Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 24, 2016 | Jun. 30, 2015 | |
Entity [Abstract] | |||
Entity Registrant Name | POOL CORP | ||
Entity Central Index Key | 945,841 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,869,059,459 | ||
Entity Common Stock, Shares Outstanding | 41,339,248 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2016 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales | $ 691,429 | $ 645,779 | $ 2,125,568 | $ 1,948,064 |
Cost of sales | 491,878 | 461,491 | 1,512,258 | 1,390,715 |
Gross profit | 199,551 | 184,288 | 613,310 | 557,349 |
Selling and administrative expenses | 125,385 | 118,776 | 367,194 | 347,106 |
Operating income | 74,166 | 65,512 | 246,116 | 210,243 |
Interest and other non-operating expenses, net | 2,989 | 2,473 | 9,954 | 6,368 |
Income before income taxes and equity earnings | 71,177 | 63,039 | 236,162 | 203,875 |
Provision for income taxes | 26,807 | 23,704 | 90,244 | 78,489 |
Equity earnings in unconsolidated investments, net | 51 | 68 | 113 | 259 |
Net income | 44,421 | 39,403 | 146,031 | 125,645 |
Net loss attributable to redeemable noncontrolling interest | 113 | 44 | 309 | 144 |
Net income attributable to Pool Corporation | $ 44,534 | $ 39,447 | $ 146,340 | $ 125,789 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.06 | $ 0.92 | $ 3.48 | $ 2.91 |
Diluted (in dollars per share) | $ 1.03 | $ 0.90 | $ 3.39 | $ 2.83 |
Weighted average shares outstanding: [Abstract] | ||||
Basic (in shares) | 42,020 | 42,826 | 42,092 | 43,266 |
Diluted (in shares) | 43,119 | 43,939 | 43,201 | 44,407 |
Cash dividends declared per common share | $ 0.31 | $ 0.26 | $ 0.88 | $ 0.74 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 44,421 | $ 39,403 | $ 146,031 | $ 125,645 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 96 | (2,792) | 1,367 | (8,482) |
Change in unrealized gains and losses on interest rate swaps, net of changes in taxes | 625 | (822) | (1,379) | (1,568) |
Total other comprehensive income (loss) | 721 | (3,614) | (12) | (10,050) |
Comprehensive income | 45,142 | 35,789 | 146,019 | 115,595 |
Comprehensive loss attributable to noncontrolling interest | 45 | 310 | 198 | 656 |
Comprehensive income attributable to Pool Corporation | $ 45,187 | $ 36,099 | $ 146,217 | $ 116,251 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other comprehensive income (loss): | ||||
Tax effect of change in unrealized gains and losses on interest rate swaps | $ (400) | $ 525 | $ 882 | $ 1,002 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 30,292 | $ 13,237 | $ 29,504 |
Receivables, net | 81,072 | 54,173 | 70,399 |
Receivables pledged under receivables facility | 152,333 | 102,583 | 149,375 |
Product inventories, net | 455,156 | 474,275 | 412,587 |
Prepaid expenses and other current assets | 12,084 | 11,946 | 11,062 |
Deferred income taxes | 5,288 | 5,530 | 3,256 |
Total current assets | 736,225 | 661,744 | 676,183 |
Property and equipment, net | 84,643 | 69,854 | 66,296 |
Goodwill | 185,486 | 172,761 | 172,150 |
Other intangible assets, net | 13,645 | 11,845 | 11,393 |
Equity interest investments | 1,152 | 1,231 | 1,196 |
Other assets | 16,370 | 16,926 | 13,682 |
Total assets | 1,037,521 | 934,361 | 940,900 |
Current liabilities: | |||
Accounts payable | 199,922 | 246,554 | 170,582 |
Accrued expenses and other current liabilities | 126,654 | 56,591 | 77,298 |
Short-term borrowings and current portion of long-term debt and other long-term liabilities | 1,298 | 1,700 | 1,799 |
Total current liabilities | 327,874 | 304,845 | 249,679 |
Deferred income taxes | 28,359 | 29,808 | 22,755 |
Long-term debt, net | 388,891 | 326,345 | 391,571 |
Other long-term liabilities | 17,945 | 14,955 | 13,216 |
Total liabilities | 763,069 | 675,953 | 677,221 |
Redeemable noncontrolling interest | 2,467 | 2,665 | 2,457 |
Stockholders' equity: | |||
Common stock | 42 | 43 | 43 |
Additional paid-in capital | 399,071 | 374,138 | 361,553 |
Retained deficit | (113,276) | (104,709) | (87,174) |
Accumulated other comprehensive loss | (13,852) | (13,729) | (13,200) |
Total stockholders' equity | 271,985 | 255,743 | 261,222 |
Total liabilities, redeemable noncontrolling interest and stockholders' equity | $ 1,037,521 | $ 934,361 | $ 940,900 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 41,711,888 | 42,711,016 | 42,620,194 |
Common stock, outstanding (in shares) | 41,711,888 | 42,711,016 | 42,620,194 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities | ||
Net income | $ 146,031 | $ 125,645 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 15,020 | 11,920 |
Amortization | 1,288 | 771 |
Share-based compensation | 7,373 | 7,112 |
Excess tax benefits from share-based compensation | (6,582) | (4,916) |
Equity earnings in unconsolidated investments, net | (113) | (259) |
