 with payments to be made as: $5,200.00 for Permit & Demo; $5,800.00 when starting frame and drywall; $6,000.00 when starting millwork; $2,000.00 upon completion. Ms. Maloney stated she has already paid Brian Pascal two (2) separate checks in the amount of $2,000.00 and $1,400.00. The payments were for permit applications and materials. I then inquired of Ms. Maloney the other items on her contract with Kathy Kamin not listed with the contractor Pascal's written estimated contract. Ms. Maloney advised that she would be hiring all other subcontractors to complete the job and would be paying them with monies from the account of A New Creation Interiors. I then spoke to Ms. Maloney about Kathy Kamin's request to terminate the contract and receive a refund of funds already paid. Ms. Maloney related that she has already paid contractor Brian Pascal two checks of $2,000.00 and $1,400.00 ($3,400.00) to get the permit and get materials. She (Ms. Maloney) also stated that she has many hours of design fees in the project to date. Ms. Maloney advised she has approximately 250 hours into the project and her design fees are $90.00 per hour. Her total hourly fee would be $22,500.00. So a refund would only amount to $14,500 ($37,000 minus $22,500). I explained to Ms. Maloney that I believed that would be unsatisfactory to Kathy Kamin however I would contact Ms. Kamin and explain the fees. On the date of September 29, 2017, I met with Kathy Kamin. At that time, I discussed the fees as explained by Victoria Maloney. Ms. Kamin stated that those fees are unsatisfactory, explaining that Ms. Maloney could never have spent 250 5 hours working on this project from conception to September 5th when she was contacted by Contractor Licensing about the complaint. Ms. Kamin requested another meeting with Victoria Maloney reference the refund of monies paid. Continues 10/18/2017 On the date of October 16, 2017, I again met with Victoria Maloney. During the meeting, I explained to Ms. Maloney that I had reviewed the contract between herself and Brian Pascal / Build All Inc for the work at Ms. Kamin's home. It was explained to Ms. Maloney that upon review, it was observed that the contract only specified for the listed scope of work as follows as Demolition, Frame & Drywall and Millwork (as well as obtaining a building permit for the entire job). That all other scope of work was contained within her (Ms. Maloney's) contract with Ms. Kamin to include items not specified with the licensed contractor's contract. These included Plumbing, Electrical, Tile-Granite Flooring, Painting and Designer Services. Ms. Maloney again indicated she would be handling the hiring of these subcontractors and paying them from her company. I explained to Ms. Maloney that based on my review of both contracts, interviews with Ms. Kamin and herself (Ms. Maloney) that she (Ms. Maloney) was engaging in the business or acting in the capacity of a contractor without being duly registered or certified. I then issued Ms. Maloney Citation # 10992 for the above stated violation. I did read all reverse side information to Ms. Maloney at that time. Ms. Maloney signed the citation # 10992. It should be noted that Ms. Maloney came to no decision in reference to refunding any monies to the homeowner, Ms. Kamin. Case closed- Citation issued 6 .. ,� Report Title: Code Case Details Date: 11/1/2017 10:55:14 AM Case Number: CEUL20170014569 a4 x 1 Case Number: CEUL20170014569 Status: Citation Case Type: Unlicensed Date&Time Entered: 9/1/2017 10:04:06 AM Priority: Normal Entered By: JackGumph Inspector: JackGumph Case Disposition: Unpaid Jurisdiction: Contractor's Licensing Origin: Complaint Detail Description: Maloney, Victoria, Citation # 10992, $1,000, Unlicensed GC A New Creation Interiors By Victoria, Inc. Location Comments: 7864 GARDNER DR, NAPLES, FL 34109 (Folio#64702005624) Property 64702005624 �.. Complainant Kathy Kamin Contractor BUILD ALL INC Violator Victoria Maloney Business Management& Budget Office Code Case Details Execution Date 11/1/2017 10:55:14 AM Desc Assigned Required Completed Outcome Comments Preliminary Investigation JackGumph 9/1/2017 9/1/2017 Needs 09/01/2017 Investigatio n On the date of September 1, 2017, 1(Jack Gumph)received a written complaint reference a homeowner entering into a contractual agreement for construction work with a design decorating firm not carrying a certificate of competency through the state or County of Collier. The complainant was listed as Kathy Kamin (239-566-1722), 7864 Gardner Dr., Naples, FL 343109.The written complaint indicated that Ms. Kamin had entered into a contractual agreement for construction remodeling work at her owned residence(7864 Gardner Dr.) with a company identified as A New Creation Interiors By Victoria, Inc. This company is a "Design/Decorating"firm owned by a Victoria Maloney.The contract with"New Creation Interiors"was signed on the date of 08/12/2017 whereby a check from the personal account of Ms. Kamin was issued to Victoria Maloney in the amount of$35,000.00. Ms. Kamin indicated that she is concerned because there has been no activity on the permitting process for the work. Contact with the complainant forthcoming for additional information. Business Management& Budget Office 2 Code Case Details Execution Date 11/1/2017 10:55:14 AM Desc Assigned Required Completed Outcome Comments Investigation JackGumph 9/8/2017 10/18/2017 Citation 10/18/2017 Required On the date of October 16,2017, I again met with Victoria Maloney. During the meeting, I explained to Ms. Maloney that I had reviewed the contract between herself and Brian Pascal /Build All Inc for the work at Ms. Kamin's home. It was explained to Ms. Maloney that upon review, it was observed that the contract only specified for the listed scope of work as follows as Demolition, Frame& Drywall and Millwork(as well as obtaining a building permit for the entire job).That all other scope of work was contained within her(Ms. Maloney's)contract with Ms. Kamin to include items not specified with the licensed contractor's contract.These included Plumbing, Electrical,Tile-Granite Flooring, Painting and Designer Services. Ms. Maloney again indicated she would be handling the hiring of these subcontractors and paying them from her company. I explained to Ms. Maloney that based on my review of both contracts, interviews with Ms. Kamin and herself(Ms. Maloney)that she(Ms. Maloney) was engaging in the business or acting in the capacity of a contractor without being duly registered or certified. I then issued Ms. Maloney Citation#10992 for the above stated violation. I did read all reverse side information to Ms. Maloney at that time. Ms. Maloney signed the citation#10992. It should be noted that Ms. Maloney came to no decision in reference to refunding any monies to the homeowner, Ms. Kamin. Case closed-Citation issued Cont. Investigation JackGumph 10/18/2017 10/18/2017 Complete On the date of September 5, 2017, I (Jack Gumph)telephoned the complainant, Ms. Kathy Kamin (239-566-1722)reference additional information on her referral. Ms. Kamin related that she had enlisted the services of Victoria Maloney as referred by a friend in June of 2017. She(Ms. Kamin) spoke with Victoria Maloney by phone and met several times about the renovation project at her home. On the date of August 1, 2017, she(Ms. Kamin)wrote a personal check to Victoria Maloney in the amount of $200.00 for consultation fees. On the date of August 12,2017, she(Ms.Kamin)entered into a written contract with Victoria Maloney/ A New Creation Interiors entitled"General Remodeling Contract".The total amount for the contract was documented in the amount of"A budget range: $75,000.00 to $85,000.00". On that date(08/12/2017), Ms. Kamin wrote a check to"A New Creation Interiors"in the amount of$35,000.00.As per Business Management& Budget Office 3 Code Case Details Execution Date 11/1/2017 10:55:14 AM the contract, this amount was documented for: "To begin project—including permit— contractors work and purchasing of necessary materials". (NOTE: it should be noted that I received a copy of the contract document&checks with the original complaint from). Ms. Kamin explained to Victoria Maloney that she(Ms. Kamin)wanted an itemized budget for each facet of the renovation, for example, cost of flooring,granite,tile etc. She(Ms. Kamin)was subsequently introduced (by Victoria Maloney)to the contractor who was to work with Victoria Maloney on the project. His name was Brian Pascal and reiterated to Ms. Kamin that he would be getting the permit and working on the project with Victoria Maloney. Ms. Kamin went on to relate that she was feeling an uneasiness because Victoria Maloney was not providing the itemized budget she had requested and Ms. Kamin feared that she(Victoria Maloney) might not be able to meet the stated budget. Ms. Kamin spoke to Victoria Maloney who advised that she(Victoria Maloney)was still getting"bids"from contractors on the flooring, granite,tile etc.to come in under budget (NOTE: it should be noted that it was Victoria Maloney who was bidding out to subcontractors, not contractor, Brian Pascal). Ms. Kamin stated at one point she inquired of Victoria if she(Kathy Kamin)would be paying the contractor for these services however, Victoria Maloney told her that"if they're not working for me,then how do I get paid". Ms. Kamin stated that she finally contacted the Collier County Contractors Licensing section who advised to complete the written complaint. Ms. Kamin stated it would be her desire to terminate the contract with Victoria Maloney, receive a full refund and move on to another contractor. I had previously researched the computer database networks of the Florida Department of Business and Professional Regulation (DBPR)and Collier County Contractor Licensing and found no listing for A New Creation Interiors or Victoria Maloney. I did find a listing in the Florida Division of Corporations for company:A NEW CREATION INTERIORS BY VICTORIA, INC which listed the Registered Agent and President as Victoria Maloney. Business Management& Budget Office 4 ,.. o Code Case Details Execution Date 11/1/2017 10:55:14 AM had previously,the opportunity to examine the copy of the written contract between Kathy Kamin and Victoria Maloney/A New Creation Interiors entitled"General Remodeling Contract",dated August 12, 2017. The contract was printed on Letterhead of"ANCI,A New Creation Interiors". The contract listed the Client as: Kathy Kamin with address of 7864 Gardner Dr., Naples, FL.The contract listed the Designer as:Victoria Maloney/A New Creation Interiors and Remodeling Corporation:A New Creation Interiors By Victoria, Inc. The contract listed the Contractor as: Brian Pascal, CBC1255774, Bonded and Insured. The contract went on to stipulate 9 separate sections of work to be completed to include: 1. Demolition 2. Plumbing 3. Electrical 4. Frame& Drywall 5. Glass Doors&Millwork 6.Tile-Granite Flooring 7. Painting 8. Designer Services 9. Permit This contact involved the complete renovation of a kitchen and two bathrooms of the home at 7864 Gardner Dr.This included all demolition, new cabinets,countertops, plumbing,electrical,drywall, carpentry-trim, tile flooring,and painting. The cost breakdown of the contract was listed as follows: 1. $35,000.00 to begin project—including permit—contractor's work and purchasing of necessary materials. 2.$20,000.00—Two to Three weeks into project—possibly sooner covering partial costs of cabinetry and flooring. 3. $20,000.00—As necessary to cover costs and expenses 4. $10,000.00—Balance to be paid upon completion. I observed the signature of Kathy Kamin, dated 8/12/2017. On the date of September 27,2017, I met with Victoria Maloney for a scheduled appointment at the Collier County Contractor Licensing offices.At that time, I inquired of Victoria Maloney information related to her contract with Kathy Kamin for the renovation job and information on the contractor/client Business Management & Budget Office 5 l i Code Case Details Execution Date 11/1/2017 10:55:14 AM relationship.Victoria Maloney related that she (Victoria Maloney)was the party who drafted the written contract with Kathy Kamin. Ms. Maloney went on to state that she knew Kathy Kamin was waiting on the itemized budget, but she(Victoria Maloney)was still getting the bids from the flooring contractor for the flooring tile work. The itemized list was now complete(provided a copy).When asked about who the subcontractors would be working for,Victoria Maloney related that "they need to be working for me, that's how I get paid". I then asked about the working relationship with the contractor listed on the written contract.Victoria Maloney advised me his name is Brian Pascal and he is a licensed contractor and would be working for her on the project. (NOTE: It should be noted that I previously researched contractor Brian Pascal and found him to be a state licensed Building Contractor, #CBC1255774 listed under company name, Build All Inc.). Ms. Maloney went on to state that she will be using Brian Pascal to obtain the permit and various other contractual items.Victoria Maloney then presented me with a written contract(unsigned)between herself and Brian Pascal/Build All Inc.for the renovation at Ms. Kamin's address. I did observe the document which was on the Letterhead of "Build All Inc.". The contract was dated 08/11/2017.The contract was listed to: Victoria Maloney/A New Creation Interiors By Victoria, Inc.The contract job address was listed as:7864 Gardner Dr, Naples, FL 34103. The contract stated:This contract is between Build All Inc.and A New Creation Interiors By Victoria, Inc. The contract listed scope of work as follows: 1. Demolition 2. Frame&Drywall 3. Millwork CONTRACT TOTAL was listed as: $19,000 with payments to be made as: $5,200.00 for Permit&Demo; $5,800.00 when starting frame and drywall;$6,000.00 when starting millwork;$2,000.00 upon completion. Ms. Maloney stated she has already paid Brian Pascal two (2)separate checks in the amount of$2,000.00 and$1,400.00. The payments were for permit applications and materials. I then inquired of Ms. Maloney the other items on her contract with Kathy Kamin not listed Business Management & Budget Office 6 Code Case Details Execution Date 11/1/2017 10:55:14 AM with the contractor Pascal's written estimated contract. Ms. Maloney advised that she would be hiring all other subcontractors to complete the job and would be paying them with monies from the account of A New Creation Interiors. I then spoke to Ms. Maloney about Kathy Kamin's request to terminate the contract and receive a refund of funds already paid. Ms. Maloney related that she has already paid contractor Brian Pascal two checks of $2,000.00 and$1,400.00($3,400.00)to get the permit and get materials. She(Ms. Maloney)also stated that she has many hours of design fees in the project to date. Ms. Maloney advised she has approximately 250 hours into the project and her design fees are $90.00 per hour. Her total hourly fee would be $22,500.00. So a refund would only amount to $14,500 ($37,000 minus$22,500). explained to Ms. Maloney that I believed that would be unsatisfactory to Kathy Kamin however I would contact Ms. Kamin and explain the fees. On the date of September 29,2017, I met with Kathy Kamin.At that time, I discussed the fees as explained by Victoria Maloney. Ms. Kamin stated that those fees are unsatisfactory, explaining that Ms. Maloney could never have spent 250 hours working on this project from conception to September 5th when she was contacted by Contractor Licensing about the complaint. Ms. Kamin requested another meeting with Victoria Maloney reference the refund of monies paid. Continues Issue Citation (licensing) JackGumph 10/18/2017 10/18/2017 Complete 10/16/2017: Issued citation#10992 Unlicensed General Contracting, $1,000.00 1st offense,to Maloney,Victoria (DBA)A New Creation Interiors By Victoria, Inc.Signed for by Victoria Maloney, Registered Agent/President. I explained all reverse side information of the citation to Mr. Maloney who stated that he understood and signed for the citation. Citation Paid/Contested clements_k 11/1/2017 11/1/2017 Payment Not Received Generate Follow Up Letter clementsk 11/1/2017 11/1/2017 Complete Citation Paid clements_k 11/30/2017 Pending Business Management& Budget Office 7 X13 Code Case Details Execution Date 11/1/2017 10:55:14 AM Violation Description Status Entered Corrected Amount Comments Unlicensed General Contracting Open 9/1/2017 $1,000 Title Reason Result Compliance Fine/Day Condition Business Management & Budget Office 8 . ., . , #CO' - • 1411-CY Gr h Management Department Operations & Regulatory Management Division PRELIMINARY COMPLAINT FORM Complainant's Name: Kathy E. Kamin Date: 08/31/2017 Address: 7864 Gardner Drive City: Naples State: FL Zip: 34109 Home Phone: 239-566-1722 Business Phone: 239-377-0213 (7a-3p) Cell Phone: 239-273-1108 COMPLAINT INFORMATION: Company Name: A New Creation Interiors by Victoria License Number: N/A Contractor or Person in Charge: (If known): Victoria .1, Maloney Address: 3333 Renaissance Blvd Ste 210 Bonita Springs, Fl. 34134 Phone: 239-272-3605 Date of Contract: _08/12/2017 COMPLAINT DETAILS: (Attach additional sheets as necessary) I understand that designers/ decorators are not to act as the contractor when it comes to taking money - when not licensed as a contractor. I do not believe that Ms. Maloney has this licensee; however, I did contract with her and wrote two checks,one for $200 for her plans and consultation, and a check for$35,000.00 to begin the project, which has yet to begin. I am concerned because as of late I am not getting the paperwork or answers that I need to feel comfortable. Attached are the only documents that I have at this time. I am waiting for the bank to send me a copy of the cashed check for$35,000.00. I understand that the contractor has been given a check to pull the permit here in Collier County. _,, •.k_ , ,` \‘‘, . %.••• •s, t. Not sure what to do or where to go at this point. I am avoiding her calls. , c...,, 5 ...,.. Kathy '0 1 ........__.-_ .... .... ctalice-4-Fr,C.PP+lc laNk4unal-au•suLt.Zitialiattlictscatur-raz..1•1411(.4..11 -1_---..---' , .i •.11.1k mk-47,4 n,0 _ _ ------- 8/30/2017 Check Details-chase com • CHASE 0 Printed from Chase Personal Online Check Front . . . . . . . . . . . . . , 83-8413 — 23814 26M 8082 KATHY E. KAMIN 7864 GAFIDNER DR, NAPLES,Ft. 341090807 Cl'-E 6t 11 ei ! TO .IP* ilk . _ _ 14— ... -- -I $ 200 — ... I., 1 gi i I , ^ oct,ARS 8 .*•0111t i — CHASE LP , Ofeerilan Chas*Sank N.A. www.chsee 1 i 1 ii - • --- Back 01g91:10UNII3ValqURITY BANK . 1 410 5003 4 7 rn ..„ ....„ i. _ . Post date Check # Check amount Aug 3, 2017 8082 $200.00 https//secura05t)chase comiweb/authidashboardeidashboarcl/accounts/activityiwithdrawalDetails 1/2 ET1 Check Image System -Check Printing Window Page 8 of 8 ?.;)?tel?II1'AM i_,____ Brokerage Access- 1004 KATHY E KAMM ' tat oalONA DR t1AY/„ MARI A.34109 $ . t Z, 1—t 4444.. _ t•,.+uoK onlrr:,� �(1 -J }.L�S�...--b.7./1+.-.L(V�G"',,,_�� (} ,4� $ 5, 6'K'O �'. 1 vet*ju I -._ ----- > 1 i _ l , al :: , ,.. z ,M 4,., 1 ,t , I �___..__,�_ ---__ —_. _._-.......-.----._-__ –___-- __ ,.,.ti`_ac: :�ii c ; ; ;Paid Dar il2anouni ;69:V1;53681.11004 4000529552 1€1,8 IS I I7I;S?: NIt!�t�;�! cJ 0Z Ir\ // „2.5" .., r n ,�--, , ._...._, c _._� f •._..: . tit_- "•:.._..7.-. ill?'11 nil 1"7 A • N• C' I E'%(R►:.4"IIO%Iti I I:RIORS • GENERAL REMODELING CONTRACT• CLIENT: KATHY KAMIN ADDRESS: 7864 GARDNER DRIVE NAPLES, FLORIDA PHONE: 1-239-273-1108 DESIGNER: VICTORIA MALONEY-A NEW CREATION INTERIORS AND REMODELING CORPORATION: A NEW CREATION INTERIORS BY VICTORIA,INC. CONTRACTOR: BRIAN PASCAL LICENSE: #CBC 1255774 BONDED AND INSURED REMODELING PROJECTS TO BE COMPLETED: 1. DEMOLITION: • REMOVE ALL FLOORING AND BASE BOARD AND DISPOSE FROM HOME • REMOVE BATHROOM SHOWER WALL TILES,VANITIES,TOILETS AND PLUMBING FIXUTURES AND OLD SHOWER PANSIN-BOTH BATHROOMS • REMOVE EXISTING KITCHEN CABINETS • REMOVE DESIGINATED KITCHEN AND DINING WALL PER APPROVED DESIGN • REMOVE WALLS IN MASTER BEDROOM CLOSET PER APPROVED DESIGN • REMOVE ALL VANITIES • REMOVE ALL TRASH FROM SITE-PROVIDE DUMPSTER 2. PLUMBING: • INSTALLED NEW FIXTURES TO BOTH BATHROOMS AND KITCHEN. • (POSSIBLY INCLUDED IN CONTRACT) • INSTALL NEW VANITIES • INSTALL NEW SHUT OFF VALVES UNDER SINKS AND TOILETS • INSTALL TWO NEW SHOWER PANS • DRAINS TO REMAIN IN SAME LOCATION • MOVE REFRIGERATOR WATERLINE • INSTALL NEW PLUMBING UNDER SINKS. • (SINKS POSSIBLY INCLUDED IN CONTRACT) 3. ELECTRICAL: • INSTALL NEW ELECTRIC IN KITCHEN AS NECESSARY FOR CODE COMPLIANCE • INSTALL NEW LIGHTING AND SWITCHS FOR NEW FIXTURES OVER ISLAND • INSTALLATION OF NEW LIGHTING FIXTURES AND FANS-$70.00 PER FIXTURE • ADD NEW POWER FOR REFRIGERATOR THAT IS BEING MOVED 4. FRAME AND DRYWALL: • REPLACE ROTTED WOOD AS NECESSARY IN BATHROOMS AND KITCHEN • INSTALL NEW CEMENT BOARD UNDER TILE WALLS IN WET AREAS • IF DRY WALL IS DAMAGED REPAIR AS NECESSARY. TEXTURE TO MATCH EXISTING • REPAIR DRYWALL ON KITCHEN CEILING ATER WALL REMOVAL • REPAIR DRYWALL ON MASTER BATH CEILING IF DRYWALL IS REMOVED 333314•%NSVs(►'.Ri.'.it, Wrn.210 134 t Fwitin. 3413-1 1439-272-M05 GENERAL REMODEUNG CONTRACT CONTINUED 5. GLASS DOORS AND MILLWORK: • INSTALL NEW CABINETS-KITCHEN AND BATHROOM • INSTALL NEW CLASS IN BATHROOMS • INSTALL NEW DOOR TO SWING INTO LAUNDRY ROOM • INSTALL NEW BASEBOARD MOULDING THRU OUT HOME-5 INCH • NEW KITCHEN CABINETRY(TO BE SELECTED) • NEW BATHROOM VANITIES(TO BE SELECTED) 6. TILE-GRANITE(OR QUARTZ)AND FL ING • QUARTZ PER SELECTION(PRICE INCLUDED IN CONTRACT MUST STAY WITHIN AMOUNT BUDGETED) • INSTALLATION OF NEW FLOORING THRU OUT HOME • INSTALLATION OF NEW TILE IN MASTER BATH AND GUEST BATH 7. PAINTING: • THROUGHOUT HOME-COLORS TO BE SELECTED BY OWNER AND DESIGNER 8. DESIGNERS SERVICES: • DRAWINGS AND FLOOR PLANS-REDESIGNING EXISTING SPACE TO A MORE INVITING AND FUNCTIONAL SPACE AND USE BOTH KITCHEN AND BATHROOMS • SELECTION OF FLOORING-PER CUENT'S APPROVAL • SELECTION Of CABINETRY-PER CLIENT'S APPROVAL • WORKING WITH AND OVERSEEING WORK • COORDINATION OF ALL OF THE ABOVE • ALSO TAKING CARE OF ALL OTHER MISCELLANEOUS AREAS • DESIGNER'S CHARGES ARE INCLUDED IN THE TOTAL BUDGET 9. PERMIT: • INCLUDED IN COST OF PROJECT PLEASE NOTE THAT BECAUSE OF ADDITIONAL CABINETRY AND REMODEUNG WORK TO BE COMPLETED-AND COSTS OF PRODUCTS TO BE USED-CABINETRY-TILE-SINKS-FAUCETS AND OTHER MISCELANEOUS COSTS THAT UNKNOWN AT THIS TIME WE DO NEED TO HAVE A BUDGET RANGE: $75,000.00 TO $85,000.00 THIS IS NECESSARY-COSTS OF CABINETS-FLOORING ETC. NOT KNOWN AS OF YET. PAYMENT SCHEDULE: 1. $35,000.00 TO BEGIN PROJECT-INCLUDING PERMIT-CONTRACTORS WORK AND PURCHASING OF NECESSARY MATERIALS 2. $20,000.00-TWO TO THREE WEEKS INTO PROJECT-POSSIBLY SOONER COVERING PARTIAL COSTS OF CABINETRY AND FLOORING 3. $20,000.00-AS NECESSARY TO COVER C•STS.r.0 EXPENSES 4. $ 10,000.00-BALANCE TO BE PAL' • ° COMPLETION (FINAL PAYMENT AMOUNT-SUBJECT TO COSTS OF OWNER'S SELECTIONS) (THESE ABON'EIGUR Y BE ADJUSTED UPON PURCHASES OF MATERIALS.) n C CLIENT'S APPROVAL .0444 DATE: (? 11 i E\ 9 � T A �_ �-�^ i �• `'^* ^,��cmc^noNINTERIORS September 1, 2017 KathyKam/r 7864 Gardner Drive Noc!e� qo/i�a341I9 LIST OF EXPENSES: 1. GENERAL CONTRACTOR—BRIAN PASCAL—LISCENCE#CBC 1255774 (DESIGNER 15%) (COVERING #I'#4 '#5AND#9OFOUR CONTRACT) $ 23,000.80 $ 3450.00 Z. FLOORING—COST OF TILE - @ $ 2.50 PER SQUARE FT. $ 6000.00 750.00 3. INSTALATION OF FLOORING—INCLUDING LABOR—MATERIALS REPAIRS OF CONCRETE FLOORING BY BUILDER AND LEVELING 10'000.00 $ 1500.00 4. KITCHEN CABINETS—WHICH INCLUDES DESIGNERS WORK AND REDESIGNING SPACE—SELECTION OF CABINETS—DESIGNING WORKABLE CABINET STRUCTURE—ALL INCLUDED IN PLANS $ 9'000.00 $ I350.00 5. BATHROOM CABINETS—NEW VANITIES—MASTER AND GUEST $ 3'000.00 $ 450.00 6. PAINTING—INCLUDING REPAIR TO WALLS—PAINTING CEILING—WALLS—BASEBOARDS—AND DOORS AND DOOR FRAMES -THIS INCLUDES PAINT. $ 7'500.00 $ 1,125.00 7. PLUMBING $ 3,500.00 8, GRANITE 5 5,000.00 S 750.00 9. TILE—BATHROOMS--ESTIMATE—SHOWERS $ 4,000.00 $ 600.00 10. BACK SPLASH—KITCHEN—ESTIMATE $ 1'500.00 $ 225D0 11. GLASS FOR SHOWERS—MASTER AND GUEST—POSSIBLE MIRRORS $ 4,000.00 $ 600.00 * SEVERAL OF THESE COSTS FACTORS HAVE BEEN ESTIMATED* $ 75,500.00 $ 10,800.00 TOTAL DESIGNER'S EXPENSES $ 10'800.00 TOTAL $ 86.300D0 PLEASE NOTE: DESIGNER TIME IS$ 90.00 PER HOUR—ESTIMATED TIME AS OF NOW MORE THAN 250 HOURS-$ 22,500.00—OF WHICH THE CLIENT HAS NOT BEEN CHARGED BECAUSE OF OUR SIGNED CONTRACT DATED 8-12-17. s33aRsN^/ss^NcmBLVD. Sonezm BONITA SPRINGSFLORIDA 34/3* 1-239-272-3605 �� ,ln E: (9' +gyp^; 1 z., W* g Yb6 7Q... ,,,..„....,:. , . ...i; , i . , , , _ , ,.., =:,„ . _ sh > —r ...,;_-_,L. zC` fir' t7 b 1' . . , cil 0 ' II 0 -..r,: C0P OZ co rt .-.. .... ' P4V fT- .m co ---- r: 1 co ' — mm2 45 1 2 * (13 iir a z 0. , . .. . a 1 , . .4-. BUILD ALL, INC. BUILDING CONTRACTOR 152 S.W. 49th TERRACE PHONE (239) 540 - 4442 CAPE CORAL, FL. 33914 FAX (239) 540 - 4446 L IC x # CBC 1255774 ,sh J .c. rt BONDED & INSURED www.buildallinc.com CONTRACT To:Victoria Maloney/A new creation interiors by Victoria Inc. Job Address: 7864 Gardner Drive Naples Fl. 34103Date: 08/11/17 Inc. andA new creation interiors by° Victoria Inc. All work This contract is between and Build All to be done at address above.We will be performing interiorrenovations only.This contract is for labor and most material to complete the scope of work.Material not included will be called out below. We are responsible for all material pickup and delivery. Scope of work will include: Permit '-! Pull permit for job at address above Demolition t Remove all flooring and base board threw-out of unit RemoveBathroom both shower wall tile, vanities, toilet and plumbing fixtures and old shower pansin both Bathrooms Remove Kitchen cabinets Remove two kitchen and dining room walls as per Designer 1, Remove walls in Master Bedroom closet as per Designer Remove all vanities Remove all trash from site,provide dumpster Frame and drywall ir Replace rotted wood as necessary in Bathrooms and kitchen • Install new cement board under tile walls in wet area • If dry wall is damaged repair as necessary. Texture to match existing • Repair drywall on kitchen ceiling after wall removal • Frame three new closet openings in master bedroom • Build knee wall for cabinets in sink area Millwork • Install Kitchen cabinets and vanities. (Supplied by others) • Install base board through- out house 2 Install new door from kitchen to laundry Install new closet door in Master Bath (Glass bi-fold supplied by others) 67(p...3 3 TOTAL------------------------519,000.00 Payments to be made as: 55200.00 For permit and demo 55800.00 When starting frame and dry-wall 56000.00 When starting Millwork C2000.00 upon completion Owner shall pay contractor for the performance of this contract, subject to changes in accordance with any properly executed Change Orders, for the Contract sum of: NINTEEN THOUSANDDOLLARS EVEN Thank you for choosing BUILD ALL, INC. serving all your construction needs. We hereby propose to furnish labor, and most material in complete accordance with the above specifications, for the sums specified above. ACCEPTANCE OF CONTRACT The prices,specifications,and conditions are hereby accepted. Payment will be made as outlined above. Accepted: Signature/Date Officer of Signature/Dates Build All Inc.: e;11 • Detail by Entity Name Page 1 of 2 Ronda Department of t-,t,fate org .2-ter,etret rtt state. / Otetainn of curpotatterti / -4e,o-ws / pgLarttypacurneatilaymoe: / Detail by Entity Name Florida Profit Corporation A NEW CREATION INTERIORS BY VICTORIA,INC Filing Information Document Number P12000036545 FEUEIN Number N/A Date Filed 04/17/2012 Effective Date 04/12/2012 State FL Status ACTIVE principal Address 3333 Renaissance Blvd.Suite Suite*210 Bonita Springs,FL 34134 Changed:04/26/2017 Melling Address 3333 Renaissnce Blvd.Suite Suite 210 Bonita Springs,FL 34134 Changed:04/26/2017 Registered Agent Name 44Address MALONEY,VICTORIA 3333 Renaissance Blvd. Suite*210 Bonita Springs,FL 34134 Address Changed:04/26/2017 Orricaripirecter Detail Name&Address Title PRES MALONEY,VICTORIA 3333 Renaissance Blvd. Suite//I 210 Bonita Springs,FL 34134 http://search.sunbizorganquiry/CorporationSearch/SearchResultDetail?inquirytype=Entity... 9/1/2017 Detail by Entity Name Page 2 of 2 Annual R.ctorts Report Year Filed Date 2015 06/10/2015 2016 03/29/2016 2017 04/26/2017 Document Ns�ao s ,N^o_LuAWNI,IAL R f_PQR1 vow inagp.„ i1 fC r ! I 3.257^'b ANN11A REPQRT 'D 'xm.y ,?61tIZV 5-ANNUAL Nj PQZ- view,mails r=PDF !cKmat 0425,2014 ANN[PAL HEPQRT V<c-w 17.x e err?F}I !xmI U1 16/2013-r NNJAL fiPQRT V erw "r fgr+sa),Dr ::rr- I 04177012 P-9rpC56c{' fit V.ew nw e '01,I,J1 I http://search.sunbiz.ocg/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=Entity... 9/1/2017 DBPR - PASCAL, BRIAN RICHARD; Doing Business As: BUILD ALL INC, Certified ... Page 1 or 9 57.30 AM r1/1/20/7 Licensee Details Licensee Information Name: PASCAL, BRIAN RICHARD (Primary Name) BUILD ALL INC (OSA Name) Main Address: 1616 CAPE CORAL PKWY W STE 102 #139 CAPE CORAL Florida 33914 County: LEE License Mailing: License Location: License Information License Type: Certified Building Contractor Rank: Cert Building License Number: CBC1255774 Status: Current,Active Licensure Date: 07/27/2007 Expires: 08/31/2018 Special Qualifications Qualification Effective Construction Business 07/27/2007 Alternate Names View Related License Information - • 11 • • 1 . •$ - • • ;•;• • afiAssee FL 32399 Email. Cu*tomer Contact Center :: Customer Contact Center: 850.487.1395 7he State or Honda.s as kA/EEO employer.Copyright 2007-2010 State of Florida,privacy Statement Under Honda law,email addresses are public records If you do not want your email address released in response to a public-records request,do not send electronic mail to this entity.Instead,contact the office by phone or by traditional mail. IF you have any questions,please contact 850 487 1395. 'Pursuant to Section 455.2'75(1),Florida Statutes,effective October 1,2012,licensees iicensed under Chapter 455,F.5 must provide the Department with an email address if they have one.The ernails provided may be used for official communication with the licensee.However email addresses are public record. If you do not wish to supply a personal address,please provide the Department with an email address which can be made available to the public.Please see our Chi= 45.5 page to determine if you are affected by this change. hups://www.myfloridalicense.com/LicenseDetail.asp?SID—&id=337FOEE6BCCDCOACE2... 9/1/2017 License Application Status - CityView Portal Page 1 of 1 GMD Public Portal License Application Status Note:You can collapse and expand individual sections by clicking the header of the section you wish to collapse/expand. — License Application Summary Application Number: C36295 Business Name: BUILD ALL INC License Type: Contractor Application Status: Active Description of Business: All Certificates from CDPlus:34085,36295 Mailing Address: 1616 CAPE CORAL PKWY W STE 102#139 152 SW 49TH TERR CAPE CORAL FL 33914 CAPE CORAL FL 33914- Locations: — Issuances Type Date Issued Date Expires Status Number BUILDING CONTR.-CERTIFIED 07/06/2017 08/31/2018 Active 36295 — Submittals There are no submittals for this license application. _ Reviews There are no reviews for this license application. - Insurance Producer Type Policy Effective Date Expiry Date Limit ROE INS.AGENCY General Liability GLP020845902 04/04/2013 12/29/2017 $1,000,000.00 Expiration Processed: No Producer Phone Number: 727-376-0030 BRIAN R.PASCAL Worker's Comp (QUALIFIER) 03/16/2016 03/16/2018 Exemption Expiration Processed: No ROE INS.AGENCY Worker's WCV020845501 12/29/2016 12/29/2017 3 Compensation Expiration Processed: No Producer Phone Number: 727-376-0030 http://cvportal.colliergov.net/CityViewWeb/License/Status?licenseld=100644 11/1/2017 . . CeA(.- V-d --4-' b 6 1 '-'-----' 5 10 9 9 2 coLLIgR COUNTY GROWTH MANAGEMENT DIVISION CITATION Pursuant to section 489 Florida Statutes,the undersigned hereby certifies that upon personal investigation,he/the has reasonable and probable grounds to believe that the person whose name appears below as issued to,did violate subsection 489.127(l),Florida Statues.and the Collier County Contractors Licensing Ordinance No.2006-46(as may be amended I by committing the violation stated below. Month / ° Day /‘. 242/ .. 2: 4 1- Year Time A! t•i Issued To 11/e-rax.4 it-'14/,o,k/d7' Address 71.15 R644"5-C4JCCIP-1/4N # 2/O Ci - /AO'W-1 State 6- Zip 3 6/.3 Telephone No 23/ I.D. Date of Birth- zn-3446- ...._ Vehicle Make/Type(if applicable)]. Year.....AcloiL45L No. Loca'.• .., '.I if:), OPT1O S I have been informed of the violation for which I have been charged and elect the followi31uption(Check one) I) IlUrchoose to pay the penalty of$ i)000. 2) (J I choose not to pay the penalty.and will request in writing by certified mail or hand delivery an Administrative Hearing before the Contractors Licensing Board. Description of Violation Date Violation Observed(ey,7_ a) °Falsely hold self or business organization out as a licensee,certifica h der or registrant; b) 0 Falsely impersonate a certificate holder or registrant; c) (Present as his/her own the certificate or registration of another; d) 0 Knowingly give false or forged evidence to the Board or a member thereof; e) OUse or attempt to use a certificate or registration which has been suspended r revoked;in the f) Engage business or act in the capacity of a contractor or advertise self( or business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified: g) ClOperate a business organization engaged in contracting after(60)days; h) ['Commence or perform work for which a building permit is required pursuant to an adopted state minimum building code or without such permit being in effect; i) 0 Willfully or deliberately disregard or violate any Collier County ordinance relating to uncertified or unregistered contractors. A person or business organization operating on an inactive or suspended certificate, or registration,or operating. i. the scope o -- k or:- .:4 . ical scope of the .. , ion,is not duly . -1 . .1. :*, ,• . Aiiiimuly dip.........iii... jii "....''...." 'A SIGNATURE(RECIP ;#4w) SO '4 (INVEST! ATOR) ki‘41rittelomff, a r , /I I'IP PRINT(RECIPIENTS NAME) PRINT(INVESTIGATO' NAME) Pursuant to 489.127,Florida Statues,willful refusal to sign and accept this citation constitutes a misdemeanor of the second degree,punishable as provided in section 775.082 or 775.083 Florida Statutes. (SEE REVERSE FOR INSTRUC'CIONS) A tut5i...) Ca4-4-1-7 oi-/ "- _,,,f7792‘0 fz-s. COLLIER COUNTY CONTRAC TORS t ic H, - INSTRUCTIONS The + natty for each uncontested violation has been sei by the Board of Col- a,= t Commissioners,and skill be payable Lathe-Board of Colder County Commissioners, 2800 North Horseshoe Drive, Naples, Florida 34104,no later than 10 days of notice receipt,excluding weekends and,kgatl holida}s. PAYMENTS MUST BE MADE BY CASH,CHECK.OR MONEYORDER: ALL FEES MUST BE REMITTED IN U,S.FUNDS. FINE SCHEDULE,-UNCONTESTED VIOLATIONS 1st Uncontested Offense t$1,000.00 2nd Uncontested Offense 52,0(X1.00 Notwithstanding the above-referenced penalties,in the event a first uncontested violation is the result of the violator engaging in the business or acting in the capacity of a contractor in-advertising himsttf or herself or a business organization as available to engage in the business or act in the capacity of a contractor without being duly registered or certified. 'Ihe penalty shall abated from 51,000.00 to i300.00 ilthe violator submits a completed application in accordance with sec- tion 2.1 and'2'2.2 of this Ordinance within forty-tisk k4 days of the date of issu- ance of the Citation for the violation, REQUEST FOR HEARING: You may request an Administrative Hearing within the same ten(10:day time Came before the Collier County Contractors Licensing Board upon notice,in writing,to the Contractor',, licensing Supervisor. If you do not request a hearing in pay the penalty lee as described,the citation shall automatically become a Final Order of the Contractors Licensing Board,ordering the violator to pay the civil penalty set forth on the citation without a hearing.A certified copy of such Order shall he recorded in public records and thereafter shall constitute a lien against most real and personal property owned by the violator.Upon petition to the Cir- cuit Court,such Order may be enforced in the same manner as a Court ludgment by the Sheriff's Office or the State.If after three 131 months from filing such lien,the hen remains unpaid,the Contractor's Licensing Board n;iv authorize the County Attorney's Office to foreclose on the lien. The maximum penalty tor a contested citation is 52,300.00 for each stay the violation exists. Each day a willful knowing violation Continues it shall constitute a separate offense and penalties shall cont?nue to accrue.Any aggrieved party-may appeal a f=inal Administrative Order otthe t=,:,rd to tkke Circuit Court,$sett.appeal shall not lie a nearing de nods.but shall pe ! ,`'r± tr appellate review of the record <re,ued before the Board_Ari appeal irhhri thirty J('lave of the Order, it you needU!tton;u int r r;at ;ftk („rt.00011 Di„-p4rirot 44,1114j,,,py Pianiumt& Oper,itom, Ihtt,twt I ittc1,41,14 October 30,2017 VICTORIA MALONEY 3333 RENAISSANCE BLVD#210 BONITA SPRINGS, FL 34134 RE Contesting Citation(s) Ms. MALONEY, You have teen added to the agenda for the Contractor Licensing Board meeting on Wednesday, November 15th, 2017, The meeting is held at 9:00am at the W Harmon Turner Building (Bldg F, Admin Bldg.), 3299 Tamiarni In E. Naples, FL in the Commissioner's Meeting Room on the 3"1 floor. If you have any questions or concerns, please call(239i 252-2930 Sincerely, Joann Greenberg Collier County Contractors Licensing &Operations Regulatory Mgrs 2800 North Horseshoe Drive Naples, FL 34104 w1 ; ' C. A N. C. I A NEM CKLA1 OA rsTratiotN October 27,2015 , , Collier County Growth Management Division , 2 l., r North Horseshoe Drive Naples,Florida 34104 Re° Citation#10992 Attention: Mr.Everildo%meta Licensing Compliance Suoervisor i at requesting an Administrative Hearing before theContractor's Licensing Board. Thank you very moth! VP-wie — )1C,2H- f-s---• Victoria Maloney A New Creation Interiors 3333 Refta issa nce Blvd,Suite#210 Bonita Springs,Florida 34134 Mobile: 1-239-272-3E05 , , 27 21311 LI 1 . ' . (`--'-(--- COLLIER COUNTY GROWTH MANAGEMENT OIVISiON IN§TRVOTIONS CITATION EMV,EN T-9 f CITATION, 1.143u f.,,--c.,, ilL'1141.,4i4j'I' liadr‹,,,1373 fe44•1415:•ClAie -i5t-i/41 #.07(''''-') , ..