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

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

Mohawk’s fashionable and innovative products, successful participation in all sales channels, creative marketing tools and programs and extensive sales resources have enabled the Company to build market leadership positions in multiple geographies, primarily North America, Brazil, Europe, RussiaLatin America and Australasia, as well as to export products to approximately 170 countries. In North America, Mohawk’s largest marketplace, the Company has leveraged its brands, broad offering and award-winning merchandising to build strong positions across all product categories. In Europe, and Russia, similar advantages have supported market leadership in ceramic tile, premium laminate and sheet vinyl. The Company also has established a strong position in the fast-growing LVT market in the U.S. and Europe following the 2015 acquisition of IVC and subsequent investments to expand productioncapacity and capacity.align the product offering with market trends. The 2018 acquisition of Godfrey Hirst provided the Company with the largest market position in carpet in Australasia to complement the leading hard surface presence that the Company had grown through its earlier acquisitions of national distributors in both Australia and New Zealand. In 2018, the Company acquired Eliane, a leading ceramic tile manufacturer in Brazil, the world’s third largest ceramic market. The Eliane brand is highly regarded for innovative design and strength in high-end porcelain floor and wall tile. TheIn 2023, the Company believes Eliane is Brazil’s largestfurther expanded its presence in Brazil through the acquisition of Elizabeth Revestimentos, a leading Brazilian ceramic tile exporter.business with four manufacturing facilities strategically located throughout Brazil. In 2023, the Company also acquired Vitromex, a leading Mexican ceramic tile business with four manufacturing facilities strategically located throughout Mexico, further solidifying the Company’s position in the Mexico ceramic tile market.

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

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

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

Global Ceramic Segment utilizes various distribution methods including regional distribution centers, service centers, direct shipping and customer pick-up from manufacturingCompany 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.

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

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

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.

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

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

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

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

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

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

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

The principal raw materials used in the production of carpet and rugs are polypropelene, polyester, triexta, nylon, polypropylene, caprolactam, recycled post-consumer plastics, synthetic backing materials, latex and various dyes and chemicals, the majority of which are petroleum-based. The Company uses wood chips, wood veneers, lumber, paper and resins in its production of laminate and wood products. In its vinyl flooring operations, the Company uses glass fiber, plasticizers and polyvinyl chloride (PVC) resins. Major raw materials used in the Company’s manufacturing process are available from independent sources, and the Company obtains most of its raw materials from major suppliers that provide inputs to each major product category. If these suppliers were unable to satisfy the requirements, the Company believes that alternative supply arrangements would be available. The market for raw materials is sensitive to temporary disruptions. During the COVID-19 pandemic, the North American flooring industry has experienced and might continue to experience disruptions in obtaining raw materials or components to produce the Company’s products, adversely affecting its operations.

The principal raw materials used in the production of boards, laminate and wood flooring are wood, paper and resins. The wood suppliers provide a variety of wood species, providing the Company with a cost-effective and secure supply of raw material. In its vinyl flooring operations, the Company uses glass fiber, plasticizers and PVC resins. Major raw materials used in the Company’s manufacturing process are available from independent sources, and the Company has long-standing relationships with a number of suppliers. The principal raw materials used in the production of broadloom carpet and carpet tile are polypropelene,wool, polyester, triexta, nylon, polypropylene, caprolactam, recycled post-consumer plastics, synthetic backing materials, latex and various dyes and chemicals, the majority of which are petroleum-based. If these suppliers were unable to satisfy the requirements, the Company believes that alternative supply arrangements would be available. The market for raw materials is sensitive to temporary disruptions. During the COVID-19 pandemic, the flooring industry has experienced and might continue to experience disruptions in obtaining raw materials or components to produce the Company’s products, adversely affecting its operations.