Other | 3,799 | 2,314 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Receivables | (71,936) | (78,662) |
Product inventories | 23,624 | 52,463 |
Prepaid expenses and other assets | (1,094) | 296 |
Accounts payable | (49,479) | (66,035) |
Accrued expenses and other current liabilities | 75,239 | 27,334 |
Net cash provided by operating activities | 143,170 | 77,983 |
Investing activities | ||
Acquisition of businesses, net of cash acquired | (19,314) | (602) |
Purchase of property and equipment, net of sale proceeds | (30,388) | (21,299) |
Payments to fund credit agreement | (3,852) | (6,300) |
Collections from credit agreement | 3,300 | 4,557 |
Other investments, net | 21 | 75 |
Net cash used in investing activities | (50,233) | (23,569) |
Financing activities | ||
Proceeds from revolving line of credit | 873,854 | 721,835 |
Payments on revolving line of credit | (866,801) | (690,677) |
Proceeds from asset-backed financing | 145,000 | 128,400 |
Payments on asset-backed financing | (90,000) | (85,800) |
Proceeds from short-term borrowings, long-term debt and other long-term liabilities | 15,705 | 4,948 |
Payments on short-term borrowings, long-term debt and other long term liabilities | (16,107) | (4,678) |
Excess tax benefits from share-based compensation | 6,582 | 4,916 |
Proceeds from stock issued under share-based compensation plans | 10,978 | 10,906 |
Payments of cash dividends | (37,007) | (32,008) |
Purchases of treasury stock | (117,901) | (90,306) |
Net cash used in financing activities | (75,697) | (32,464) |
Effect of exchange rate changes on cash and cash equivalents | (185) | (7,276) |
Change in cash and cash equivalents | 17,055 | 14,674 |
Cash and cash equivalents at beginning of period | 13,237 | 14,830 |
Cash and cash equivalents at end of period | $ 30,292 | $ 29,504 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Pool Corporation (the Company , which may be referred to as we, us or our ) prepared the unaudited interim Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC) for interim financial information. As permitted under those rules, we have condensed or omitted certain footnotes and other financial information required for complete financial statements. We own a 60% interest in Pool Systems Pty. Ltd. (PSL), an Australian company. This constitutes a controlling interest in the acquired company, which requires us to consolidate PSL’s financial position and results of operations from the date of acquisition. The Consolidated Financial Statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. All significant intercompany accounts and intercompany transactions have been eliminated. A description of our significant accounting policies is included in our 2015 Annual Report on Form 10-K. You should read the interim Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and accompanying notes in our Annual Report. The results for our three and nine month periods ended September 30, 2016 are not necessarily indicative of the expected results for our fiscal year ending December 31, 2016 . Variable Interest Entity In February 2015, we entered into a five-year credit agreement with a swimming pool retailer. Under this agreement and the related revolving note, we are the primary lender of operating funds for this entity. The total lending commitment under the credit agreement is $8.5 million , of which $7.3 million is owed as of September 30, 2016 . Amounts outstanding under the credit agreement are recorded within Other assets on our Consolidated Balance Sheets and are collateralized by essentially all of the assets of the business. We have a variable interest in this entity; however, we have no decision-making authority over its activities through voting or other rights. Additionally, we have no obligation to absorb any of its losses, nor do we have the right to receive any residual returns, should either occur. We are not considered the primary beneficiary of this variable interest entity, and therefore we are not required to consolidate this entity’s financial statements. Retained Deficit We account for the retirement of treasury shares as a reduction of retained earnings (deficit). As of September 30, 2016 , the Retained deficit on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, treasury share retirements since the inception of our share repurchase programs of $1,032.8 million and cumulative dividends of $355.0 million . New Accounting Pronouncements Upon adoption of Accounting Standards Update (ASU) 2015-03, Interest - Imputation of Interest (Subtopic 8365-30) - Simplifying the Presentation of Debt Issuance Costs , we now include financing costs, net of accumulated amortization as a component of long-term debt. For comparability across all periods presented on our Consolidated Balance Sheets, we reclassified certain amounts from Other assets, net in 2015 to Long-term debt, net to conform to our 2016 presentation. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 2 – Earnings Per Share We calculate basic earnings per share (EPS) by dividing Net income attributable to Pool Corporation by the weighted average number of common shares outstanding. We include outstanding unvested restricted stock awards of our common stock in the basic weighted average share calculation. Diluted EPS includes the dilutive effects of other share-based awards. Stock options with exercise prices that are higher than the average market prices of our common stock for the periods presented are excluded from the diluted EPS calculation because the effect is anti-dilutive. The table below presents the computation of EPS, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except EPS): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income $ 44,421 $ 39,403 $ 146,031 $ 125,645 Net loss attributable to noncontrolling interest 113 44 309 144 Net income attributable to Pool Corporation $ 44,534 $ 39,447 $ 146,340 $ 125,789 Weighted average shares outstanding: Basic 42,020 42,826 42,092 43,266 Effect of dilutive securities: Stock options and employee stock purchase plan 1,099 1,113 1,109 1,141 Diluted 43,119 43,939 43,201 44,407 Earnings per share: Basic $ 1.06 $ 0.92 $ 3.48 $ 2.91 Diluted $ 1.03 $ 0.90 $ 3.39 $ 2.83 Anti-dilutive stock options excluded from diluted earnings per share computations 1 — 1 176 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3 – Acquisitions In April 2016, we acquired the distribution assets of Metro Irrigation Supply Company Ltd., an irrigation and landscape supply company with eight locations in Texas. In November 2015, we acquired the distribution assets of The Melton Corporation, a masonry materials and supplies distributor with one sales center location in California and one sales center location in Arizona. In October 2015, we acquired the distribution assets of Seaboard Industries, Inc., a swimming pool supply wholesale distributor with one sales center location in Connecticut and two sales center locations in New Jersey. In April 2015, we acquired certain distribution assets from Poolwerx Development LLC and opened a satellite sales center location serving South Mesa, Arizona. We have completed our acquisition accounting for these acquisitions, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material. These acquisitions did not have a material impact on our financial position or results of operations, either individually or in the aggregate. In December 2014, we acquired certain distribution assets of St. Louis Hardscape Material & Supply, LLC, a hardscape and landscaping materials supplier with one location in St. Louis, Missouri. Because this acquisition was completed on December 31, 2014, we have included the results of this acquired company beginning January 1, 2015. We completed our acquisition accounting for this acquisition. This acquisition did not have a material impact on our financial position or results of operations. |
Fair Value Measurements and Int
Fair Value Measurements and Interest Rate Swaps | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Interest Rate Swaps | Note 4 – Fair Value Measurements and Interest Rate Swaps Our assets and liabilities that are measured at fair value on a recurring basis include the unrealized gains or losses on our interest rate swap contracts and contingent consideration related to recent acquisitions. The three levels of the fair value hierarchy under the accounting guidance are described below: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include: • quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • inputs other than quoted prices that are observable for the asset or liability; or • inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands): Fair Value at September 30, 2016 2015 Level 2 Unrealized gains on interest rate swaps $ 32 $ — Unrealized losses on interest rate swaps $ 6,174 $ 4,777 Level 3 Contingent consideration liabilities $ 1,626 $ — Interest Rate Swaps We utilize interest rate swap contracts and forward-starting interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our unsecured syndicated senior credit facility (the Credit Facility). For determining the fair value of our interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs) that we believe market participants would use in pricing similar assets or liabilities, including assumptions about counterparty risk. Our fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves. We include unrealized gains in Prepaid expenses and other current assets and unrealized losses in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. We recognize any differences between the variable interest rate payments and the fixed interest rate settlements from our swap counterparties as an adjustment to interest expense over