- -) ,3-57 _ )- - 5, ---- 1 ----- , ..... 4' '(1°444400e,,rog--.9/L.. e OPTIVOS F? . JEST it,.-.47 HE,...A•41`14:7,,/,, i o _ ,, .._,- *roe" ki fl -iy AA.„,:,v-t„...i.,-..:r.,,,;-,,,,,k----, ,..., --:,-,,,,,7-5.-L , rn FP Z 1 P t r • Licensing Section Wednesday, December 06, 2017 VICTORIA MALONEY 3333 RENAISSANCE BLVD # 210 BONITA SPRINGS, FL 34134 RE: Contesting Citation(s) 10992 Ms. MALONEY, You have been added to the agenda for the Contractor Licensing Board meeting on Wednesday, December 20th, 2017. The meeting is held at 9:00am at the W. Harmon Turner Building (Bldg. F, Admin. Bldg.), 3299 Tamiami Trl. E., Naples, FL 34112 in the Commissioner's Meeting Room on the 3rd floor. If you have any questions or concerns, please call (239) 252-2930. lea , n-1 CERTIFIED [T IVrA , RECEIPT m (Domestic Mail Only;No insurance Coverage Provided) Sincerely ti For delivery information visit our wetssiteatwww.usps.comr ��I'�/__ `D Postage ra:rr Certified Fee Reium Receipt Fee \\ Lilla Davis (Endorsement Required) \\\\,`\\` Administrative Supervisor o Restricted Delivery t 0 (Endorsems”." \its\\\\\\ Contractor Licensing11.1 \ \\\\\\�\\� P ON�`� B J0 Collier County Growth Management Department 1""‘ ""\ '\�oR\PM SP4G - 34A34 2800 North Horseshoe Drive o v\(', ENP$ S FL Naples, FL 34104 j 3333 SQR\NG ' �;h gON\� for Instructiorm Growth Management Division`Planning&Reguiotion'2800 North i-lors,shoe t 'N p-5,'lurid 10',^ 252-2-u0'WW c r 1,��.net USPS.com® s USPS Tracking® Results ® FAQs > (http://faci.usps.com/?articield=220900) USPS Tracking Track Another Package + Remove X Tracking Number: 70042510000469932332 Your item was delivered at 1:49 pm on December 10, 2017 in BONITA SPRINGS, FL 34135. C✓ Delivered December 10, 2017 at 1:49 pm DELIVERED BONITA SPRINGS, FL 34135 Get Updates \.' Text & Email Updates u Tracking History n December 10, 2017, 1:49 pm Delivered BONITA SPRINGS, FL 34135 Your item was delivered at 1:49 pm on December 10, 2017 in BONITA SPRINGS, FL 34135. December 9, 2017, 12:25 pm In Transit to Destination On its way to BONITA SPRINGS, FL 34134 December 9, 2017, 11:49 am Notice Left (No Authorized Recipient Available) BONITA SPRINGS, FL 34134 haps://tools.usps.coin/go/TrackConfirmActi on_input?ori gTrackNum=700425100004699... 12/12/2017 us?,s co <D I $ a a ,t, ;gig© R stirs December 8,2017, 10:25 pm Departed USPS Regional Facility FORT MEYERS FL DISTRIBUTION CENTER December 8, 2017, 7:12 pm Arrived at USPS Regional Facility FORT MEYERS FL DISTRIBUTION CENTER Product Information \./ See Less n Can't find what you're looking for? Go to our FAQs (http://faq.usps.com/?articleld=220900) section to find answers to your tracking questions. https://tools.usps.com/go/TrackConfinnAction input?ongTrackNum=700425100004699... 12/12/2017 I • 1--- _ ,=_, — -.;-:-.= =7=-_-17--- ---=-- --.----.•--- -=,-,- — —_ ____ __ __ PSI SERVICES-LI-4=i= -= -------: ---=_-- AiildiatMCONSTRUCTION CONTRACTOR BOARD This report certifies that the candidate listed below has taken an Oregon Contractor licensing test and achieved the results detailed below, - t--- --..--. --g-----.- _ --:-'-:= ELIZABET1-1 L GREESON 150 BLUE HOLLY DRIVE NE CALHOUN, GEORGIA 30701 _ ,-„..... .....-..,.*--. , :,r.,1,,,,,....,r......-.• -,,,-: i--i CANDIDATE ID: 05502607,-.7-_---, -i_------ --, ---_------. t-L------„--,,-- .._- --f--- , - 17--",-44---.--,---. EXAM DATE:06/08/201 -77-L'.__-L- ---- - - - - - - EXAM NAME: OR Construction Contractor-English 4,-.ei,-,,:•,-,...,.. .-------- t-,--- ,,,..-:-.. .,....:;,_ 7...,,. ..;,...:., .•.-,,...._ '.:.!.-L, EXAM RESULT: PASS COURSE CODE: HOME STUDY -- _----- 2-L-- --;t4.-T-;,-LL 4, .,41., T.-Tr -,r -1--,,,C o ng ra tu I a t lo n s,yo u have passed the_-_OFF_ConStratiOn-Contractor-English Test. ...,,, The following is an analysis of your examination: .."-:--_ -_-_-7-_-- ,---__ --- s-----= f-..-h.,- = ---=- =_.= ------= ',•-------- -rchie7SitiOTIS.,---- --_-1 #Correct - - --- ,.,-,„p_,... ----= = --- -- -----___- ---- .-..-- ,- ---: --=:::-,------:::= -------,---.15 rtConlfrablicinICOntractor Laws and Regulations 7.-:-.-•-_-_-:-..-7--,-.,-.----.7-. -7-.._--1-87- -!-- 17 ---------LiCho-o-sirig YO-Ur Business Structure --,-- -----) .-- 4 Hiring and Managing Employees 7 7 Working with Subcontractors 2 2 Contracts _ -9 8 -- - _ Oregon'Llen Law-- - ___ _ _ 5 Ridding'and-Estimating6 -_--_,-,--:.---- - - --- -'Scheduling-andrProject Management -g------------ --- 5 -i.5=._- -....__ Oregon Building Building Codes 4 4- Jobsite Safety 4 4 Environmental Factors 4 3 Building Exterior-Shell . - - FitiaritiakMana_gement __ ___ __ . -=-.. _,.z--_------,.._---- 4.7.--.._-.:,.,-.._, ,,,-__. _-_---_ _--,__-:--_-.- - --- --- __-_, .....----- ------:_.- -- ---- ---=_= 4 4 RESULT*"PASS*At -_-_-_, 80 7695.O%) . IMPORTANT-In-Order to obtain your constructiorTcri4trktor license you must submit your completed CCB license__7:„.:-.47:::_-, --,- - _-- •=---- --E-- -- -___'' APPIICatiOrr along with the licensingleeseore_seport andall other necessary documentation to the CCB. - — --- 410.4,Ft. lillitYlk ...11# dt,,1 .....1fr =====, 1,---,..,- ..r.-,•,-= --=,--- =-...--= __,-_-_r =_,.... ..,....---...: -,--,.• ,---.= - —- =- — ,-- Oregon Construction Contractors Board 201 High St.SE,Suite 600 ---- ----:----,, P.O Box 14140 - --L.,---- ------- __- .-, rt---.:.;_-- ,---=.---- ---- ..-_—_ —.-_—__ -.......2 Salem, OR 97301-5054 -----,4-,--- ----.,.,-, --,--- ------- ------ A z-— ,,,----__=, .== _... _ ,--.. (503)378-462 i .-===------ ----, ---- _,-,------_-_ --..,,,-___;.--__ ----.._- -----, --7-_---- -.=------ ---:--- .- - ---- 7.---_---- --,,,-- ,,- -- http://www.oregon.gov/CCB/licensing/Paforrfts-5_16es;aspx- ---_---..---- --- Please retain the original copy of this score report for your records. - - -_-__,-, '' ---_, . --f..,-,_ -----1-:-;-_,-- 1--.7--f" --:r---- -=-- -- - ,,g,-.,. :,..-,----1,t', =,- ,--- .-----*,-, ----.-4-=_,_-:----- .---.. _•-f--__ _-7.-__ —____ . 7-±.--t:-; -__7L•22_ :-._'.-17: ._=. =_7_7- - 110.01110 ..145€441M11," ,,11....1, ...TIE, --- -. =-2----=':r'.- ------Ibls-TaTrarnfirratterr-was delivered by PSI Services LLC**3210 E Tropicana**Las--VagaNV-,-891,21M Mg 9267 www.pslexams.com ——— — —---7, -=—__--- -,--;_-.---- --- MOHAWK CARPET DISTRIBUTION INC C/O MOHAWKONE DEPARTMENT PO BOX 12069 CALHOUN GA 30703 CCB LICENSE 216040 CONSTRUCTION CONTRACTORS BOARD � POCKET CARD RESIDENTIAL BOND:$15,000 LICENSE NUMBER:216040 COMMERCIAL BOND: $50,000 EXPIRATION DATE: 07/21/2019 fold and detach INSURANCE.$1,000,000/$1,000,000 ENTITY TYPE: Corporation along INDEP.CONT.STATUS:NONEXEMPT ENDORSEMENT(S): Residential Specialty Contractor and a perforation RMI:ELIZABETH LOUISE GREESON Commercial Specialty Contractor Level 1 p HOME INSPECTOR CERTIFIED: NO MOHAWK CARPET DISTRIBUTION INC C/O MOHAWKONE DEPARTMENT PO BOX 12069 4 4 4 4 4 CALHOUN GA 30703 LICENSE CARD - STATE OF OREGON I CONSTRUCTION CONTRACTORS BOARD LICENSE CERTIFICATE f-i LICENSE NUMBER: 216040 This document certifies that: MOHAWK CARPET DISTRIBUTION INC , C/O MOHAWKONE DEPARTMENT PO BOX 12069 CALHOUN GA 30703 is licensed in accordance with Oregon Law as a Residential Specialty Contractor and a Commercial Specialty • Contractor Level 1. License Details: ' • EXPIRATION DATE: 07/21/2019 ENTITY TYPE: Corporation INDEP. CONT. STATUS: NONEXEMPT RESIDENTIAL BOND: $15,000 L I COMMERCIAL BOND: $50,000 INSURANCE. $1,000,000/$1,000,000 RMI: ELIZABETH LOUISE GREESON HOME INSPECTOR CERTIFIED: NO • __ PSI SERVICES LLC------- Tennessee Board for Licensing_uontractors— Score Report --"-77------'f-.W,,,,ViT .,74te'!'-",‘,,,.1 ELIZABETH GREESON -- .', ._NAmii„mp-., '',•ff_i -41,---1,-1.,,--"4,7---_,_-'-tii0,--,'.-_,„:.-,-E• '--, 150 blue holly drive ne - — -'--'-'--- -. '-- --e';--w--', ------- calhoun,-Georgia 30701 , 1 SSN:--111.111111119364 EXAM DATE: 03/10/2017 - -- _ ---1,,.."-..--,•-_,,--... , ----_--,----7---tr----_-- -..-_---f• --___.- ----=-= i 7-----.---,-- ---.-,,r-, EXAM: TN Business and,LaW;Nrinagement= __= ----!----.--.A, ,--:-,_:_.__-7___:e--_--_-, " 'N ---•------- ---,,-.-, ---= ______ -,--- _TN Business and Law Management th,,,-- 11..,..-.. -74.11k 4.4[•• -4.1111 --...1 r-- '. --"-' - -- - — ,-,------,-=r--- ---. -- ---- --- PASS --_,__ --- — We are pleased to inform you that you have achieved a passing score of 47(94.0%)on the TN Business and -- ------',6-a-cwiviaggrtlent examination. _. an =_ -_ ---. ---„------f — -__ ,,_,_-_, -7-„,----- --,--- ,----- ---- -_, 7-7---:--------, --=' --- ------ ___-_—---.. --- _____ —-- ----- -„--.: =_-_- --, --- ..-----_. — In order to complete the process for obtaining a contractor's license, please contact the Tennessee Board for Licensing Contractors to request an application at the telephone number below or you may download from - their website at:-www.tn.gov/commerce/boards/contractors. --'7---_TrinesSee3-ba-Cd for Licensing Contractors .7. --- ..-- 500= James: :Robertson Pkwy ---'-' - Davy Crockett Tower Nashville,TN 37243-1150 Telephone:(800)544-7693 or FAX: (615)532-2868 ±-_--;_l_-_-LL--.--- __ -:--- ---------------- -7---. = -_:-_- --_, —„_,,,,, --- -,---_-_ , — -- —— =:____ ___ ______ ____ ,•,.___ .:-_-__.-.-___-,--,-_, ___ _-_„,_ ___ _ . .- _ ---=-_-_ ... .-..; •,--._ _-=- __ -----;---- Ple-ase be advised it is unlawful to contract, bid or offer to engage prioFteobarting a-contractor's license with the required classification and monetary limit.—-i.- ---7- ----=- -----_iff '7_l'-- SWOP ,, - = -----F---Thism was delivered by PSI Services LLC. ---- --1---7--_,-:_-: ---- 4:-,---.:-. J.---; 7-71 7-L-.1-, --:_7,-71.,,--7,7-7 -,--,-- •-_,---- ,--...-. v-,_L_•,, --==-.. :.-_-__ ,,,-, •_,- ___- __ .:--,-,.--- ----=-----;-----,, .7----•:-.• -.------ ----f--.-_---1=--;. ---.-- ...-.----=----_L---- -,_..-= — . . — -n------- ----- --,=:--- --i-,-- .,---- ------ ,- ..,.r.-:- --- • =----- =------- - - - i_''---....--._--'-±--------1-- -------..-- _--'=-_- ----= -- - - - -----.-- -- -:-- - --,.=4 ------ -.=----- - ,--, ..- -7...:- ',--7.--,.= ,-L_±---__----'_ _•.:.::-==- t..4,7,- -1,1 _-_=- ,,==. -7.-- .-- -.,=--- - STATE OF TENNESSEE ,, DEPARTMENT OF r'-"�:ery•`�:'1 .�►* COMMERCE AND INSURANCE i� , MOHAWK CARPET DISTRIBUTION,INC. 334480 - ID NUMBER.71 154 LIC STATUS:ACTIVE EXPIRATION DATE May 31,2019 BOARD FOR LICENSING CONTRACTORS CONTRACTOR THIS IS TO CERTIFY THAT ALL REQUIREMENTS OF THE STATE OF TENNESSEE HAVE BEEN MET Attn:MOHAWK ONE DEPT. MOHAWK CARPET DISTRIBUTION,INC. 160 SOUTH INDUSTRIAL BLVD CALHOUN,GA 30701 • 7 tats Vr Tenne5ce 334480 BOARD FOR LICENSING CONTRACTORS CONTRACTOR MOHAWK CARPET DISTRIBUTION,INC. 1.4 to,e4 mat aaxeyabem6Jztd a't><ie Mute?�/ervize&ee Acme been met. •. ETHgT•.• ID NUMBER:71154 <� "TF LIC STATUS:ACTIVE AGRICU URE I:T: EXPIRATION DATE:May 31,2019 i�•._ -; 1 AGLM UNLIMITED;BC-15;BC-4 ']796' IN-1313 DEPARTMENT OF COMMERCE AND INSURANCE PSI SERVICES LLC Commonwealth of Virginia Department of Professional and Occupational Regulation This report certifies that the candidate listed below has taken a Virginia Contractor examination and achieved the results detailed below. 1-1!' CANDIDATE 111111111169364 EXAM DATE: 11/28/2016 EXAM: VA Contractor-Class A or Class B Elizabeth L Greeson ' 150 Blue Holly Drive NE Calhoun, Georgia 30701 Portion VIRGINIA(Class A or B) RESULT PASS*** - _ - - - --- If you need to register for another examination, complete the registration form and mail or fax to PSI.You may also visit the PSI website at www.psiexams.com or call 1-800-733-9267 the next business day or later to register with a-Visa or Mastercard. Note: The Qualified Individual(s)on a Contractor license may also have to pass the Contractor Specialty Exam(s) for the classification(s)to be on the license. For Contractors: To obtain the Contractor license application forms for submittal to DPOR please go to http://www.dpor,virginia.gov/Boards/Contractors/. If you have any questions about the application you can email Contractor@dpor.virginia.gov or call 804-367- 8511, For Tradesmen: If you have any questions about the Tradesman application you have already submitted to DPOR,you can email Tradesmen@dpor.virginia.gov or call 804-367-8511. Please allow two weeks from the date you passed your exam to receive your license. This exam was delivered by PSI Services LLC, - - . COMMONWEALTH of VIRGINIA Department of Professional and Occupational Regulation r EXPIRES ON 0060 N1a yl and{)riveSuite 401) Richln.tot),VA 23213 NUMBER 03-31-2019 IT kphnno:(801)3t;' 6500 2705162&69 BOARD FOR CONTRACTORS CLASS A CONTRACTOR *CLASSIFICATIONS* FLR r• . e" A I MOHAWK CARPET DISTRIBUTION INC G I?,� _ 160 SOUTH INDUSTRIAL BLVD �� '' CALHOUN, GA 30703 Status can be verified at http✓/www.dpocvirginia:gov j1, 11 Det-,,,et Dr«i;,, (SEErREVERSE SIDE FOR PRIVILEGES AND INSTRUCTIONS) DPOR-LIC(02/2017) & ro TAk..6i+EKr; CC.,;+IC?ty•i`, C x,,1 1 �r ' f' i�'i. Department at Profe,,ional and Ckcup.nional12,:tdolon I I CLASS A BOARD FOR CONTRACTORS CONTRACTOR I I i *CLASSIFICATIONS*FLR I NUMBER: 2705162869 EXPIRES: 03-31: ff19 '- i° MOHAWK CARPET DISTRIBUT_ION-1Nf ..- : 160 SOUTH INDUSTRIAL BLVD I7 CALHOUN,GA 30703 ,1.� 1 Status can be verified at htfpd/www.dpor.virginia.gov -- DPOR-PC)02'2017) POV Collier County Florida Contractor Examinations Candidate Information Bulletin Exam Description Business and Law (Spanish) Acoustical (FL08143) Tests a candidate's knowledge of payroll taxes, workers' Tests a candidate's knowledge of the installation,repair,alteration and compensation,unemployment compensation,lien laws and other laws extension of any acoustical or suspended acoustical ceiling. or subjects that will affect their daily operations as contractors. Number of Questions 30 Number of Questions 50 Time allowed(hours) 1.5 Time allowed(hours) 2 Subject Area #Quest. Subject Area #Quest. Plan Reading&Estimating 8 Business Organization 2 Materials 7 Lien laws 2 Installation 10 Labor Laws 8 Safety 5 Tax Laws 5 Safety OSHA 3 References Licensing 3 Contract Management 9 Project Management 6 • Basic Safety, 2009. ISBN: 978-0-136-09875-1. NCCER MATS Estimating&Bidding 4 Testing, 13614 Progress Blvd, Alachua, FL 32615. Available at Financial Management 5 www.provbookstore.com or http://nccer.pearsonconstructionbooks.com Risk Management 3 • Drywall Level 1, 2007.ISBN:978-0-13-604512-0.Prentice Hall,P.O. Box 11071, Des Moines, IA 50336. Available at References http://nccer.pearsonconstructionbooks.com. • Florida Business &Law Study Guide for Contractors,2012.Prov, • Drywall Level 2, 2009.ISBN:978-0-13-604480-2. Prentice Hall,P.O. - — Box" 1.1 07r, Des —Moines, _ IA 50336.:=Available at---- 13614 Progress Blvd., Alachua, FL 32615. Available at www.provbookstore.com. http://nccer.pearsonconstructionbooks.com. • Florida Building Code 2010-Building, 2010.ISBN:Item#:5601 L 10. International Code Council,4051 West Flossmoor Road,Country Club Business and Law - (FLO8100) Hills,IL 60478.Available at www.iccsafe.org. Tests a candidate's knowledge of payroll taxes, workers' compensation,unemployment compensation,lien laws and other laws Alarm Contractor I (Burglar, Fire) - or subjects that will affect their daily operations as contractors. (FL08206) Number of Questions 50 Time allowed(hours) 2 Tests a candidate's knowledge of the design,plan,installation,repair, alteration, and maintenance of intrusion detection, fire detection, and Subject Area #Quest. signaling systems. Business Organization 2 Number of Questions 50 Licensing 3 Time allowed(hours) 2 Lien laws 2 Tax Laws 5 • Subject Area #Quest. Safety Reporting Regulations 3 General Electrical Knowledge 5 Labor Laws 8 Fire Detection&Alarms 24 Contract Management 9 Power Supplies 5 Project Management 6 Notification Appliances&Signaling Circuits 5 Estimating&Bidding 4 Grounding&Bonding 4 Financial Management 5 Raceways&Boxes 3 Risk Management 3 Conductors&Cables 3 Special Occupancies I References • Florida Business&Law Study Guide for Contractors, 2012. Prov, 13614 Progress Blvd., Alachua, FL 32615. Available at www.provbookstore.com. Collier County FL_CIB 2017.08.01 © Prov, Inc. 2017 Page 11 of 37 THIS LICENSE HAS £UDaN R1AVIIMED AND A?PT4OV D C10 1 e-r Cr ptl-rty DATE: GMD Operations &Regulatory Management Licensing Section 2800 North Horseshoe �y a`0`r7 -, � DriveNaplcs, FL 34104 2, Q 17 - k_12 ! APPLICATION FOR COLLIER COUNTY/CITY OF NAPLES/CITY OF MARCO FIRM INSTRUCTIONS: This application must be typewritten or legibly printed. The application fee must be paid upon approval and is not refundable. All checks should be made payable to: Collier County Board of County Commissioners. For further information, consult Collier • County Ordinance No. 90-105,as amended. NAME OF COMPANY: Exact Corporate/Business Name: MOHAWK CARPET DISTRIBUTION, INC. Fiction Name/DBA: N/A Qualifier Name: ELIZABETH GREESON • Physical Address: c/o MohawkONE Dept., 160 S. Industrial Blvd., Calhoun, GA 30701 (Number&Street) (City) (State) (Zip Code) Mailing Address: do MohawkONE Dept.,P.O.Box 12069, Calhoun, GA 30703 (Number&Street) (City) (State) (Zip Code) Telephone: _706-624-2567 E-mail: libby_greeson@mohawkind.com TYPE OF LICENSE: General$230.00 Electrician$230.00 Building$230.00 Plumper$230.00 Residential$230.00 Air Conditioner$2.30,00 Mechanical$230.00 Swimming Pool$230.00 Roofing$230.00 x Specialty Trade: $205 Flooring and Installation CHANGE OF STATUS: ( )Reinstatement ( )From One Business to Another ( ) Dormant License to Active • Page 1 of 4 1. The names, titles,home address and phone numbers of all Officers/Managing Members of the Pb m. Frank Boykin, President Edward Schleper,VP 107 Avery Drive NE,Atlanta,GA 30309 2040 I-Ieritage Green Drive, Marietta,GA 30064 Michel Vermette, VP Barbara Goetz,Asst.Secretary 6229 Arnall Ct,NW,Acworth, GA 30101 1339 Paces Forest Drive,Atlanta,GA 30327 James Brunk,CFO Shailesh Bettadapur,Treasurer 251 Misty Hill Trail,Dallas,GA 30132 160 S.Industrial Blvd.,Calhoun,GA 30701 David Patton,Secretary Chris Roselli,Asst. Secretary 1200 Kenway Circle,Smyrna,GA 30082 1201 W.Peachtree St.,Atlanta,GA 30309 2. List all businesses,firms,entities or contracting businesses you have been associated with during the last ten years(i.e. held a license for or been a partner). Attach extra pages if needed. 3. List all debts you or any company(s)associated with you that you refused to pay and the reasons for the refusal to pay. Attach extra pages if needed. Mss AFFIDAVIT Under the penalties of perjury I declare that I have read the foregoing application and that the facts stated in it are true. A L I ,MA Cd Authorized Of err .(the Firm State of Georgia �1 j County of LON.. �t-1 �' I G� The foregoing instrument as acknowledged before me this 3 rot ( ( o 1 / 90/i (Dae) (. by C ,S� Q. T'r? who has produced 1 /L,(,t%J � L 1 �� . (name of person acknowledging) (type of identification) as identification and did not take an oath. NOTARY'S SEAL ALL . I / , J • (S INA''URE OF J T4 ) Page 2 of 4 IA ;tFo JOYCEJEF1 EHYb! Notary Public, eorgta .i(1 ''�. WhItlloldCounty ' '4it�0 M Commission Expires `4, ORD�P�� y Maroh 1 G,2021 QUALIFIER INFORMATION: Name: Elizabeth Greeson Address:_150 Blue Holly Drive, Calhoun, GA 30701 (Number&Street) (City) (State) (Zip Code) Telephone: 706-624-2567 Date of Birth: SS#: XXX-XX- E-mail libby_greesonnntohawkind.com Driver's License#: LAST FOUR# ONLY 1. Type of Certificate of Competency for which application is made. Specialty—Flooring and Installation 2. The names and telephone numbers of two persons who will know your whereabouts. Michele Vowell,Manager MohawkONE,Cell Phone 706-879-9199 Andy Ostman, Director MohawkONE Cell Phone 404-790-7567 3. Have you ever been convicted of a crime related to Contracting?No (If yes,attach extra sheet with explanation.) 4. 1-Iave you or any firms you have been associated with ever filed bankruptcy? No 5. List all debts you or any company(s) associated with you that you refused to pay and the reasons for the refusal to pay and reasons why. None 6. List your business or work experience during the last ten years. 7. Statement of any formal training you have had in the area for which the application is made. bOC.US\Lr\ 5 Ac,c_ANkck 3 of AFFIDAVIT The undersigned hereby makes application for Certificate of Competency under the provisions of Collier County No.2006-46, as amended, and under penalties of perjury. I declare that I have read the foregoing qualifier information and that the facts stated in it are true. The undersigned hereby certifies that he is legally qualified to act on behalf of the business organization sought to be licensed in all matters connected with its contracting business and that he has fill authority to supervise construction undertaken by himself or such business or organization and that he will continue during this registration to be able to so bind said business organization. The qualified license holder understands that in all contracting matters, he/she will be held strictly accountable for any and all activities involving his license. Any willful falsification of any information contained herein is grounds for disqualification. f; be L , 6-re_es0r\ Applicant(please print) MOKtkk d' e1C Name of Company Y • Signa 'e of Applicant State of Georgia County of , a ' l The foregoing instrument as acknowledged before me this 3 (4 0 a 0'66, o20 I`7 (Date by IQ(-(C Q ,J e who has produced t RA4 g tilt1,W1A, (name of person acknoMed in (type of identification) as identification and did not take an oath. j • NOTARY'S SEAL (SI NAATURaOTAR 4 of 4 Ana'%, JOYCE JEFFERY - I; Notary Public, Georgia ' *( }*x WhitfleldCounty �ipv My CommissionExpiroa lav March 16,2021 2017 Florida Annual Resale Certificate for Sales Taxi R, joins THIS CERTIFICATE EXPIRES ON DECEMBER 31,2017 DR-13 FLORIDA Business Name and Location Address Certificate Number 80-8012882244-3 MOHAWK CARPET DISTRIBUTION, INC. PO BOX 12069 CALHOUN, GA 30703-7002 By extending this certificate or the certificate number to a selling dealer to make eligible purchases of taxable property or services exempt from sales tax and discretionary sales surtax, the person or business named above certifies that the taxable property or services purchased or rented will be resold or re-rented for one or more of the following purposes: • Resale as tangible personal property. • Re-rental as tangible personal property. • Resale of services, • Re-rental as commercial real property. • Incorporation into and sale as part of the repair of tangible personal property by a repair dealer, •- Re-rental as transient-rental-property, • Incorporation as a material, ingredient,or component part of tangible personal property that is being produced for sale by manufacturing, compounding,or processing, Florida law provides for criminal and civil penalties for fraudulent use of a Florida Annual Resale Certificate. The Florida Annual Resale Certificate is issued to active, registered sales and use tax dealers,As a buyer, use your certificate to purchase or rent property or services tax exempt that you Intend to resell or re-rent to your customers. You cannot use this certificate to purchase or rent property or services that you will use in your business. As a seller,you must collect sales tax and discretionary sales surtax imposed on retail sales or rentals of taxable property or services, unless the transaction is exempt, Seller Certificate Verification—Verify resale or exemption certificates using a customer's sales tax certificate number: • Phone:877-EL-RESALE(877-357-3725) • • Online: Go to www,myflorlda.com/dor and select"More e-Services"and then "Verify resale and exemption certificates" • Mobile App: Florida Tax(FL Tax)mobile app for iPhone, IPad,Android phones and tablets, Windows Phone If you obtain an authorization number for each tax-exempt sale, or for all sales to a specific customer, you do not need to keep a copy of the customer's Florida Annual Resale Certificate. rim I Request for Taxpayer I Give Form to the ot I requester.Do n 4 (Rev.December 2014) 1 Identification Number and Certification sand to the IRS. Depart-Bent of tins Tteasu y l int nal Revenue Smite 1 1 Name(as shown on yowlncome lax return).Name is requ'red ori Ws lino;do not leave this roe blank. Mohawk Carpet Distribution,inc, r‘i 2 Business name/dlsragenied entity name,It different from above 0 3 Check appropriate box for federal tax classification;chock only one of the following seven boxes: 4 Exemptions(codes apply only to o certain entitles,not individuals;see ❑Indivkivalfsote proprietor or 0 C Corporation 0 S Corporation ❑ Partnership ❑TrusVestate instructions on pages): 0 single-member LLC Exempt payee code(t any) ° 0 Limited IlabUay company.Enter the tax classification(C=C corporation,S-S corporation,Papartnership)a- t Note,For a striate-member LLC that is disregarded,do not check LLC;check the appropriate box In the 6ne above for Exemption from FATCA reporting the tax ciessification Of the single•member owner, code Qt any) 0 Other(sea Instructions)1 r `afro aaax,t,„urvatatrartu,rk tis) 6 Address(number,street,and apt,or suite no.) Requester's name andaddress(optional)160 South industrial Blvd o v 6 City,state,and ZIP code Calhoun Ga 30701 _ 7 List account numbsr(s)here(optional) Taxpayer Identification Number(TiN) Enter your TIN In the appropriate box.The TiN provided must match the name given on line 1 to avoid I.Soctal security number 1 backup withholding.For individuals,this is generally your social security number(SSN),However,for a resident alien,sole proprietor,or disregarded entity,see the Pert I Instntctlons on page 3.For other - I - entitles,It is your employer identification number(EIN),II you do not have a number,see How to get a 77Nonpage3. or Note.If the account is In mote than ono name,see the Instructions for lino 1 and the chart on page 4 for [Employer tdanttlicatfon number 1 guidelines on whose number to enter. 5 a - 2 1 7 3 4 0 3 Part 11 Certitlaation Under penalties of perjury,i certify that: I, The number shown on this onto is my correct taxpayer identification number(or I am walling for a number to be issued to me);and 2. 1 am not subisot to backup withholding because:(a)l am exempt trent backup withholding,of(b)i have not been notified by the Internal Revenue Service ORS)that I am subject to backup withholding as a result of a failure to report all interest or dividends,or(o)the IRS has notified me that I am no longer.sublect to backup withholding;and 3. I em a U,S,clltsen or other U.S.person(defined below);and 4.The FATCA code(s)entered on this form(if any)indicating that I am exempt from FATCA reporting Is correct, Certllleetton instruotlons,You,dust cross out Item 2 above li you have been notified by the iRS that you ars currently subject to backup withholding because you have felled to report all Interest and dividends on your tax return,For real estate transactions,item 2 does not apply,For mortgage interest paid,acquisition or abandonment of secured property,cancellation of debt,contributions to en individual retirement arrangement(iRA),and generally,payments other than interest and dividends,you are not required to sign the certification,but you must provide your correct TIN,See the instruotions on page 3, ,,/1 1111 Sign Signature of , � 4 Oates 04/24/2017 Hera U.S parson) General Instructions •Form 1099(home mortgage Interest),1098-E(student loan interest),1008-T (tuition) Seotlon references are to the Internal Revenue Code unless otherwise noted. •Far 1099•C(canceled debt) Future developments.Information about developments effecting Form WI(such •Form i 049A(acquisition or abandonment of secured property) es legislation enacted ager we release N Is al tvww,ksSrovif s9. Use Form W.9 only it you are a U.S.parson(including a resident alien),to Purpose of Form provide pour correct TUN. An individual or entity(Form W-9 requester)who is required to file an information II yav do not return Form t'V'9 to the raw-ester with a TIN,leu might be subject return with the IRS must obtain your-correct taxpayer tdentrTrcetion number(TIN) to bechup withholding.See I4Tat is backup wothhardfrg?on page 2, which may bs your sociai security number(SON),tndtvidual taxpayer identification By signing the flflad-out form,you: comber(MN),adoption taxpayer Identification number(AT1N),or employer 1.Certify that the TIN you ore gyring Is correct(or you are waiting for a number identiricatton number(EIN),to report on en information return the amount pakf to to be issued), you,or other amount reportable on an information return,Examples of information 2 Certify that you aro not subject to backup withholding,or returns Include,but ere not ltmried to,the following: •Form 1099-INT(interest earned or paid) 3.Claim exemption from backup withholding it you are a U.S.exempt payee.i1 •Form 1099-DIV di idends,including those from stocks or mutual funds) applicable,you aro also certifying that as a U.S.person,your allocable share of ( rl4 any partnership income from a U.S.trade or business Is not subject to the •Form 1099-MISC(various types of income,prizes,awards,or gross proceeds) vvilhhoIdbg tax on foreign pernes s'share of elfecl'rvaly connected become,and •Form 1099.8(stock or mutual fund sales and certain other hen sections by 4.Certify that FATCA code(s)entered on this form(if any)Indicating that you are exempt from the FATCA reporting,is correct.See What is FATCA roporf,'ng?on •Form 1099-S(proceeds from real estate transactions) page 2 nor further information. •Form 1099-K(merchant card and third party network transactions) Cat.No.10231X Form W^9(Rev.12-2014) 1 A n'{. I `:';',,:::^ - 41F Div' on of to 00000/15g.:;1..f t 0 1 . Florida Department of State Division of Corporations Public Access System Electronic piling Cover Sheet Note;Please punt this page and use it as a covet sheet.Type the fax audit, number(shown below)on the top and bottom of ail pages of the document. (((HO9Q00007900 3))) ' IIIIUII 111111111111111111111111111111111111111111111111 ILIIIIIUI 111111 IUl IIII III 1Ill 111!1111111I111IIIIIIIIIIIlI111! 1,0o9004110781303ACZ Notot DO NOT hit the al''ItRSI;Y/RELOAD button on your browser fronrthis Wi i page,Doing so will generate another cover sheet. r r.1 ?• rPt t I.:._ Ta: �W, ta Division of Corporations t1'1: M tax Number a (850)617.6301 ••tt t 0 frOmt s • ?; i Acaourit Name t C T CORPORATICA 9XsTFtd rr.t Aaeonnt Numbar t MA000000023 Phone • t MO)2A2-3.09a Fax t'umbat: t (ESO)6704360 FOREIGN PROFIT/NONPROFIT CORPORATION o Mohawk Carpet Distribution,Inc. x Ill Cettificato of Status ____ 0~ Vit{ CcrtifiedCo, 0 om Pe a Count_ 05 --- slimmed stitntued Chane __�_ S'10,00 ca m ) leotronio Filing Menu Corporate riling Menu Help ) , . .retmh JAN 1.�•� .�. ti•. el J F�4-r,. Q rrrr.•.n 1.rt i .1nt11 7 r t n •..1 tr , , �'/ �ttrt�tz.orgrsc 1�covr,o ".. 1/13/2009.41-2:6- -:°-'•'•9•9. 1117)314R0143111%. ,i1iv i iir4.•ir +ft , �.n tt.. .•/tf 1. 0? r,.••3^ VIVI: IVEtnill'VI„r INCLIF53V1l0 :1V:lli1gX.:,1A.EF=3 lM! I I I 1 � - APPLICATION BY PO14 WON CORPORATION VOR AUTHORIZATION TO TRANSACT BUSINESS IN PLORWA INCOMPLIANCE pant=MN 607.1S0l,FLORIDASrATUT&S TN&IVLWWING/SSU8MIlTRD TO REGISTER A FOREION CORJOPATION TO TRAREACTBUSINESS!N Tits STATE QF FLOWDA, 1, Mohawk C • t 1?laitibutto lnc. �. i pier nem doerporation•must I not uda INCORPORATEDP'COMPANY,* "CORPORATION," t�,•••• "Mo.,"•W.,w.Cod""Inc�,'CoI"or•Corp") (If name unavailable in Florid%enter alternatecorporate name adopted far the putpote ofaaoaaotina bualnoss In Piorlde). I -•� 2, D40,,,to3, S8.2173403 ca—1 010)or ocuntry under the few ofwhivh B is ineotporatar� (Flit numbtx,if applleable) ilii t 4, 44CL 9.4 1, 2£t831113L._. -.------- (Dalcoftntorpotation) (Duration: Year corp,wits cease toaxle or" patuel") 6. ! ! Orli (Data first Mantel buxinrat in Florida.ifprior to resituation (811B SECTIONS 607,150114 497,1502,1?+3,:,to determl na penalty i btltty) 7, 190 S,lndorial Blvd,. 11@p,()ANOVA . - �. (PlInelpel oiftei eddraas) Y.D,Box 130d9,(. iDOuna Q/‘ Pint nu�llt+g addrent) 0, .ac, .,. ., ,'etib .1 . t.. •. I.: t1! . . •tile (1?urpoie(t)OreotporatIon author red In home stele or country to be coaled out In state of Florida) D.Name and ligy,sulathu of Florida regitterod agcntt (P.O.Box acceptable) Noma: CTVpjnotallo Sure a °Moo Address; I� PIa,Ltedon _. _ 1 Florida 53324 (City) (RIP code) 10. Registered agent's notptanoet Moving been etomed ar registered agent aad 10 accept service afp ines1Jbrt a above stated corporation at the place designated to this application,I hereby act ape the appointment at registered agent and agree to act In this ova city. I furtheragree locomply with lhnprovlstonYttfail;Agates relative totheproperandcompletepallornu:nReofniydytter, and I amftt nlllor with and accept the otligations of me position as registered ogant. C r Catporatlnn System �d none's slariutoro) yy�sbnliz.i1',lam.�So I, Attached is It eartiflonlc of oxlattnoe du nttth-endcolcd, not Inoro than 90 d$ys prior to delivery ofihis eppliuntIon to i the Departmpent of State,by the Secretary of State of other official having custody of corporate records In the Jurisdiction under the law of whloh It Is Inoarportttod, FUR.11/11/1111 CTF.4.tM.wlwe,t. •.{• ..',.•-• :..t,n+m •Y,U r_ rJ • . • . • , . 1 ,r• .nn.. ..w .,. r•+ '1 t r Ca i}t32 {f' `�'� H',� v.• fru tr.t,.•�.. ,t 71-z f. 7711-17.r. ..c ,x.t'�'llia�i X11?o ., ,.' . _ E .'j 4 • 12, Name and In nate addratsas of offlcort and/or dircctorct A, A1RECTOVS Chattmxn; SBBATTACNMBNT ?^-trrt r— o Address; ";ii ai • L.)Moo Chturnttun r te, rn Addreslt - . ., r t) , )> c i Phaeton Addreait plrataort A4Arotlt B, OFFICERS Mahlon �S`�£,&an:4CHMENT Address: - _ . . Vloa Prdsldont: Seote:ery: Addraza: • 'Dreamt t: -, , T - Addreitr _ - ... • NOTE! Ifnom sary.you may attach an addendum to the apptioatton liaiing additional offices and/or dlrootora, (S1gnatura Imola or Offiotr Iteted In number 12 attic application) I 14, B Karam M.t7ectMoo President and Corporate Secnuary (Typed or printed name and capacity oFperion Planing applIcatson) VIM/.tV 150 Ci rnrvKtujtt .AbI17}I.C�t, r •?".r he//'r ,t..,tp�„y�.,.11Vy)'�,{}r� ~�Tl7'��77 h .Tsvn—.t..p�.,r►.t..�... T f'w•— --mow ,.gr��t/ i�•!lift]1,J,a+�1r vi wvi� ...c-, .,�:.,�. r„`,.�J':1�'.:u ty . .,�"vi: Wsy.ti�:4�i► ,. , ,:r" MOHAWK CARPET DISTP1DT I1ION,INC. QFFICEE/0111ECi'OR ATTACHMENT Frank H.Boykin • Proidont and Olaf blrecutivo Officer do Mohawk induatrloa,Ino. • 160 Sr industrial Blvd. Calhoun,GA 30701 , .71 W.Christopher Wailborn `— ; Chief Operating Offleor do Mohawk Indust/102,1m, 164 5,industrial Blvd Calhoun,OA 30701 • r'-11 no _< ) 0.41101 S.VOrmutttt 't Vico President `s IZ` do Mohawk tndusttlas, 'S S 160 5,Indnsclal Blvd, �, o Calhoun,GA 30701 Thongs J,Kenuk Viet Proaldara end Corporato Controtlar do Mohawk tntlurtrioa,Inc, 160 S.Industrial Blvd. Calhoun,GA 30701 Barbara M,Corm Viae President And Corporate Secretary 0/o Mohawk Industries,Inc. 160 S,Industrial Blvd. • Calhoun,OA 30701 Scott R.Voldman Vioo President and Treasurer ' 010 Mohawk Industrias,1no, .160 S.Industrial Blvd, Calhoun,GA 30701 dame.T,Lucke Vico President,General Counrel and Assistant Soctalary do Mohawk Industries,Ino. 160 S.Industrial Blvd. Calhoun,QA 30701 • LoAro 10335o3Y1 • ..gin,::• • r„ n, •.r• ,.• ..-,..r•.:• ... , .'y'� F 4 ~r�...r .t.. ✓1^� r ,vnn� . •�.--tee p>JCTOlt4 Prank H,Boykin cloMohawk lndustrlas,Eno. 160 S,Industrial Blvd, Calhoun.GA 30701 Thomas J,Kanuk c/a Mohawk Edduatrim, Ena, 160 S.lndurtrtsi Blvd, Calhoun,OA 30701 Amos 7.Lucke i oto Mohawk Industries,loo, 160 S.Industrial Blvd, Calhoun,GA 30701 • t• • ?� 6 L fi7.' Lfir3AL02/31073S09YI I.0iA • . • 1zua re PASTE gfie First State I♦ RARRIEW SMITH WINDSOR, SECRETARY OF STATE OF TEE STATE OF • DEIiAWARS, DO A&RSBY CSRR`Zk^Y "MORAFIE CARP&1' DSSTRIRO"fON# INC, " .YS DULY INCORPORATED UNDER TRE TAWS OP PRE S 'APR,OP•' DELAWARE AND I i XS IN GOOD SANDING AND NAS A S.RO.L COAD RATS EXISTENCE 8O FAR • AS TRE RECORDS OP THIS OLrFYCE $EOJ', A3 OF TRE TTW LFPE DAY Off' k ANVARY, A,D. 2009, AND r DO RSASDY P ORT'RA'R C.ERx1'P1' MAD ME ANNUAL WORTS RAVE BeRN I'XDBD TO DAM. AND r DO 21211EDY rURTRDR CXRflE'Y'TEAT THL FRANCAISE 't'A 'S SAVO SEN PA= WO DAVV. • fr Vs; atm .1:r`Y t... g tin — W3R 0 tii N„,_'r/.1 Apr W .f 9-4v.v�.61n/ �• ' y% Harriet Srnthyandwr,StrretetyofState 2902640 0.700 %_.1116 ! ACTSIIENTICATIOW: 7074807 090023503 :1 •IP)/ DATE: 01-12-09 You as .amity tate azelricau engine ht.• ,, 1L c':i.d.2oxar..gor/ovtlW -.l 4 ;,;�,. ^ ti • 3 I t V4 � DRIVER'S LICENSES y j • 1 i 7 V . '''.41',,V, , 1 Ftf< I@t141, r • 1 { �s I 7 v7 1,Iiii �J`�.�`.r y�3. Y�i 3 �, �, jy1lU i! YARtiE > • "'i •47.1',;4.- -4. .o. • '�I !if op12j?2Q 2 s.Sev ; . 11 s 31�. Eyc1NA2�� - r ,64I .' ...' , ...,.,v ,{ 1 . Its` ' ryog;y • {I• • • . . ... .liallieftM 1 a 11111101„14„4 #3111111111111111111111111111 . - ..t.„.. ‘ • .,i\.ik-..-14). I,F.)41-1-6:A,-... ‘N)0;1'41.( -, • '-;.---,'...41,-,4 . 1.i ,fti‘-,-I. ii.: i,.i•"..-•.. ., . ' i Y . % A ' 'it'Art 4 4'‘4-4ji. (1)'..1 ' .k . ,7 , , *.t:4...1 'I't i• ry ..L- . t A ..", 'rt I: '. ;.:, , • :••• ,; -•..