The Company is the largest flooring manufacturer in a fragmented industry composed of a wide variety of companies ranging from small, privately-held firms to large multinationals. In 2020,2022, the U.S. floor covering industry reported $26.7$37.6 billion in sales, downup approximately 1.3%7.5% over 2019’s2021’s sales of $27.0$35.0 billion. In 2020,2022, the primary categories of flooring in the U.S., based on sales, were carpet and rugs (38.4%(33.7%), resilient consisting of LVT, sheet vinyl and various other resilient categories (25.2%(32.7%), ceramic tile (13.3%(12.7%), wood (12.9%(12.1%), stone (6.6%(5.7%) and laminate (3.6%(3.2%). In 2020,2022, the primary categories of flooring in the U.S., based on square feet sold, were carpet and rugs (44.5%), resilient consisting of LVT, sheet vinyl and various other resilient categories (30.1%(39.3%), carpet and rugs (38.6%), ceramic tile (13.4%(12.0%), wood (6.4%(5.4%), laminate (4.0%(3.3%) and stone (1.6%(1.4%).  Each of these categories is influenced by the residential and commercial construction and residential and commercial remodeling end-use markets. These markets are influenced by many factors including changing consumer preferences, consumer confidence, spending for durable goods, interest rates, inflation, availability of credit, turnover in housing and the overall strength of the economy.

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

The Company faces competition in the non-U.S. laminate, wood, LVT and sheet vinyl flooring business from a large number of domestic manufacturers as well as pressures from imports. The Company believes it is one of the largest manufacturers and distributors of laminate flooring in the world, with a focus on premium products, which the Company supplies under some of the best-known and most widely marketed brands in its regions. In addition, the Company believes it has a competitive advantage in its laminate flooring markets as a result of the Company’s industry-leading water resistance, realistic visuals and embossed-in-register surfaces as well as patented installation technologies, all of which allow the Company to differentiate its products in the areas of design, performance, installation and assembly. In wood flooring, the Company has extended the strength of its well-known laminate brands and its installation technologies to add value to its wood collections. The Company faces competition in the non-U.S. vinyl flooring channel from a large number of domestic and foreign manufacturers, but believes it has a competitive advantage in its LVT and sheet vinyl markets due to industry-leading design, patented technologies, brand recognition and vertical integration. The Company has elevated the performance of its sheet vinyl collections and is now aggressively placing the product in commercial applications. After initially extending its geographic footprint by acquiring national hard surface distributors in Australia and New Zealand, the Company acquired Godfrey Hirst, in 2018, making the Company the largest manufacturer of carpet in both countries. The Company has integrated its soft and hard surface businesses to provide a comprehensive offering to residential and commercial customers in the region. In Australia and New Zealand, the Company faces competition from a large number of domestic and foreign manufacturers, but believes it has a competitive advantage in its carpet and hard surface offering due to industry-leading design, patented technologies, brand recognition and vertical integration of manufacturing and distribution. Through the 2015 acquisitionacquisitions of Xtratherm and the 2021 acquisitionof

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

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

During 2021,2023, no single customer accounted for more than 10% of the Company’s total net sales, and the top 10 customers accounted for less than 20% of the Company’s total net sales. The Company believes the loss of one major customer would not have a material adverse effect on its business.

The Company’s talent development initiatives center on the education, exposure and experience of its employees.employees, and the Company’s commitment to diversity. The healthCompany prioritizes the development of early-in-career minority talent to build and expand future generations of minority leadership. The Company is also dedicated to building community partnerships and leveraging its employer brand to yield an applicant pool that reflects the diversity of the communities in which the Company operates. The Company remains committed to promoting all aspects of diversity, equity and inclusion in its hiring practices and talent development framework.

The Company is dedicated to creating a working environment that is free from hazards, promoting employee well‑being and prioritizing safety at every level. The Company fosters a collaborative partnership with its employees to uphold safe and secure workplaces across the globe. Each of the Company’s employees during the COVID-19 pandemic have been particularly important. Thebusiness segments prioritizes enhancement of safety proceduresmeasures within their respective facilities, with a heightened focus on equipment maintenance, machine guards and peer‑to‑peer feedback. By consolidating safety data from all business segments, the Company has put in place to prevent workplace transfercalculates its corporate recordable incident rate, which serves as a key indicator of the virus include strict policies on quarantining, audits and enforcement of social distancing, temperature scans, masks and sanitization standards.our overall safety performance.

As of December 31, 2021,2023, the Company employed approximately 43,00043,300 persons, consisting of approximately 19,60017,100 in North America -the United States and Canada, approximately 14,40014,900 in Europe and Russia and approximately 9,00011,300 in other countries. The majority of the Company’s European and Russian manufacturing employees are members of unions. Additionally, theThe Company has not experienced any major strikes or work stoppages in recent years. The Companyyears and believes that its relations with its employees are good.

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

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.

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

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

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

The Company 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.