the life of the swaps. We have designated these swaps as cash flow hedges and we record the changes in the estimated fair value of the swaps to Accumulated other comprehensive loss on our Consolidated Balance Sheets. To the extent our interest rate swaps are determined to be ineffective, we recognize the changes in the estimated fair value of our swaps in earnings. As of September 30, 2016, we had five interest rate swap contracts in effect that convert the variable interest rate to a fixed interest rate on borrowings under the Credit Facility. Each of these swap contracts terminates on October 19, 2016. The following table provides additional details related to each of these swap contracts: Derivative Effective Date Notional Amount (in millions) Fixed Interest Rate Interest rate swap 1 November 21, 2011 $25.0 1.185% Interest rate swap 2 November 21, 2011 $25.0 1.185% Interest rate swap 3 December 21, 2011 $50.0 1.100% Interest rate swap 4 January 17, 2012 $25.0 1.050% Interest rate swap 5 January 19, 2012 $25.0 0.990% For the five interest rate swap contracts in effect at September 30, 2016, a portion of the change in the estimated fair value between periods relates to future interest expense. Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive loss to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in the first nine months of 2016 nor 2015 . We also have three forward-starting interest rate swap contracts in place that were amended in October 2015. These swaps were amended to bring the fixed rates per our forward-starting contracts in line with current market rates and extend the hedged period for future interest payments on our Credit Facility following the October 19, 2016 termination date of the swap contracts described above. Concurrent with this amendment of these contracts, we de-designated the original hedge arrangements and designated the amended forward-starting interest rate swap contracts as cash flow hedges, which become effective on October 19, 2016 and terminate on November 20, 2019. In the fourth quarter of 2015, we recognized a benefit as a result of our determination of ineffectiveness for that period. In the first quarter of 2016, these forward-starting interest rate swaps were deemed effective, and the benefit previously recognized was reversed, resulting in $0.6 million in expense. This amount was recorded in Interest and other non-operating expenses, net on our Consolidated Statements of Income. There was no benefit or expense recognized in the second and third quarters of 2016 as these swaps continued to be effective for the periods. The following table provides additional details related to each of these amended swap contracts: Derivative Amendment Date Notional Amount (in millions) Fixed Interest Rate Forward-starting interest rate swap 1 October 1, 2015 $75.0 2.273% Forward-starting interest rate swap 2 October 1, 2015 $25.0 2.111% Forward-starting interest rate swap 3 October 1, 2015 $50.0 2.111% We are required to amortize the amounts related to the changes in the fair values of these swaps as of the de-designation date of the original forward-starting swap contracts. These unrealized losses, which are recorded in Accumulated other comprehensive loss and total $3.7 million , will be amortized over the effective period of the original forward-starting interest rate swap contracts from October 2016 to September 2018. In July 2016 we entered into an additional forward-starting interest rate swap contract to extend the hedged period for future interest payments on our Credit Facility to its maturity date. This swap contract will convert the variable interest rate to a fixed interest rate on borrowings under the Credit Facility. This contract becomes effective on November 20, 2019 and terminates on November 20, 2020. The following table provides additional details related to this new swap contract: Derivative Inception Date Notional Fixed Forward-starting interest rate swap 4 July 6, 2016 $150.0 1.1425% Failure of our swap counterparties would result in the loss of any potential benefit to us under our swap agreements. In this case, we would still be obligated to pay the variable interest payments underlying our debt agreements. Additionally, failure of our swap counterparties would not eliminate our obligation to continue to make payments under our existing swap agreements if we continue to be in a net pay position. Our interest rate swap and forward-starting interest rate swap contracts are subject to master netting arrangements. According to our accounting policy, we do not offset the fair values of assets with the fair values of liabilities related to these contracts. Contingent Consideration Liabilities As of September 30, 2016 , our Consolidated Balance Sheets reflected $0.2 million in Accrued expenses and other current liabilities