-.=!..---.1-.--,',- ..... ..:.o-ms&C41144141.11Wilkwalintni 0,001b1./.1fteni. -1.V.A4ilz... . . '...'::k,:',I', • :.:-N,..:t.T7..,-..i.,.it •- -• ). .•.,.. . ... .1, .i I I . . • I . . I I , 1 ' I Aco ofz CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY) 44,..------- 10/03/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT:If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must have ADDITIONAL INSURED provisions or be endorsed.If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement.A statement on this w certificate does not confer rights to the certificate holder in lieu of such endorsement(s). '2 PRODUCER CONTACT d .a NAME: Aon Risk Services South, Inc. PHONE (866) 283-7122 FAx 800) 363-0105 _ Atlanta GA Office (Alc.No.Ext): (Aro.No.): 3565 Piedmont Rd NE,B1g1,#700 E-MAIL a O ADDRESS: Atlanta GA 30305 USA _ INSURER(S)AFFORDING COVERAGE NAIC# INSURED INSURER A: Liberty Insurance Corporation 42404 Mohawk industries, Inc. INsuRERB: Liberty Mutual Fire Ins Co 23035 P 0 Box 12069 . 160 South Industrial Blvd SW INSURER C: Calhoun GA 30703 USA INSURER D: INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER: 570068844954 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested ?NSR ADDL SUER POLICY EFF POLICY EXP LTR TYPE OF INSURANCE ?NSD WVD POLICY NUMBER (MM/DDIYYYY),f MMIDDIYYYY LIMITS B X COMMERCIAL GENERALLLLIABILITY EB2651004272047 10/01/2017 10/01/201$ EACH OCCURRENCE $1,000,000 CLAIMS-MADE I X I OCCUR Excess General Liability DAMAGE TO RENTED SIR applies per policy terns & conditions PREMISES(Ea occurrence) X Contractual Liability MED EXP(Any one person) PERSONAL&ADV INJURY $1,000,000 1 GEN'LAGGREGATE_LIMITAPPLIES.PER:_._ __.. _.. GENERAL AGGREGATE $1,000,006 4 PRO- - - - -- X POLICY n JECT LOC PRODUCTS-COMPIOPAGG $1,000,000 co OTHER: 0 0 AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT `o (Ea accident) ANY AUTO BODILY INJURY(Per person) Z OWNED —SCHEDULED BODILY INJURY(Per accident) d —AUTOS HIRED HIS ARED NON -OWNED PROPERTY DAMAGE J lit ONLY —AUTOS ONLY (Per accident) ;w—, CD.- UMBRELLA LIAB OCCUR EACH OCCURRENCE V — EXCESS LIAR CLAIMS-MADE AGGREGATE DED RETENTION A WORKERS COMPENSATION AND WA765D004272017 10/01/2017 10/01/2018 x PER STATUTE OTH- A EMPLOYERS'LIABILITY YIN WC7651004272027 10/01/2017 10/01/2018 ER ANY PROPRIETOR/PARTNER/EXECUTIVE E.L.EACH ACCIDENT - 51,000,000 OFFICER/MEMBER EXCLUDED? 1N I N/A (Mandatory in NH) - E.L.DISEASE-EA EMPLOYEE 51,000,000 It yes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $1,000,000— Ell AB. =M DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached if more space is required) Collier County Licensing Department is included as Additional Insured in accordance with the policy provisions of the General X� Liability policy. a, 8-111 } Ne !he- ei CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE - POLICY PROVISIONS. Collier County AUTHORIZED REPRESENTATIVE GMD Operations & ; Regulatory Management c9 e5 Ws., Licensing Section _ 2800 North Horseshoe Drive tWs.. Naples FL 34104 USA — Eli ©1988-2015 ACORD CORPORATION.All rights reserved. ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K [tviark Ouej © ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2016 OR 0 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 01-13697 MOHAWK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 52-1604305 (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 160 S.Industrial Blvd., Calhoun,Georgia 30701 (Address of principal executive offices) (Zip Code) Registrant's telephone number,including area code:(706)629-7721 Securities Registered Pursuant'to Section 12(b)of the Act: Title of Eaci Class - - 7Iame ofEac�Excliange n- ch3tegistere _-_------ - Common Stock,$.01 par value 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 © No 0 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act Yes 0 No 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 CI No 0 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted 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 and post such files). Yes ® No 0 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. 0 Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer or a smaller reporting company.See definition of"large accelerated filer,""accelerated filer"and"smaller reporting company"in Rule 12b-2 of the Exchange Act - Large accelerated filer © Accelerated filer ❑ Non-accelerated filer 0 Smaller reporting company 0 Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Act). Yes 0 No 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(61,594,455 shares)on July 1,2016(the last business day of the Registrant's most recently completed fiscal second quarter)was$11,664,141,943.The aggregate market value was computed by reference to the closing price of the Common Stock on such date. Number of shares of Common Stock outstanding as of February 22,2017:74,184,572 shares of Common Stock,$.01 par value. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive Proxy Statement for the 2017 Annual Meeting of Stockholders-Part III. Table of Consents Index to Financial Statements - Table of Contents Page No. Part I Item 1. Business 3 Item 1A. Risk Factors 2. Item 1B. Unresolved Staff Comments 17 Item 2. Properties 17 Item 3. Legal Proceedings 18 Item 4. Mine Safety Disclosures 20 Part H Item 5. Market for Registrant's Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. Selected Financial Data 2� Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22 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 72 Item 9A. Controls and Procedures 72 Item 9B. Other Information 73 Part III Item 10. Directors.Executive Officers and Corporate Governance 74 Item.11. Executive Compensation 74 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 74 Item 13. Certain Relationships and Related Transactions,and Director Independence 74 Item 14. Principal Accounting Fees and Services 74 Part IV Item 15. Exhibits.Financial Statement Schedules 75 2 Table of Contents Index to Financial Statements PART I Item 1. Business General Mohawk Industries,Inc.("Mohawk"or the"Company")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 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®,Daltilee,Durkan®,NC®,Karastan®,Marazzi®,Mohawk®, Pergo®,Quick-Step®and Unilin®.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 and the United States.The Company had annual net sales in 2016 of$9.0 billion.Approximately 65%of this amount was generated by sales in the United States and approximately 35%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 net sales in 2016 of 36%%,43% and 21%,respectively.Selected financial information for the three segments,geographic net sales and the location of long-lived assets are set forth in Note 15-Segment Reporting. The Global Ceramic segment designs,manufactures,sources,distributes and markets a broad line of ceramic tile,porcelain tile and natural stone products used in the residential and commercial markets for both remodeling and new construction.In addition,the Global Ceramic segment sources,and distributes other tile related products.The Global Ceramic segment markets and distributes its products under various brands,including the following brand names:American Olean,Daltile,KAI,Kerama Marazzi,Marazzi,and Ragno®which it sells through independent distributors,home center,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. The Flooring NA segment designs,manufactures,sources and distributes its floor covering product lines,in a broad range of colors,textures and patterns in the residential and commercial markets for both remodeling and new construction.The segment's product lines include carpets,rugs,carpet pad, hardwood, laminate, LVT and sheet vinyl.The Flooring NA segment markets and distributes its flooring products under various brands, including the following brand names:Aladdin®,Columbia Flooring®,Durkan,Horizon®,NC,Karastan,Mohawk,Pergo,Portico®,Quick-Step and SmartStrand®which it sells through 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 and distributes laminate,hardwood flooring, and vinyl flooring products,including LVT,roofing elements, insulation boards, medium-density fiberboard("MDF"),and chipboards,used in the residential and commercial markets for both remodeling and new construction.In addition,the Flooring ROW segment licenses certain patents related to flooring manufacturers throughout the world. The Flooring ROW segment markets and distributes its flooring products under various brands,including the following brand names:IVC,Moduleo,Pergo, Quick-Step and Unilin,which it sells through retailers,wholesalers,independent distributors and home centers. Business Strategy Mohawk's Business Strategy provides a consistent vision for the organization and focuses employees around the globe on delivering exceptional returns for shareholders.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 • 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 generating shareholder value and profitability through exceeding customer expectations. 3 Table ui Contents Index to Financial Statements 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,Europe and Russia,as well as exports products to more than 160 countries.In North America,Mohawk's largest marketplace,the Company has leveraged its brands,breadth of offering and • award-winning merchandising to build strong positions across all of its product categories.In Europe and Russia,similar advantages have supported market leadership in ceramic,premium laminate and sheet vinyl.The Company also has assumed a strong position in the fast-growing LUT market on both sides of the Atlantic following the 2015 acquisition of IVC and subsequent investments to expand production. Product Innovation Mohawk drives performance through product innovation and improvements across all categories. In ceramic, this includes proprietary Reveal Imaging*printing that replicates theappearanceof other surfaces,such as long planks with the visuals and texture of natural wood as well as tiles that mimic natural stone,cement and other alternatives.In carpet,exclusive fiber technologies include the unique bio-based SmartStrand®and its brand extensions that represented the first super soft stain resistant products on the market and 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 installation • technology revolutionized the category,and the Company continues to deliver new innovations with more realistic visuals and surface embossing in register that precisely recreates the appearance of wood. In hardwood flooring, the Company is introducing longer and wider planks in increasingly popular engineered wood collections,as well as introducing more fashion-forward stains, finishes and surface protection.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 accentuate the beauty of the products. - 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. Since 2013,the Company has invested approximately$2 billion 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 more than a eca e; o aw s training arid development programs have been ranked among the best in the country by Training magazine,and Forbes designated Mohawk as one of the Best Large U.S. Employers in 2016. 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 annual use of over 5 billion plastic bottles to create polyester carpet fiber and more than 25 million pounds of tires to produce decorative crumb rubber mats. In all, the Company diverts more than 7 million pounds of waste from landfills each year, with 43 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 100 million gallon reduction in water use since 2014 even as the Company grew, lower greenhouse gas emissions and increased energy efficiency,as well.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 11 on-site or near- site 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 mohawksustainability.com. 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.Products are distributed through various distribution channels including independent distributors, 4 Table of Contents index to Financial Statements home centers,Company-operated service centers and stores,ceramic specialists,commercial contractors,and directly to commercial end users.The business is organized to address the specific customer needs of each distribution channel with dedicated sales forces that support the various channels. 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,stone products,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,Dal-Tile,KAI,Kerama Marazzi,Marazzi and Ragno brand names. These brands are supported by a fully integrated marketing program,displays,merchandising boards,literature,catalogs and intemet websites.Innovative design, quality and response to changes in customer preference enhances 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 carpet, laminate, carpet pad, rugs, hardwood,LVT and sheet vinyl 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,shop at home,buying groups,commercial contractors and commercial end users. Some products are also marketed through private labeling programs.Sales to residential customers 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.Aladdin,Mohawk,Horizon,IVC,Pergo,Portico,Quickstep,SmartStrand and Karastan are positioned to sell in the residential flooring markets.Aladdin Commercial and Karastan Contract are positioned to sell in the commercial market, which is made up of:corporate office space,education institutions,healthcare facilities,retail space and government facilities.The Company also sells into the commercial hospitality space for hotels and restaurants using its Durkan brand. -T-he-segment' ales forces-are-generally-organizedby product-type and-sales-channels in-order-to best-serve each-tyroalcustomer roductdelivery to independent dealers is done predominantly on Mohawk trucks operating from strategically positioned 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, hardwood,LVT and sheet vinyl. It also designs and manufactures roofing elements, insulation boards, MDF and chipboards. Products are distributed through separate distribution channels consisting of retailers,independent distributors,wholesalers and home centers.The business is organized to address the specific customer needs of each distribution channel. The Flooring ROW segment markets and sells laminate,hardwood and vinyl flooring products under the IVC,Modulen,Quick-Step,Pergo and Magnum brands.The Flooring ROW segment also sells private label laminate,hardwood and vinyl flooring products.The Company believes Quick-Step and Pergo are leading brand names in the European flooring industry.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. 5 Table of Contents index to Financial Statements 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 both traditional advertising channels--including numerous trade publications and unique promotional events that highlight product design and perfonriance--and social media initiatives and Intemet-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 identifying local retailers that offer the Company's collections.In 2016,the Company introduced OmnifyT"t,a new Internet platform that automatically syncs updated product and sales information between the Company and aligned retailer websites,ensuring that consumers have access to the most accurate and timely information. The Company actively participates in cause marketing partnerships with such well known programs as Susan G.Komen®(breast cancer research), Habitat for Humanity®(housing for low income families)and Operation Finally Home®(housing for disabled veterans),which include both traditional media partnerships as well as promotional events generating national press coverage.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 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 recovered by the purchase of these items by the Company's customers. Manufacturing and Operations Global Ceramic Segment - The Company's 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.The Company believes that its manufacturing organization offers competitive advantages due to its ability to manufacture a differentiated product line consisting of one of the industry's broadest product offerings of colors,textures and finishes and its ability to utilize the industry's newest technology,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 product 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 nig 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 yam processing,backing manufacturing,tufting,weaving,dyeing,coating and finishing. The Company is also vertically integrated with significant manufacturing assets that produce laminate flooring,high density fiber board,engineered and pre-finished solid hardwood flooring,fiber-glass sheet vinyl,and luxury vinyl tile.The Flooring NAsegment continues to invest in capital projects,such as the expansion of the Company's North American LVT manufacturing capacity.Other investments in state-of-the-art equipment support market growth, increase manufacturing efficiency and improve overall cost competitiveness. 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 engineered wood flooring, LVT and sheet vinyl.The Flooring ROW segment continues to invest in capital expenditures,such as the LVT expansion,including new plants utilizing the latest advances in technologies to increase manufacturing capacity,improve efficiency and develop new capabilities including state-of-the-art,fully integrated LVT production which will leverage the Company's proven track record of 6 i Table ofCon,ena Index to Financial Statements bringing innovative and high-quality products to the market.The manufacturing facilities for roofing elements,insulation boards,MDF and chipboards in the Flooring ROW segment arc all configured for cost-etticient 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,industrial minerals and glazes.The Company has long-term clay mining rights in the U.S.,Russia and Bulgaria 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.The Company has entered into long-term supply agreements for a portion of its talc requirements. 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 ingredient.The Company manufactures a significant amount of its flit 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 nylon,triexta,polyester,polypropylene,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,and resins in its production of laminate and hardwood products.In its vinyl flooring operations,the Company uses plasticizers and 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 providing 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 hardwood flooring are wood,paper and resins. The wood suppliers provide a variety of wood species giving the Company 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-hasjong-standingselationshiis with a number of s�pliers. Industry and Competition The Company is the largest flooring manufacturer in a fragmented industry composed of a wide variety of companies from small privately held firms to large multinationals.In 2015,the U.S.floor covering industry reported$23.1 billion in sales,up approximately 4.2%over 2014's sales of$22.2 billion.In 2015,the primary categories of flooring in the U.S.,based on sales,were carpet and rug (46%),hardwood(16%),resilient(includes vinyl and LVT)and rubber(14%),ceramic tile(14%),stone(6%)and laminate(4%).In 2015,the.primary categories of flooring in the U.S.,based on square feet,were carpet and rug(53%),resilient(includes vinyl and LVT)and rubber(18%),ceramic rile(14%),hardwood(8%),laminate(5%)and stone(2%). Each of these categories is influenced by the residential construction,commercial construction,and residential remodeling 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 there is limited differentiation among competing 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. 7 T-hl.of Contents Index to Financial Statements 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 2015,the estimated global capacity for ceramic tile was 131 billion square feet,with selling prices varying widely based on a variety of factors,including supply within the market,materials used,size,shape and design.While the Company operates ceramic manufacturing facilities in six countries,the Company has leveraged advantages in technology,design,brand recognition and marketing to extend exports of its products to approximately 160 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 manufacturez 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.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,the U.S.flooring industry for carpet and rug in 2015 had market sales in excess of$10.7 billion of the overall$23.1 billion market.The Company believes it is the largest producer of rugs and the second largest producer of carpet in the world based on its 2015 net sales.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 solid and engineered hardwood 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 realistic visuals,beveled edges,deeply embossed in register surfaces and patented installation technologies. The U.S.LVT and sheet vinyl industry is highly competitive and according to industry publications,grew over 30% in 2015. Based on industry publications,the U.S.flooring industry for LVT and sheet vinyl in 2015 had market sales of$2.9 billion of the$6.2 billion vinyl 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. - Flooring ltaW3-gment - ---- The Company faces competition in the non-U.S. laminate,hardwood,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 high-end products,which the Company supplies under some of the best known and most widely marketed brands in the region.In addition,the Company believes it has a competitive advantage in the laminate flooring market as a result of the Company's industry-leading visuals and embossed in register surfaces as well as patented installation technologies,all of which allow the Company to distinguish its products in the areas of design, quality,installation and assembly.In hardwood flooring,the Company has extended the strength of its well known laminate brands and its installation technology 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 the LVT and sheet vinyl market 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.The Company has also extended the reach of its distribution by acquiring national distributors in the U.K.,Australia and New Zealand.Through a 2015 acquisition,the Company has extended its insulation panel business to the U.K.and Ireland while expanding sales in its core Benelux Region. 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. 8 Table or Contents Index to Financial Statements The Company uses several trademarks that it considers important in the marketing of its products,including American Olean,Daltile,Durkan,NC, Karastan, Malazzi, Mohawk, Pergo, Quick-Step and Unilin. These trademarks represent innovations that highlight 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 most important of these patent families is the UNICLIC family,which include the snap,pretension and clearance patents.Most of the UNICLIC family of patents will expire in 2017.The licensing earnings from patents included in the Flooring ROW segment's results were approximately $148 million in 2016,only a portion of which will be retained following the UNICLIC expiration. While the Company continues to explore additional opportunities to generate revenue from its patent portfolio,only a portion of the licensing earnings will be retained following the expiration of the UNICLIC patents. The Company continues to explore additional opportunities to generate revenue from its patent portfolio.The licensing revenue from patents generated in the Flooring ROW segment's operations is partially offset by various expenses such as amortization,developing new technologies,filing new patents,supporting existing patents,defending patent lawsuits,collection and auditing of receivables,bad debt and other administrative activities. The Company expects its earnings from patents to range from$65 million to$70 million in.2017,with the amount declining to a$35 million annual run rate starting in June. Sales Terms and Major Customers The Company's sales terms are substantially the same as those generally available throughout the industry.The Company generally permits its customers to return products purchased from it within specified time periods from the date of sale,if the customer is not satisfied with the quality of the product. During 2016,no single customer accounted for more than 10%of total net sales and the top 10 customers accounted for less than 20% of the Company's net sales.The Company believes the loss of one major customer would not have a material adverse effect on its business. Employees As of December 31, 2016, the Company employed approximately 37,800 persons consisting of approximately 21,200 in the United States, approximately 7,600 in Europe,approximately 3,900 in Mexico,approximately 3,800 in Russia,approximately 900 in Malaysia and approximately 400 in various other countries.The majority of the Company's European and Mexican manufacturing employees are members of unions.Most of the Company's U.S.employees are not a party to any 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. Available Information The Company's Internet address is http://wwwmohawkind.com.The Company makes the following reports filed by it available,free of charge,on its website under the heading"Investor Information": • 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"). 9 Table of Contents Index to Financial Statements 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. 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,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.Although the impact of a decline in new construction activity is typically accompanied by an increase in remodeling and replacement activity,these activities lagged in the most recent downturn.Although the difficult economic conditions have improved in the U.S.,European and other markets have not recovered as quickly and there may be additional downturns that could cause the industry to deteriorate in the foreseeable future.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 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 and technical features.Failure to quickly and effectively respond to changing customer demand or technological developments could have a material adverse effect on our business. 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. hElluarcovering-industry-is highly competitive.T h-e-Company-faces campetition from a-number-of manufacturers and indepenzitn-distributors.- -- 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 or force the Company to lower prices.Moreover,a strong U.S.dollar combined with lower fuel 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. Changes in the global economy could affect the Company's overall availability and cost of credit. Despite recent improvement in overall economic conditions in the U.S.,continued weakness elsewhere in the world or changes in market conditions could impact the Company's ability to obtain financing in the future,including any financing necessary to refinance existing indebtedness.The cost and availability of credit during uncertain economic times could have a material adverse effect on the Company's financial condition. 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 our 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. 10 • • Table of Contents Index to Financial Statements If the Company were unable to meet certain covenants contaured in its existing credit facilities,it may he 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 March 26, 2015, the Company entered into a$1,800 million, senior revolving credit facility (the "2015 Senior Credit Facility").As of December 31,2016,the amount utilized under the 2015 Senior Credit Facility,including the commercial paper issuance,was 5881.9 million resulting in a total of$918.1 million available.The amount utilized included$820.3 million of commercial paper issued,$60.7 million of direct borrowings,and$0.9 million of standby letters of credit related to various insurance contracts and foreign vendor commitments.In addition,on December 19,2012,the Company entered into an on-balance sheet U.S.trade accounts receivable securitization agreement(the"Securitization Facility")that after an amendment on September • 11,2014 allows the Company to borrow up to$500 million based on available accounts receivable and is secured by the Company's U.S.trade accounts receivable.At December 31,2016,the amount utilized under the Securitization Facility was$500.0 million. During the term of the credit facilities,if the Company's cash flow is worse than expected or the U.S.trade accounts receivables are lower 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. Additionally, the 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 2015 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 3.75 to 1.0.A failure to comply with the obligations contained in our current or future credit facilities or indentures relating to our 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.We cannot be certain that we would have,or be able to obtain,sufficient funds to make these accelerated payments. 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 the Company's 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. The Company has significant operations in emerging markets, including Bulgaria,Malaysia, Mexico and Russia, 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 corruptions; • immature legal and banking systems; • uncertainty with respect to title to real and personal property; 11 • a Table of-Contents Index to Financial Statements • 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 affect on the Company's 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. While the Company is currently experiencing a low-cost environment with respect to energy and fuel related costs,the Company expects these costs to rise in the future.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. 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 rugs business;clay,talc,nepheline syenite 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 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 - - —orsourced-products_to_the.Company_couldlead to an intermption of_suppl or require the Company to purchase more expensive alternatives.An extended _ interruption in the supply of these or other raw materials or sourced products 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 relies on information systems in managing the Company's operations and any system failure or deficiencies 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 our 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 our retail operations; • manage financial reporting;and . • monitor point of sale activity. • We also rely on our computer hardware,software and network for the storage,delivery and transmission of data to our sales and distribution systems, and certain of our production processes are managed and conducted by computer. 12 Table of Contents Index to Financial Statements • Any event that causes interruptions to the input,retrieval and transmission of data or increase in the service time,whether caused by human error, natural disasters, power loss, computer viruses, system conversion,cyber attacks including and not limited to hacking, intrusions,malware or otherwise, could disrupt our nonnal operations. There can be no assurance that we can effectively carry out our disaster recovery plan to handle the failure of our infomiation systems,or that we will be able to restore our operational capacity within sufficient time to avoid material disruption to our business. The occurrence of any of these events could cause unanticipated disruptions in service, decreased customer service and customer satisfaction, harm to our reputation and loss or misappropriation of sensitive information,which could result in toss of customers,increased operating expenses and financial losses. Any such events could in turn have a material adverse effect on our business,financial condition,results of operations,and prospects. The Company's inability to maintain its patent licensing revenues in its laminate flooring business 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 laminate flooring business, 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 obtained a number of patents relating to the Company's products and associated methods and has filed applications for additional patents, including the UNICLIC and Pergo family of patents, which protect its interlocking laminateflooring technology.The Company generated approximately$148 million of earnings from licensing these patents in 2016,the majority of which will expire in 2017.The Company continues to develop new sources of revenue that may partially offset the expiration of its revenue-producing patents.The failure to develop alternative revenues could have a material adverse effect on the Company's business. 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 ofproducts 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. In addition,we have made certain investments,including through joint ventures,in which we have a minority equity interest and lack management and operational control. The controlling joint venture partner may have business interests, strategies or goals that are inconsistent with ours. Business decisions or other actions or omissions of the controlling joint venture partner, or the joint venture company,may result in harm to our reputation or adversely affect the value of our investment in the joint venture. 13 • Table of Contents Index to Financial Statements 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 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 is further expanding internationally.The Company sells products,operates plants and invests in companies around the world.Currently,the Company's Flooring ROW segment has significant operations in Europe,Russia,Malaysia,Australia and New Zealand,and the Company's Global Ceramic segment has significant operations in Europe,Russia and Mexico.In addition,the Company has invested in joint ventures in Brazil and India related to laminate flooring. The business, regulatory and political environments in these countries differ from those in the U.S.The Company's international sales, 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 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; _ —,-- overnment_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. 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 we operate.These tax laws are complex,and the manner in which they apply to our facts is sometimes open to interpretation.In calculating the provision for income taxes,we must make judgments about the application of these inherently complex tax laws.Our domestic and international tax liabilities are largely dependent upon the distribution of profit before tax among these many jurisdictions.However,it also includes estimates of additional tax which 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 our deferred tax assets.Our 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 ofpreviously filed tax returns,and ongoing assessments of our tax exposures. 14 Table of Contents index to Financial Statements 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.The Company faces risks and uncertainties related to compliance with such laws and regulations.In addition,new laws and regulations may be enacted in the U.S.or abroad that may require the Company to incur additional personnel-related,environmental,or other costs on an ongoing basis,such as recently enacted healthcare legislation in the United States. 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 could incur material expenditures to comply with new or existing regulations, including fines and penalties and increased costs of its operations. For example, our 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 our 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 us to increase our capital expenditures, use our cash to acquire emission credits or restructure our manufacturing operations,which could have a material adverse effect on our business. The Company's business operations could suffer significant losses from natural disasters,catastrophes;fire 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 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. The Company may be exposed to litigation,claims and other legal proceedings relating to its products,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.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,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 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.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. 15 • Tanie of Contents Index to Financial Statements 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.A failure to obtain trademark registrations in the U.S.and in other countries could limit the Company's ability to protect the Company's trademarks and impede the Company's marketing efforts in those jurisdictions and could have a material effect on the Company's business. 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 it to incur significant expenses or prevent it from selling the Company's 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. The long-term performance of the Company's business relies on its ability to attract,develop and retain talented management. To be successful,the Company must attract,develop and retain qualified and talented personnel in management,sales,marketing,product design, and operations, and as it considers entering new international markets, skilled personnel familiar with those markets. 