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MOH AW K I N DUS T R I E S , I NC .Mohawk’s sustainability story is ascomprehensive and international as thebusiness itself. Many of the ways in whichMohawk’s commitment to sustainabilityimpacts products, processes and people canbe viewed at mohawksustainability.com.Each Earth Day, the Company highlights itsprogress in social responsibility throughthe annual corporate sustainability reportposted on the website.**PLASTIC BOTTLES RECYCLEDINTO POLYESTER CARPETPOUNDS OF WASTE RECYCLEDPRODUCTS WITH RECYCLEDCONTENTGALLONS OF REDUCED WATERCONSUMPTION SINCE 2015*POUNDS OF TIRES RECYCLEDINTO DOORMATSWATER INTENSITY REDUCEDSINCE 2010%GREENHOUSE GAS INTENSITYREDUCED SINCE 20102018 A N N UA L R E P ORT%PLANTS WITH ZERO WASTETO LANDFILLFocused onFUNDAMENTALS*2017 ANNUAL RECYCLING2018 Annual Report160 South Industrial Boulevard Calhoun, Georgia 30701www.mohawkind.com
SHAREHOLDER INFORMATIONCORPORATE HEADQUARTERSP.O. Box 12069160 South Industrial BoulevardCalhoun, Georgia 30703(706) 624-2246INDEPENDENT REGISTERED PUBLICACCOUNTING FIRMKPMG LLPAtlanta, GeorgiaCORPORATE COUNSELAlston & Bird LLPAtlanta, GeorgiaMOHAWK CARPETDream World, SmartStrand SilkFood.Clothing.Shelter.TABLE OF CONTENTSPRODUCT INQUIRIESFor more information about Mohawk’sproducts, visit our .eliane.comINVESTOR/ANALYST CONTACTFor additional information about Mohawk,please contact Investor Relations at(706) 624-2695 or at the Company’s headquarters address.TRANSFER AGENT AND REGISTRARAmerican Stock Transfer andTrust Company, LLC6201 15th AvenueBrooklyn, New York 11219(972) 764-2720PUBLICATIONSThe Company’s Annual Report, ProxyStatement, Form 8-K, 10-K and 10-Q reportsare available without charge and can beordered via our stockholder communicationsservice at (706) 624-2246 or via the Internetat www.mohawkind.com under InvestorInformation. Written requests should be sentto Deby Forbus at the Company’s headquarters address above.ANNUAL MEETING OF STOCKHOLDERSThe Annual Meeting of Stockholders ofMohawk Industries, Inc. will be held at the timeand location specified in our Notice of AnnualMeeting of Stockholders for 2019.COMPANY STOCKMohawk’s common stock is traded on the NewYork Stock Exchange under the symbol MHK.Global Ceramic.12Flooring North America.16Flooring Rest of World.20Board of Directors and Senior Management Team.2410-K Filing.25BNYSE AFFIRMATION CERTIFICATIONSAs a listed company with the New York StockExchange (“NYSE”), Mohawk is subject tocertain Corporate Governance standards asrequired by the NYSE and/or the Securitiesand Exchange Commission (“SEC”). Amongother requirements, Mohawk’s CEO, asrequired by Section 303A.12(a) of the NYSEListing Company Manual, must certify to theNYSE each year whether or not he is awareof any violations by the Company of NYSECorporate Governance listing standards asof the date of the certification. On June 19,2018, Mohawk’s CEO Jeffrey S. Lorberbaumsubmitted such a certification to the NYSEwhich stated that he was not aware of anyviolation by Mohawk of the NYSE CorporateGovernance listing standards.The Company has filed the certificationsof its Chief Executive Officer and ChiefFinancial Officer required by Section 302 ofSarbanes-Oxley Act of 2002 as an exhibitto the Company’s Form 10-K for the yearended December 31, 2018.STOCK PERFORMANCE GRAPHThe following is a line graph comparing the yearly change in the Company’s cumulative total stockholder returns to those of the Standard & Poor’s 500Index and a group of peer issuers beginning on December 31, 2012 and ending on December 31, 2018.The peer group includes the following companies: Armstrong Flooring, Inc.; Dixie Group, Inc.; Interface, Inc.; Leggett & Platt, Inc.; MASCO Corporationand Stanley Black & Decker. Total return values were calculated based on cumulative total return, assuming the value of the investment in the Company’sCommon Stock and in each index on December 31, 2012 was 100 and that all dividends were reinvested. The Company is not included in the peergroup because management believes that, by excluding the Company, investors will have a more accurate view of the Company’s performance relativeto peer companies. 250 200Letter to Shareholders.6EQUAL OPPORTUNITYMohawk is an Equal Opportunity/AffirmativeAction employer committed to attracting adiverse pool of applicants and sustainingan inclusive workforce. 149.43 150.33 150 78.55 100C101537 50020132014201520162017 Mohawk Industries, Inc. S&P 500 Index — Total Returns Peer Group2018Design by Corporate Reports Inc., Atlanta, GAwww.cricommunications.com