and $0.7 million in Other long-term liabilities for contingent consideration related to future payouts for our acquisition of The Melton Corporation. In determining the estimate for contingent consideration, which is based on a percentage of gross profit for certain products, we applied a linear model using our best estimate of gross profit projections for fiscal years 2016 to 2020 (Level 3 inputs as defined in the accounting guidance). No adjustments to our original estimates of future payouts have been required since the acquisition date. We have determined that the contingent consideration liability was in a range of acceptable estimates as of September 30, 2016 . Adjustments to the fair value of contingent consideration are recognized in earnings in the period in which we determine that the fair value changed. As of September 30, 2016 , our Consolidated Balance Sheets also reflected close to $0.1 million in Accrued expenses and other current liabilities and $0.7 million in Other long-term liabilities for contingent consideration related to future payouts for our acquisition of Metro Irrigation Supply Company Ltd. This contingent consideration is based on a multiple of gross profit for fiscal years 2016 to 2020, with a maximum total payout of $1.0 million over this time period. We determined our estimate based on a methodology similar to that used for our contingent consideration liability described above. Other The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments (Level 1 inputs). For the note receivable with our variable interest entity, our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to collectibility (Level 3 inputs). In the third quarter of 2016 , we recorded an additional $0.5 million fair value adjustment to the note receivable based on the results of our discounted cash flow model. The carrying value of this note receivable, including adjustments, approximates fair value. The carrying value of long-term debt approximates fair value. Our determination of the estimated fair value reflects a discounted cash flow model using our estimates, including assumptions related to borrowing rates (Level 3 inputs). |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 5 – Debt The table below presents the components of our debt as of September 30, 2016 and September 30, 2015 (in thousands): September 30, 2016 2015 Variable rate debt Short-term borrowings $ — $ 965 Current portion of long-term debt: Australian Seasonal Credit Facility 1,298 834 Short-term borrowings and current portion of long-term debt and other long-term liabilities 1,298 1,799 Long-term portion: Revolving Credit Facility 280,068 282,867 Receivables Securitization Facility 110,000 110,200 Less: financing costs, net 1,177 1,496 Long-term debt, net 388,891 391,571 Total debt $ 390,189 $ 393,370 Certain of our foreign subsidiaries entered into a cash pooling arrangement with a financial institution for cash management purposes. This arrangement allows the participating subsidiaries to withdraw cash from the financial institution to the extent that aggregate cash deposits held by these subsidiaries are available at the financial institution. To the extent the participating subsidiaries are in an overdraft position, such overdrafts are recorded as short-term borrowings under a committed cash overdraft facility. These borrowings bear interest at a variable rate based on 3-month Euro Interbank Offered Rate (EURIBOR), plus a fixed margin. The facility has a seasonal maximum borrowing capacity of €10.0 million . We are required to pay a commitment fee, which is based on the borrowing capacity schedule. We pay this fee annually, in advance. PSL utilizes the Australian Seasonal Credit Facility, which provides a borrowing capacity of AU$ 3.0 million , to supplement working capital needs during its peak season from July to March. The Receivables Securitization Facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly owned subsidiary (the Securitization Subsidiary). The Securitization Subsidiary transfers variable undivided percentage interests in the receivables and related rights to certain third party financial institutions in exchange for cash proceeds, limited to the applicable funding capacities. Upon payment of the receivables by customers, rather than remitting to the financial institutions the amounts collected, we retain such collections as proceeds for the sale of new receivables until payments become due to the third party financial institutions. We account for the sale of the receivable interests as a secured borrowing on our Consolidated Balance Sheets. The receivables subject to the agreement collateralize the cash proceeds received from the third party financial institutions. We classify the entire outstanding balance as Long-term debt, net on our Consolidated Balance Sheets as we intend to refinance the obligations on a long‑term basis. We present the receivables that collateralize the cash proceeds separately as Receivables pledged under receivables facility on our Consolidated Balance Sheets. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2016 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Noncontrolling Interest Disclosure [Text Block] | Note 6 – Redeemable Noncontrolling Interest As discussed in Note 1 - Summary of Significant Accounting Policies, in July 2014, we purchased a controlling interest in PSL. Included in the transaction documents is a put/call option deed that grants us an option to purchase the shares held by the noncontrolling interest, and grants the holder of the noncontrolling interest an option to require us to purchase its shares in one or two transactions. The put/call option deed in this transaction is considered an equity contract and therefore a financial instrument under the accounting guidance. In applying the guidance for this transaction, we have determined that the financial instrument is embedded in the noncontrolling interest. As a public company, we are required to classify the noncontrolling interest and the embedded financial instrument as redeemable noncontrolling interest in a separate section of our Consolidated Balance Sheets, between liabilities and equity. At the end of each period, we record the portion of comprehensive income or loss attributable to the noncontrolling interest to Redeemable noncontrolling interest to determine the carrying amount. We are required to compare the carrying amount to our estimated redemption value at the end of each reporting period. The redemption value is based on a multiple of a PSL earnings measure for a specified time period. To the extent that the estimated redemption value exceeds the carrying amount, we would record an adjustment to Redeemable noncontrolling interest. We did not record such an adjustment at September 30, 2016 . The table below presents the changes in Redeemable noncontrolling interest (in thousands): September 30, 2016 Redeemable noncontrolling interest, beginning of period $ 2,665 Net loss attributable to noncontrolling interest (309 ) Other comprehensive income attributable to noncontrolling interest 111 Redeemable noncontrolling interest, end of period $ 2,467 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of earnings per share and reconciliation of basic and diluted weighted average common shares outstanding | The table below presents the computation of EPS, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except EPS): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net income $ 44,421 $ 39,403 $ 146,031 $ 125,645 Net loss attributable to noncontrolling interest 113 44 309 144 Net income attributable to Pool Corporation $ 44,534 $ 39,447 $ 146,340 $ 125,789 Weighted average shares outstanding: Basic 42,020 42,826 42,092 43,266 Effect of dilutive securities: Stock options and employee stock purchase plan 1,099 1,113 1,109 1,141 Diluted 43,119 43,939 43,201 44,407 Earnings per share: Basic $ 1.06 $ 0.92 $ 3.48 $ 2.91 Diluted $ 1.03 $ 0.90 $ 3.39 $ 2.83 Anti-dilutive stock options excluded from diluted earnings per share computations 1 — 1 176 |
Fair Value Measurements and I15
Fair Value Measurements and Interest Rate Swaps (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative [Line Items] | |
Estimated fair value of swap contracts | The table below presents the estimated fair values of our interest rate swap contracts, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands): Fair Value at September 30, 2016 2015 Level 2 Unrealized gains on interest rate swaps $ 32 $ — Unrealized losses on interest rate swaps $ 6,174 $ 4,777 Level 3 Contingent consideration liabilities $ 1,626 $ — |
Interest Rate Swap Agreements[Member] | |
Derivative [Line Items] | |
Schedule of Interest Rate Derivatives | The following table provides additional details related to each of these swap contracts: Derivative Effective Date Notional Amount (in millions) Fixed Interest Rate Interest rate swap 1 November 21, 2011 $25.0 1.185% Interest rate swap 2 November 21, 2011 $25.0 1.185% Interest rate swap 3 December 21, 2011 $50.0 1.100% Interest rate swap 4 January 17, 2012 $25.0 1.050% Interest rate swap 5 January 19, 2012 $25.0 0.990% |
Forward-Starting Interest Rate Swap Agreements[Member] | |
Derivative [Line Items] | |