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 is subject to changing regulation of corporate governance and public disclosure that have increased both costs and. the risk of noncompliance. The Company's stock is publicly traded.As a result,the Company is subject to the rules and regulations of federal and state agencies and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board,the Securities and Exchange Commission and the New York Stock Exchange,frequently issue new requirements and regulations.The Company's efforts to comply with the regulations and interpretations have resulted in,and are likely to continue to result in, increased general and administrative costs and diversion of management's time and attention from profit generating activities to compliance activities. 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. 16 Table of Contents index to Financial Statements Forward-Looking Information Certain ofthe statements in this Form 10-K,particularly those anticipating future performance,business prospects,growth and operating strategics, 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 27Aof 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 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,product and other claims; litigation;regulatory and political changes in the jurisdictions in which we do business; and other risks identified in Mohawk's SEC reports and public announcements. Item 1B. Unresolved Staff Comments None. 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 31,2016.The Company owns its Corporate Headquarters in Calhoun,GA.The Company also owns and operates service centers and stores in the United States&Russia,none of which are individually material.The Company believes its existing facilities are suitable for its present needs. The following is a list of the principal manufacturing and distribution facilities owned or leased by the Company: Location Function/Use Owned/Leased Global Ceramics Segment: - Borriol,Spain _ Man,fiacturing_&Distribution Owned Castellon,Spain Manufacturing Owned Dickson,Tennessee Manufacturing&Distribution - Owned El Paso,Texas Manufacturing Owned Eldersburg,Maryland Distribution Leased Fayette,Alabama Manufacturing&Distribution Owned Finale Emilia,Italy Manufacturing Owned Fiorano,Italy Manufacturing Owned Florence,Alabama Manufacturing&Distribution Owned Isperih,Bulgaria Manufacturing&Distribution Owned Lewisport,Kentucky Manufacturing Owned Malino,Russia Manufacturing&Distribution Owned Mexicali,Mexico Manufacturing Owned Monterrey,Mexico Manufacturing Owned Monterrey,Mexico Distribution Leased Muskogee,Oklahoma Manufacturing&Distribution Owned Ontario,California Distribution Leased Orel,Russia Manufacturing&Distribution Owned Salamanca,Mexico Manufacturing Owned Sassuolo,Italy Manufacturing&Distribution Owned Shumen,Bulgaria Manufacturing&Distribution Owned Sunnyvale,Texas Manufacturing Owned Sunnyvale,Texas Distribution Leased 17 Location Function/Use Owned/Leased Flooring NA Segment: Bennettsville,South Carolina Manufacturing Owned Calhoun,Georgia Manufacturing&Distribution Owned Dalton,Georgia Manufacturing&Distribution Owned Dandille,Virginia Manufacturing Owned Eden,North Carolina Manufacturing&Distribution Owned Flower Mound,Texas Distribution Leased Fontana,California Distribution Leased Garner,North Carolina Manufacturing Owned Gamer,North Carolina Distribution Leased Glasgow,Virginia Manufacturing Owned Hillsville,Virginia Manufacturing Owned Holden,West Virginia Manufacturing Owned Lyerly,Georgia Manufacturing Owned Melbourne,Arkansas Manufacturing Owned Milledgeville,Georgia Manufacturing Owned Mt.Gilead,North Carolina Manufacturing Owned Roanoke,Alabama Manufacturing Owned Sugar Valley,Georgia Manufacturing Owned Summerville,Georgia Manufacturing Owned Thomasville,North Carolina Manufacturing Owned Flooring ROW Segment: Avelgem,Belgium Manufacturing Owned Avelgem,-Belgium- _ Manufacturing- Leased Bazeilles,France Manufacturing Owned Chesterfield,United Kingdom Manufacturing Owned Desselgem,Belgium Manufacturing Owned Dzerzhinsk,Russia Manufacturing Owned Feluy,Belgium Manufacturing Owned Izegem,Belgium Manufacturing Owned Meath County,Ireland Manufacturing Owned Moeskroen,Belgium Manufacturing Owned Oisterwijk,Netherlands Manufacturing Owned Oostrozebeke,Belgium Manufacturing&Distribution Owned Sungai Pentani,Malaysia Manufacturing Owned Sury-le-Comtal,France Manufacturing Owned Vielsalm,Belgium Manufacturing Owned Vyskov,Czech Republic Manufacturing Owned Wielsbeke,Belgium Manufacturing&Distribution Owned Wiltz,Luxembourg Manufacturing Owned Item 3. Legal Proceedings The Company is involved in litigation from time to time in the regular course of its business.Except as noted below,there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject. Gadsden,Alabama Litigation In September 2016,the Water Works and Sewer Board of the City of Gadsden,Alabama(the"Water Board")filed an individual complaint in the Circuit Court of Etowah County,Alabama against certain manufacturers,suppliers and users of chemicals containing perfluorinated compounds,including the Company.On October 26,2016,the defendants removed the case 18 • Table of Contents Index to Financial Statements to the United States District Court for the Northern District ofAlabama,Middle Division,alleging diversity of citizenship and fraudulent joinder. The Water Board filed a motion to remand the case back to the state court and the defendants have opposed the Water Board's motion. The parties await a ruling from the federal court on the motion to remand.The Company has never manufactured perflourinated compounds,but purchased them for use in the manufacture of its carpets prior to 2007. The Water Board is not alleging chemical levels in the Company's wastewater discharge exceeded legal limits. Instead,the Water Board is seeking lost profits based on allegations that its customers decreased water purchases,reimbursement for the cost of a filter and punitive damages. The Company intends to pursue all available defenses related to this matter. The Company does not believe that the ultimate outcome of this case will have a material adverse effect on its financial condition,but there can be no assurances at this stage that the outcome will not have a material adverse effect on the Company's results of operations,liquidity or cash flows in a given period. Furthermore,the Company cannot predict whether any additional civil or regulatory actions against it may arise from the allegations in this matter. Polyurethane Foam Litigation Beginning in August 2010, a series of civil lawsuits were initiated in several U.S. federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the Company's carpet underlay division had engaged in price fixing in violation of U.S.antitrust laws.The Company was named as a defendant in a number of the individual cases,as well as in two consolidated amended class action complaints on behalf of a class of all direct purchasers of polyurethane foam products and on behalf of a class of indirect purchasers.In these actions,the plaintiffs,on behalf of themselves and/or a class of purchasers,sought damages allegedly suffered as a result of alleged overcharges in the price of polyurethane foam products from at least 1999 to the present.Any damages actually awarded at trial would have been subject to being tripled under US antitrust laws. On March 23 and April 30,2015,the Company entered into agreements to settle all claims brought by the class of direct and indirect purchasers,and the trial court entered orders granting approval of the settlements on November 19,2015 and January 27,2016.Certain individual members of the indirect purchaser class sought to overturn the approval through an appeal to the Sixth Circuit of Appeals.As of June 21,2016,all of these appeals have been dismissed,provided that one request to reconsider remains pending.The Company has also entered into settlement agreements resolving all of the claims brought on behalf of all of the consolidated individual lawsuits. In December 2011,the Company was named as a defendant in a Canadian Class action,which alleged similar claims against the Company as raised in the U.S.actions.On June 12,2015,the Company entered into an agreement to settle all claims brought by the class of Canadian plaintiffs. The Co...an denies all aIle•ations ofwron:doing but settled to avoid the uncertainty,risk,expense and distraction of protracted litigation. During the twelve months ended December 31,2015 the Company recorded a$122.5 million charge within selling,general and administrative expenses for the settlement and defense of the antitrust cases.All of the antitrust cases have now been finally settled and with the exception of the single issue pending on appeal in the indirect purchaser class case,all consolidated cases have been dismissed.The Company does not believe that the ultimate outcome of the one remaining issue in the indirect purchaser case will have a material adverse effect on its financial condition. Belgian Tax Matter In January 2012,the Company received a E23.8 million assessment from the Belgian tax authority related to its year ended December 31,2008, asserting that the Company had understated its Belgian taxable income for that year.The Company filed a formal protest in the first quarter of 2012 refuting the Belgian tax authority's position.The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits, including interest income of E1.6 million earned on such deposits.However,on October 23,2012,the Belgian tax authority notified the Company of its intent to increase the Company's taxable income for the year ended December 31,2008 under a revised theory. On December 28,2012,the Belgian tax authority issued assessments for the years ended December 31,2005 and December 31,2009,in the amounts of€46.1 million and€35.6 million,respectively, including penalties,but excluding interest.The Company filed a formal protest during the first quarter of 2013 relating to the new assessments.In September 2013,the Belgian tax authority denied the Company's protests,and the Company has brought these two years before the Court of First Appeal in Bruges.In December 2013,the Belgian tax authority issued additional assessments related to the years ended December 31,2006,2007,and 2010,in the amounts of €38.8 million,€39.6 million,and€43.1 million,respectively,including penalties,but excluding interest.The Company filed formal protests during the first quarter of 2014,refuting the Belgian tax authority's position for each of the years assessed.In the quarter ended 19 • Table of Contents Index to Financial Starements June 28,2014,the Company received a formal assessment for the year ended December 31,2008,totaling E30.1 million,against which the Company also submitted its formal protest.All 4 additional years have been brought before the Court of First Appeal in November 2014.In,Tanuary of 2015,the Company met with the Court of First Appeal in Bruges,Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009.and apply the ruling to all of the open years(to the extent there arc no additional facts/procedural arguments in the other years). On January 27,2016,the Court of First Appeal in Bruges,Belgium ruled in favor of the Company with respect to the calendar years ending December 31,22005 and December 31,2009.On March 9,2016,the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal_ The Company disagrees with the views of the Belgian tax authority on this matter 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. 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. Item 4. Mine Safety Disclosures Not applicable. 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_Companys_common atnrlr SIL01 par-value-pershare(the 'ommon-Stockf-,-is-quoted-0n the-New-Yore Stock Exchange-"NYSE')under-the— symbol"MHK."The table below shows the high and low sales prices per share of the Common Stock as reported on the NYSE Composite Tape,for each fiscal period indicated. Mohawk Common Stock High Low 2015 Fust Quarter 5 188.29 151.15 Second Quarter 195.53 172.97 Third Quarter 212.16 174.49 Fourth Quarter 201.88 180.00 2016 First Quarter 192`.43 151.78 Second Quarter 201.03 177.96 Third Quarter 216.22 186.19 Fourth Quarter 204.87 176.98 As of February 22,2017,there were 240 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 Company's policy is to retain all net earnings for the development of its business,and it does not anticipate paying cash dividends on the Common Stock in the foreseeable future.The payment of future cash dividends will be at the discretion of the Board of Directors and will depend upon 20 the Company's profitability,financial condition,cash requirements,future prospects and other factors deemed relevant by the Board of Directors. The Company's Board of Directors has authorized the repurchase of up to 15 million shares of the Company's outstanding common stock.Since the inception of the program in 1999,a total of-approximately 11.5 million shares have been repurchased at an aggregate cost of approximately$335.5 million. All of these repurchases have been financed through the Company's operations and banking arrangements.The Company did not repurchase shares during the year ended December 31,2016. 21 Table of Contents Index to Financial Statements 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 ofFinancial Condition and Results of Operations"and the Company's consolidated financial statements and notes thereto included elsewhere herein. As of or for the Years Ended December 31, 2016 20154) 2014 2013N 2012 (In thousands,except per share data) Statement of operations data: Net sales $ 8,959,087 8,071,563 7,803,446 7,348,754 5,787,980 Cost of sales 6,146,262 5,660,877 5,649,254 5,427,945 4,297,922 Gross profit 2,812,825 2,410,686 2,154,192 1,920,809 1,490,058 Selling,general and administrative expenses 1,532,882 1,573,120 1,381,396 1,373,878 1,110,550 Operating income 1,279,943 837,566 772,796 546,931 379,508 Interest expense 40,547 71,086 98,207 92,246 74,713 Other expense(income),net (1,729) 17,619 10,698 9,114 303 Earnings from continuing operations before income taxes 1,241,125 748,861 663,891 445,571 304,492 Income tax expense 307,559 131,875 131,637 78,385 53,599 Earnings from continuing operations 933,566 616,986 532,254 367,186 250,893 Loss from discontinued operations,net of income tax benefit of$1,050 - - (17,895) Net earnings including noncontrolling interest 933,566 616,986 532,254 349,291 250,893 Less:Net earnings attributable to the noncontrolling interest - - 3,204 --;- 1,684 289 505 635 Net earnings attributable to Mohawk Industries,Inc. S 930,362 615,302 531,965 348,786 250,258 Basic earnings from continuing operations per share $ 12.55 8.37 7.30 5.11 3.63 Basic earnings per share attributable to Mohawk Industries,Inc. $ 12.55 8.37 7.30 4.86 3.63 Diluted earnings from continuing operations per share S 12.48 8.31 7.25 5.07 3.61 Diluted earnings per share attributable to Mohawk Industries,Inc. $ 12.48 8.31 7.25 4.82 3.61 Balance sheet data: Working capital $ 753,192 (9,056) 1,033,762 1,764,907 1,721,397 • Total assets 10,230,596 9,934,400 8285,544 8,494,177 6,303,684 Long-term debt(including current portion) 2,511,485 3,191,967 2,253,440 2,260,008 1,382,942 Total stockholders'equity 5,783,487 4,860,863 4,422,813 4,470,306 3,719,617 (a) During 2015,the Company acquired the IVC Group,the KAI Group and Xtrathenn as discussed in Note 2 of the Notes to Consolidated Financial Statements. (b) During 2013,the Company acquired Pergo,Marazzzi and Spano. 22 . Table of Contents Index ro.Financial Statements Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview The Company has 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 and other products, which it distributes primarily in North America,Europe and Russia through various selling channels,which include company-owned stores,independent distributors and home centers. 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,hardwood,laminate and vinyl products,including LVT,which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks,common carrier 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, hardwood flooring,roofing elements,insulation boards,medium-density fiberboard("MDF"),chipboards,other wood products and vinyl products,including LVT, which it distributes primarily in Europe and Russia through various selling channels,which include retailers,independent distributors and home centers. The Company is a significant participant in every major product category across the global flooring industry.In the industry,sales of tile,LVT, sheet vinyl,laminate and wood are growing faster than sales of carpet and rugs.Inside the soft surface category,sales of polyester carpets are increasing, which decreases the average selling price in the soft surface category.The Company believes that it is well positioned in all product types to satisfy these changes in customer trends. A majority of the Company's sales and long-lived assets are located in the United States and Europe. The Company expects continued strong performance in the United States market as residential housing starts and remodeling continue to improve.In Europe,the Company's operations improved on a local basis despite a low-growth macro-economic environment.The Company also has operations in Mexico and Russia where the Company is growing market share,especially in its ceramic tile product lines.While the Company is performing well in the local markets where it operates,the Company expects that a strong U.S.dollar will continue to impact the translation of its foreign operating results. Net earnings attributable to the Company were$930.4 million, or diluted EPS of$12.48 for2016 compared to net earnings attributable to the Company of$615.3 million,or diluted EPS of$8.31 for 2015.The increase in EPS was primarily attributable to increased sales volumes,savings from capital investments-and-cost-redait-on_miti-atives,lower=material-costs e-absence-of-a non-recurring-charge of-approximately-$-122.5-mil onrin 201T-=elated-to-the_ settlement and defense of the polyurethane foam litigation,and the receipt of$90.0 million related to a contract dispute,partially offset by costs associated with investments in new product development,sales personnel,and marketing and the$47.9 million write off of the Lees tradename. �- For the year ended December 31,2016,the Company generated$1,327.6 million of cash from operating activities.As of December 31,2016,the Company had cash and cash equivalents of$121.7 million,of which$29.2 million was in the United States and$92.4 million was in foreign countries. Recent Events In January, the Company entered into an agreement to acquire a ceramic company in Italy. The Company anticipates product, sales and manufacturing synergies that will enhance its cost position and strengthen its combined brands and distribution. 23 Table of Contents Index to Financial Statements Results of Operations Following are the results of operations for the last three years: For the Years Ended December 31, 2016 2015 2014 (In millions) Statement of operations data: Net sales $ 8,959.1 100.0% $ 8,071.6 100.0% $ 7,803.4 100.0% Cost of sales(1) 6,146.3 68.6% 5,660.9 70.1% 5,649.3 72.4% Gross profit 2,812.8 311`.4% 2,410:7 29.9% 2,154.127.6% Selling,general and administrative expenses(2) 1,532.9 17.1% 1,573.1 19.5% 1,381.4 17.7% Operating income 1,279.9 14.3% 837,6 10.4% 772.7 9.9% Interest expense(3) 40.5 0.5% 71.1 0.9% 98.2 1.3% Otherexpense(4) (1.7) 0.0% 17.6 0.2% 10.7 0.1% Earnings before income taxes 1,241.1 13.9% 748.9 9.3% 663.8 8.5% Income tax expense(5) 307.6 3.4% 131.9 1.6% 131.6 1.7% Net earnings including noncontrolling interest 933.5 10.4% 617.0 7.6% 532.2 6.8% - Less:Net earnings attributable to the noncontrolling interest 3.2 -% 1.7 -% 0.3 -% Net earnings attributable to Mohawk Industries, Inc. $ 930.3 10.4% $ 615.3 7.6% 5 531.9 6.8% (1) Cost of sales includes: Restructuring,acquisition and integration charges $ 38.3 0.4% $ 45.6 0.6% $ 31.2 0.4% _.._____Acquisition itwentorysteprup__ -°G ii 9- _0?Pl°---- -_ -%__- _._ (2) Selling,general and administrative expenses include: ' ' Restructuring,acquisition and integration-related charges 12.3 0.1% 29.1 0.4% 20.4 0.3% Legal settlement and reserve (90.0) (1:0)/ 124.5 1.5% 10.0 0.1% Tradename impairment 47.9 0.5% -% - -% Other charges 9:9 0.1 / -% - -/ (3) Interest expense includes: Debt extingnishment costs - -/ - -% 18.9 0.2% Deferred loan cost write-off - -% 0.7 -% 1.1 -% (4) Other expense(income)includes; Loss on disposal of subsidiary - _% - -% 12.0 0.2% Reversal of uncertain tax position indemnification asset 5.4 0:1% 11.2 0.1% - - -% (5)Income tax expense includes: Reversal of uncertain tax position (5.4) (0.1)% (11.2) (0.1)% - -/ • 24 Table of Contents index to Financial Statements Year Ended December 31,2016,as Compared with Year Ended December 31,2015 Net sales Net sales for2016 were$8,959.1 million, reflecting an increase of$887.5 million, or 11.0%, from the$8,071.6 million reported for')015. The increase was primarily attributable to higher sales volume of approximately$944 million,or 12%,which includes sales volumes attributable to acquisitions of approximately $509 million and legacy sales volumes of approximately $435 million, and the favorable net impact of price and product mix of approximately$11 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately$69 million,or 1%. Global Ceramic Segment—Net sales increased$161.8 million, or 5.4%,to$3,174.7 million for 2016,compared to$3,012.9 million for 2015.The increase was primarily attributable to higher sales volume of approximately$159 million,or 5%,which includes sales volume attributable to acquisitions of approximately$29 million and legacy sales volume of approximately$130 million,and the favorable net impact of price and product mix of approximately $45 million,or 2%,offset by the net impact of unfavorable foreign exchange rates of approximately$43 million,or 2%. Flooring NA Segment—Net sales increased$263.6 million, or7.3%, to$3,865.7 million for2016, compared to$3,602.1 million for2015. The increase was primarily attributable to higher sales volumes of approximately$305 million,or 8%,which includes sales volume attributable to acquisitions of approximately$76 million and legacy sales volume of approximately$229 million,partially offset by the unfavorable net impact of price and product mix of$42 million,or I% Flooring ROW Segment Net sales increased$461.7 million,or 31.7%,to$1,918.6 million for 2016,compared to$1,456.9 million for 2015.The increase was primarily attributable to higher sales volume of approximately$481 million,or 33%,which includes sales volume attributable to acquisitions of approximately$405 million and legacy sales volume of approximately$76 million and the favorable net impact of price and product mix of approximately $7 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately$26 million,or 2%. Quarterly net sales and the percentage changes in net sales by quarter for 2016 versus 2015 were as follows(dollars in millions): 2016 2015 Change First quarter $ 2,172.0 1,881.2 15.5% Second quarter 2,310.3 2,041.7 13.2%Fourth quarter 2,182.6 1,998.0 9.2%_ Total year $ 8,959.0 8,071.6 11.0% Gross profit Gross profit for 2016 was$2,812.8 million(31.4%of net sales),an increase of$402.1 million or 16.7%,compared to gross profit of$2,410.7 million (29.9% of net sales) for 2015.As a percentage of net sales, gross profit increased 150 basis points. The increase in gross profit dollars was primarily attributable to higher sales volume of approximately$254 million,savings from capital investments and cost reduction initiatives of approximately$113 million,lower material costs of approximately$67 million and the favorable impact of lower restructuring,acquisition and integration-related,and other costs of approximately $21 million, partially offset by the net impact of unfavorable foreign exchange rates of approximately $28 million, and the unfavorable net impact of price and product mix of approximately$11 million. Selling,general and administrative expenses Selling,general and administrative expenses for 2016 were$1,532.9 million(17.1%of net sales),a decrease of$40.2 million compared to$1,573.1 million(19.5%of net sales)for 2015.As a percentage of net sales,selling,general and administrative expenses decreased 240 basis points.The decrease in selling,general and administrative expenses in dollars was primarily attributable savings from capital investments and cost reduction initiatives of$27 million,the net impact of favorable foreign exchange rates of approximately$9 million,and the favorable impact of lower restructuring,acquisition and integration-related, and other costs of approximately $173 million,partially offset by approximately $94 million of costs due to higher sales volume, approximately$51 million of costs associated with investments in new product development,sales personnel,and marketing,and 2-5 . • Tante of Contents Index to Financial Statement increased employee costs of approximately$18 million.Restructuring,acquisition and integration-related,and other costs were lower primarily due to the non-recurring 2015 charge of approximately $122 million related to the settlement and defense of the polyurethane foam litigation and the $90 million received in the third quarter of 2016 related to a contract dispute,partially offset by a charge for approximately$48 million related to the write-offofthe Lees tradcnamc. Operating income Operating income,for 2016 was$1,279.9 million(14.3% of net sales)reflecting an increase of$442.4 million, or 52.8%,compared to operating income of$837.6 million (10.4% of net sales) for 2015. The increase in operating income was primarily attributable to increased sales volumes of approximately$160 million, savings from capital investments and cost reduction initiatives of approximately $140 million, lower material costs of approximately $67 million and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $194 million,partially offset by approximately$51 million of costs associated with investments in new product development,sales personnel,and marketing,the net impact of unfavorable foreign exchange rates of approximately$19 million,increased employee costs of approximately$18 million,and the unfavorable net impact of price and product mix of approximately$13 million.Restructuring,acquisition and integration-related,and other costs were lower primarily due to the non-recurring 2015 charge of approximately$122 million related to the settlement and defense of the polyurethane foam litigation and the$90 million received in the third quarter of 2016 related to a contract dispute,partially offset by a charge for approximately$48 million related to the write-off of the Lees tradename. Global Ceramic Segment—Operating income was$478.4 million(15.1%of segment net sales)for 2016 reflecting an increase of$64.3 million,or 15.5%,compared to operating income of$414.2 million(13.7%of segment net sales)for 2015.The increase in operating income was primarily attributable to savings from capital investments and cost reduction initiatives of approximately$49 million,increased sales volumes of approximately$36 million,and the favorable impact of price and product mix of approximately $20 million, partially offset by costs associated with investments in new product development,sales personnel,and marketing of approximately$18 million,increased employee costs of approximately$9 million,increased material costs of approximately$6 million,and the net impact of unfavorable foreign exchange rates of approximately$3 million. Flooring NA Segment—Operating income was$505.1 million(13.1%of segment net sales)for 2016 reflecting an increase of$240.8 million, or 91.1%,compared to operating income of$264.3 million(7.3%of segment net sales)for 2015.The increase in operating income was primarily attributable to savings from capital investments and cost reduction initiatives of approximately$64 million,lower material costs of approximately$49 million,increased sales volumes of approximately $46 million, and the favorable impact of lower restructuring, acquisition and integration-related, and other costs of approximately $157 million, partially offset by approximately $27 million of costs associated with investments in new product development, sales personnel,and marketing,the unfavorable impact of price and product mix of approximately$27 million,costs associated with investments in expansion of ---production capacity-of approximately-$6 million and increased employee-costs-of1-5-million:-Restructuring,acquisition and integration'relatedand other costs were lower primarily due to the non-recurring 2015 charge of approximately$122 million related to the settlement and defense of the polyurethane foam litigation and the$90 million received in the third quarter of 2016 related to a contract dispute,partially offset by a charge for approximately$48 million related to the write-off of the Lees tradename. Flooring ROW Segment—Operating income was$333.1 million(17.4%of segment net sales)for 2016 reflecting an increase of$129.7 million,or 63.8%,compared to operating income of$203.4 million(14.0%of segment net sales)for 2015.The increase in operating income was primarily attributable to higher sales volumes of approximately$77 million,savings from capital investments and cost reduction initiatives of approximately$27 million,lower material costs of approximately$23 million,lower restructuring,acquisition and integration-related,and other costs of approximately$23 million,and the favorable impact of reduced costs from investments in expansion of production capacity of approximately$6 million,partially offset by the net•impact of unfavorable foreign exchange rates of approximately$16 million,the unfavorable net impact of price and product mix of approximately $6 million and approximately$5 million of costs associated with investments in new product development,sales personnel,and marketing. Most of the UNICLIC family of patents will expire in 2017.The licensing earnings from patents included in the Flooring ROW segment's results were approximately$148 million in 2016,only a portion of which will be retained following the UNICLIC expiration.While the Company continues to explore additional opportunities to generate revenue from its patent portfolio,only a portion of the licensing earnings will be retained following the expiration of the UNICLIC patents.The Company expects its earnings from patents to range from$65 million to$70 million in 2017,with the amount declining to a$35 million annual run rate starting in June. 26 • Table of Contents • Index to Financial Statements Interest expense Interest expense was$40.5 million for'7016, reflecting a decrease of$30.5 million compared to interest expense of$71.1 million for2015. The decrease was primarily attributable to the Company paying the remaining balance of its 6.125%senior notes in January 2016 utilizing cash on hand and lower interest rate commercial paper borrowings. Other(income)expense Other income was$1.7 million for 2016,reflecting a favorable change of$19.3 million compared to other expense of$17.6 million for 2015.The change was primarily due to the prior year release of an indemnification receivable related to the reversal of uncertain tax positions recorded with the IVC Group acquisition of approximately$11 million. Income tax expense For 2016,the Company recorded income tax expense of$307.6 million oh earnings before income taxes of$1,241.1 million for an effective tax rate of 24.8%,as compared to an income tax expense of$131.9 million on earnings before income taxes of$748.9 million,resulting in an effective tax rate of 17.6%for 2015.The increase in effective tax rates was partially due to benefits recorded in 2015,that did not recur in 2016: the expiration of the.statute of limitations on European-related tax exposures of approximately$18 million and a favorable multi-year tax study yielding a benefit of approximately$8.5 million. The balance of the year-over-year increase is the direct result of the geographic dispersion of the Company's earnings for 2016,which are up approximately 94%in the U.S.(partially due to the absence of the 2015$122.5 million charge related to the settlement and defense of the polyurethane foam litigation)and almost 45%outside the U.S. See Note 12-Income Taxes. Year Ended December 31,2015,as Compared with Year Ended December 31,2014 Net sales Net sales for 2015 were$8,071.6 million,reflecting an increase of$268.1 million,or 3.4%,from the$7,803.4 million reported for 2014.The increase was primarily attributable to higher sales volume of approximately $785 million, or 10%,which includes sales volumes attributable to acquisitions of approximately$396 million and legacy sales volume of approximately$389 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately$490 million,or 6%,and the unfavorable net impact of price and product mix of approximately$28 million. Global Ceramic Segment Net sales decreased$2.4 million,or 0.1%,to $3,012.9 million for 2015,compared to$3,015.3 million for 2014.The decrease was primarily attributable to the net impact of unfavorable foreign exchange rates of approximately$252 million,or 8%,partially offset by higher sales volume of approximately$150 million,or 5%,which includes sales volume attributable to acquisitions of approximately$65 million and legacy sales volume of approximately$85 million,and the favorable net impact of price and product mix of approximately$99 million,or 3%. Flooring NA Segment Net sales increased$161.1 million,or 4.7%,to $3,602.1 million for 2015,compared to $3,441.0 million for 2014. The increase was primarily attributable to higher sales volume of approximately$275 million,or 8%,which includes sales volume attributable to acquisitions of approximately$77 million and legacy sales volume of approximately$198 million,partially offset by the unfavorable net impact of price and product mix of approximately$114 million,or 3%. Flooring ROW Segment—Net sales increased$102.9 million,or 7.6%,to$1,456.9 million for 2015,compared to $1,354.0 million for 2014.The increase was primarily attributable to higher volume of approximately$354 million,or 26%,which includes sales volume attributable to acquisitions of approximately$254 million and legacy sales volume of approximately$100 million,partially offset by the net impact of unfavorable foreign exchange rates' of approximately$238 million,or 18%,and the unfavorable net impact of price and product mix of approximately$13 million,or 1%. 