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:

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

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

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

The principal raw materials used in the Company’s manufacturing operations include triexta, nylon, polypropylene, and polyester resins and fibers, which are used in the Company’s carpet and rug business; clay, talc, feldspar and glazes, including frit (ground glass), zircon and stains, which are used in the Company’s ceramic tile business; wood, paper and resins, which are used in the Company’s wood and laminate flooring businesses and panels business; and glass fiber, plasticizers, and pvc resins, which are used in the Company’s sheet vinyl and luxury vinyl tile business.businesses. 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. A material temporary or long-term adverse change in the Company’s relationship with such a supplier, the financial condition of such a supplier or such a supplier’s ability to manufacture or deliver such raw materials or sourced products to the Company could lead to an interruption of supply or require the Company to purchase more expensive alternatives. Also, the Company’s ability to obtain raw materials or source products at reasonable costs may be impacted by tariffs, global trade uncertainties and international crises, such as ongoing geopolitical conflict. For example, the COVID-19 pandemic. DespiteRussian invasion of Ukraine resulted in supply chain disruption of raw materials sourced from Ukraine (primarily clay) in fiscal 2022, and the ongoing conflict in the Middle East may result in an escalation of oil and petroleum-based chemical prices as well as the introduction of sanctions or transportation barriers, which could impact the Company’s efforts to maintain a number of sources for its raw materials, the Company experienced disruptions in its raw materials supply chain resulting from the COVID-19 pandemic in 2021. While the Company continues to monitor the COVID-19 pandemic and government restrictions enacted to address the pandemic, the long-term impact on its supply chain is unpredictable.operations. An extended interruption in the supply of sourced products or raw materials used in the Company’s business or in the supply of suitable substitute materials or products wouldcould disrupt the Company’s operations, which could have a material adverse effect on the Company’s business.

The Company’s business requires significant capital investment to expand capacity to support its growth, introduce new products, enter new markets and improve operating efficiencies.  The Company has historically made significant capital investments each year and will continue to make capital investments in future periods, including approximately $800$480 million of capital investments in 2022.2024. While the Company believes that many of its past capital investments have been successful, there is no guarantee that the return on investment from the Company’s recent or future capital projectsexpenditures will be sufficient to recover the expenses and opportunity costs associated with these projects.  Furthermore, a meaningful portion of the Company’s capital investment is based on forecasted growth in its business, which is subject to uncertainty such as general economic trends, including as a result of the COVID-19 pandemic, increased competition and consumer preferences.  If the Company does not accurately forecast its future capital investment needs, the Company could have excess capacity or insufficient capacity, either of which would negatively affect its revenues and profitability.

The Company 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:

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.

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, to secure certain required governmental approvals necessary to consummate such strategic transactions 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 is subject to increasingly numerous and complex laws, regulations and licensing requirements in each of the jurisdictions in which the Company conducts business. In addition, new laws and regulations may be enacted in the U.S. or abroad, the compliance ofwith which may require the Company to incur additional personnel-related, environmental, or other costs on an ongoing basis.

In particular, the Company’s operations are subject to various environmental, social, and 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.products, and other sustainability related matters. The applicable requirements under these laws are subject to amendment, to the imposition of new or additional requirements and to changing interpretations of agencies or courts. The Company may incur material costs in order to comply with new or existing regulations, including fines and penalties and increased costs of its operations. For example, Extended Producer Responsibilitycertain aspects of the Company’s operations and supply chain have become, and are expected to become increasingly subject to federal, state, local and international laws, place a shared responsibility for post-consumer product management on various entities involvedregulations and international treaties and industry standards related to climate change. Many governing bodies have introduced additional due diligence and disclosure requirements addressing sustainability that the Company expects will apply to its operations and supply chain in the supply chain, including producers and manufacturers. Expansion of Extended Producer Responsibility legislationcoming years, such as California’s Climate Corporate Data Accountability Act in the jurisdictions whereUnited States and the Company operates could impose additional responsibility onCorporate Sustainability Reporting Directive in the Company in relation to the ultimate treatment or disposal of its products, which could lead to an increase in total costs related to the Company’s products. European Union.