Schedule of Interest Rate Derivatives | The following table provides additional details related to each of these amended swap contracts: Derivative Amendment Date Notional Amount (in millions) Fixed Interest Rate Forward-starting interest rate swap 1 October 1, 2015 $75.0 2.273% Forward-starting interest rate swap 2 October 1, 2015 $25.0 2.111% Forward-starting interest rate swap 3 October 1, 2015 $50.0 2.111% The following table provides additional details related to this new swap contract: Derivative Inception Date Notional Fixed Forward-starting interest rate swap 4 July 6, 2016 $150.0 1.1425% |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The table below presents the components of our debt as of September 30, 2016 and September 30, 2015 (in thousands): September 30, 2016 2015 Variable rate debt Short-term borrowings $ — $ 965 Current portion of long-term debt: Australian Seasonal Credit Facility 1,298 834 Short-term borrowings and current portion of long-term debt and other long-term liabilities 1,298 1,799 Long-term portion: Revolving Credit Facility 280,068 282,867 Receivables Securitization Facility 110,000 110,200 Less: financing costs, net 1,177 1,496 Long-term debt, net 388,891 391,571 Total debt $ 390,189 $ 393,370 |
Redeemable Noncontrolling Int17
Redeemable Noncontrolling Interest (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Redeemable Noncontrolling Interest [Table Text Block] | The table below presents the changes in Redeemable noncontrolling interest (in thousands): September 30, 2016 Redeemable noncontrolling interest, beginning of period $ 2,665 Net loss attributable to noncontrolling interest (309 ) Other comprehensive income attributable to noncontrolling interest 111 Redeemable noncontrolling interest, end of period $ 2,467 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies Controlling Interest Percentage (Details) | Sep. 30, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Controlling interest percentage by parent | 60.00% |
Summary of Significant Accoun19
Summary of Significant Accounting Policies Variable Interest Entity (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Variable Interest Entity [Line Items] | |
Variable Interest Entity, Nonconsolidated, Credit Agreement Capacity | $ 8.5 |
Variable Interest Entity, Nonconsolidated, Credit Agreement Amount Borrowed | $ 7.3 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies Retained Deficit (Details) $ in Millions | Sep. 30, 2016USD ($) |
Retained Earnings (Accumulated Deficit) [Abstract] | |
Cumulative share repurchases | $ 1,032.8 |
Cumulative dividends declared | $ 355 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 44,421 | $ 39,403 | $ 146,031 | $ 125,645 |
Net loss attributable to redeemable noncontrolling interest | 113 | 44 | 309 | 144 |
Net income attributable to Pool Corporation | $ 44,534 | $ 39,447 | $ 146,340 | $ 125,789 |
Weighted average shares outstanding: [Abstract] | ||||
Basic (in shares) | 42,020 | 42,826 | 42,092 | 43,266 |
Effect of dilutive securities: [Abstract] | ||||
Stock options and employee stock purchase plan (in shares) | 1,099 | 1,113 | 1,109 | 1,141 |
Diluted (in shares) | 43,119 | 43,939 | 43,201 | 44,407 |
Basic (in dollars per share) | $ 1.06 | $ 0.92 | $ 3.48 | $ 2.91 |
Diluted (in dollars per share) | $ 1.03 | $ 0.90 | $ 3.39 | $ 2.83 |
Anti-dilutive stock options excluded from diluted earnings per share computations (in shares) | 1 | 0 | 1 | 176 |
Acquisitions (Details)
Acquisitions (Details) | Sep. 30, 2016 |
Metro Irrigation Supply Company Ltd [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 8 |
Seaboard Industries Inc [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 3 |
The Melton Corporation [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 2 |
Poolwerx Development LLC [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
St. Louis Hardscape Material & Supply, LLC [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
Interest Rate Swaps (Details)
Interest Rate Swaps (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Interest Rate Swap 1 [Member] | |
Derivative [Line Items] | |
Interest rate swap agreement, effective date | Nov. 21, 2011 |
Interest rate swap agreement, notional amount | $ 25 |
Interest rate swap agreement, fixed interest rate | 1.185% |
Interest rate swap agreement, termination date | Oct. 19, 2016 |
Interest Rate Swap 2 [Member] | |
Derivative [Line Items] | |
Interest rate swap agreement, effective date | Nov. 21, 2011 |
Interest rate swap agreement, notional amount | $ 25 |
Interest rate swap agreement, fixed interest rate | 1.185% |
Interest rate swap agreement, termination date | Oct. 19, 2016 |
Interest Rate Swap 3 [Member] | |
Derivative [Line Items] | |
Interest rate swap agreement, effective date | Dec. 21, 2011 |
Interest rate swap agreement, notional amount | $ 50 |
Interest rate swap agreement, fixed interest rate | 1.10% |
Interest rate swap agreement, termination date | Oct. 19, 2016 |
Interest Rate Swap 4 [Member] | |
Derivative [Line Items] | |
Interest rate swap agreement, effective date | Jan. 17, 2012 |
Interest rate swap agreement, notional amount | $ 25 |
Interest rate swap agreement, fixed interest rate | 1.05% |
Interest rate swap agreement, termination date | Oct. 19, 2016 |