Mohawk’s position as theglobal flooring leader helps meeta fundamental need around theworld, which, in turn, creates a set ofcompelling growth opportunities.DALTILE FIELD TILESaddle Brooke XT1
AccelerateGROWTHTHROUGH 3.2 BILLION IN CAPEX & ACQUISITIONSSince 2016, we have invested in CapEx and acquisitions to propel salesgrowth. These investments in six product categories and 12 countries allowus to capitalize on rapidly growing flooring categories, enter new regions andenhance manufacturing capabilities and capacity. We plan to invest an additional 550 to 580 million in capital expenditures through 2019. As these investmentsare fully integrated and optimized, Mohawk will be positioned to reap thebenefits through increased incremental sales and enhanced margins.ALADDIN COMMERCIAL CARPET TILEDownload Tile
DeliverPRODUCTSWITH PROPRIETARY DESIGNS & FEATURESFrom differentiated attributes that deliver advanced performance tothose that enhance aesthetic appeal, Mohawk is a leader in establishingnew and innovative frontiers across its flooring portfolio. The resultsare products — superior slip-resistant ceramic tile, proprietary waterproofwood and super soft and stain-resistant carpet fibers to name a few —that provide a superior competitive position, command premiumprice points and deliver enhanced profitability.QUICK-STEP LAMINATESandblasted Oak Natural with HydroSeal Technology
Capture theOPPORTUNITYIN NORTH AMERICA & EUROPEThe newest flooring category is taking the market by storm with explosivegrowth on two continents. Consumers love LVT for versatility, affordability, easeof installation and low maintenance. To capitalize on the extraordinary growthopportunity LVT presents, we have invested strategically in five new state-of-theart production facilities in the U.S. and Belgium, which, once optimized,will position us as a global leader in this exciting new category.IVC RESILIENT DESIGN LVTHighland Hickory
EnhanceRESULTSTHROUGH INVESTMENT & SHARED EXPERTISEAcquiring and successfully integrating premier flooring companies aroundthe world is a core competency at Mohawk. Our most recent additions includeGodfrey Hirst, the largest flooring provider in Australia and New Zealand, andEliane, a leading ceramic tile manufacturer in Brazil — one of the largest tilemarkets in the world. As with past acquisitions, we are investing in resourcesand leveraging internal expertise to grow sales, improve margins andefficiencies and create additional competitive advantages in the local markets.GODFREY HIRST CARPETBurgos
TO OUR SHAREHOLDERSOur relentless focus on our growth priorities is helping Mohawk fulfill itsfundamental purpose: Grow Profitability and Increase Shareholder Return.After five consecutive years ofrecord earnings, 2018 proved moredifficult than we anticipated, withinflation increasing dramatically,luxury vinyl tile (LVT) impactingother U.S. flooring products andmost of our markets slowing. Inthis environment, we selectivelyinvested 1.5 billion to enhance ourlong-term performance, primarilyin new product categories andgeographies through greenfieldprojects and acquisitions, cost-savinginitiatives and buying back shares.Our industry has faced periods withvolatile costs and shifts in consumerpreferences before, and we havealways navigated through themto emerge stronger with a morecompetitive position.In 2018, inflation in the U.S. wasdriven primarily by dramaticallyincreasing material costs, escalatingtransportation and energy costs andconstrained chemical supply. Thetight U.S. labor market increasedemployee turnover, which impactedboth our efficiencies and trainingcosts. Our ability to offset thesepressures was hindered by continuousinflation, more competitive importsdue to a stronger dollar and enduser substitution of LVT for otheralternatives.Jeffrey S. LorberbaumChairman andChief Executive Officer6Mohawk IndustriesIn the U.S., LVT is taking sharefrom other flooring and will becomea significantly larger part of ourportfolio. Our LVT manufacturingand import strategies are progressing,and we believe our margins willimprove in the future. In the U.S.and Europe, we are adding moretalent to our new LVT operations toincrease our production, efficiencyand differentiation in 2019.Across most regions, growth slowedthrough the year due to softeningeconomies, slowing home sales,higher mortgage rates and politicaluncertainty. The largest flooringchannel is residential remodeling,which is expected to strengthen ashome sales slow.We are managing through theseconditions, while enhancing thelong-term growth and profitabilityof our business. To accomplishthis, we continued our strategy ofacquiring leading businesses innew markets and