27 • • Table of Contents Index to Financial Statements Quarterly net sales and the percentage changes in net sales by quarter for 2015 versus 2014 were as follows(dollars in millions): 2015 2014 Change First quarter„ 1,881,2 1,813.E 3.8% Second quarter 2,041.7 2,048.2 (0.3)% Third quarter 2,150.7 1,990.7 8,0% Fourth quarter 1,998:0 1,951.4 2.4% Total year $ 8,071.6 7,803.40 3.4 /o Gross profit Gross profit for 2015 was$2,410.7 million(29.9%of net sales),an increase of$256.5 million or 11.9%,compared to gross profit of$2,154.2 million (27.6% of net sales) for 2014.As a percentage of net sales, gross profit increased 230 basis points. The increase in gross profit dollars was primarily attributable to higher sales volume of approximately$254 million,savings from capital investments and cost reduction initiatives of approximately$127 million,and lower input costs of approximately$101 million,including lower material costs of approximately$87 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately$151 million,the unfavorable net impact of price and product mix of approximately$30 million,the unfavorable impact of higher restructuring,acquisition and integration-related costs of approximately$28 million,and costs associated with investments in expansion of production capacity of approximately$15 million. Selling,general and administrative expenses Selling, general and administrative expenses for 2015 were $1,573.1 million (19.5% of net sales), an increase of$191.7 million compared to $1,381.4 million(17.7%of net sales)for 2014.As a percentage of net sales,selling,general and administrative expenses increased 180 basis points.The increase in selling, general and administrative expenses in dollars was primarily attributable to a charge of approximately $122 million related to the settlement and further defense of the polyurethane foam litigation described in more detail herein,approximately$83 million of costs due to higher sales volume, approximately $44 million of costs associated with investments in new product development,sales personnel, and marketing, and increased employee costs of approximately$27 million,partially offset by the positive impact of foreign exchange rates of approximately$77 million and savings from capital investments and cost reduction initiatives of approximately$6 million. - _- Operatingincome Operating income for 2015 was$837.6 million(10.4%of net sales)reflecting an increase of$64.8 million,or 8.4%,compared to operating income of$772.8 million(9.9%of net sales)for 2014.The increase in operating income was primarily attributable to higher sales volume of approximately$172 million,savings from capital investments and cost reduction initiatives of approximately$133 million,and lower input costs of approximately$101 million, including lower material costs of approximately$87 million,partially offset by a charge of approximately$122 million related to the settlement and defense of the polyurethane foam litigation described in more detail herein,the net impact of unfavorable foreign exchange rates of approximately$74 million,costs associated with investments in new product development,sales personnel and marketing of approximately$44 million,the unfavorable net impact of price and product mix of approximately $29 million,increased employee costs of approximately $27 million,the unfavorable impact of higher restructuring, acquisition and integration-related costs of approximately$30 million which includes approximately$13 million of costs related to acquisition inventory step-up,and costs associated with investments in expansion of production capacity of approximately$15 million. Global Ceramic Segment-Operating income was$414.2 million(13.7%of segment net sales)for 2015 reflecting an increase of$63.0 million,or 18.0%,compared to operating income of$351.1 million(11.6%of segment net sales)for 2014.The increase in operating income was primarily attributable to sales volume increases of approximately$52 million,savings from capital investments and cost reduction initiatives of approximately$36 million,the favorable net impact of price and product mix of approximately$32 million,and lower input costs of approximately$12 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately$35 million,costs associated with investments in new product development,sales personnel and marketing of approximately$22 million,and increased employee costs of approximately$11 million. Flooring NA Segment-Operating income was$264.3 million(7.3%of segment net sales)for 2015 reflecting a decrease of$35.7 million,or 11.9%, compared to operating income of$300.0 million (8.7%of segment net sales)for 2014.The decrease in operating income was primarily attributable to a • charge of approximately$122 million related to the settlement and defense of 28 • Table of Contents lode,to Financial Srarcmcnrs the polyurethane foam litigation described in more detail herein,the unfavorable net impact of price and product mix of approximately$53 million,the unfavorable impact of higher restructuring,acquisition and integration-related costs of approximately$21 million,costs associated with investments in new product development,sales personnel and marketing of approximately $13 million,and increased employee costs of approximately $9 million,partially offset by savings from capital investments and cost Deduction initiatives of approximately$92 million,lower material costs of approximately$69 million, and sales volume increases of approximately$31 million. Flooring ROW Segment—Operating income was$203.4 million(14.0%of segment net sales)for 2015 reflecting an increase of$51.8 million,or 34.2%,compared to operating income of$151.5 million(11.2%of segment net sales)for 2014.The increase in operating income was primarily attributable to higher sales volume of approximately$89 million,lower material costs of approximately $22 million,and savings from capital investments and cost reduction initiatives of approximately $6 million,partially offset by the net impact of unfavorable foreign exchange rates of approximately $40 million, costs associated with investments in new product development, sales personnel and marketing of approximately $9 million, costs associated with investments in expansion of production capacity of approximately$8 million,and the unfavorable net impact of price and product mix of approximately$8 million. Interest expense Interest expense was$71.1 million for 2015,reflecting a decrease of$27.1 million compared to interest expense of$98.2 million for 2014.The decrease was primarily attributable to the inclusion in the 2014 amount of$20 million of non-recurring premiums and fees due to the redemption of$254.4 million of the 6.125%Senior Notes due January 15,2016,and the use of lower rate U.S.commercial paper to finance the aforementioned redemption,offset by an increase in debt resulting from the 2015 acquisitions. Other(income)expense Other expense was$17.6 million for 2015,reflecting an increase of$6.9 million compared to other expense of$10.7 million for 2014.The increase was primarily attributable to the release of an indemnification receivable related to the reversal of uncertain tax positions recorded with the IVC Group acquisition of approximately$11 million. Income tax expense For 2015,the Company recorded income tax expense of$131.9 million on earnings from continuing operations before income taxes of$748.9 miUaon_fnr an effective tax rate of 17.6% as compared to an income tax expense of$131.6 million on earnings from continuing operations before income taxes of$663.9 mrlTion,ieskltingin"an=effective tax rate of 19:8%-for-2014 The decrease-in-effective tax-rates waspnmanly attnbhh a le-to-the-expi ion o --- the-statute of limitations on European-related tax exposures,resulting in the reversal of uncertain tax positions of approximately $11 million, and the geographic dispersion of the Company's profits and losses for the year, including the $122 million charge related to the settlement and defense of the polyurethane foam litigation in the U.S.,partially offset by the non-recurrence of the favorable court case in Italy of approximately$8 million occurring in 2014.See Note 12-Income Taxes. 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. Net cash flows provided by operating activities for 2016 were$1,327.6 million compared to$911.9 million provided by operating activities for 2015. The increase in cash provided by operating activities for 2016 as compared to 2015 is primarily attributable to higher earnings driven by increased sales volumes during 2016 when compared to the prior year,the non-recurring 2015 $122.5 million charge related to the settlement and defense of the polyurethane foam litigation,and the$90 million related to the settlement of a contract dispute with a third party.The increase in earnings was partially offset by changes in working capital.These changes in working capital reflect normal fluctuations relative to the timing and nature of these transactions.The increase in cash provided by operating activities of$250 million for 2015 as compared to 2014 was primarily attributable to changes in working capital. Receivables,inventories and accounts payable used approximately$7 million of cash in 2015 compared to$224 million 2014. Net cash used in investing activities for 2016 was$672.1 million compared to net cash used in investing activities of$1,874.2 million for 2015.The Company did not make any acquisitions in 2016,while in 2015 the Company spent$1,371 million 29 • Table of Contents Index to Financial Statements • on the PVC Group,the KAI Group,Xtratherm and other acquisitions.Capital expenditures increased by$168 million to$672 million in the current year.The increase in cash used in investing activities of$1,308 million for2015 as compared to 2014 wasprimarily attributable to the 2015 acquisitions. Net cash used in financing activities for2016 was$623.9 million compared to nct cash provided by financing activities of$964.1 million for2015. The change in cash used in financing as compared to 2015 is primarily attributable to decreased borrowings in the current year.Net cash provided by financing activities for 2015 compared to net cash used in financing activities for 2014 changed primarily due to net proceeds from commercial paper of $302 million and$200 million in proceeds fiom asset securitization borrowings,partially offset by repayments of senior notes of$254 million and$165 million of net payments of the senior credit facility. Senior Credit Facility On September 25,2013,the Company entered into a$1,000.0 million,5-year,senior revolving credit facility(the"2013 Senior Credit Facility"). The 2013 Senior Credit Facility provided for a maximum of$1,000.0 million of revolving credit,including limited amounts of credit in the form of letters of credit and swingline loans.The Company paid financing costs of$1.8 million in connection with its 2013 Senior Credit Facility.These costs were deferred and,along with unamortized costs of$11.4 million related to the Company's previous credit facility,were amortized over the term of the 2013 Senior Credit Facility. On March 26,2015, the Company amended and restated the 2013 Senior Credit Facility increasing its size from$1,000.0 million to$1,800.0 million and extending the maturity from September 25,2018 to March 26,2020(as amended and restated,the "2015 Senior Credit Facility").The 2015 Senior Credit Facility eliminates certain provisions in the 2013 Senior Credit Facility,including those that:(a)accelerated the maturity date to 90 days prior to the maturity of senior notes due in January 2016 if certain specified liquidity levels were not met;and(b)required that certain subsidiaries guarantee the Company's obligations if the Company's credit ratings fell below investment grade.The 2015 Senior Credit Facility also modified certain negative covenants to provide the Company with additional flexibility,including flexibility to make acquisitions and incur additional indebtedness.On March 1, 2016,the Company amended the 2015 Senior Credit Facility to,among other things,carve out from the general limitation on subsidiary indebtedness the issuance of Euro-denominated commercial paper notes by subsidiaries and to extend the maturity date from March 26,2020 to March 26,2021 with respect to all but$120.0 million of the total amount committed under the 2015 Senior Credit Facility.On October 17,2016,the Company extended the maturity date for the remaining$120.0 million commitment to March 26,2021. At the Company's election,revolving loans under the 2015 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 31,2016),or(b)the higher of the Wells Fargo Bank,National Association prime rate,the Federal Funds rate plus 0.5%,and a monthly LIBOR rate plus 1.0%,plus an applicable margin-ranging--between 0:00-% and 0.75%-(0:125%-as-ofDe-em er--1;-201 ).1'he-Co= mpany-also-paysa-eomnutment fee-to-the lenders under-the 2015-- - ---- Senior Credit Facility on the average amount by which the aggregate commitments of the lenders'under the 2015 Senior Credit Facility exceed utilization. The commitment fee ranges from 0.10% to 0.225%per annum(0.125% as of December 31,2016). 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 2015 Senior Credit Facility are unsecured. The 2015 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 Company is also required 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 3.75 to 1.0,each as of the last day of any fiscal quarter.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 2015 Senior Credit Facility also contains customary representations and warranties and events of default,subject to customary grace periods. Also on March 1,2016,the Company entered into a three-year,senior,unsecured delayed-draw term loan facility(the"Term Loan Facility")by and among the Company,Wells Fargo Bank,National Association,as administrative agent,and each of the lenders party thereto.Subject to customary conditions precedent,the Company could borrow up to$200.0 million under the 30 • Tahl r of Contents Index to Financial Statements Term Loan Facility in no more than 2 borrowings between March 1,2016 and September 1,2016. The Company did not borrow under the Term Loan Facility,and it has since expired on its stated expiration date. The Company paid financing costs of S0.5 million in connection with the amendment and extension of its 2015 Senior Credit Facility.These costs were deferred and,along with unamortized costs of$S.8 million related to the Company's 2013 Senior Credit Facility,are being amortized over the teen of the 2015 Senior Credit Facility.The Company also paid financing costs of$0.6 million in connection with its Term Loan Facility. As of December 31,2016,amounts utilized under the 2015 Senior Credit Facility included$60.7 million of borrowings and$0.9 million of standby letters of credit related to various insurance contracts and foreign vendor commitments.The outstanding borrowings of$820.3 million under the Company's U.S.and European commercial paper programs as of December 31,2016 reduce the availability of the 2015 Senior Credit Facility.Including commercial paper borrowings,the Company has utilized$881.9 million under the 2015 Senior Credit Facility resulting in a total of$918.1 million available under the 2015 Senior Credit Facility. Commercial Paper .. On February.28,2014,the Company established a U.S.commercial paper program for the issuance of unsecured commercial paper in the United States capital markets.Under the commercial paper program,the Company issues commercial paper notes from time to time.The U.S.commercial paper notes have maturities ranging from one day to 397 days and may not be voluntarily prepaid or redeemed by the Company.The U.S.commercial paper notes rank pan passu with all of the Company's other unsecured and unsubordinated indebtedness.As of December 31,2016 there was$283.8 million outstanding under the U.S.commercial paper program. On July 31,2015,the Company established a European commercial paper program for the issuance of unsecured commercial paper in the Eurozone capital markets.The European commercial paper notes have maturities ranging from one day to 183 days and may not be voluntarily prepaid or redeemed by the Company.The European commercial paper notes rank pad 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.As of December 31,2016, the euro equivalent of$536.5 million was outstanding under the European commercial paper program. The Company uses its 2015 Senior Credit Facility as a liquidity backstop for its commercial paper programs.Accordingly,the total amount due and payable under all of the Company's commercial paper programs may not exceed$1,800.0 million(less any amounts drawn on the 2015 Credit Facility)at any time. The proceeds from the sale of commercial paper notes will be available-for general corporate purposes.The Company used the initial proceeds from the sale of U.S.commercial paper notes to repay borrowings under its 2013 Senior Credit Facility and certain of its industrial revenue bonds.The Company used the initial proceeds from the sale of European commercial paper notes to repay euro-denominated borrowings under its 2015 Senior Credit Facility.As of December 31,2016,the amount utilized under the commercial paper programs was$820.3 million with a weighted-average interest rate and maturity period of 0.98%and 15.62 days,respectively for the U.S.commercial paper program and(0.11)%and 28.92 days,respectively for the European commercial paper program. 31 • Table of Contents - Index to Financial Statements Senior Notes On June 9,2015,the Company issued€500.0 million aggregate principal amount of 2.00%Senior Notes due January 14,2022.The 2.00%Senior Notes are senior unsecured obligations of the Company and rank pati passu with all of the Company's existing and future unsecured indebtedness.Interest on the 2.00%SeniorNotes is payable annually in cash on January 14 of each year,commencing on January 14,2016.The Company paid financing costs of 54.2 million 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$600.0 million aggregate principal amount of 3.85% Senior Notes due February 1,2023. The 3.85% Senior Notes are senior unsecured obligations of the Company and rank pan 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 February1 and August 1 of each year.The Company paid financing costs of$6.0 million 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. On January 17,2006,the Company issued$900.0 million aggregate principal amount of 6.125%Senior Notes due January 15,2016. During 2014, the Company purchased for cash approximately$254.4 million aggregate principal amount of its outstanding 6.125%senior notes due January 15,2016.On January 15,2016, the Company paid the remaining$645.6 million outstanding principal of its 6.125% Senior Notes(plus accrued but unpaid interest) utilizing cash on hand and borrowings under its U.S.commercial paper program. Accounts Receivable Securitization On December 19, 2012, the Company entered into a three-year on-balance sheet trade accounts receivable securitization agreement (the "Securitization Facility").On September 11,2014,the Company made certain modifications to its Securitization Facility,which modifications,among other things,increased the aggregate borrowings available under the facility from$300.0 million to$500.0 million and decreased the interest margins on certain borrowings.On December 10,2015,the Company amended the terms of the Securitization Facility extending the termination date from December 19,2015 to December 19,2016.The Company further amended the terms of the Securitization Facility on December 13,2016,extending the termination date to December 19,2017.The Company paid financing costs of$0.3 million in connection with this extension.These costs were deferred and are being amortized over the remaining term of the Securitization Facility. Under the terms of the Securitization Facility,certain subsidiaries of the Company sell at a discount certain of their trade accounts receivable(the "Receivables") to Mohawk Factoring, LLC ("Factoring") on a revolving basis.The Company has determined that Factoring is a bankruptcy remote subsidiary,meaning that Factoring is a separate legal entity whose assets are available to satisfy the claims of the creditors of Factoring only,not the creditors of the Company or the Company's other subsidiaries.Factoring may borrow up to$500.0 million based on the amount of eligible Receivables owned by -- Factoring,—and Facwi g-has granteilaseunrity interest isall ofsnzh Rnceivabies-to-he-hird-party iending groupers-collateral for-such-borrowings mounts _ loaned to Factoring under the Securitization Facility bear interest at LIBOR plus an applicable margin of 0.70% per annum. Factoring also pays a commitment fee at a per annum rate of 0.30%on the unused amount of each lender's commitment.At December 31,2016,the amount utilized under the Securitization Facility.was$500.0 million. 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. As of December 31,2016,the Company had cash of$121.7 million,of which$92.4 million was held outside the United States.While the Company plans to permanently reinvest the cash held outside the United States, the estimated cost of repatriation for the cash as of December 31, 2016 was approximately$32.3 million.The Company believes that its cash and cash equivalents on hand,cash generated from operations and availability under its 2015 Senior Credit Facility will be sufficient to meet its capital expenditure,working capital and debt servicing requirements over the next twelve months. The Company's Board of Directors has authorized the repurchase of up to 15 million shares of the Company's outstanding common stock.Since the inception of the program in 1999,a total of approximately 11.5 million shares have been repurchased at an aggregate cost of approximately$335.5 million. All of these repurchases have been financed through the Company's operations and banking arrangements.The.Company did not repurchase shares during the yearended December 31,2016. 32 Contractual obligations The following is a summary of the Company's future minimum payments under contractual obligations as of December 31,2016(in millions): Total 2017 2018 2019 2020 2021 Thereafter Recorded Contractual Obligations: Long-term debt,including current maturities and capital leases $ 2,511.5 1382.7 1.7 1.4 1.0 0.8 1,123:8 Unrecorded Contractual Obligations: Interest payments on long-term debt and capital leases(1) 2133 43.9' 33.8 33.8 33.8 33.8 34.4 Operating leases 303.5 99.1 75.2 54.2 36.8 20.5 17.6 Purchase commitments(2) 637:5 217.8 69.9 ' 40.2 29.1 25:5 255.0 Expected pension contributions(3) 2.6 2.6 - - - - Uncertain tax positions(4) 0.7 -0.7 - - Guarantees(5) 18.0 18.0 - - - - - 1,175.6 382.0 178:9 I28.2 99.7 79.8 307.0 Total $ 3,687.1 1,764.7 180.6 129.6 100.7 80.6 1,430.8 (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 31,2016 to these balances. (2) Includes volume commitments for natural gas,electricity and raw material purchases. (3) Includes the estimated pension contributions for 2017 only,as the Company is unable to estimate the pension contributions beyond 2017.The Company's projected benefit obligation and plan assets as of December 31,2016 were$48.1 million and$40.6 million,respectively.The projected benefit obligation liability has not been presented in the table above due to uncertainty as to amounts and timing regarding future payments. (4) Excludes$35:0 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 elsewhere in this report. Some of those significant accounting policies require the Company to make subjective or complex judgments or estimates.Critical accounting policies 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. 33 Table oiConlents Index to Financial Statements The Company believes the following accounting policies require it to use judements and estimates in preparing its consolidated financial statements and represent critical accounting policies. • Accounts receivable and revenue recognition.Revenues are recognized when there is persuasive evidence of an arrangement,delivery has occurred, the price has been fixed or is determinable,and collectability can be reasonably assured.The Company provides allowances for expected cash discounts,sales allowances,returns,claims and doubtful accounts based upon historical bad debt and claims experience and periodic evaluation of specific customer accounts and the aging of accounts receivable.If the financial condition of the Company's customers were to deteriorate,resulting in an impairment of their ability to make payments, additional allowances may be required.A 10% change in the Company's allowance for discounts,returns,claims and doubtful accounts would have affected net earnings by approximately$5 million for the year ended December 31, 2016. • Inventories are stated at the lower of cost or market(net realizable value).Cost has been determined using the first-in first-out method("FIFO"). Costs included in inventory include raw materials,direct and indirect labor and employee benefits,depreciation,general manufacturing overhead and various other costs of manufacturing.Market,with respect to all inventories,is replacement cost or net realizable value.Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence.Actual results could differ from assumptions used to value obsolete inventory,excessive inventory or inventory expected to be sold below cost and additional reserves may be required.A 10%change in the Company's reserve for excess or obsolete inventory would have affected net earnings by approximately$7 million for the year ended December 31,2016. • Acquisition Accounting.The fair value of the consideration we pay for each new acquisition is allocated to tangible assets and identifiable intangible assets,liabilities assumed,any non-controlling 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 our business. The impact of prior or future acquisitions on our 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 for further discussion ofbusiness combination accounting valuation methodology and assumptions. • Goodwill and other intangibles.Goodwill is tested annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances.The Company considers the relationship between its market capitalization and its book value,among other tactors,when-reviewing-for indicators of impairment-:-he-goodwrll-impalimertegts are-limed-on determining-the-fart-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 of more than 35%or a more than 28%increase in WACC or a significant or prolonged decline in market capitalization could result in an additional indication of impairment. 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. 34 • Table of Con ten is Index to Financial Statements The impairment evaluation for indefinite lived intangible assets,which for the Company are its trademarks,is conducted during 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 canying 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 in the fourth quarter and no impairment was indicated for 2016. • Income taxes. The Company's effective tax rate is based on its income, statutory tax rates and tax planning opportunities available in the jurisdictions in which it operates.Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities.Significant judgment is required in determining the Company's tax expense and in evaluating the Company's tax positions.Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in a future period.The Company evaluates the recoverability of these future tax benefits by assessing the adequacy of future expected taxable income from all sources,including reversal of taxable temporary differences,forecasted operating earnings and available tax planning strategies.These sources of income inherently rely on estimates,including business forecasts and other projections of financial results over an extended period of time.In the event that the Company is not able to realize all or a portion of its deferred tax assets in the future,a valuation allowance is provided.The Company would recognize such amounts through a charge to income in the period in which that determination is made or when tax law changes are enacted.The Company had valuation allowances of$289.1 million in 2016,$287.6 million in 2015 and$300.5 million in 2014.For further information regarding the Company's valuation allowances,see Nnte t)-Tncnme Taxes_ - - 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.As of December 31,2016,the Company has $46.4 million accrued for uncertain tax positions.For further information regarding the Company's uncertain tax positions,see Note 12-Income Taxes. • 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(v),"Summary of Significant Accounting Policies",of our accompanying audited consolidated financial statements in Item 8 of this Annual Report on Form 10-K for a description of recent accounting pronouncements including the dates,or expected dates of adoption,and effects,or expected effects,on our disclosures,results of operations,and financial condition. 35 t • 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 Flooring NA and Global Ceramic segments,its results of operations for the first quarter tend to be the weakest followed by the fourth quarter.The second and third quarters typically produce higher net sales and operating income in these segments.These results are primarily due to consumer residential spending patterns which have historically decreased during the holiday season and the first two months following.The Flooring ROW segment's second quarter typically produces the highest net sales and earnings followed by a moderate first and fourth quarter and a weaker third quarter. 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(o)"Hedges of Net Investments in Non-U.S.Operations",of our accompanying consolidated financial statements and supplementary data in Item 8 of this Annual Report on Form 10-K,the Company did not have any derivative contracts outstanding as of December 31,2016 and 2015. Interest Rate Risk As of December 31,2016,approximately 45%of the Company's debt portfolio was comprised of fixed-rate debt and 55%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-percentag oint interest rate hange_opthe_outstandingbalance of_outsariable_rate-dehtas_ofDecember3l, 2076—world be approximately$I4 million or$0:12 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 Malaysian ringgit. 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 3 I,2016,a hypothetical overall 10 percent change in the U.S.dollar against the euro would have resulted in a translational adjustment of approximately$42 million. 36 Item$. Consolidated Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm 33 Consolidated Balance Sheets as of December 31.2016 and 2015 40 Consolidated Statements of Operations for the Years ended December 31,2016,2015,and 2014 41 Consolidated Statements of Comprehensive Income(Loss)for the Years ended December 31,2016.2015 and 2014 42 Consolidated Statements of Stockholders'Equity for the Years ended December 31,2016.2015 and 2014 43 Consolidated Statements of Cash Flows for the Years ended December 31.2016,2015 and 2014 44 Notes to Consolidated Financial Statements 45 37 Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Mohawk Industries,Inc.: We have audited the accompanying consolidated balance sheets of Mohawk Industries,Inc.and subsidiaries as of December 31,2016 and 2015,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 31,2016.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 conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. - In our opinion,the consolidated financial statements referred to above present fairly,in all material respects,the financial position of Mohawk Industries,Inc.and subsidiaries as of December 31,2016 and 2015,and the results of their operations and their cash flows for each of the years in the three- year period ended December 31,2016,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),Mohawk Industries, Inc.'s internal control over financial reporting as of December 31,2016,based on criteria established in Internal Control—Integrated Framework(2013) published by the Committee of Sponsoring Organizations of the Treadway Commission(COSO),and our report dated February 27,2017 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting. /s/KPMG LLP, Atlanta,Georgia February 27,2017 38 • Table of Contents Index to Financial Statements Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders Mohawk Industries,Inc.: We have audited Mohawk Industries,Inc.'s internal control over financial reporting as of December 31,2016,based on criteria established in Internal Control—Integrated Framework(2013)published by the Committee of Sponsoring Organizations.of the Treadway Commission(COSO) Mohawk Industries,Inc.'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,as set forth in Item 9A.of Mohawk Industries,Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016.Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board(United States).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 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. 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. In our opinion,Mohawk Industries,Inc.maintained,in all material respects,effective internal control over financial reporting as of December 31, 2016,based on criteria established in Internal Control—Integrated Framework(2013)published by the Committee of Sponsoring Organizations of the -_Treadwaymmission._ We also have audited,in accordance with the standards of the Public Company Accounting Oversight Board(United States),the consolidated balance sheets of Mohawk Industries,Inc.and subsidiaries as of December 31,2016 and 2015,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 31,2016,and our report dated February 27,2017 expressed an unqualified opinion on those consolidated financial statements. /s/KPMG LLP Atlanta,Georgia February 27,2017 39 Table niContents Index to Financial Statements - MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Consolidated Balance Sheets December 31,2016 and 2015 2016 2015 (In thousands,except per share data) ASSETS Current assets: - Cash and cash equivalents $ 121,665 81,692 Receivables,net 1,376,151 1,257,505 Inventories 1,675,751 1,607,256 Prepaid expenses 267,724 258,633 Other current assets 30,221 44,886 Total current assets 3,471,512 3,249,972 Property,plant and equipment,net 3,370,348 3,147,118 Goodwill 2,274,426 2,293,365 Tradenames 580,147 632,349 Other intangible assets,net 254,459 304,192 Deferred income taxes and other non-current assets 279,704 307,404 $ 10,230,596 9,934,400 LIABILITIES AND STOCKHOLDERS'EQUITY Current liabilities: Current portion oflong-term debt $ 1,382,738 2,003,003 Accounts payable and accrued expenses 1,335,582 1,256,025 T-otat-current-liabilities 2;718,320— _ —3,239M28 Deferred income taxes 361,416 388,130 Long-term debt,less current portion 1,128,747 1,188,964 Other long-term liabilities 214,930 215;463 Total liabilities 4,423,413 5,051,585 Commitments and contingencies(Note 13) Redeemable noncontrolling interest 23,696 21,952 Stockholders'equity: Preferred stock,$.01 par value;60 shares authorized;no shares issued Common stock,$.01 par value;150,000 shares authorized;81,519 and 81,280 shares issued in 2016 and 2015,respectively 815 813 Additional paid-in capital 1,791,540 1,760,016 Retained earnings 5,032,914 4,102707 Accumulated other comprehensive loss P (833,027) (793,568) • 5,992,242 5,069,968 Less treasury stock at cost;7,351 shares in 2016 and 2015 215,791 215,795 Total Mohawk Industries,Inc.stockholders'equity 5,776,451 4,854,173 Noncontrolling interest 7,036 6,690 Total stockholders'equity 5,783,487 4,860,863 $ 10,230,596 9,934,400 See accompanying notes to consolidated financial statements. 40 • • • Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Consolidated Statements of Operations Years Ended December 31,2016,2015 and 2014 2016 2015 _ 2014 (In thousands,except per share data) Net sales $ 8,959,087 8,071,563 7,803,446 Cost of sales 6,146,262 5,660,877 5,649,254 Gross profit 2,812,825 2,410,686 2,154,192 Selling,general and administrative expenses 1,532,882 1,573,120 1,381,396 Operating income 1,279,943 837,566 772,796 Interest expense 40,547 71,086 98,207 Other(income)expense (1,729) 17,619 10,698 Earnings before income taxes 1,241,125 748,861 663,891 Income tax expense 307,559 131,875 131,637 Net earnings including noncontrolling interest 933,566 616,986 532,254 Net earnings attributable to noncontrolling interest 3,204 1,684 289 Net earnings attributable to Mohawk Industries,Inc. $ 930,362 615,302 531,965 Basic earnings per share attributable to Mohawk Industries,Inc. Basic earnings per share attributable to Mohawk Industries,Inc. $ 12.55 8.37 7.30 Weighted-average common shares outstanding—basic 74,104 73,516 72,837 Diluted earnings per share attributable to Mohawk Industries,Inc. Diluted earnings per share attributable to Mohawk Industries,Inc: $ 12.48 8:31 7 25 Weighted-average common shares outstanding—diluted 74,568 74,043 73,363 See accompanying notes to consolidated financial statements. 41 Table 01 Consents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Consolidated Statements of Comprehensive Income(Loss) Years Ended December 31,2016,201 5 and 2014 2016 2015 2014 (in thousands) Net earnings including noncontrolling interest $ 933,566 616,986 532,254 Other comprehensive(loss)income: Foreign currency translation adjustments (36,702) (360,147) (607,351) Prior pension and post-retirement benefit service cost and actuarial(loss)gain (2,757) (4,100) (659) Other comprehensive(loss)income 9,459 ('3 ) (364,247): . (608,010) Comprehensive income(loss) 894,107 252,739 (75,756) Comprehensive income attributable to the non-controlling interest 3,204 1,684 289 Comprehensive income attributable to Mohawk Industries,Inc. $ 890,903 251,055 (76,045) See accompanying notes to consolidated financial statements. 42 Tahle'o,'Content5 Index to FinancialStatements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Consolidated Statements of Stockholders'Equity Years Ended December 31,2016,2015 and 2014 Total Stockholders'Equity _,...