Also, the Company’s manufacturing facilities may become subject to further limitations on the emission of “greenhouse gases”emissions due to public policy concerns regarding climate change issues or other environmental or health and safety concerns. WhileBecause the form of any additional regulations cannot be predicted, a “cap-and-trade” system similar to the system that applies to the Company’s businesses in the European Union could be adopted in the United States. The Company’s manufacturing processes use a significant amount of energy, especially natural gas. Anygas, the imposition of greenhouse gas emissions limitations, such as a “cap-and-trade” system, or other limitations imposed on the emission of “greenhouse gases” could require the Company to increase its capital expenditures, use its cash to acquire emission credits or restructure its manufacturing operations, any of which could have a material adverse effect on its business.

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

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

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

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.

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 attorneys’ 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 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:

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

Any event that causes interruptions to the input, retrieval and transmission of data or increase in the service time could disrupt the Company’s normal operations. There can be no assurance that the Company can effectively carry out its disaster recovery plan to handle the failure of its information systems, or that the Company will be able to restore its operational capacity within sufficient time to avoid material disruption to its business. The occurrence of any of these events could cause unanticipated disruptions in service, decreased customer service and customer satisfaction, harm to the Company’s reputation

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

Furthermore, third party business partners provide a number of the key components necessary to the Company’s business functions and systems. Any problems caused by these business partners, including those resulting from disruptions in communication services provided by a business partner, cyber-attacks and security breaches, regulatory restrictions, fines, or orders or other regulatory action causing reputational harm, failure of a business partner to provide services for any reason or poor performance of services, could adversely affect the Company’s ability to conduct its business. In addition, the Company’s business partners could also be sources of operational and information security risk to the Company, including from breakdowns or failures of their own systems or capacity constraints. Replacing these third-party business partners could also create significant delay and expense.

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

On October 18, 2019,August 12, 2022, the Company entered into a $1,800 million,fourth amendment (the “Amendment”) to its existing senior revolving credit facility (the “Senior Credit Facility”) that provides for revolving credit, including limited amounts of credit in the form of letters of credit and swingline loans. The Amendment, among other things, increased the amount available under the Senior Credit Facility from $1,800 million to $1,950 million until October 18, 2024, after which the amount available under the Senior Credit Facility will decrease to $1,485 million. Any outstanding borrowings under the Company’s U.S. and European commercial paper programs also reduce availability under the Senior Credit Facility. Including commercial paper borrowings, the Company has utilized approximately $615.3$67.9 million under the Senior Credit Facility resulting in a total of $1,184.7$1,882.1 million available as of December 31, 2021.2023.

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

A significant or prolonged decrease in the Company’s market capitalization, including a decline in stock price, or a negative long-term performance outlook, has in the past resulted in and could in the future result in an impairment of its assets which resultsassets. An impairment occurs when the carrying value of the Company’s assets exceed their fair value. The Company tests the goodwill and intangible assets on its balance sheet for impairment on an annual basis, and also when events occur or circumstances change that indicate that the fair value of the reporting unit or intangible asset may be below its carrying amount. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions. Declines in market conditions, a trend of weaker than anticipated financial performance for the Company’s reporting units or declines in projected revenue, a decline in stock price for a sustained period of time or an increase in the market-based weighted average cost of capital (“WACC”), among other factors, are indicators that the carrying value of the Company’s goodwill or indefinite-lived intangible assets may not be recoverable.

The Company is subject to the tax laws of the many jurisdictions in which it operates. These tax laws are complex, and the manner in which they apply to the Company’s facts is sometimes open to interpretation. In calculating the provision for income taxes, the Company must make judgments about the application of these inherently complex tax laws. The Company’s domestic and international tax liabilities are largely dependent upon the distribution of profit before tax among these many jurisdictions. However, the Company’s provision for income taxes also includes estimates of additional tax that may be incurred for tax exposures and reflects various estimates and assumptions, including assessments of future earnings of the Company that could impact the valuation of its deferred tax assets. The Company’s future results of operations and tax liability

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

The Company owns and leases manufacturing and distribution facilities worldwide. The table below lists the primary owned and leased facilities atas of December 31, 2021.2023. The Company owns its Corporate Headquarterscorporate headquarters in Calhoun, GA.Georgia. The Company also owns and operates service centers and stores in the United States, Canada and Russia, none of which are individually material. The Company believes its existing facilities are suitable for its present needs.