implementingmajor greenfield projects to establishnew product categories in the U.S.,Europe and Russia.GLOBAL ACQUISITIONSIn July, we finalized our acquisitionof Godfrey Hirst, which positionedus as the largest flooring supplier inAustralia and New Zealand. With theAustralian housing market slowing,we are investing to expand GodfreyHirst’s commercial carpet positionand leveraging Mohawk’s resourcesto enhance product and materialstrategies. We anticipate bringinggreater value to the market with moreinnovative products and a comprehensive offering of hard surface products distributed under our brands. Wealso are growing Godfrey Hirst’s U.S.sales by positioning the brand’s NewZealand wool collections as part ofMohawk’s luxury carpet range.In November, we extended ourposition as the world’s largestceramic tile provider by finalizingthe purchase of Eliane in Brazil.Eliane is an industry leader, with thebest brand and a premium position
Letter to Shareholdersin one of the world’s largest ceramicmarkets. The Brazilian market isstrengthening, and both our salesand margins are expanding. Wehave ordered the first phase ofnew equipment to enhance Eliane’soperations and margins followingthe strategy we used to dramaticallyimprove Marazzi’s profitability.We are formulating strategies tooptimize sales in Central and SouthAmerica from our operations inBrazil and Mexico.MARAZZI PORCELAIN TILEArt Grey Rectificato (floor), Grande Metal Look Porcelain Slabs (wall)and D Segni Colore Decoro Mix (desk)STRATEGIC EXPANSIONS 8,072Lorem IpsumLoremDolorIpsum Dolor XXXXXXEBITDA1 9,491 8,959 7,803Lorem IpsumXXXEBITDA1 1,859 9,984 1,712 8,072 1,71 1,705 1,396 1,396201820172016 1,17220152014201820172016 1,17220182017201620152014 7,803While these acquisitionsprovide uswith substantial growth and profitopportunities, we will also benefitfrom multiple internal investmentsin new products and markets thatexpand the scope of our business.XXX2014 9,9842015 9,491 8,959NETSALES2015Lorem IpsumLoremDolorIpsum DolorXXXNETSALES2014In Europe, we extended our directdistribution strategy by acquiringhard surface distributors in Italy,Switzerland and the Netherlands,which will broaden our customerbase and improve our service inthese countries. We also acquiredBerghoef, the largest mezzanineLoremIpsumflooringproviderinDolorEurope, andexpanded the business by leveraging our existing manufacturingresources and sales organization.In the U.S., our new state-of-theart quartz countertop plant ismanufacturing basic products as we1 See non-GAAP reconciliation tables.ramp up production and optimizeour processes and formulations. Ourexisting ceramic tile sales channelsEarlier in 2018, we began to supplyproviding the architect and designand countertop distribution willthe European market with carpetcommunity a single source forbolster our presence in the market.tile from our new plant in Belgium.superior flooring.For years, we have been one of theThe products showcase sophisticatedSALESBY REGIONSALESBY REGIONBY SEGMENTSALES SALESBY SEGMENTBY PRODUCTlargest U.S. distributorsof stoneslabsstyling SALESfor commercialapplicationsAs planned, our new sheet vinyland quartz countertops, and now wealong with exceptional performanceplant in Russia commenced operaare complementing those offeringsfeatures that distinguish them in thetions in December and is producingwith our own U.S.-manufacturedmarketplace. As in Australia, we aregoods to satisfy commitments toquartz as well as porcelain slabsutilizing the design and technicalmajor customers. Sheet vinyl is oneimported from our Italian operations.expertise of our U.S. carpet teamof the most widely used flooringWith this product extension, weto deliver style and innovation andcategories in Russia; and, as wenow manufacture options for allensure the efficient operation of ourrefine the plant’s processes andkitchen and bath surfaces, creating aindustry-leading facility. To grow ourcosts, we will expand our customercoordinated offering for residentialcarpet tile business, we have builtbase and introduce innovative collecand commercial spaces.anexperiencedEuropeansalesteamtions. We haveFlooringpreppedRussianUnited States 61%United StatesFlooring61% NA 40%CarpetNA the40%andResilient 39%that will also Europerepresent
Eliane, a leading ceramic tile manufacturer in Brazil — one of the largest tile markets in the world. As with past acquisitions, we are investing in resources and leveraging internal expertise to grow sales, improve margins and efficiencies and create additional competitive advantages in the local markets. RESULTS GODFREY HIRST CARPET Burgos. 6 Mohawk Industries TO OUR SHAREHOLDERS