- _- Common Stock Accumulated Treasury Stock Redeemable Additional Other Total Noncontrolling Paid-in Retained Comprehensive Noncontrolling Stockholders' Interest Shares Amount Capital Earrings Income(Loss) Shares Amount Interest Equity (In thousands) Balances at December 31,2013 5 - 80,841 $ 808 $1,566,985 $2,953,809 $ 178,689 (8,155) $(239,234) $ 9,249 $4,470,306 Shares issued under employee and director stock plans 229 3 (1,113) - (2) (216) • - (1,326) Stock-based compensation expense - - - 27,961 - - - - - 27,961 Tax benefit from stock-based 5,054 compensation --- 5,054 - - - - Distribution to noncontrolling interest,net of adjustments - - - - - - - - (1,087) (1,087) Noncontrolling earnings - - - - 289 289 Currency translation adjustment on noncontrolling interests - - - - - - - - (2,339) (2,339) Acquisition of noncontrolling interest - 1,305 - - - (1,305) - Currency translation adjustment - - - - - (607,351) - - - (607,351) Pension prior service cost and actuarial g� - - - (659) - (659) Net income - - - - 531,965 - - - - 531,965 Balances at December 31,2014 - 81,070 811 1,598,887 3,487,079 (429,321) (8,157) (239,450) 4,807 4,422,813 IVC Group acquisition - - 129,445 - - 806 23,651 - 153,096 Shares issued under employee and director :,..tms - - 210. -- 2 (4,536) - 4 (6,530) -,w�- s-- ---____ - - Stock-based compensation expense - 32,552 - 32,552 Tax benefit from stock-based compensation - - - 5,668 - - - - - 5,668 Accretion of redeemable noncontrolling interest 194 - - - (194) - - - - (194) Noncontrolling earnings 1;428 - - - - - - 256 256 Currency translation adjustment on non- controlling interests (713) - - - - - - - (970) (970) Acquisition of noncontrolling interest,net of taxes 21,043 - - 520 - 2,597 3,117 Currency translation adjustment - - (360,147) - (360,147) Pension prior service cost and actuarial loss (4,100) - - - (4,100) Net income - - - - 615,302 - - - - 615,302 Balances at December 31,2015 21,952 81,280 813 1,760,016 4,102,707 (793,568) '(7,351) (215;795) 6,690 4,860,863 Shares issued under employee and director stock plans - 239 2 (8,232) - - - 4 - (8,226) Stock-based compensation expense - 35,059 - - 35,059 Tax benefit from stock-based compensation - - - 4,697 - - - 4,697 Accretion of redeemable noncontrolling interest 123 - - - (123) - - - - (123) Noncontrolling earnings 2,864 - - - - - - - 340 340 Currency translation adjustment on non- controlling interests (1,243) - - - - (26) (26) Acquisition of noncontrolling interest,net of tax - - - (32) - - - 32 - Currency translation adjustment - - - (36,702) - - (36,702) Prior pension and post-retirement benefit service cost and actuarial loss - - (2,757) - - - (2,757) Net income - 930,362 - 930,362 Balances as of December 31,2016 $ 23,696 81,519 $ 815 $1,791,540 $5,032,914 $ (833,027) (7,351) $(215,791) $ 7,036 $5,783,487 See accompanying notes to consolidated financial statements. • 43 f Table of Caaients index to Financial Sfatcmcnrs MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Consolidated Statements of Cash Flows Years Ended December 31,2016,2015 and 2014 2016 2015 2014 (In thousands) Cash flows from operating activities: Net earnings $ 933,566 616,986 532,254 Adjustments to reconcile net earnings to net cash provided by operating activities: Restructuring 38,463 33,085 16,497 Intangible asset impairment 47,905 - - Loss on sale of subsidiary - - 11,954 Depreciation and amortization 409,467 362,647 345,570 Deferred income taxes (34,009) (28,883) (24,026) Loss on extinguishment of debt - - 20,001 Loss on disposal of property,plant and equipment 3,932 3,007 2,153 Stock-based compensation expense 35,059 32,552 27,961 Changes in operating assets and liabilities,net of effects of acquisitions: Receivables,net (158,888) (14,383) (107,705) Inventories (81,923) 6,400 (67,016) Accounts payable and accrued expenses 80,875 783 (49,204) Other assets and prepaid expenses 54,267 (75,813) (30,376) Other liabilities (1,161) (24,508) (15,875) Net cash provided by operating activities 1,327,553 911,873 662,188 Cash flows from investing activities: roe q p Additions to __- property,rtY�Plant and a ument i _ _ - (672;125) (503,657) _ (561,804) - Acquisitions,net of cash acquired - (1,370,567) 19 Net change in cash from sale of subsidiary - - (3,867) Net cash used in investing activities (672,125) (1,874,224) (565,652) Cash flows from financing activities: Payments on Senior Credit Facilities (707;129) (1;376,082) (1,613,484). Proceeds from Senior Credit Facilities 631,807 1,315,930 1,448,191 Payments on Commercial Paper (20,210,585) (1.5,934,767). (7,424,751) Proceeds from Commercial Paper 20,301,372 16,402,507 7,726,351 Repayment of senior notes (645,555) (254,445) Proceeds from asset securitization borrowings - - 200,000 Proceeds from senior note issuance • - 564;653 - Payments on other debt - - (55,358) Payments on acquired debt and other financings (9,530) (42,954) Debt issuance costs (1,336) (7,109) - Debt extinguishment costs - (18,921) Distribution to non-controlling interest - - (1,087) Change in outstanding checks in excess of cash (1;754) (2,052) (1,920) Proceeds and net tax benefit from stock transactions 9,280 10,533 12,828 Net cash(used in)provided by financing activities (623,900) 964,083 (25,550) Effect of exchange rate changes on cash and cash equivalents 8,445 (17,917) (27,175) Net change in cash and cash equivalents 39,973 (16,185) 43,811' Cash and cash equivalents,beginning of year 81,692 97,877 54,066 Cash and cash equivalents,end of year $ 121,665 81,692 97,877 See accompanying notes to consolidated financial statements. 44 V Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements Years Ended December 31,2016,2015 and 2014 (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("LUT")and 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)Segment Realignment During the second quarter of 2015, the Company realigned its reportable segments to reflect how the Company's results will be reported by management.The Company has reorganized its business into three segments-Global Ceramic,Flooring North America("Flooring NA")and Flooring Rest of the World("Flooring ROW").In order to leverage its relationship and distribution capabilities,the Company organized its carpet,wood,laminate,LVT and vinyl operations by geography into the Flooring NA segment and Flooring ROW segment. The Company did not make changes to the Global Ceramic segment,which includes our ceramic tile and stone operations.Previously reported segment results have been reclassified to conform to the current period presentation. This new segment structure is consistent with the strategic objective that management now applies to manage the growth and profitability of the Company's business.The Global Ceramic segment includes all worldwide tile and natural stone operations. The Flooring NA segment includes North —American-operations in all product categories-except-tile and-natural stone.-The new-segment combines-theformer-Carpet-segmentwith the-North Ameri-can- operations of the former Laminate and Wood segment and the North American operations of the Company's newly acquired LUT and vinyl flooring businesses. The Flooring ROW segment includes operations outside of North America in all product categories except tile and natural stone. The new segment combines the European and Rest of the World operations of the former Laminate and Wood segment and the European and Rest of the World operations of the Company's newly acquired LVT and vinyl flooring businesses. (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, 2016,the Company had cash of$121,665 of which$92,419 was held outside the United States.As of December 31,2015,the Company had cash of$81,692 of which$61,173 was held outside the United States. (d)Accounts Receivable and Revenue Recognition The Company sells carpet,rugs,ceramic tile,natural stone,hardwood,sheet vinyl,LVT and laminate flooring products in the U.S.and to a lesser extent,Mexico,Europe and Russia principally for residential and commercial use.The Company grants credit to customers,most of whom are retail-flooring dealers,home centers and commercial end users,under credit terms that the Company believes are customary in the industry. Revenues,which are recorded net of taxes collected from customers,are recognized when there is persuasive evidence of an arrangement,delivery has occurred,the price has been fixed or is determinable,and collectability can be reasonably assured.The Company provides allowances for expected cash discounts,returns,claims,sales allowances and doubtful accounts based upon historical bad debt and claims experience and periodic evaluations of specific customer accounts and the aging of accounts receivable.Licensing revenues received from third parties for patents are recognized based on contractual agreements. 45 } Table of Contents Index lo Financial.Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES - Notes to Consolidated Financial Statements--{Continued) (e)Inventories The Company accounts for all inventories on the first-in, first-out ("FIFO")method. Inventories are stated at the lower of cost or market (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. Market, with respect to all inventories, is replacement cost or net realizable value. Inventories on hand are compared against anticipated future usage, which is a function of historical usage, anticipated future selling price, expected sales below cost, excessive quantities and an evaluation for obsolescence.Actual results could differ from assumptions used to value obsolete inventory,excessive inventory or inventory expected to be sold below cost and additional reserves may be required. 0 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 25-40 years for buildings and improvements,5-15 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. (g)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. (h)Goodwill and Other Intangible Assets In accordance with the provisions of the Financial Accounting Standards Board("FASB")Accounting Standards Codification Topic("ASC")350, "Intan_ibles-Goodwill and Other,"the Co...an tests oodwill and other intangible assets with indefinite lives for impairment on an annual basis in the fourth quarter for onaninterim basis if an event occursstha might reduce the fair value oT"the reporting-unit-WOW-its carrying value):Tlie 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 during the fourth quarter of each year,or more frequently if events or changes in circumstances indicate that an asset might be impaired.The first step of the impairment tests for our indefinite lived intangible assets is a thorough 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 test indicates it is not more likely than not that the fair value of these assets is less than their carrying amounts,a quantitative assessment is not required.If a quantitative test is necessary,the second step of our impairment test involves comparing the estimated fair value of a reporting unit to its canying amount.The determination of fair value used in the impairment evaluation is based on discounted estimates of future sales projections attributable 46 • Table olConaents index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) 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 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.If the carrying value of the intangible asset exceeds its fair value,an impairment loss is recognized in an amount equal to that excess. Intangible assets that do not have indefinite lives are amortized based on average lives,which range from 7-16 years. (i)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. 6)Financial Instruments The Company's financial instruments consist primarily of 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 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. (k)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$122,148 in 2016,$100,012 in 2015 and$93,050 in 2014. 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 is classified as a selling,general and administrative expense in accordance with ASC 605-50. Co-op advertising expenses,a component of advertising and promotion expenses,were$11,132 in 2016,$9,417 in 2015 and$10,064 in 2014. (I)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. (m)Impairment of Long-Lived Assets 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 canying 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 canying 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. 47 Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (n)Foreign Currency Translation The Company's subsidiaries that operate outside the United States 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. (o)Hedges of Net Investments in Non-US.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 year ended December 31,2016,the change in the U.S.dollar value of the Company's euro denominated debt was$20,644($12,902 net of taxes),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. a)Earningsper 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 not included in the diluted EPS computation because the price was greater than the average market price of the common shares for the periods presented for 2016,2015 and 2014. Computations of basic and diluted earnings per share are presented in the following table: 2016 2015 2014 Earnings attributable to Mohawk Industries,Inc. $ 930,362 615,302 531,965 Accretion of redeemable noncontrolling interest(al (123) (194) Net earnings available to common stockholders $ 930,239 615,108 531,965 Weighted-average common shares outstanding-basic and diluted: Weighted-average common shares outstanding-basic 74,104 73,516 72,837 Add weighted-average dilutive potential common shares-options and RSV's to purchase common shares,net 464 527 526 Weighted-average common shares outstanding-diluted 74,568 74,043 73,363 Earnings per share attributable to Mohawk Industries,Inc. Basic $ 12.55 8.37 7.30 Diluted $ 12.48 8.31 7.25 (a)Represents the accretion of the Company's redeemable noncontrolling interest to redemption value.See Note 2-Acquisitions for further information. 48 • Table oiC:ontcros Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (q)Stock-Based COmpensati011 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. (r)Employee Benefit Plans The Company has a 401(k)retirement savings plan(the"Mohawk Plan")open to substantially all U.S.and Puerto Rico based employees who have completed 90 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$50,542 and$21,002 in 2016, $45,279 and$18,882 in 2015 and$42,681 and$17,654 in 2014,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-US.Plans are funded in accordance with local regulations.The Company uses December 31 as the measurement date for its Non-U.S.Plans.As of December 31,2016,the funded status of the Non- U.S.Plans was a liability of$7,517 of which$3,803 was recorded in accumulated other comprehensive income,for a net liability of$3,714 recorded in other long-term liabilities within the consolidated balance sheets.As of December 31,2015,the funded status of the Non-U.S.Plans was a liability of$3,224 of which$1,075 was recorded in accumulated other comprehensive income(loss),for a net liability of$2,149 recorded in other long-term liabilities within the consolidated balance sheets. (s)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 changes in accumulated other comprehensive income(loss)by component,net of tax,for years ended December 31,2016,2015 and 2014 are as fnllnwc Foreign currency Pensions and post- translation adjustments retirement benefits Total Balance as`of December 31,2013 $ 178,846 (157) 178,689 Current period other comprehensive income(loss)before reclassifications (607,351) (659) (608,010) Amounts reclassified from accumulated other comprehensive loss — — — Balance as of December 31,2014 (428,505) (816) (429,321) Current period other comprehensive income(loss)before reclassifications (360,147) (4,100) (364,247) Amounts reclassified from accumulated other comprehensive income — —Balance as ofDecember 31,2015 (788,652) (4,916) (793568) Current period other comprehensive income(loss)before reclassifications (36,702) (2,757) (39,459) Amounts reclassified from accumulated other comprehensive income(loss) — --- Balance Balance as of December 31,2016 $ (825,354) (7,673) (833,027) (t)Self-Insurance Reserves The Company is self-insured in the U.S.for various levels of general liability,auto liability,workers'compensation and employee medical coverage. Insurance reserves,excluding workers'compensation,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 49 - Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) ' differences in actual settlements and claims could have an adverse effect on the Company's results ofoperations and financial condition. (ii)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. (v)Recent Acctounting Pronouncements In May 2014,the FASB issued Accounting Standards Codification("ASC")606,Revenue from Contracts with Customers.This topic converges the guidance within U.S.GAAP and International Financial Reporting Standards("IFRS")and supersedes ASC 605,Revenue Recognition.The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services.The new standard will also result in enhanced disclosures about revenue,provide • guidance for transactions that were not previously addressed comprehensively,and improve guidance for multiple-element arrangements.The new guidance is effective for annual reporting periods beginning after December 15,2016, including interim reporting periods within that reporting period and early application is not permitted.On July 9,2015,the FASB decided to defer the effective date ofASC 606 for one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods within those fiscal years beginning after December-15,2017.The Company currently plans to adopt the provisions of this new accounting standard at the beginning of fiscal year 2018,using the cumulative effect method,and continues to evaluate the impact of the adoption ofASC 606 on its consolidated financial statements.The Company expects to complete its assessment of the impact of adoption of ASC 606 during the first half of 2017. In April 2015,the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs.This topic converges the guidance within U.S. GAAP and INKS.The new standard intends to simplify the presentation of debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability,versus recording the costs as a prepaid expense in other assets that is amortized.The new standard will more closely align the presentation of debt issuance costs under U.S.GAAP with the presentation under comparable IFRS.In August 2015,the FASB issued ASU 2015-15,Interest - Imputation of Interest(Subtopic 835-30) to address the measurement of debt issuance costs associated with line-of-credit arrangements.ASU 2015-15 states that an entity can defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement,regardless if there are outstanding borrowings on the line-of-credit arrangement.The Company __ adopted-the provisions-of-this new accounting standard-effective--anuary-12616 retrospectively.-Accordingly,unamortized-debt issuance-costs-of-$-F964 were reclassified from other non-current assets to long-term debt in the December 31,2015 consolidated balance sheet. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update changes the measurement principle for inventory for entities using FIFO or average cost from the lower of cost or market to lower of cost and net realizable value.Entities that measure inventory using LIFO or the retail inventory method are not affected.This update will more closely align the accounting for inventory under U.S.GAAP with IFRS.The new guidance is effective for annual reporting periods beginning after December 15,2016 including interim periods within that reporting period and early adoption is permitted.The Company currently accounts for inventory using the FIFO method.Accordingly,the Company plans to adopt the provisions of this update at the beginning of fiscal year 2017.This update is not expected to have a material impact on the Company's consolidated financial statements. In September 2015,the FASB issued ASU No.2015-16,Business Combinations(Topic 805):Simplifying the Accounting for Measurement-Period Adjustments,which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under this ASU, acquirers must recognize measurement-period adjustments in the period in which they determine the amounts,including the effect on eamings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date.The Company adopted the provisions of this update effectively January 1,2016 prospectively.This update did not have a material impact on the Company's consolidated financial statements. In February 2016,the FASB issued ASU 2016-02,Leases.The amendments in this Update create Topic 842,Leases,and supersede the requirements in Topic 840,Leases.Topic 842 specifies the accounting for leases.The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount,timing,and uncertainty of cash flows arising from a lease.The guidance in this update is effective for annual reporting 50 • Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) periods beginning after December 15,2018 including interim periods within that reporting period and early adoption is permitted.The Company plans to adopt the provisions of this update at the beginning of fiscal year 2019,and is currently assessing the impact on its consolidated financial statements. In March 2016,the FASB issued ASU 2016-09,hi/proven/en ts io Employee Share-Eased Payment Accounting.This update simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures,and statutory tax withholding requirements,as well as classification in the statement of cash flows.The guidance in this update ineffective for annual reporting periods beginning after December 15,2016 and interim periods within those annual periods and early adoption is permitted.The Company plans to adopt the provisions of this update at the beginning of fiscal year 2017.This update is not expected to have a material impact on the Company's consolidated financial statements. In June 2016,the FASB issued ASU 2016-13,Financial Instruments - Credit Losses (Topic 326):Measurement of credit losses on financial instruments.Topic 326 amends guidance on reporting credit losses by replacing the current incurred loss model with a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred.The update will require a financial asset measured at amortized cost to be presented at the net amount expected to be collected by means of an allowance for credit losses that runs through net income.ASU 2016- 13 ineffective for annual and interim reporting periods beginning after December 15,2019.Early adoption is permitted beginning after December 15,2018. The Company plans to adopt the provisions of this update at the beginning of fiscal year 2020,and is currently assessing the impact on its consolidated financial statements. In August 2016,the FASB issued ASU 2016-15, Statement of Cash Flows(Topic 230).This update clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows.ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows.Additionally, the FASB issued ASU 2016-18 in November 2016 to address the classification and presentation of changes in restricted cash on the statement of cash flows.The guidance in these updates should be applied retrospectively and are effective for fiscal years beginning after December 15,2017,and interim periods within those years.Early adoption is permitted.The Company plans to adopt the provisions of these updates at the beginning of fiscal year 2018 and is currently assessing the impact on its consolidated statement of cash flows. 51 Table ofConlents Index to Financial Starements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (2)Acquisitions ITEC Group On January 13,2015,the Company entered into a share purchase agreement(the"Share Purchase Agreement")with Enterhold S.A.,a Luxembourg societe anonyme (the "Seller"),to acquire all of the outstanding shares of International Flooring Systems S.A., a Luxembourg Societe anonyme,and its subsidiaries(collectively,the"IVC Group").The IVC Group is a global manufacturer,distributor and marketer of luxury vinyl tile("LUT")and sheet vinyl. On June 12,2015,pursuant to the terms of the Share Purchase Agreement,the Company completed the acquisition of IVC Group for $1,146,437.The results of the IVC Group's operations have been included in the consolidated financial statements since that date in the Flooring NA and the Flooring ROW segments.The IVC Group acquisition will position the Company as a major participant in both the fast growing LVT category and the expanding fiberglass sheet vinyl business. Pursuant to the terms of the Share Purchase Agreement,the Seller will indemnify the Company for uncertain tax positions and tax liabilities that were incurred by the Seller.The Company has recorded these tax liabilities and related indemnification asset in the amount of$34,781 as of the acquisition date in other long-term liabilities and other long-term assets,respectively. The equity value of IVC Group was paid to the Seller in cash and in shares of the Company's common stock(the"Shares").Pursuant to the Share Purchase Agreement,the Company(i)acquired the entire issued share capital of IVC Group and(ii)acquired$17,122 of indebtedness of the IVC Group,in exchange for a net cash payment of$732,189,debt paid of$261,152,and 806 issued treasury shares for a value of$153,096. The Company funded the cash portion of the IVC Group acquisition through a combination of proceeds from the 2.00%Senior Notes(as discussed in Note 9-Long-Term Debt),cash on hand and borrowings under the 2015 Senior Credit Facility(as discussed in Note 8-Long-Term Debt). KAI Group • On May 12, 2015, the Company purchased approximately 90% of all outstanding shares of Advent KAI Luxembourg Holdings S.a Ll., a Luxembourg societe a respsonsabilite limitee,and its subsidiaries(collectively,the"KAI Group"),an eastern European ceramic tile floor manufacturer The Company completed the acquisition of the KAI Group for$194,613.The results of the KAI Group's.operations have been included in the consolidated financial statements since the date of acquisrtionin the Global Ceramic segment.The KAT Group has a low cost position in the B111ganan an3dRomanian .markets.The combination with the Company will present opportunities to enhance the group's product offering,upgrade its technology and expand its exports to other countries.The remaining 10%ownership interest in the KAI Group is controlled by a third party.The 10%interest is subject to redemption provisions that are not solely within the Company's control and therefore is recorded as a redeemable noncontrolling interest in the mezzanine section of the balance sheet for$23,696 as of December 31,2016.Pursuant to the share purchase agreement,the Company(i)acquired approximately 90%of the issued share capital of the KAI Group and(ii)acquired$24 of indebtedness of the KAI Group,in exchange for a net cash payment of$169,540 and debt paid of $25,073. The Company accounted for the acquisitions of the IVC Group and the KAI Group(the"Acquisitions")using the acquisition method of accounting, with the Company as the acquirer of the IVC Group and the KAI Group.The preliminary estimated combined consideration transferred of$1,341,050, including debt paid and shares issued, was determined in accordance with the respective share purchase agreements.The preliminary consideration transferred is allocated to tangible and intangible assets and liabilities based upon their respective fair values. The following table summarizes the preliminary acquisition-date fair value of the consideration transferred for the Acquisitions and the estimated fair value of the consideration transferred to assets acquired and liabilities assumed as of the date of the Acquisitions,and the allocation of the aggregate purchase price of the IVC Group and the KAI Group acquisitions to the estimated fair values of the tangible and identifiable intangible assets acquired and liabilities assumed(in thousands): • 52 Table of Convents Index to Financial Statements - MOHAWKINDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) Fair value of assets,net of cash acquired S 1,3/12,356 Noncontrolling interests in assets acquired (24160) Assumed indebtedness (17,146) Consideration transferred $ 1,341,050 Working capital 140,606 Property,plant and equipment 363570 Tradenames 48,563 Customer relationships 224,326 Goodwill 740,140 Other long-term assets 50,236 Long-term debt,including current portion (17,146) Other long-term liabilities (57,832) Deferred tax liabilities (127,253) Noncontrolling interest (24,160) Consideration transferred $ 1,341,050 Intangible assets subject to amortization of$224,326 related to customer relationships have estimated lives of 12 to 14 years.In addition to the amortizable intangible assets,there is an additional$48,563 in indefinite-lived tradename intangible assets.The goodwill of$740,140 was allocated to the Company's segments as disclosed in Note 6,Goodwill and Other Intangible Assets.The factors contributing to the recognition of the amount of goodwill are based on strategic and synergistic benefits that are expected to be realized from the Acquisitions.These benefits include the opportunities to improve the Company's performanc-e by leveraging best-practices,operational expertise;prodfiCtinnovation and manufactunng asset&The recognrzedgoodWill from-the - --- Acquisitions is not expected to be deductible for tax purposes. The results of operations for the Acquisitions were not significant to the Company's consolidated results of operations and, accordingly, the Company has not provided pro forma information relating to the Acquisitions. Xtratherm On December 7, 2015,the Company completed its purchase of Xtratherm Limited, an Irish company, and certain of its affiliates(collectively, "Xtratherm"),a manufacturer of insulation boards in Ireland,the UK and Belgium.The total value of the acquisition was$158,851.The Xtratherm acquisition will expand the Company's existing insulation board footprint to include Ireland,the UK and Belgium while capitalizing on expanded product offerings in Belgium.The acquisition's results and purchase price allocation have been included in the consolidated financial statements since the date of the acquisition. The Company's acquisition of Xtrathenn resulted in a preliminary goodwill allocation of$33,307,indefinite-lived trademark intangible assets of$4,681 and intangible assets subject to amortization of$39,784.The goodwill is not expected to be deductible for tax purposes.The factors contributing to the recognition of the amount of goodwill include the opportunity to optimize the assets of Xtratherm with the Company's existing insulation assets.The Xtratherm results are reflected in the Flooring ROW segment. Other Acquisitions During the first quarter of 2015,the Company acquired certain assets of a distribution business in the Flooring ROW segment for$2,822,resulting in a preliminary goodwill allocation of$2,659. During the third quarter of 2015,the Company acquired certain assets of a ceramic business in the Global Ceramic segment for$20,423,resulting in a preliminary goodwilildlocation of$269. - 53 Table of Contents Index to Financial Statements MOHA WK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements-(Continued) (3)Restructuring,Acquisition and Integration-Related Costs The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost- reduction/productivity initiatives.For example: • In connection with acquisition activity,the Company typically incurs costs associated with executing the transactions,integrating the acquired operations(which may include expenditures for consulting and the integration of systems and processes),and restructuring the combined company (which may include charges related to employees,assets and activities that will not continue in the combined company);and • In connection with the Company's cost-reduction/productivity initiatives,it typically incurs costs and charges associated with site closings and other facility rationalization actions including accelerated depreciation and workforce reductions. Restructuring,acquisition transaction and integration-related costs consisted of the following during the year ended December 31,2016,2015 and 2014,respectively(in thousands): 2016 2015 2014 Cost of sales Restructuring coststa> $ 33,582 35,956 19,795 Acquisition integration-related costs 4,722 9,597 11,426 Restructuring and integration-related costs $ 38,304 45,553 31,221 Selling,general and administrative expenses Restructuring coststa> $ 4,881 5,779 5,684 Acquisition transaction-related costs - 9,502 - Acquisition integration-related costs 7,438 13,770 14,697_-_ Restructuring,acquisition and integration-related costs $ 12,319 29,051 20,381 - (a)The restructuring costs for 2016,2015 and 2014 primarily relate to the Company's actions taken to lower its cost structure and improve efficiencies of manufacturing and distribution operations as the Company adjusted to changing economic conditions as well as actions related to the Company's recent acquisitions,In 2015 and 2014 restructuring costs included accelerated depreciation of$8,650 and$8,982,respectively. The restructuring activity for the twelve months ended December 31,2016 and 2015,respectively is as follows(in thousands): Other Lease restructuring impairments Asset write-downs Severance costs Total Balance as of December 31,2014 $ 1,741 - 3037 100 4,878 Provision-Global Ceramic segment - 2,318 3,227 (1,180) 4,365 Provision-Flooring NA segment 1,877 4,279 4,600 8,688 19,444 Provision-Flooring ROW segment - 8,789 5,366 3,771 17,926 Cash payments (3,618) (7,265) (11,494) (22,377) Non-cash items - (15,386) - 1,180 (14,206) Balance as of December 31,2015 - - 8$65 1,065 10,030 Provision-Global Ceramic segment - 795 1,396 • 79 2,270 Provision-Flooring NA segment - 10,048 3,850 18,170 32,068 Provision-Flooring ROW segment - 184 1,932 2,009 4,125 Cash payments - - (10,958) (9,982) (20,940) Non-cash items (11,027) (2) (5,098) (16,127) Balance as of December 31,2016 $ - - 5183 6,243 11426 The Company expects the remaining severance and other restructuring costs to be paid over the next year. 54 Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (4)Receivables December 31, December 31, 2016 2015 Customers,trade $ 1,386,306 1,243,533 Income tax receivable 8,616 21,835 Other 59,564 71,084 1,454,486 1,336,452 Less allowance for discounts,returns,claims and doubtful accounts 78,335 78,94.7 Receivables,net $ 1,376,151 1,257,505 The following table reflects the activity of allowances for discounts,returns,claims and doubtful accounts for the years ended December 31: Additions Balance at charged to Balance beginning costs and at end of year Acquisitions expenses Deductions(1) of year 2014 $ 77,037 — 252,982 257,416 72,603 2015 72,603 7,750 272,329 273,735 78,947 2016 78,947 — 296,419 297,031 78,335 (1) Represents charge-offs,net of recoveries. (5)-llnvE or-ies-_ ----- — — The components of inventories are as follows: December 31, December 31, 2016 2015 Finished goods $ 1,127;573 1,083,012 Work in process 137,310 137,186 Raw materials 410;868 387,058 Total inventories $ 1,675,751 1,607,256 55 Table of Contents Index In Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (6)Goodwill and Other Intangible Assets The Company conducted its annual impairment assessment in the fourth quarter of 2016 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 31,2014 Goodwill $ 1,395,132 538,515 998,130 2,931,777 Accumulated impainnents losses (531,930) (343,054) (452,441) (1,327,425) 863,202 195,461 545,689 1,604,352 Goodwill recognized during the year 99,848 329,401 345,905 775,154 Currency translation during the year (22,223) — (63,918) (86,141) Balances as of December 31,2015 Goodwill 1,472,757 867,916 1,280,117 • 3,620,790 Accumulated impairments losses (531,930) (343,054) (452,441) (1,327,425) 940,827 524,862 827,676 2,293,365 Goodwill recognized during the year $ — 1,848 1,158 3,006 Currency translation during the year 9,469 — (31,414) (21,945) Balances as of December 31,2016 Goodwill 1,482,226 869,764 1,249,861 3,601,851 A uni at_.prl impairments losses—: (531910) (343,054)__---- (452,441)_:____.._ (1,323,425)_ $ 950,296 526,710 797,420 2,274,426 Intangible assets: During the third quarter of 2016,the Company determined that it needed to simplify the branding strategy in the Flooring NA segment by consolidating products under the Mohawk Group brands and discontinuing the Lees brand.This resulted in the Company writing off the full value of the Lees tradename and recording an impairment charge of$47,905 in selling,general and administrative expenses in the consolidated statements of operations. Tradenames Indefinite life assets not subject to amortization: Balance as of December 31,2014 - $ 622,691 Intangible assets acquired during the year 53,244 Currency translation during the year (43,586) Balance as of December 31,2015 632,349 Intangible assets acquired during the year - Intangible assets impaired during the year (47,905) Currency translation during the year (4,297) Balance as of December 31,2016 $ 580,147 56 • Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements-(Continued) Customer relationships Patents Other Total Intangible assets subject to amortization: Balances as of December 31,2014 $ 33,917 44,591 810 79,318 Intangible assets acquired during the year 258,875 - 5,290 264,165 Amortization during the year (16,567) (13,331) (11) (29,909) Currency translation during the year (5,102) (4,275) (5) (9,382) Balances as of December 31,2015 271,123 26,985 6,084 304,192 Intangible assets acquired during the year - _ - Amortization during the year (25,778) (13,141) (626) (39,545) Currency translation during the year (9,641) (420) (127) (10,188) Balances as of December 31,2016 5 235,704 13,424 5,331 254,459 December 31,2016 Accumulated Cost Acquisitions Currency translation amortization Net Value Customer Relationships $ 588,716 - (18,736) 334,276 235,704 Patents 243,258 - (9,236) 220,598 13,424 Other 6,790 (460) 999 5,331 Total $ 838,764 - (28,432) 555,873 254,459 December 31,2015 Accumulated Cost Acquisitions Currency translation amortization Net Value Customer Relationships $ 354,768 258,875 (24,927) 317,593 271,123 Patents 270,466 j27,208) 216,273 - 26,985 Other 1,479 5,290 21 706 6,084 Total $ 626,713 264,165 (52,114) 534,572 304,192 Years Ended December 31, 2016 2015 2014 Amortization expense $ 39,545 29,909 24,724 Estimated amortization expense for the years ending December 31 are as follows: 2017 $ 34,302 2018 26,013 2019... _..:.... __ _ 22,967_. 2020 22,967 2021 1 22,936:... 