TheFrom time to time in the regular course of its business, the Company is involved in various lawsuits, claims, investigations and other legal matters from time to time in the regular course of its business.matters. Except as noted elsewhere in this report, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

On September 16, 2021,February 10, 2022, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock (“2021(the “2022 Share Repurchase Program”). In the fourth quarter 2021, the Company purchased $427.0 million of its common stock. As of December 31, 2021,2023, there remained $36.8remains $229.2 million authorized under the 2021 Share Repurchase Program.

Under the 2022 Share Repurchase Programs,Program, the Company may purchase common stock in open market transactions, block or privately negotiated transactions, and may from time to time purchase shares pursuant to trading plans in accordance with Rules 10b5-1 or 10b-18 under the Exchange Act or by any combination of such methods. The number of shares to be purchased and the timing of the purchases are based on a variety of factors, including, but not limited to, the level of cash balances, credit availability, debt covenant restrictions, general business conditions, regulatory requirements, the market price of the Company’s stock and the availability of alternative investment opportunities. No time limit was set for completion of repurchases under the 2022 Share Repurchase ProgramsProgram and the 2022 Share Repurchase ProgramsProgram may be suspended or discontinued at any time.

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

During 2021, inflation2023, rising interest rates, delayed consumer spending due to inflationary pressures and other macroeconomic factors impacted new single-family home construction and residential remodeling in materials, energy, transportation and labor has impactedmost of the Company’s profitability across all segments.major markets. Increased mortgage rates have suppressed the housing market and decreased home renovation activity. In addition, globally, consumers have faced a higher cost of living, reducing discretionary spending on large purchases such as flooring. Mohawk has, to some extent, offset the impact of inflationary pressuresdecreased construction and renovation activity through multiple pricing actions acrosscost containment, productivity and lower input costs. Declining costs in energy and raw materials, coupled with lower industry volumes, constrained selling prices, although energy prices in certain geographies and materials prices in some product categories remain volatile and geographies; improved mix from sales of higher-value, differentiated products;may change significantly and productivity gains in manufacturing and logistics. In the near future, the Company might not foresee significant changes in these external pressures,unpredictably, which could have an adverse impact on the Company’s results. Similarly, inflationary pressures around the globe may continue to impact consumer and commercial investments in flooring and other large, deferrable purchases. During 2023, the Company focused on reducing costs through restructuring actions and manufacturing enhancements by taking certain actions to enhance future performance, including facility and product rationalizations and workforce reductions. The Company anticipates these global actions will deliver annual savings of approximately $150 million, with an estimated cost of approximately $215 million.

Since becoming a publicly traded company in April 1992, Mohawk has grown both organically and through strategic and bolt-on acquisitions. Mohawk has completed a number of smaller acquisitions in recent years, many of which expanded the Company’s hard surface flooring distribution in Europe. In 2022, the Company completed five small, bolt-on acquisitions: a wood veneer plant in Romania; a sheet vinyl producer in Poland; a mezzanine flooring manufacturer in Germany; a nonwoven carpet and rug producer in the U.S.; and a commercial flooring trim and accessories business in the U.S. During the first quarter of 2023, the Company completed its acquisitions of Vitromex, a Mexican ceramic tile business, and Elizabeth Revestimentos, a Brazilian ceramic tile business. The Company believes these acquisitions have further solidified the Company’s position in the Mexico and Brazilian ceramic tile markets, respectively.

Net loss attributable to the Company was $439.5 million for 2023 compared to net earnings of $25.2 million for 2022. The change was primarily attributable to lower sales volume; higher impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles; unfavorable net impact of price and product mix; the unfavorable impact of temporary plant shutdowns; the unfavorable net impact of foreign exchange rates; higher restructuring, acquisition and integration-related and other costs; higher legal settlements, reserves and fees; higher interest expense and higher costs associated with investments in new product development and marketing costs. The unfavorable impact of the aforementioned items was partially offset by lower taxes due to supply shortagesdecreased earnings in 2023 compared to the prior year; productivity gains and are presently more than five timeslower inflation. The Company believes that a number of circumstances may influence trends in 2024, including continued impact of inflation on consumer discretionary spending, barriers to home sales due to higher than last year. Giveninterest rates, continued softness in residential remodeling and uncertainty in residential and commercial new construction, but the unexpected acceleration of natural gas expenses, the European flooring industry will require some time to align product prices with higher energy costs, which could result from pricing actions, de-escalation of energy costs or a combination of the two factors. Theextent and duration of such impact cannot be predicted.