Interest Rate Swap 5 [Member] | |
Derivative [Line Items] | |
Interest rate swap agreement, effective date | Jan. 19, 2012 |
Interest rate swap agreement, notional amount | $ 25 |
Interest rate swap agreement, fixed interest rate | 0.99% |
Interest rate swap agreement, termination date | Oct. 19, 2016 |
Interest Rate Swaps (Details 2)
Interest Rate Swaps (Details 2) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Derivative [Line Items] | |
Loss on Cash Flow Hedge Ineffectiveness | $ 0.6 |
Cumulative Fair Value of De-designated Cash Flow Hedges, Gross | $ 3.7 |
Forward-starting Interest Rate Swap 1 [Member] | |
Derivative [Line Items] | |
Forward-starting interest rate swap agreement, inception date | Oct. 1, 2015 |
Forward-starting interest rate swap agreement, effective date | Oct. 19, 2016 |
Forward-starting interest rate swap agreement, notional amount | $ 75 |
Forward-starting interest rate swap agreement, fixed interest rate | 2.273% |
Forward-starting interest rate swap agreement, termination date | Nov. 20, 2019 |
Forward-starting Interest Rate Swap 2 [Member] | |
Derivative [Line Items] | |
Forward-starting interest rate swap agreement, inception date | Oct. 1, 2015 |
Forward-starting interest rate swap agreement, effective date | Oct. 19, 2016 |
Forward-starting interest rate swap agreement, notional amount | $ 25 |
Forward-starting interest rate swap agreement, fixed interest rate | 2.111% |
Forward-starting interest rate swap agreement, termination date | Nov. 20, 2019 |
Forward-starting Interest Rate Swap 3 [Member] | |
Derivative [Line Items] | |
Forward-starting interest rate swap agreement, inception date | Oct. 1, 2015 |
Forward-starting interest rate swap agreement, effective date | Oct. 19, 2016 |
Forward-starting interest rate swap agreement, notional amount | $ 50 |
Forward-starting interest rate swap agreement, fixed interest rate | 2.111% |
Forward-starting interest rate swap agreement, termination date | Nov. 20, 2019 |
Forward-starting Interest Rate Swap 4 [Member] | |
Derivative [Line Items] | |
Forward-starting interest rate swap agreement, inception date | Jul. 6, 2016 |
Forward-starting interest rate swap agreement, effective date | Nov. 20, 2019 |
Forward-starting interest rate swap agreement, notional amount | $ 150 |
Forward-starting interest rate swap agreement, fixed interest rate | 1.1425% |
Forward-starting interest rate swap agreement, termination date | Nov. 20, 2020 |
Fair Value Measurements (Detail
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 30, 2015 |
Derivatives, Fair Value [Line Items] | ||
Unrealized gains on interest rate swaps | $ 32 | $ 0 |
Unrealized losses on interest rate swaps | 6,174 | 4,777 |
Contingent consideration liability | $ 1,626 | $ 0 |
Fair Value Measurements (Deta26
Fair Value Measurements (Details 4) $ in Millions | Sep. 30, 2016USD ($) |
The Melton Corporation [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Contingent consideration liability, current | $ 0.2 |
Contingent consideration liability, noncurrent | 0.7 |
Metro Irrigation Supply Company Ltd [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Contingent consideration liability, current | 0.1 |
Contingent consideration liability, noncurrent | $ 0.7 |
Fair Value Measurements (Deta27
Fair Value Measurements (Details 5) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Note receivable fair value adjustment | $ (0.5) |
Debt (Details)
Debt (Details) $ in Thousands, € in Millions, AUD in Millions | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016AUD | Sep. 30, 2015USD ($) |
Debt Instrument [Line Items] | ||||
Borrowing Capacity, Bank Overdraft Facility (in Euros) | € | € 10 | |||
Short-term borrowings | $ 0 | $ 965 | ||
Long-term debt [Abstract] | ||||
Financing costs, net (noncurrent) | 1,177 | 1,496 | ||
Total debt | 390,189 | 393,370 | ||
Receivables Securitization Facility [Member] | ||||
Long-term debt [Abstract] | ||||
Receivables Securitization Facility | 110,000 | 110,200 | ||
Australian Seasonal Credit Facility [Member] | ||||
Long-term debt [Abstract] | ||||
Australian Seasonal Credit Facility | 1,298 | 834 | ||
Australian Seasonal Credit Facility Borrowing Capacity | AUD | AUD 3 | |||
Unsecured Syndicated Senior Credit Facility [Member] | ||||
Long-term debt [Abstract] | ||||
Revolving Credit Facility | $ 280,068 | $ 282,867 |
Redeemable Noncontrolling Int29
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Redeemable Noncontrolling Interest [Roll Forward] | ||||
Redeemable noncontrolling interest, beginning of period | $ 2,665 | |||
Net loss attributable to redeemable noncontrolling interest | $ (113) | $ (44) | (309) | $ (144) |
Other comprehensive income attributable to redeemable noncontrolling interest | 111 | |||
Redeemable noncontrolling interest, end of period | $ 2,467 | $ 2,457 | $ 2,467 | $ 2,457 |