57 Table of Contents Index to Financial Statement' MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (7)Property,Plant and Equipment Following is a summary of property,plant and equipment. December 31, December 31, 2016 2015 Land $ 288,633 305,943 Buildings and improvements 1,189,408 1,120,193 Machinery and equipment 3,979,349 3,750,787 Furniture and fixtures 236,183 133,857 Leasehold improvements 77,97668,977 Construction in progress 472,226 403,500 6,243,775 5,783,257 Less accumulated depreciation and amortization 2,873,427 2,636,139 Net property,plant and equipment $ 3,370,348 3,147,118 Additions to property,plant and equipment included capitalized interest of$5,608,$7,091 and$9,202 in 2016,2015 and 2014,respectively. Depreciation expense was$366,233,$328,486 and$315,840 for 2016,2015 and 2014,respectively.Included in the property,plant and equipment are capital leases with a cost of$7,986 and$8,233 and accumulated depreciation of$4,436 and$4,431 as of December 31,2016 and 2015,respectively. (8)Long-Term Debt Senior Credit Facility On September 25,2013,the Company entered into a$1,000,000,5-year;senior revolving credit facility (the "2013 Senior Credit Facility").The --20-1-3=Seng Credit-Fattlity-providddlom a m cimum of$1,000,000 afrevolviug-credit-including limitecLamounts=ofcredit in-th-e-form-aflettersmfireditand swingline loans.The Company paid financing costs of$1,836 in connection with its 2013 Senior Credit Facility.These costs were deferred and,along with unamortized costs of$11,440 related to the Company's previous credit facility,were amortized over the term of the 2013 Senior Credit Facility. On March 26,2015,the Company amended and restated the 2013 Senior Credit Facility increasing its size from$1,000,000 to$1,800,000 and extending the maturity from September 25,2018 to March 26,2020 (as amended and restated,the"2015 Senior Credit Facility").The 2015 Senior Credit Facility eliminates certain provisions in the 2013 Senior Credit Facility, including those that: (a) accelerated the maturity date to 90 days prior to the maturity of senior notes due in January 2016 if certain specified liquidity levels were not met; and (b)required that certain subsidiaries guarantee the Company's obligations if the Company's credit ratings fell below investment grade.The 2015 Senior Credit Facility also modified certain negative covenants to provide the Company with additional flexibility,including flexibility to make acquisitions and incur additional indebtedness.On March 1, 2016,the Company amended the 2015 Senior Credit Facility to,among other things,carve out from the general limitation on subsidiary indebtedness the issuance of Euro-denominated commercial paper notes by subsidiaries and to extend the maturity date from March 26,2020 to March 26,2021 with respect to all but$120,000 of the total amount committed under the 2015 Senior Credit Facility.On October 17,2016,the Company extended the maturity date for the remaining$120,000 commitment to March 26,2021. At the Company's election,revolving loans under the 2015 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 31,2016),or(b)the higher of the Wells Fargo Bank,National Association prime rate,the Federal Funds rate plus 0.5%,and a monthly LIBOR rate plus 1.0%,plus an applicable margin ranging between 0.00% and 0.75%(0.125%as of December 31,2016).The Company also pays a commitment fee to the lenders under the 2015 Senior Credit Facility on the average amount by which the aggregate commitments of the lenders'under the 2015 Senior Credit Facility exceed utilization. The commitment fee ranges from 0.10% to 0.225%per annum(0.125% as of December 31,2016). 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). 58 Table of Convents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) The obligations of the Company and its subsidiaries inrespect of the 2015 Senior Credit Facility are unsecured. The 2015 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 Company is also required 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 3.75 to 1.0,each as of the last day of any fiscal quarter.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 2015 Senior Credit Facility also contains customary representations and warranties and events of default,subject to customary grace periods. Also on March 1,2016,the Company entered into a three-year,senior;unsecured delayed-draw term loan facility(the"Term Loan Facility")by and among the Company,Wells Fargo Bank,National Association,as administrative agent,and each of the lenders party thereto.Subject to customary conditions precedent,the Company could borrow up to$200,000 under the Term Loan Facility in no more than 2 borrowings between March 1,2016 and September 1, 2016.The Company did not borrow under the Term Loan Facility,and it has since expired on its stated expiration date. The Company paid financing costs of$532 in connection with the amendment and extension of its 2015 Senior Credit Facility.These costs were deferred and,along with unamortized costs of$8,785 related to the Company's 2013 Senior Credit Facility,are being amortized over the term of the 2015 Senior Credit Facility.The Company also paid financing costs of$553 in connection with its Term Loan Facility. As of December 31,2016,amounts utilized under the 2015 Senior Credit Facility included$60,672 of borrowings and$941 of standby letters of credit related to various insurance contracts and foreign vendor commitments.The outstanding borrowings of$820,303 under the Company's U.S. and European commercial paper programs as of December 31, 2016 reduce the availability of the 2015 Senior Credit Facility. Including commercial paper borrowings,the Company has utilized$881,916 under the 2015 Senior Credit Facility resulting in a total of$918,084 available under the 2015 Senior Credit Facility. Commercial Paper On February 28,2014,the Company established a U.S.commercial paper program for the issuance of unsecured commercial paper in the United States capital markets.Under the commercial paper program,the Company issues commercial paper notes from time to time.The U.S.commercial paper notes have maturities ranging from one'day to 397 days and may not be voluntarily prepaid or redeemed by the Company.The U.S.commercial paper notes rank pari passu with all of the Company's other unsecured and unsubordinated indebtedness.As of December 31,2016 there was$283,800 outstanding under the U.S.commercial paper program. On July 31,2015,the Company established a European commercial paper program for the issuance of unsecured commercial paper in the Eurozone capital markets.The European commercial paper notes have maturities ranging from one day to 183 days and may not be voluntarily prepaid or redeemed by the Company.The European commercial paper notes rank pan 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.As of December 31,2016,the euro equivalent of$536,503 was outstanding under the European commercial paper program. The Company uses its 2015 Senior Credit Facility as a liquidity backstop for its commercial paper programs.Accordingly,the total amount due and payable under all of the Company's commercial paper programs may not exceed$1,800,000(less any amounts drawn on the 2015 Credit Facility)at any time. The proceeds from the sale of commercial paper notes will be available for general corporate purposes.The Company used the initial proceeds from the sale of U.S.commercial paper notes to repay borrowings under its 2013 Senior Credit Facility and certain of its industrial revenue bonds.The Company used the initial proceeds from the sale of European commercial paper notes to repay euro-denominated borrowings under its 2015 Senior Credit Facility.As of December 31,2016,the amount utilized 59 • Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) under the commercial paper programs was$820,303 with a weighted-average interest rate and maturity period of0.98%and 15.62 days,respectively for the U.S.commercial paper program and(0.11)%and 28.92 days,respectively for the European commercial paper program. Senior Notes On June 9,2015,the Company issued E500,000 aggregate principal amount of 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%SeniorNotes.These costs were deferred and are being amortized over the term of the 2.00%SeniorNotes. On January 31,2013,the Company issued$600,000 aggregate principal amount of 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. On January 17,2006,the Company issued$900,000 aggregate principal amount of6.125% Senior Notes due January 15,2016.During 2014,the Company purchased for cash approximately$254,445 aggregate principal amount of its outstanding 6.125% senior notes due January 15, 2016. On January 15,2016,the Company paid the remaining$645,555 outstanding principal of its 6.125%Senior Notes(plus accrued but unpaid interest)utilizing cash on hand and borrowings under its U.S.commercial paper program. Accounts Receivable Securitization On December 19, 2012, the Company entered into a three-year on-balance sheet trade accounts receivable securitization agreement (the "Securitization Facility").On September 11,2014,the Company made certain modifications to its Securitization Facility,which modifications,among other things,increased the aggregate borrowings available under the facility from$300,000 to$500,000 and decreased the interest margins on certain borrowings. On December 10, 2015, the Company amended the terms of the Securitization Facility extending the termination date from December 19, 2015 to December 19, 2016.The Company further amended the terms of the Securitization Facility on December 13, 2016, extending the termination date to - - e�cemb�-9 2U1/.'lhe—Company paid-financing-co 0 5D-in connecTion with=tlirs ex eynsion.These-cons were de#eireand-are-beingamortized overthe remaining term of the Securitization Facility. Under the terms of the Securitization Facility,certain subsidiaries of the Company sell at a discount certain of their trade accounts receivable(the "Receivables") to Mohawk Factoring, LLC ("Factoring") on a revolving basis.The Company has determined that Factoring is a bankruptcy remote subsidiary,meaning that Factoring is a separate legal entity whose assets are available to satisfy the claims of the creditors of Factoring only,not the creditors of the Company or the Company's other subsidiaries.Factoring may borrow up to$500,000 based on the amount of eligible Receivables owned by Factoring,and Factoring has granted a security interest in all of such Receivables to the third-party lending group as collateral for such borrowings. Amounts loaned to Factoring under the Securitization Facility bear interest at LIBOR plus an applicable margin of 0.70% per annum.Factoring also pays a commitment fee at a per annum rate of 0.30%on the unused amount of each lender's commitment.At December 31,2016,the amount utilized under the Securitization Facility was$500,000. • 60 • Table of'Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) The fair values and carrying values of our debt instruments arc detailed as follows: . December 31,3016 December 31,2015 Carrying Carrying Fair Value Value Fair Value Value 3.85%senior notes,payable February 1,2023;interest payable semiannually $ 615,006 600;000 584,730 600,000 6.125%notes,payable January 15,2016;interest payable semiannually — — 646,130 645,555 2.00%senior notes,payable January 14,2022;interest payable annually 556,460 525,984 554,209 546,627 • U.S.commercial paper 283,800 283,800 284,800 284,800 European commercial paper 536;503 536,503 472,067 472,067 Five-year senior secured credit facility,due March 26,2021 60,672 60,672 134,075 134,075 Securitization facility 500,000 500,000 500,000 500,000 Capital leases and other 11,643 11,643 16,805 16,807 Unamortized debt issuance costs (7,117) (7,117) (7,964) (7,964) Total debt 2,556,967 2,511,485 3,184,852 3,191,967 Less current portion oflong ternidebt and commercial paper 1,382,738 1,382,738 2,003,578 2,003,003 - Long-term debt,less cun'entportion $ 1,174,229 1,128,747 1,181,274 1,188,964 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 long-term debt as of December 31,2016 are as follows: —2017 u 2018 2019 1,694 1,441 2020 961 2021 824 Thereafter 1,123,827 $ 2,511,485 61 Table o Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (9)Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows: December 31,2016 December 31,2015 Outstanding checks in excess of cash $ 12,269 _ 14,023 Accounts payable,trade 729,415 696,974 Accrued expenses 333,942 293,867 Product warranties 46,347 35,516 Accrued interest 20,396 34,623 Accrued compensation and benefits 193,213 181,022 Total accounts payable and accrued expenses $ 1,335,582 1,256,025 (10)Stock-Based Compensation The Company recognizes compensation expense for all share-based payments granted for the years ended December 31,2016,2015 and 2014 based on the grant-date fair value estimated in accordance with the provisions ofASC 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's principal stock compensation plan as of May 9, 2012,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. Restricted stock and RSUs are granted with a 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. Stock Option Plans Additional information relating to the Company's stock option plans follows: 2016 2015 2014 Options outstanding at beginning of year 169 298 425 Options exercised (78) (66) (108) Options forfeited and expired (63) (19) Options outstanding at end of year 91 169 298 Options exercisable at end of year 90 164 257 Option prices per share: Options exercised during the year $28.37-93.65 28.37-93.65 28.37-93.65 Options forfeited and expired during the year $ — 28.37-88.33 46.80-93.65 Options outstanding at end ofyear $57.34-66.14 28:37-93.65 28.37-93.65 Options exercisable at end of year $57.34-66.14 28.37-93.65 28.37-93.65 During 2016,2015 and 2014,a total of 1,1 and 0 shares,respectively,were awarded to the non-employee directors in lieu of cash for their annual retainers. The Company's Board of Directors has authorized the repurchase of up to 15,000 shares of the Company's outstanding common stock.For the years ended December 31,2016 and December 31,2015,the Company did not repurchase any shares.The Company purchased common stock for the year ended December 31,2014,of 2 shares.Since the inception of the program,a total of approximately 11,521 shares have been repurchased at an aggregate cost of approximately$335,455.All of these repurchases have been financed through the Company's operations and banking arrangements. 62 Table ot'Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) A summary of The Company's options under the 2002,2007 and 2012 Plans as of December 31,2016,and changes during the year then ended is presented as follows: Weighted Weighted average average remaining Aggregate exercise contractual intrinsic Shares price term(years) value Options outstanding,December 31,2015 169 $ 61.73 Granted Exercisgd (78) 5924 Forfeited and expired Options outstanding,December 31,2016 91 $ 63.84 4.9 $ 12,360' Vested and expected to vest as of December 31,2016 91 $ 63.84 4.9 $ 12,360 Exercisable as of December 3 I,2016 90 $ 63.82 4.9 $ 12,227 The Company has not granted options since the year ended December 31,2012.The total intrinsic value of options exercised during the years ended December 31,2016,2015,and 2014 was$10,571,$7,252 and 6,613,respectively.Total compensation expense recognized for the years ended December 31, 2016,2015 and 2014 was$40($24,net of tax),$209($131,net of tax)and$865($548,net of tax),respectively,which was allocated to selling,general and administrative expenses.The remaining unamortized expense for non-vested compensation expense as of December 31,2016 was$4 with a weighted average remaining life of 0.15 years. The following table summarizes information about the Company's stock options outstanding as of December 31,2016: Outstanding Exercisable Number of Average Average Number of Average Exercise price range shares life price shares price $5734457.34 23;735 4.1 5734 23,735 5734 $66.14-$66.14 67,258 5.1 66.14 66,258 66.14 Total 90,993 4.9 $ 63.84 89,993 $ 63.82 Restricted Stock Plans A summary of the Company's RSUs under the 2007 and 2012 Plans as of December 31,2016,and changes during the year then ended is presented as follows: Weighted average Weighted Iemaining average grant date fair contractual Aggregate Shares value term(years) intrinsic value Restricted Stock Units outstanding,December 31,2015 750 $ 84.67 Granted 187 184.88 Released (226) 78.94 Forfeited (16) 84.20 Restricted Stock Units outstanding,December 31;2016 695` $ 113:51 1 $ 127,856 Expected to vest as of December 31,2016 682 1.4 $ 125,203 The Company recognized stock-based compensation costs related to the issuance of RSUs of$35,019($21,250,net of taxes),$32,343($20,832,net of taxes)and$27,016(10,735,net of taxes)for the years ended December 31,2016,2015 and 2014,respectively,which has been allocated to selling,general and administrative expenses.Pre-tax unrecognized compensation expense 63 Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements-(Continued) for unvestcd RSUs granted to employees,net of estimated forfeitures,was$27,917 as of December 3I, 2016, and will be recognized as expense over a weighted-average period of approximately 1.61 years. Additional information relating to the Company's RSUs under the 2007 and 2012 Plans is as follows: 2016 2015 2014 Restricted Stock Units outstanding,January 1 750 725 733 Granted 187 248 189 Released (226) (212) (189) Forfeited (16) (11) (8) Restricted Stock Units outstanding,December 31 695 750 725 Expected to vest as of December 31 682 731 691 (11)Other(Income)Expense Following is a summary of other expense(income): 2016 2015 2014 Foreign currency losses(gains) $ 1,099 9,295 6,869 Release of indemnification asset 5,371 11,180 All other,net (8,199) (2,856) 3,829 Total other expense $ (1,729) 17,619 10,698 {11)Income-Taxes Following is a summary of earnings from continuing operations before income taxes for United States and foreign operations: 2016 2015 2014 United States $ 627,567 324,210 331,553 Foreign 613,558 424,651 332,338 Earnings before income taxes $ 1,241,125 748,861 663,891 Income tax expense(benefit)from continuing operations for the years ended December 31,2016,2015 and 2014 consists of the following: 2016 2015 2014 Current income taxes: U.S.federal $ 247,917 117,602 100,826 State and local 31,939 11,175 13,686 Foreign 61,712 31,981 41,151 Total current 341568 160,758 155,663 Deferred income taxes: U.S.federal (16,167) 4,165 31,052 State and local (22,115) (3,983) (3,473) Foreign 4,273 (29,065) (51,605) Total deferred (34,009) (28,883) (24,026) Total $ 307,559 131,875 131,637 The geographic dispersion of eamings and losses contributes to the annual changes in the Company's effective tax rates.Approximately 51%of the Company's current year earnings from continuing operations before income taxes was generated in 64 Table otLontents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) the United States at a combined federal and state effective tax rate that is higher than the Company's overall effective tax rate.The Company is also subject to taxation in other jurisdictions where it has operations,including Australia,Belgium,Bulgaria,France,Ireland,Italy,Luxembourg,Malaysia,Mexico,the Netherlands,Russia and Spain. 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 31,2016,2015 and 2014 were 38.5%,39.8%, and 42.8%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2016, 2015 and 2014 were 10.8%, 0.7%, and(3.1)%, 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 from continuing operations before income taxes differs from the amounts computed by applying the U.S.statutory federal income tax rate to earnings from continuing operations before income taxes as follows: 2016 2015 2014 Income taxes at statutory rate $ 434,394 262,102 232,362 State and local income taxes,net of federal income tax benefit 6,298 4,951 9,239 Foreign income taxesta> (111,217) (95,198) (89,385) Change in valuation allowance (21,106) (14,237) (6,482) Tax contingencies and audit settlements(b) 2,496 (23,032) (7,882) Other,net .(3,306) (2,711) (6,215) $ 307,559 131,875 131,637 (a)Foreign income taxes includes statutory rate differences,financing arrangements,withholding taxes,local income taxes,notional deductions,and other miscellaneous items. (b)2016 and 2015 include reversals of uncertain tax positions of$5,371 and$11,180,respectively. 65 Table of Contents Index to Financial Statements 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, 2016 and 2015 are presented below: 2016 2015 Deferred tax assets: Accounts receivable $ 23,521 11,134 Inventories 48,673 42,558 Employee benefits 76,143 70,989 Accrued expenses and other 72,258 54,652 Deductible state tax and interest benefit 5,186 491 Intangibles 12,874 34,003 Federal,foreign and state net operating losses and credits 456,130 458,743 Gross deferred tax assets 694,785 672,570 Valuation allowance (289,078) (287,580) Net deferred tax assets 405,707 384,990 Deferred tax liabilities: Inventories (13,099) (8,663) Plant and equipment (426,087) (429,258) Intangibles (243,339) (267,571) Other liabilities (50,041) (30,256) Gross deferred tax liabilities (732,566) (735,748) Net deferred tax liability $ (326,859) (350,758) 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, 2016, and 2015 is$289,078 and$287,580 , respectively. The valuation allowance as of December 31,2016 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 2016 valuation allowance was an increase of$1,498 which includes($9,364)related to foreign currency translation.The total change in the 2015 valuation allowance was a decrease of$12,892, which includes$(24,718)related to foreign currency translation. 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 31,2016,the Company has state net operating loss cany forwards and state tax credits with potential tax benefits of$53,874,net of federal income tax benefit;these carry forwards expire over various periods based on taxing jurisdiction.A valuation allowance totaling $26,992 has been recorded against these state deferred tax assets as of December 31,2016.In addition,as of December 31,2016,the Company has net operating loss carry forwards in various foreign jurisdictions with potential tax benefits of$402,255.Avaluation allowance totaling $249,529 has been recorded against these deferred tax assets as of December 31,2016. The Company does not provide for U.S.federal and state income taxes on the cumulative undistributed earnings of its foreign subsidiaries because such earnings are deemed to be permanently reinvested.As of December 31,2016,the Company had not provided federal income taxes on earnings of approximately$1,400,000 from its foreign subsidiaries.Should these earnings be distributed in the form of dividends or otherwise,the Company would be subject to both U.S. income taxes and withholding taxes in various foreign jurisdictions.These taxes may be partially offset by U.S.foreign tax credits. Determination of the amount of the unrecognized defen-ed U.S.tax liability is not practical because of the complexities associated with this hypothetical calculation. • 66 Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements-(Continued) 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 related to unrecognized tax benefits in interest and penalties 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 31,2016,the Company's gross amount of unrecognizedtax benefits is$46,434,excluding interest and penalties.If the Company were to prevail on all uncertain tax positions,$28,489 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: 2016 2015 Balance as ofJanuary I $ 51,037_ 49,599 - Additions based on tax positions related to the current year 2,221 684 Additions for tax positions of acquired companies - • 27,455 Additions for tax positions of prior years 6,412 2,330 Reductions resulting from the lapse of the statute of limitations (6,294) (13,471) Settlements with taxing authorities (6,555) (11,693) Effects of foreign currencytranslation (387) (3,867) _Balance as ofDecembei-31--- _ - _ -- --- $_ 46,434 51,037 The Company will continue to recognize interest and penalties related to unrecognized tax benefits as a component of its income tax provision.As of December 31,2016 and 2015,the Company has$8,020 and$5,394,respectively,accrued for the payment of interest and penalties,excluding the federal tax benefit of interest deductions where applicable.During the years ending December 31,2016,2015 and 2014,the Company accrued interest and penalties through the consolidated statements of operations of$2,170,$(5,635)and$(3,579),respectively. The Company believes that its unrecognized tax benefits could decrease by$10,336 within the next twelve months.The Company has effectively settled all Federal income tax matters related to years prior to 2010.Various other state and foreign income tax returns are open to examination for various years. Belgian Tax Matter In January 2012,the Company received a€23,789 assessment from the Belgian tax authority related to its year ended December 31,2008,asserting that the Company had understated its Belgian taxable income for that year.The Company filed a formal protest in the first quarter of 2012 refuting.the Belgian tax authority's position.The Belgian tax authority set aside the assessment in the third quarter of 2012 and refunded all related deposits,including interest income of E1,583 earned on such deposits.However,on October 23,2012,the Belgian tax authority notified the Company of its intent to increase the Company's taxable income for the year ended December 31,2008 under a revised theory. On December 28,2012,the Belgian tax authority issued assessments for the years ended December 31,2005 and December 31,2009,in the amounts of€46,135 and€35,567,respectively,including penalties,but excluding interest.The Company filed a formal protest during the first quarter of 2013 relating to the new assessments.In September 2013,the Belgian tax ' authority denied the Company's protests,and the Company has brought these two years before the Court of First Appeal in Bruges.In December 2013,the Belgian tax authority issued additional assessments related to the years ended December 31,2006,2007,and 2010,in the amounts of€38,817,€39,635,and €43,117,respectively,including penalties,but excluding interest.The Company filed formal protests during the first quarter of 2014,refuting the Belgian tax authority's position for each of the years assessed.In the,quarter ended June 28,2014,the Company received a formal assessment for the year ended December 31,2008,totaling€30,131,against which the Company also submitted its formal protest.All 4 67 • Table of Contents Index to Financial Statements - MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) additional years have been brought before the Court of First Appeal in November 2014.In January of 2015,the Company met with the Court of First Appeal in Bruges,Belgium and agreed with the Belgium tax authorities to consolidate and argue the issues regarding the years 2005 and 2009,and apply the ruling, to all of the open years(to the extent there are no additional facts/procedural arguments in the other years). On January 27,2016,the Court of First Appeal in Bruges,Belgium ruled in favor of the Company with respect to the calendar years ending December 31,2005 and December 31,2009.On March 9,2016,the Belgian tax authority lodged its Notification of Appeal with the Ghent Court of Appeal. The Company disagrees with the views of the Belgian tax authority on this matter 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 Wrelsbeke(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. (13)Commitments and Contingencies The Company is obligated under various operating leases for office and manufacturing space,machinery,and equipment.Future minimum lease payments under non-cancelable capital and operating leases(with initial or remaining lease terms in excess of one year)as of December 31: Total Future Capital Operating Payments 2017 $ 1,463 99,091 100,554 2018 1,158 75,238 76,396 1019 869 54,187 55,056 2020 531 36,811 37,342 2021 523 20,535 21,058 Thereafter 3,983 17,612 21,595 Total payments " 8,527 303474 312,001 Less amount representing interest 1,506 Present value of capitalized lease payments $ 7,021 Rental expense under operating leases was$125,103,$116,663 and$120,677 in 2016,2015 and 2014,respectively. The Company had approximately$941 and$1,381 in standby letters of credit for various insurance contracts and commitments to foreign vendors as of December 31,2016 and 2015,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 12-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. Gadsden,Alabama Litigation In September 2016,the Water Works and Sewer Board of the City of Gadsden,Alabama(the"Water Board")filed an individual complaint in the Circuit Court of Etowah County,Alabama against certain manufacturers,suppliers and users of chemicals containing perfluorinated compounds,including the Company.On October 26,2016,the defendants removed the case to the United States District Court for the Northern District of Alabama,Middle Division, alleging diversity of citizenship and fraudulent joinder. The Water Board filed a motion to remand the case back to the state court and the defendants have opposed the Water Board's motion. The parties await a ruling from the federal court on the motion to remand. The Company has never manufactured perfluorinated compounds,but purchased them for use in the manufacture of its carpets prior to 2007. The Water Board is not alleging that chemical levels in the Company's wastewater discharge exceeded legal limits. Instead,the Water Board 68 Table ot',ontents Inde:to Financial.Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements--(Continued) is seeking lost profits based on allegations that its customers decreased water purchases,reimbursement for the cost of a filter and punitive damages. The Company intends to pursue all available defenses related to this matter. The Company does not believe that the ultimate outcome of this case will have a material adverse effect on its financial condition,but there can be no assurances at this stage that the outcome will not have a material adverse effect on the Company's results of operations,liquidity or cash flows in a given period. Furthermore,the Company cannot predict whether any additional civil or regulatory actions against it may arise from the allegations in this matter. Polyurethane Foam Litigation Beginning in August 2010,. a series of civil lawsuits were initiated in several U.S. federal courts alleging that certain manufacturers of polyurethane foam products and competitors of the Company's carpet underlay division had engaged in price fixing in violation of U.S.antitrust laws.The Company was named as a defendant in a number of the individual cases,as well as in two consolidated amended class action complaints on behalf of a class of all direct purchasers of polyurethane foam products and on behalf of a class of indirect purchasers.In these actions,the plaintiffs,on behalf of themselves and/or a class of purchasers,sought damages allegedly suffered as a result of alleged overcharges.in the price of polyurethane foam products from at least 1999 to the present.Any damages actually awarded at trial would have been subject to being tripled under US antitrust laws. On March 23 and April 30,2015,the Company entered into agreements to settle all claims brought by the class of direct and indirect purchasers,and the trial court entered orders granting approval of the settlements on November 19,2015 and January 27,2016.Certain individual members of the indirect purchaser class sought to overturn the approval through an appeal to the Sixth Circuit of Appeals.As of June 21,2016, all of these appeals have been dismissed,provided that one request to reconsider remains pending.The Company has also entered into settlement agreements resolving all of the claims brought on behalf of all of the consolidated individual lawsuits. • In December 2011,the Company was named as a defendant in a Canadian Class action,which alleged similar claims against the Company as raised in the U.S.actions.On June 12,2015,the Company entered into an agreement to settle all claims brought by the class of Canadian plaintiffs. The Company denies all allegations of wrongdoing but settled to avoid the uncertainty,risk,expense and distraction of protracted litigation. During the twelve months ended December 31,2015 the Company recorded a$122,480 charge within selling,general and administrative expenses for_the ettlemen and_defense offhe-antitmstcases_ l� fthent trust-ries--hav-e-now-been-finallyy 1 -fid ee-exception-of the-single-issue pending on appeal in the indirect purchaser class case,all consolidated cases have been dismissed.The Company does not believe that the ultimate outcome of the one remaining issue in the indirect purchaser case will have a material adverse effect on its financial condition. 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 we are 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. 69 • • Table orConients Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (14)Consolidated Statements of Cash Flows Information Supplemental disclosures of cash flow information are as follows: 2016 2015 2014 Net cash paid(received)during the years for: Interest $ 57,269 67,974 109,451 Income taxes $ 276,789 133,283 148,991 Supplemental schedule of non-cash investing and financing activities: Fairvalue of net assets acquired in acquisition — 1,564,970 7,267 Noncontrolling interest of assets acquired — (24,160) — Liabilities assumed in acquisition — (17,147) (7,286) Shares issued for acquisitions — (153,096) — $ 1,370,567 (19) (15)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 and other products,which it distributes primarily in North America,Europe 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 covenng p'�uct-lines rneludrng carpets nrgs,-carpet-pad;hardwood-,laminate-and vinyl products,inclult rng7uxury vinyl-tile j"L --,w ith it rstrtbuttT– -- through its network of regional distribution centers and satellite warehouses using company-operated trucks,common carrier 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, hardwood flooring, roofing elements,.insulation boards, medium-density fiberboard ("MDF"), chipboards,other wood products,sheet vinyl and LVT,which it distributes primarily in Europe and Russia through various selling channels,which include retailers,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.Previously reported segment results have been reclassified to conform to the current period presentation.No single customer accounted for more than 10%of net sales for the years ended December 31, 2016,2015 or 2014. 70 Table of Contents Index to Financial Statements islOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements-(Continued) Segment information is as follows: 2016 2015 2014 Net sales: Global Ceramic $ 3,174,706 3,012,859 3,015,279 Flooring NA 3,865,746 3,602,112 3,441,018 Flooring ROW 1,918,635 1,456,898 1,354,018 Intersegment sales - (306) (6,869) $ 8,959,087 8,071,563 7,803,446 Operating income(loss): Global Ceramic $ 478,448 414,154 351,113 Flooring NA 505,115 264,271 299,992 Flooring ROW 333,091 203,370 151,528 Corporate and intersegment eliminations (36,711) (44,229) (29,837) $ 1,279,943 837,566 772,796 Depreciation and amortization: Global Ceramic $ 135,370 118,801 120,121 Flooring NA 148,067 137,064 122,677 Flooring ROW 116,048 97,239 92,090 Corporate 9,982 9,543 10,682 $ 409,467 362,647 345,570 Capital (excluding acquisitions): Global Ceramic $ 263,401 247,829 192,642 Flooring NA 248,843 148,598 258,987 Flooring ROW 144,207 95,447 100,899 Corporate 15,674 11,783 9,276 $ 672,125 503,657 561,804 Assets: Global Ceramic $ 4,024,859 3,846,133 3,542,594 Flooring NA 3;410,856 3,164,525 2,587,151 Flooring ROW 2,689,592 2,805,246 1,909,487 Corporate and intersegment eliminations 105,289 118,496 246,312 $ 10,230,596 9,934,400 8,285,544 Geographic net sales: United States $ 5,842,683 5,399,561 5,233,796 All other countries 3,116,404 2,672,002 2,569,650 $ 8,959,087 8,071,563 7.803,446 Long-lived assets(1)r United States $ 3,092,902 2,945,783 2,381,843 Belgium 1,371,397 1,377,533 949,169 All other countries 1,180,475 1,117,167 976,550 $ 5644,774 .,.._. 5,440483 4,307562 Net sales by product categories(2): Soft surface $ 3,414,956 3,056,946 2,764,370 Tile 3,258,136 3,094,389 3,087,895 Laminate and wood 2,285,995 1,920,228 1;951,181 $ 8,959,087 8,071,563 7,803,446 71 • Table of Contents Index to Financial Statements MOHAWK INDUSTRIES,INC.AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) (1) Long-lived assets arc composed of property,plant and equipment,net,and goodwill. (2) The soft surface product category includes carpets,rugs,carpet pad,LV T and sheet vinyl.The tile product category includes ceramic tile,porcelain tile and natural stone.The laminate and wood product category includes laminate,hardwood,roofing elements,insulation boards,MDF,chipboards,and licensing,with most of the UNICLIC family of patents expiring in 2017. (16)Quarterly Financial Data(Unaudited) The supplemental quarterly financial data are as follows: Quarters Ended April 2, July 2, October 1, December 31, 2016 2016 2016 2016 Net sales $ 2,172,046 2,310,336 2,294,139 2,182,566 Gross profit 639,679 755,588. 726,559 690,999 Net earnings 171,548 255,188 269,878 233,748 Basic earnings per share 2.32 3.44 3.64 3.15 Diluted earnings per share 2.30 3.42 3.62 3.13 Quarters Ended April 4, July 4, October 3, December 31, 2015 2015 2015 2015 Net sales $ 1,881,177 2,041,733 2,150,656 1,997,997 Gross profit 511,943 615,129 661,404 622,210 Netearnings22,346 186,492 214,905 191,559- Basic earnings per share 0.31 2.54 2.91 2.59 Diluted earnings per share 0.30 2.53 2.89 2.57 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 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,intemal control over financial reporting determined to be effective provides only reasonable assurance regarding the reliability of 72 • • Table of Contents Index to Financial Statements - 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'Menial control over financial repottingas of December 31,2016. 