For the natural gas price spike is unpredictable, andyear ended December 31, 2023, the Company will explore all options to managegenerated $1,329.2 million of cash from operating activities. As of December 31, 2023, the impactCompany had cash and cash equivalents of energy inflation while continuing to deliver service to customers, but this energy inflation could impact future results$642.6 million, of operations.which $553.1 million was in the United States and $89.5 million was in foreign countries.

Net sales for 2023 were $1,033.2$11,135.1 million or diluted EPS of $14.94 for 2021 compared to net earnings attributable to the Companysales of $515.6$11,737.1 million or diluted EPS of $7.22 for 2020.2022. The change in EPS was primarily attributable to lower legacy sales volume of approximately $743 million; the favorableunfavorable net impact of price and product mix of approximately $143 million and the favorableunfavorable net impact of higher volumes, productivity gains, lower restructuring, acquisition and integration-related costs, the favorable impact due to fewer short-term manufacturing disruptions and the favorable net impact from foreign exchange rates of approximately $72 million, partially offset by higher inflation, higher costs associated with investments in new product development and marketing costs and higher startup costs. The Company’s operations and net earnings for 2020 were affected by broader economic conditions relatedsales volume attributable to the COVID-19 pandemic. In particular, the Company experienced decreasing demand during the first six monthsacquisitions of 2020 and increased costs associated with short-term reductions in manufacturing output. The Company believes that a number of circumstances may impact trends in 2022, including the continuation of the COVID-19 pandemic, impacts to material availability due to disruptions in the global supply chain and inflation, but the extent and duration of such impact cannot be predicted.

Gross profit for 20212023 was $3,268.7$2,709.7 million (29.2% of net sales), an increase of $838.0 million or 34.5%, compared to gross profit of $2,430.7$2,943.4 million (25.4% of net sales) for 2020. As a percentage of net sales, gross profit increased 380 basis points.2022. The increase in gross profit dollarschange was primarily attributable to the favorable net impact of price and product mixlower sales volume of approximately $593 million, productivity gains of approximately $263 million, higher volumes of approximately $257 million, lower restructuring, acquisition and integration-related costs of approximately $107 million, the favorable impact of approximately $90 million due to fewer short-term manufacturing disruptions and the favorable net impact from foreign exchange rates of approximately $55 million, partially offset by higher inflation of approximately $524 million and approximately $4 million of higher startup cost. As previously discussed, the Company’s operations for the period did not reflect normal seasonality in 2020 and were affected by broader economic conditions related to the COVID-19 pandemic. In particular, the Company experienced increased costs associated with short-term reductions in manufacturing output in addition to decreased demand during the first six months of 2020.

Operating incomeloss for 20212023 was $1,335.0$287.8 million (11.9% of net sales) reflecting an increase of $699.0 million, or 109.9%, compared to operating income of $636.0$244.2 million (6.7% of net sales) for 2020.2022. The increase in operating incomechange was primarily attributable to approximately $586 million due to the favorable net impact of price and product mix, higher volumeslower sales volume of approximately $212 million, productivity gains$223 million; higher impairment charges to reduce the carrying amount of goodwill and indefinite-lived intangibles of approximately $209 million,$182 million; the impact of lower restructuring, acquisition and integration-related costs of approximately $138 million, the favorable impact due to fewer short-term manufacturing disruptions of approximately $90 million and the favorable net impact from foreign exchange rates of approximately $34 million, partially offset by higher inflation costs of approximately $559 million, higher costs associated with investments in new product development and marketing costs of approximately $9 million and higher startup costs of approximately $4 million. As previously discussed, the Company’s operations for 2020 were negatively impacted by disruptions from the COVID-19 pandemic resulting in decreased demand during the first six months of 2020 and increased costs associated with short-term reductions in manufacturing output.

Interest expense was $57.3$77.5 million for 2021, reflecting an increase of $4.9 million2023 compared to interest expense of $52.4$51.9 million for 2020. During2022. The change was primarily attributable to a significant increase in interest rates, as well as increased borrowings due to the secondacquisitions made in 2022 and the first quarter of 2020, the Company issued new long-term debt to strengthen its liquidity position during the early months of the COVID-19 pandemic, which shifted the Company from a mix of fixed and floating rate debt, with a lower average interest rate, to more fixed rate debt, which carries a higher average interest rate. The higher average interest rate impacted interest expense for all of 2021 compared to a portion of 2020, with the impact partially offset by the early redemption of the €500.0 million 2.00% Senior Notes in October 2021 and the prepayment of the Term Loan Facility of $500.0 million in May 2020.2023.

Other income was $12.2$10.8 million for 2021, reflecting a favorable change of $11.4 million2023 compared to other incomeexpense of $0.8$8.4 million for 2020.2022. The change was primarily attributable to the resolutionreversal of foreign non-incomean uncertain tax contingencies of $6.2 million, favorable net impact of foreign exchange rates of $1.5 million, an impairment charge of $3.6 million related toposition recorded with the Company’s net investment in a joint venture in Brazil2017 acquisition of Emilceramica S.r.l during 2020 and other miscellaneous items.

For 2021,2023, the Company recorded income tax expense of $256.4$84.9 million on earningsloss before income taxes of $1,290.0$354.5 million for an effective tax rate of 19.9%(23.9)%, as compared to an income tax expense of $68.6$158.1 million on earnings before income taxes of $584.4$183.9 million, resulting in an effective tax rate of 11.7%86.0% for 2020. In 2021, the Company was impacted by significant pre-tax income differences between the 2020 and 2021 periods that was a result of the recovery from the COVID-19 pandemic, a one-time Italian step-up benefit allowing for the realignment of tax asset values, and carryback rate differential2022. The change in the U.S. In 2020, the Company realizedeffective tax rate was primarily driven by a $33.8 million carryback rate differentialshift from earnings before income taxes to a loss before income taxes and an increase in the U.S. and had a $10.3 million tax benefit from a foreign exchange loss on previously taxed earnings distributed during the year.impairment of non-deductible goodwill.

The Company’s primary capital requirements are for working capital, capital expenditures and acquisitions. The Company’s capital needs are met primarily through a combination of internally generated funds, commercial paper, bank credit lines, term and senior notes and credit terms from suppliers. As of December 31, 2021,2023, the Company had a total of $1,184.7$1,882.1 million available under its Senior Credit Facility. The Company also maintains local currency revolving lines of credit and other credit facilities to provide liquidity to its businesses around the world.  None of such local facilities are material in amount.

Net cash provided by operating activities for the year ended 20212023 was $1,309.1$1,329.2 million, compared to net cash provided by operating activities of $1,769.8$669.2 million for the year ended 2020. This decrease of $460.7 million2022. The change was primarily attributable to changesthe change in working capital,inventory and accounts receivable, partially offset by higherlower net earnings.earnings and the change in accounts payable.

Net cash used in investing activities for the year ended 20212023 was $556.8$970.3 million compared to net cash used in investing activities of $954.8$625.3 million for the year ended 2020.2022. The decreasechange was primarily due to the increase in the redemptionsacquisitions of short-term investments of $772.6$305.8 million (net of purchases of short-term investments), partially offset byand the increase ofin capital expenditures of $250.6 million and an increase in acquisitions of $124.0$32.2 million.

Net cash used in financing activities for the year ended 20212023 was $1,232.2$210.7 million compared to net cash used inprovided by financing activities of $188.2$194.3 million for the year ended 2020.2022. The change in cash used in financing iswas primarily attributable to thelower proceeds (net of payments) from commercial paper of $1,044 million, lower proceeds from the Senior NotesTerm Loan Facility of $1,667.6 million (net of repayments of $605.3 million) and higher share repurchases of $711.7$908 million, partially offset by higher proceeds (net of payments) on the reduced net pay down on commercial paperSenior Notes of $1,310.3$1,200 million and lower share repurchases of $308 million.

On September 16, 2021,February 10, 2022, the Company’s Board of Directors approved a new share repurchase program, authorizing the Company to repurchase up to $500 million of its common stock. This was in addition to the previously approved 2020stock (the “2022 Share Repurchase Program. For the twelve months ended December 31, 2021, the Company purchased $900.3 million of its common stock, exhausting the $437.2 million remaining under the 2020 Share Repurchase Program, and utilizing $463.1 million under the 2021 Share Repurchase Program.Program”). As of December 31, 2021,2023, there remained $36.8remains $229.2 million authorized under the 20212022 Share Repurchase Program.

In preparing the consolidated financial statementsConsolidated 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 statementsConsolidated Financial Statements are prepared.

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