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 31,2016. The effectiveness of the Company's internal control over financial reporting as of December 31, 2016 has been audited by KPMG LLP, an independent registered public accounting firm,as stated in their attestation report which is included herein. Remediation of Material Weakness in Internal Control over Financial Reporting As of December 31,2016,the Company has remediated the previously reported material weakness in its internal control over financial reporting related to the design,operation and documentation of internal controls related to the monitoring of inventory cycle counts-and the valuation of obsolete inventory at two of the Company's divisions.The remediation was accomplished by updating policies that require specific monitoring activities occur at defined levels and management's conduct of monitoring activities for the inventory cycle counts and the valuation of obsolete inventory in these divisions be evidenced upon completion. The Company has completed the documentation,implementation and testing of the effectiveness of the design and operation of the remediation actions described above and,as of December 31,2016,has concluded that the steps taken have remediated the material weakness. Changes in Internal Control Over Financial Reporting The Company integrated recent acquisitions(referenced in Note 2 in the Notes to Consolidated Financial Statements of this Form 10-K)into its system of internal control.As a result,the Company's internal control over financial reporting now includes appropriate controls,procedures and supporting systems with respect to transactions and account balances of the acquisitions,which are reflected in the Company's consolidated financial statements. There were no other changes identified in the Company's internal control over financial reporting during the quarter that materially affected,or are likely to materially affect,the Company's internal control over financial reporting,other than the completed remediation actions described above and the irate_ .tion of the recent as uisitions. 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. 73 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 2017 Annual Meeting of Stockholders under the following headings: "Election of Directors—Director, Director Nominee and Executive Officer Information," "— Nominees for Director," "—Continuing 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]rttp://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 2017 Annual Meeting of Stockholders under the following headings: "Compensation,Discussion and Analysis," "Executive Compensation and Other Information— Summary Compensation Table," "—Grants of Plan Based Awards,""—Outstanding Equity Awards at Fiscal 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 2017 Annual Meeting of Stockholders under the following headings:"Executive Compensation and Other Information—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 infoimation contained in the Company's Proxy Statement for the 2017 Annual Meeting of Stockholders under the following heading: "Election of Directors—Meetings and Committees of the Board of Directors," and "Executive Compensation and Other Information--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 2017 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." 74 • PART IV Item 15.Exhibits,Financial Statement Schedules (a)1.Consolidated Financial Statements The Consolidated Financial Statements of Mohawk Industries,Li c.and subsidiaries listed in Item 8 ofPart I[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 19,2016.) *4.6 Indenture,dated as of January 31,2013,by and between Mohawk Industries,Inc.and U.S.Bank National Association,as Trustee (Incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated January 31,2013.) *4.7 First Supplemental Indenture,dated as of January 31.,2013,by and between Mohawk Industries,Inc.and U.S.Bank National Association,as Trustee(Incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated January 31,2013.) *4.8 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.) *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 ofMarch 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 Credit and Security Agreement,dated as of December 19,2012,by and among Mohawk Factoring,LLC,as borrower,Mohawk Servicing,LLC,as servicer,the lenders from time to time party thereto,the liquidity banks from time to time party thereto,the co- agents from time to time party thereto and SunTrust Bank,as administrative agent(Incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated December 21,2012.) *10.4 First Amendment to Credit and Security Agreement,dated as of January 22,2013,by and among Mohawk Factoring,LLC,as borrower,Mohawk Servicing,LLC,as servicer,the lenders from time to time party thereto,the liquidity banks from time to time party thereto,the co-agents from time to time party thereto and SunTrust Bank,as administrative agent.(Incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K(File No.001-13697)for the fiscal year ended December 31,2012.) 75 Table ni Contents index to Financial Statements *10.5 Amendment No.2 to Credit and Security Agreement and Waiver,dated as of April 1 I,2014,by and among Mohawk Factoring. LLC,Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank,as administrative agent(Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended June 28,2014). *10.6 , Amendment No.3 to Credit and Security Agreement and Omnibus Amendment,dated as of September 11,2014,by and among Mohawk Factoring,LLC,Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank,as administrative agent(Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 27,2014). *10.7 • Amendment No.4 to Credit and Security Agreement,dated as of January 5,2015,by and among Mohawk Factoring,LLC, Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank, as administrative agent(Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended April 4,2015). *10.8 Amendment No.5 to Credit and Security Agreement,dated as of December 10,2015,by and among Mohawk F6.ctoring,LLC, Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank, as administrative agent.(Incorporated by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31,2015). 10.9 Amendment No.6 to Credit and Security Agreement,dated as of December 13,2016,by and among Mohawk Factoring,LLC, Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank, as administrative agent. 10.10 Amendment No.7 to Credit and Security Agreement,dated as of January_,2017,by and among Mohawk Factoring,LLC, Mohawk Servicing,LLC,the lenders party hereto,the liquidity banks party hereto,the co-agents party hereto and SunTrust Bank, as administrative agent. *10.11 Receivables Purchase and Sale Agreement,dated December 19,2012,by and among Mohawk Carpet Distribution,Inc.,and Dal- Tile Distribution,Inc.,as originators,and Mohawk Factoring,LLC,as buyer(Incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated December 21,2012.) *10.12 Amended and Restated Credit Facility,dated March 26,2015,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 March 26,2015.) *10.13 Share Purchase Agreement,dated January 13,2015,by and among Mohawk Industries,Inc.,Unilin BVBA,Enterhold SA., International Flooring Systems S.A.and,for certain limited purposes,Filiep Balcaen,an individual resident of Belgium (Incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated January 16,2015). Exhibits Related to Executive Compensation Plans,Contracts and other Arrangements: *10.14 Service Agreement dated February 24,2009,by and between Unilin Industries BVBA and BVBA"F.De Cock Management" (Incorporated by reference to the Company's Current Report on Form 8-K dated February 24,2009.) *10.15 Service Agreement dated February 9,2009,by and between Unilin Industries BVBA and Comm.V."Bernard Thiers" (Incorporated herein by reference to Exhibit 10.7 in the Company's Annual Report on Form 10-K(File No.001-13697)for the fiscal year ended December 31,2009.) *10.16 Second Amended and Restated Employment Agreement,dated as of November 4,2009,by and between the Company and W. Christopher Wellborn(Incorporated by reference to the Company's Current Report on Form 8-K dated November 4,2009.) *10.17 Amendment No.1 to Second Amended and Restated Employment Agreement,dated as of December 20,2012,by and between the Company and W.Christopher Wellbom(Incorporated herein by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K(File No.001-13697)for the fiscal year ended December 31,2012.). *10.18 Mohawk Carpet Corporation Supplemental Executive Retirement Plan,as amended.(Incorporated herein by reference to Exhibit 10.2 of the Company's Registration Statement on Form S-1,Registration No.33-45418.) 76 Table of Contents Index to Financial Statements *10.19 The Mohawk Industries,Inc Senior Management Deferred Compensation Plan,as amended and restated as ofJanuary 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.) *10.20 Mohawk Indusbies,Inc. 1997 Non-Employee Director Stock Compensation Plan(Amended and Restated as ofJanuary 1,2009) (Incorporated herein by reference to Exhibit 10.32 in the Company's annual report on Form 10-K for the fiscal year ended December 31,2008.) *10.21 Mohawk Industries,Inc.2012 Non-Employee Director Stock Compensation Plan(Incorporated herein by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q dated August 3,2012.) *10.22 Mohawk Industries,Inc.2012 Non-Employee Director Stock Compensation Plan Amendment,approved October 23,2013 (Incorporated herein by reference.to Exhibit 10.18 in the Company's annual report on Form 10-K for the fiscal year ended December 31,2013.) *10.23 2002 Long-Term Incentive Plan.(Incorporated herein by reference to Appendix A in the 2002 Mohawk Industries,Inc.Proxy Statement dated March 29,2002.) *10.24 Mohawk Industries,Inc.2007 Incentive Plan(Incorporated herein by reference to Appendix A of the Company's Definitive-Proxy . Statement on Schedule 14A(File No.001-13697)filed with the Securities and Exchange Commission on April 9,2007.) *10.25 Mohawk Industries,Inc.2012 Incentive Plan(incorporated herein by reference to Appendix A of the Company's Definitive Proxy Statement on Schedule 14A(File No.001-13697)filed with the Securities and Exchange Commission on April 3,2012.) 21 Subsidiaries of the Registrant. 23.1 Consent of Independent Registered Public Accounting Firm(KPMG LLP). 31.1 Certification Pursuant to Rule 13a-14(a). 31.2 Certification Pursuant to Rule 13a-14(a). 32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * Indicates exhibit incorporated by reference._ 77 • Table of Contents Index to Financial Sraccments 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 Industris,Inc. By: Is/ JEFFREY S.T ORBERBAUivi February 27,2017 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 27,2017 Is/ JEFFREY S.LORBERBAUM Jeffrey S.Lorberbaum, Chairman and Chief Executive Officer (principal executive officer) February 27,2017 /s/ FRANK H.BOYKIN Frank El.Boykin, Chief Financial Officer and Vice President-Finance (principal financial officer) February 27,2017 /s/ JAMES F.BRUNK James F.Brunk, Vice President and Corporate Controller (principal accounting officer) February 27,2017 /s/ FILIP BALCAEN nip Balcaen, —Director February 27,2017 /s/ BRUCE C.BRUCKMANN Bruce C.Bruckmann, Director February 27,2017 /s/ FRANS DE COCK Frans De Cock, Director February 27,2017 Is/ RICHARD C.ILL Richard C.Ill, Director February 27,2017 /s/ JOSEPH A.ONORATO Joseph A.Onorato, Director February 27,2017 Is/ WILLIAM H.RUNGE III William Henry Runge III Director February 27,2017 Is/ KAREN A.SMITH BOGART Karen A.Smith Bogart, Director February 27,2017 /s/ W.CHRISTOPHER WELLBORN W.Christopher Wellborn, Director 78 Amendment No.6 to Credit and Security Agreement This Amendment No. 6 to Credit and Security Agreement (this "Amendment"), dated as of December 13, 2016, is made by and among Mohawk Factorin,g, LLC, a Delaware limited liability company(the Borrower"),Mohawk Servicing, LLC, a Delaware limited liability company (the "Servicer")the Lenders party hereto, the Liquidity Banks party hereto,the Co-Agents party hereto and SunTrust Bank,a Georgia banking corporation,as administrative agent(in such capacity,the `Administrative Agent"). WITNESSETH: Whereas, the Borrower, the Servicer, the Lenders, the Liquidity Banks, the Co-Agents and the Administrative Agent previously entered into that certain Credit and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time,the "Credit and Security Agreement"),dated as of December 19,2012;and Whereas,the Borrower and the Servicer have requested that the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents extend the Facility Termination Date and make certain other amendments to the Credit and Security Agreement,and the Administrative Agent,the Lenders,the Liquidity Banks and the Co-Agents are willing to do so under the terms of this Amendment; Now,Therefore,in consideration of theniutual agreements herein contained and other good and valuable consideration,receipt and sufficiency of which are hereby acknowledged by the parties hereto,the parties hereto agree as follows: Section 1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Credit and Security Agreement Seetien Amendment to the Credit and-Security Agreement. 2.1. Section 12.4 of the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended shall read as follows: Section 12.4. Substitution ofLenders.In the event(a)any Lender is then a Defaulting Lender,(b)a Lender or Agent hereunder is also a lender under the Parent Credit Agreement and such Lender or Agent fails to consent to an amendment or waiver requested under the Parent Credit Agreement at a time when the Required Lenders have approved such amendment or waiver, (c) any Lender requests compensation under Section 10.2, (d) the Borrower is required to pay amount under Section 10.3 to a Lender, (e) any Conduit is then a Downgraded Conduit, or (f) a Lender that is a Non-Conduit Lender or a Liquidity Bank provides a notice to the Administrative Agent under Section 4.3 (any such Lender referred to in any of clauses (a)through (f) above being hereinafter, together with its related Agent and its related Conduit in its Group (if any)referred to as an "Affected Lender Group"),the Borrower may,in addition to any other rights the Borrower may have hereunder or under applicable law, require, at its expense, any such Affected Lender Group to assign,at par, without recourse,all of its interest,rights,and obligations hereunder (including all of its Commitments and the Loans and other amounts at any time owing to the members of such Affected Lender Group hereunder and the other Transaction Documents) to an Eligible Replacement Lender specified by the Borrower,provided that (i) such assignment shall not conflict with or violate any law,rule or regulation or order of any court or other Governmental Authority, (ii)the Borrower shall have paid to the members of such Affected Lender Group all monies(together with any Broken-Funding Costs computed as if the Loans owing to it were prepaid rather than assigned) other than such principal owing to it hereunder, and (iii)the assignment is entered into in accordance with, and subject to the consents required by, Section 12.1 hereof(provided any assignment fees and reimbursable expenses due thereunder shall be paid by the Borrower). 2.2. The defined terms "Applicable Margin" and "Facility Termination Date", appearing in Exhibit I to the Credit and Security Agreement are hereby amended and restated in their entirety and as so amended shall read as follows: "Applicable Margin"shall mean 0.70%per annum. "Facility Termination Date"means the earlier of(i)December 19,2017(or such later date as the parties hereto may agree to from time to time)and(ii)the Amortization Date. 2.3. The defined term "Change of Control" appearing in Exhibit Ito the Credit and Security Agreement is hereby amended by deleting the parenthetical contained in clause(b)thereof. 2.4. The last sentence appearing in the defined term "Obligor Concentration Limit"appearing in Exhibit Ito the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended shall read as follows: The-SpeciaLConcentration Limit slaall_mean JO with respect to The Home Depot, Inc. and its Affiliates, 19.0% and (ii)with respect to Lowe's Companies,Inc. and its Affiliates,14.0%. 2.5. Schedule D to the Credit and Security Agreement is hereby amended and restated in its entirety and as so amended and• restated shall read as set forth on Schedule D attached hereto. Section 3. No Fundings by Conduits. Notwithstanding anything to the contrary contained in the Credit and Security Agreement or any of the other Transactions Documents,upon and after December 20,2016: (a) No Conduit shall make any Loan; (b) Each Conduit shall be deemed to have elected not to make any Loan which such Conduit otherwise had the option to make and each Liquidity Bank for such Conduit shall make such Liquidity Bank's Pro Rata Share of its Group's Percentage of such Loan;and (c) No CP Costs shall be payable in respect of any Loan. . Section 4. Representations of the Borrower.The Borrower-hereby represents and warrants to the parties hereto that as of the date hereof each of the representations and warranties contained in the Credit and Security Agreement is true and correct as of the date hereof and after giving effect to this Amendment(except to the extent that such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date);provided, that with respect to those contained in Section 5.1(a), (e), (f), (1), (u) and (w) of the Credit and Security Agreement, the determination of whether any Material Adverse Effect has occurred as set forth therein shall be made solely by the Borrower,in its reasonable,good faith judgment. Section 5. Conditions Precedent. The effectiveness of this Amendment, including without limitation, Section 3 above, is subject to the satisfaction of all of the following conditions precedent: (a) Administrative Agent shall have received a fully executed counterpart of this Amendment, including the Performance Guarantor's Acknowledgment and Consent; (b) Administrative Agent shall have received a fully executed counterpart of the Second Amended and Restated Fee Letter; • (c) each representation and warranty of the Borrower contained herein shall be true and correct;and (d) no Amortization Event shall have occurred and be continuing. Section 6. Amendment. The parties hereto hereby agree that the provisions and effectiveness of this Amendment shall apply to the Credit and Security Agreement as of the date hereof. Except as amended by this Amendment,the Credit and Security Agreement remains unchanged and in full force and effect.This Amendment is a Transaction Document. Section 7: Counterparts. This Amendment may be executed by-the-parties in-separate-counterparts;.each-of-which when-so- -- executed and delivered shall be an original,but all such counterparts shall together constitute but one and the same instrument. Section 8. Captions. The headings of the Sections of this Amendment are for convenience of reference only and shall not modify,define,expand or limit any of the terms or provisions of this Amendment Section 9. Successors and Assigns.The terms of this Amendment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Section 10. Severability.Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 11. Governing Law and Jurisdiction.The provisions of the Credit and Security Agreement with respect to governing law and consent to jurisdiction are incorporated in this Amendment by reference as if such provisions were set forth herein. [Signatures appear on following page.] Amendment No.6 to Credit and Security Agreement IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be duly executed by their respective duly authorized officers as of the day and year first above written. Mohawk Factoring,LLC,as Borrower By/s/John J Koach Name: John J Koach Title: Secretary Mohawk Servicing,LLC,as Servicer By/s/Shailesh Bettadaour Name: Shailesh Bettadapur • - Title: VP&Treasurer • • f • • 4 SunTrust Bank,as a Non-Conduit Lender By:/s/David Hufnaacl Name: David Hufiraael Title: Vice President SunTrust Bank,as Co-Agent and Administrative Agent By'/s/David Hufnaael Name: David Hufnaael Title: Vice President The Bank of Tokyo-Mitsubishi UFJ,Ltd.,New York Branch,as a Non-Conduit Lender and as Co-Agent By://Richard GreQory Hurst Name: Richard Gregor)/Hurst Title: ManaeineDirector PNC Bank,National Association,as a Non-Conduit Lender and as Co-Agent By:/s/Eric Brno Name: Eric Bruno Title: Senior Vice President Mizuho Bank,Ltd.;as a Non-Conduit Lender and as Co-Agent By:/s/Donna DeMaa.istris Name: Donna DeMaaistris Title: Authorized Signatory Wells Fargo Bank,National Association,as a Non-Conduit Lender and as Co-Agent By:/s/Isaac Washington Name: Isaac Washington Title: Vice President Performance Guarantor's Acknowledgment and Consent The undersigned,Mohawk Industries, Inc., has heretofore executed and delivered the Performance Undertaking dated as of December 19, 2012 (the "Performance Undertaking") and hereby consents to the Amendment No. 6 to the Credit and Security Agreement as set forth above and confirms that the Performance Undertaking and all of the undersigned's obligations thereunder remain in full force and effect.The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit and Security Agreement shall not be required as a result of this consent having been obtained, except to the extent, if any, required by the Performance Undertaking referred to above. Mohawk Industries,Inc. By/s/Shailesh Bettadapur Name:Shailesh Bettadpur Title:VP&Treasurer Schedule D Monthly Reporting Dates Fiscal Month End Monthly Reporting Date December 2016 January 17,2017 January 2017 February 21,2017 February 2017 March 21,2017 March 2017 April 18,2017 April2017 May 23,2017 May 2017 June 20,2017 June 2017 July 18,2017 July 2017 August 22,2017 August 2017 September 19,2017 September 2017 October 17,2017 October 2017 November 21,2017 November 2017 December 19,2017 Amendment No. 7 to Credit and Security Agreement This Amendment No. 7 to Credit and Security Agreement(this `Amendment"), dated as of January 26,2017, but effective as of December 31, 2016, is made by and among Mohawk Factoring, LLC, a Delaware limited liability company (the "Borrower"), Mohawk Servicing, LLC, a Delaware limited liability company (the "Servicer") the Lenders party hereto, the Liquidity Banks party hereto,the Co-Agents party hereto and SunTrust Bank, a Georgia banking corporation, as administrative agent(in such capacity, the "Administrative Agent"). WITNESSETH: Whereas, the Borrower, the Servicer, the Lenders, the Liquidity Banks, the Co-Agents and the Administrative Agent previously entered into that certain Credit and Security Agreement(as amended, restated, supplemented or otherwise modified from time to time,the "Credit and Security Agreement"),dated as of December 19,2012;and Whereas, the Borrower and the Servicer have requested that the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents make certain amendments to the Credit and Security Agreement, and the Administrative Agent, the Lenders, the Liquidity Banks and the Co-Agents are willing to do so under the terms of this Amendment; Now,Therefore,in consideration of the mutual agreements herein contained and other good and valuable consideration,receipt and sufficiency of which are hereby acknowledged by the parties hereto,the parties hereto agree as follows: Section I neznitions.-Capitalized-terms_nototherwise definesilierein shall_have the_meaningsgiven_to_themsn_the-Credit_and - Security Agreement. Section 2. Amendment to the Credit and Security Agreement. 2.1. Effective as of December 31,2016,the defined terms `Delinquency Ratio"and "Borrowing Base" appearing in Exhibit Ito the Credit and Security Agreement are hereby amended and restated in their entirety and as so amended shall read as follows: "Borrowing Base"means, on any date of determination,the Net Pool Balance as of the last day of the period covered by the most recent Monthly Report, minus the Required Reserve as of the last day of the period covered by the most recent Monthly Report,and minus Deemed Collections that have occurred since the most recent Cut-Off Date to the extent that such Deemed Collections exceed the Dilution Reserve.Notwithstanding the foregoing,for the period beginning December 31,2016 up to and including February 4,2017, for purposes of calculating the Borrowing Base, the Net Pool Balance shall not include any Receivables originated by Dal-Tile Distribution,Inc. "Delinquency Ratio" means, at any time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time. Notwithstanding the foregoing, for the period beginning December 31, 2016 up to and including February 4, 2017, the calculation of the Delinquency Ratio shall not include any Receivables originated by Dal-Tile Distribution,Inc.in the numerator or denominator of such calculation. Section 3. Representations of the Borrower.The Borrower hereby represents and warrants to the parties hereto that as of the date hereof each of the representations and warranties contained in the Credit and Security Agreement is true and correct as of the date hereof and after giving effect to this Amendment(except to the extent that such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date);provided, that with respect to those contained in Section 5.1(a), (e), (f), (1), (u) and (w) of the Credit and Security Agreement, the determination of whether any Material Adverse Effect has occurred as set forth therein shall be made solely by the Borrower,in its reasonable,good faith judgment. Section 4. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent (a) Administrative Agent shall have received a fully executed counterpart of this Amendment, including the Performance Guarantor's Acknowledgment and Consent; (b) each representation and warranty of the Borrower contained herein shall be true and correct;and (c) no Amortization Event shall have occurred and be continuing. Section 5. Amendment. The parties hereto hereby agree that the provisions and effectiveness of this Amendment shall apply to the Credit and Security Agreement as of the date hereof. Except as amended by this Amendment, the Credit and Security Agreement - remains pnnhangpdand-in=full-force-and ffec— -his-Aanendment is—a—Tmsac on-Document. Section 6. Counterparts. This Amendment may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original,but all such counterparts shall together constitute but one and the same instrument. Section 7. Captions. The headings of the Sections of this Amendment are for convenience of reference only and shall not modify,define,expand or limit any of the terms or provisions of this Amendment. Section 8. Successors and Assigns.The terms of this Amendment shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Section 9. Severability.Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 10. Governing Law and Jurisdiction. The provisions of the Credit and Security Agreement with respect to governing law and consent to jurisdiction are incorporated in this Amendment by reference as if such provisions were set forth herein. • [Signatures appear on following page.] IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be duly executed by their respective duly authorized officers as of the day and year first above written. Mohawk Factoring,LLC,as Borrower By/s/John J Koach Name: John J Koach Title: Secretary Mohawk Servicing,LLC,as Servicer By/s/Shailesh Bettadapur Name: Shailesh Bettadanur Title: VP&Treasurer SunTrust Bank,as a Non-Conduit Lender By:/s/David Hufiiaeel Name: David Hufnaael Title: Vice President SunTrust Bank,as Co-Agent and Administrative Agent By./s/David Hufiiagel Name: David Hufrhagel Title: Vice President The Bank of Tokyo-Mitsubishi UFJ,Ltd.,New York Branch, as a Non-Conduit Lender and as Co-Agent By/s/Richard Gregory Hurst Name: Richard Gregory Hurst Title: Manaeine Director • Mizuho Bank,Ltd., as a Non-Conduit Lender and as Co-Agent ByIs/Donna DeMatisti s Name: Donna DeMaaistris Title: Authorized Sienatory • PNC Bank,National Association,as a Non-Conduit Lender and as Co-Agent By;/s/Enc Bruno NameEnc Bnmo T1tle: Senior Vice President Wells Fargo Bank,National Association,as a Non-Conduit Lender and as Co-Agent By'/s/Isaac Washington Name: Isaac Washington Title: Vice President • Performance Guarantor's Acknowledgment and Consent The undersigned,Mohawk Industries, Inc., has heretofore executed and delivered the Performance Undertaking dated as of December 19, 2012 (the "Per foimance Undertaking") and hereby consents -to the Amendment No. 7 to the Credit and Security Agreement as set forth above and confirms that the Performance Undertaking and all of the undersigned's obligations thereunder remain in full force and effect.The undersigned further agrees that the consent of the undersigned to any further amendments to the Credit and Security Agreement shall not be required as a result of this consent having been obtained, except to the extent, if any, required by the Performance-Undertaking referred to above. Mohawk Industries,Inc. By'/s/Shailesh Bettadanur Name: Shailesh Bettadour Title:VP&Treasurer EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Aladdin Manufacturing Corporation Delaware Alsace Logistique S.A. France Altaj Kerama 000 T Russian Federation Avelgem Green Power CVBA Belgium B&M NV Belgium Balterio US,Inc. Georgia Baltkerama(LLC) Russian Federation Bienes Raices y Materiales del Centro,S.de R.L.de C.V. Mexico C.F.Marazzi S.A. Luxembourg Cevotrans BV Netherland Dal Italia LLC Delaware Dal-Elit,LLC Texas Dal-Tile Chile Comercial Limitada Chile Dal-Tile Corporation Pennsylvania Dal-Tile Distribution,Inc. Delaware Dal-Tile Group Inc. Delaware Dal-Tile I,LLC Delaware Dal-Tile Industrias,S.de R.L.de C.V. Mexico Dal-Tile International Inc. Delaware Dal-Tile Mexico,S.de R.L.de C.V. Mexico 3�a1-Tile�f�anada Ul C British-olumbia,Canada Dal-Tile Operaciones Mexico S.De R.L.De C.V. Mexico Dal-Tile Puerto Rico,Inc. Puerto Rico Dal-Tile Services,Inc. Delaware Dal-Tile Shared Services,Inc. Delaware Dal-Tile Tennessee,LLC Delaware Dekaply NV Belgium Don-Kerama(CJSC)Company Russian Federation DT Mex Holdings,LLC Delaware DTM/CM Holdings,LLC Delaware Dynea NV Belgium Explorer S.r.l. Italy F.I.L.S.Investments Ltd. Ireland Flooring Industries Limited S.a r.l. Luxembourg Flooring XL B.V. Netherlands Floorscape Limited New Zealand Hytherm Ltd Northern Ireland Hytherm Ireland Ltd Ireland Hytherm Sales Ltd Ireland International Flooring Systems S.a r.l. - Luxembourg International Vinyl Company-Vostok 000 Russian Federation Irkutsk-Kerama(CJSC) Russian Federation IVC BVBA Belgium IVC Far-East Trading(Shanghai)Co.Ltd. China IVC France S.a r.l. France 1VC Green Power NV Belgium IVC Luxembourg S.a.r.l. Luxembourg IVC US,Inc. Georgia • • EX+HBIT 21 SUBSIDIARIES OF THE REGISTRANT KAI Keramica Ltd Greece KAI Mining FOOD Bulgaria Kerama Baltics 000 Latvia Kerama Center(CJSC) Russian Federation Kerama Ksym(LLC) Russian Federation Kerama Ekaterinburg 000 Russian Federation Kerama Export(LLC) Russian Federation Kerama Golden Ring(LLC) Russian Federation Kerama Marazzi(LLC) Russian Federation Kerama Nizhny Novgorod 000 Russian Federation Kerama Omsk 000 Russian Federation Kerama Perm 000 Russian Federation Kerama Sochi 000 Russian Federation Kerama Spb,LLC Russian Federation Kerama-KMV,LLC Russian Federation Kerama-Volgograd Russian Federation Kerampromservis(LLC) Ukraine Khan Asparuh-Transport EOOD Bulgaria Khan Asparuh AD Bulgaria Khan Omurtag AD Bulgaria Manageme rr,o _ Bulgaria. Marazzi Acquisition S.r.l. Italy Marazzi Canada,Inc. Canada Marazzi Deutschland G.m.b.H. Germany Marazzi Engineering S.r.l. Italy Marazzi France Trading S.A.S. France Marazzi Group F.Z.E. UAE Marazzi Group S.r.l. Italy Marazzi Group Trading(Shanghai)Co.Ltd. China Marazzi Iberia S.L.U. Spain .Marazzi Japan Co.,Ltd. Japan Marazzi Schweiz S.A.G.L. Switzerland Marazzi UK Ltd. United Kingdom MG China Trading Ltd. Hong Kong Moduleo GmbH Germany Modulen Limited United Kingdom Mohawk Australia Pty Ltd Australia Mohawk Canada Corporation Nova Scotia,Canada Mohawk Capital Luxembourg S.A. Luxembourg Mohawk Carpet Distribution,Inc. Delaware Mohawk Carpet Transportation of Georgia,LLC Delaware Mohawk Carpet,LLC Delaware Mohawk Commercial,Inc. Delaware • Mohawk ESV,Inc Delaware Mohawk Europe BVBA Belgium Mohawk Factoring II,Inc. Delaware Mohawk Factoring,LLC Delaware Mohawk Finance SI r.l. Luxembourg t EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT . Mohawk Foreign Acquisitions S.a.r.l. Luxembourg Mohawk Foreign Funding S.a.r.l Luxembourg Mohawk Foreign Holdings S.a.r.l. Luxembourg Mohawk Global Investments S.a r.l. Luxembourg Mohawk Holdings International B.V. Netherlands Mohawk International(Europe)S.a.r.l. Luxembourg Mohawk International(Hong Kong)Limited Hong Kong Mohawk International Financing S.a.r.l Luxembourg Mohawk International Holdings(DE)Corporation Delaware Mohawk International Holdings S.a r.l. Luxembourg Mohawk International Luxembourg S.a r.l. Luxembourg Mohawk International Services BVBA Belgium Mohawk KAI Luxembourg Holding SI r.l. Luxembourg Mohawk KAI Luxembourg S.a r.l. Luxembourg Mohawk Luxembourg Financing S.a r.l. Luxembourg Mohawk Luxembourg Holdings S.a r.l. Luxembourg Mohawk Marazzi International BV Netherlands Mohawk Marazzi Russia BV Netherlands Mohawk New Zealand Limited New Zealand Mohawk Operaciones Mexicali S.de R.L.de C.V. Mexico Moha_wk_Operationa T arxe.mhon o Sal L_—--_-----_- Luxembourg - Mohawk Resources,LLC Delaware Mohawk Servicing,LLC Delaware Mohawk Singapore Private Limited Republic of Singapore Mohawk Trading(Shanghai)Co.,Ltd China Mohawk Unilin Luxembourg S.a r.l. Luxembourg Mohawk United Finance B.V. Netherlands Mohawk United International B.V. Netherlands Mohawk Vinyl Financing SA r.l. Luxembourg Monarch Ceramic Tile,Inc. Texas MUD(Holding)Brazil Ltda. Brazil Oka Kerama(LLC) Russian Federation Orelshtamp 000 Russian Federation Pergo(Europe)AB Sweden Pergo Holding BV Netherlands PJSC"Kraj Kerama" Ukraine PJSC Budagromekhzaptchastyna Ukraine Premium Floors Australia Pty Limited Australia RR Apex,LLC Delaware S.C.KAI Ceramics SRL Romania Sibir Kerama ZAO Russian Federation SimpleSolutionsUSA LLC Delaware Spanin NV Belgium Spann Invest BVBA Belgium Spano NV Belgium Spanolux 000 Russian Federation Spanolux SPRL Belgium Stroytrans Orelstroy,CJSC Russian Federation r EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Tiles Co GOD Bulgaria Ufa-Kerama(LLC) Russian Federation Unilin(Malaysia)Sdn.Bhd. Malaysia Unilin ApS Denmark Unilin BeheerBV Netherlands Unilin BVBA 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 BVBA Belgium Unilin Holding SAS France Unilin Insulation BV Netherlands Unilin Insulation SAS France Unilin Insulation Sury SAS France Unilin North America,LLC Delaware Unilin Norway AS Norway Unilin 000 Russian Federation ?Oland Unilin s.r.o. Czech Republic Unilin SAS France Unilin Spain SL Spain Volga Kerama Russian Federation World International,Inc. Barbados Xtratherm Ltd Ireland Xtratherm SA Belgium Xtratherm Sales SPRL Belgium Xtratherm UK Ltd United Kindgom Yenisei-Kerama(LLC)LLC YY Russian Federation Yugra Kerama(CJSC) Russian Federation 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.333-202351)on Form S-3 and(No.333-23577,No.333-91908,No. 333-143370,No. 333-181363 and No. 333-213078)on Form S-8,of Mohawk Industries, Inc. of our reports dated February 27,2017,with respect to the consolidated balance sheets of Mohawk Industries,Inc. and subsidiaries as of December 31,2016 and 2015,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 31,2016,and the effectiveness of internal control overfinancial reporting as of December 31,2016 which reports appear in the annual report on Form 10-K of Mohawk Industries,Inc. /s/KPMG LLP Atlanta,Georgia February 27,2017 • • • EXHIBIT 31.1 CERTIFICATIONS 1,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)- Aiffra d wlretherornot material,th tinvolves management or other employees who have a significant role in the registrant'sinternal-control over financial reporting. Date:February 27,2017 /s/Jeffrey S.Lorberbaum Jeffrey S.Lorberbaum Chairman and Chief Executive Officer EXHIBIT 31.2 CERTIFICATIONS I,Frank H.Boykin,certify that: I have reviewed this annual report on Form 10-K ofMohawk 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 infonnation 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 occun-ed 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 An fraud;whether or not material,that involves:managenientorother em to ees who have a significant Tole in theregistrant's internal contiol (b) y � P Y over financial reporting. Date:February 27,2017 /s/Frank H.Boykin Frank H.Boykin Chief Financial Officer • • EXHIBIT 32.1 Statement of Chief Executive Officer of iMOi-IAWK 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 31,2016 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 of2002,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 27,2017 • 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 of2002 In connection with the annual report of Mohawk Industries,Inc.(the"Company")on Form 10-K for the period ended December 31,2016 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 27,2017 • f 1 •'ks of p- Jy FHd /11 e t x.'11•. �� ii# Y `Y + . November 06, 2017 _ Poe'rI ase I -_ pPee Post-nark Elizabeth Greeson o Return ReceiotPee Here 150 Blue Drive / M .,tR_-ycirsd, H ,ideJ Del ,j Pa' Calhoun, GA 30701 {EndorsementPaquired) - - r ru :� P_ s $ RE: Comparison Of Examination MOHAVVK CARPET DISTRIBUTION, INC. r— istreet,Apt No.; ATT: ELIZABETH GREESON ar:=Clicx No. 150 BLUE DRIVE C :---)tacz ZtP:: CALHOUN, GA 30701 • Ms. Greeson, You have been added to the agenda for the Contractor Licensing Board meeting on Wednesday, December 20th, 2017, The meeting is held at 9:00am at the W. Harmon Turner Building (Bldg. F, Admin. Bldg.), 3299 Tamiami Trl. E., Naples, FL in the. Commissioner's Meeting Room on the Std floor. If you have any questions or concerns, please call (239) 252-2930. Sincerely, Joann Greenberg Collier County Contractors Licensing & Operations Regulatory Mgmt 2800 North Horseshoe Drive Naples, FL 34104 Growth fla�.i;fi1•..ill ,;JI.+t c)1 _oi_:;P•.,,., _ .-.^r,.,. ,.,. ,�. ..: (.i ; ' ��. ' : .. 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