Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Central Index Key | 0000945841 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 0-26640 | ||
Entity Registrant Name | POOL CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-3943363 | ||
Entity Address, Address Line One | 109 Northpark Boulevard, | ||
Entity Address, City or Town | Covington, | ||
Entity Address, State or Province | LA | ||
Entity Address, Postal Zip Code | 70433-5001 | ||
City Area Code | (985) | ||
Local Phone Number | 892-5521 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | POOL | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,370,295,585 | ||
Entity Common Stock, Shares Outstanding | 40,191,526 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement to be mailed to stockholders on or about March 26, 2020 for the Annual Meeting to be held on April 29, 2020, are incorporated by reference in Part III of this Form 10-K. | ||
Document Transition Report | false | ||
Document Annual Report | true |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | $ 3,199,517 | $ 2,998,097 | $ 2,788,188 |
Cost of sales | 2,274,592 | 2,127,924 | 1,982,899 |
Gross profit | 924,925 | 870,173 | 805,289 |
Selling and administrative expenses | 583,679 | 556,284 | 520,918 |
Operating income | 341,246 | 313,889 | 284,371 |
Interest and other non-operating expenses, net | 23,772 | 20,896 | 15,189 |
Income before income taxes and equity earnings | 317,474 | 292,993 | 269,182 |
Provision for income taxes | 56,161 | 58,774 | 77,982 |
Equity earnings in unconsolidated investments, net | 262 | 242 | 139 |
Net income | 261,575 | 234,461 | 191,339 |
Net loss attributable to noncontrolling interest | 0 | 0 | 294 |
Net income attributable to Pool Corporation | $ 261,575 | $ 234,461 | $ 191,633 |
Earnings per share: | |||
Basic (in dollars per share) | $ 6.57 | $ 5.82 | $ 4.69 |
Diluted (in dollars per share) | $ 6.40 | $ 5.62 | $ 4.51 |
Weighted average shares outstanding: | |||
Basic (in shares) | 39,833 | 40,311 | 40,838 |
Diluted (in shares) | 40,865 | 41,693 | 42,449 |
Cash dividends declared per common share (in dollars per share) | $ 2.10 | $ 1.72 | $ 1.42 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income | $ 261,575 | $ 234,461 | $ 191,339 |
Other comprehensive income (loss), net of tax [Abstract] | |||
Foreign currency translation adjustments | 2,295 | (4,945) | 5,545 |
Change in unrealized gains and losses on interest rate swaps, net of tax | (1,657) | 1,276 | 1,205 |
Total other comprehensive income (loss) | 638 | (3,669) | 6,750 |
Comprehensive income | 262,213 | 230,792 | 198,089 |
Comprehensive loss attributable to noncontrolling interest | 0 | 0 | 74 |
Comprehensive income attributable to Pool Corporation | 262,213 | 230,792 | 198,163 |
Tax effect of change in unrealized gains and losses on interest rate swaps | $ 552 | $ (425) | $ (769) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 28,583 | $ 16,358 |
Receivables, net | 76,648 | 69,493 |
Receivables pledged under receivables facility | 149,891 | 138,308 |
Inventory, net | 702,274 | 672,579 |
Prepaid expenses and other current assets | 16,172 | 18,506 |
Total current assets | 973,568 | 915,244 |
Property and equipment, net | 112,246 | 106,964 |
Goodwill | 188,596 | 188,472 |
Other intangible assets, net | 11,038 | 12,004 |
Equity interest investments | 1,227 | 1,213 |
Operating lease assets | 176,689 | |
Other assets | 19,902 | 16,974 |
Total assets | 1,483,266 | 1,240,871 |
Current liabilities: | ||
Accounts payable | 261,963 | 237,835 |
Accrued expenses and other current liabilities | 60,813 | 58,607 |
Short-term borrowings and current portion of long-term debt | 11,745 | 9,168 |
Operating Lease, Liability, Current | 56,325 | |
Total current liabilities | 390,846 | 305,610 |
Deferred income taxes | 32,598 | 29,399 |
Long-term debt, net | 499,662 | 657,593 |
Other long-term liabilities | 27,970 | 24,679 |
Operating Lease, Liability, Noncurrent | 122,010 | |
Total liabilities | 1,073,086 | 1,017,281 |
Redeemable noncontrolling interest | 0 | 0 |
Stockholders' equity: | ||
Common stock | $ 40 | $ 40 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, outstanding (in shares) | 40,074,160 | 39,506,067 |
Additional paid-in capital | $ 485,239 | $ 453,193 |
Retained deficit | (64,740) | (218,646) |
Accumulated other comprehensive loss | (10,359) | (10,997) |
Total stockholders' equity | 410,180 | 223,590 |
Total liabilities and stockholders' equity | $ 1,483,266 | $ 1,240,871 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net income | $ 261,575 | $ 234,461 | $ 191,339 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 27,885 | 26,122 | 24,157 |
Amortization | 1,389 | 1,793 | 1,568 |
Share-based compensation | 13,472 | 12,874 | 12,482 |
Provision (benefit) for doubtful accounts receivable, net of write-offs | (710) | 2,286 | (154) |
Provision for inventory obsolescence, net of write-offs | 1,310 | 1,462 | (267) |
Provision for deferred income taxes | 3,723 | 4,661 | (4,636) |
Gains on sales of property and equipment | (85) | (289) | (285) |
Equity earnings in unconsolidated investments, net | (262) | (242) | (139) |
Net losses (gains) on foreign currency transactions | 1,347 | 560 | (171) |
Impairment of other non-operating asset | 0 | 0 | 1,200 |
Other | 3,313 | 808 | 166 |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Receivables | (15,691) | (14,371) | (21,903) |
Product inventories | (14,165) | (142,170) | (35,783) |
Prepaid expenses and other assets | (4,218) | 1,018 | (4,096) |
Accounts payable | 16,860 | (6,567) | 5,077 |
Accrued expenses and other current liabilities | 3,033 | (3,750) | 6,756 |
Net cash provided by operating activities | 298,776 | 118,656 | 175,311 |
Investing activities | |||
Acquisition of businesses, net of cash acquired | (8,901) | (2,578) | (12,834) |
Purchases of property and equipment, net of sale proceeds | (33,362) | (31,580) | (39,390) |
Other investments, net | 0 | 0 | 4 |
Net cash used in investing activities | (42,263) | (34,158) | (52,220) |
Financing activities | |||
Proceeds from revolving line of credit | 1,066,529 | 1,138,195 | 1,067,868 |
Payments on revolving line of credit | (1,415,988) | (998,503) | (1,011,977) |
Proceeds from asset-backed financing | 189,000 | 198,400 | 161,600 |
Payments on asset-backed financing | (182,500) | (189,900) | (145,100) |
Proceeds from Term Facility | 185,000 | ||
Proceeds from short-term borrowings and current portion of long-term debt | 30,863 | 17,127 | 27,333 |
Payments on short-term borrowings and current portion of long-term debt | (28,286) | (18,793) | (17,603) |
Payments on deferred and contingent acquisition consideration | (312) | (661) | (324) |
Purchase of redeemable non-controlling interest | 0 | 0 | (2,573) |
Payments of deferred financing costs | (406) | (106) | (1,104) |
Proceeds from stock issued under share-based compensation plans | 18,574 | 13,569 | 11,466 |
Payments of cash dividends | (83,772) | (69,430) | (58,029) |
Purchases of treasury stock | (23,188) | (187,469) | (146,006) |
Net cash used in financing activities | (244,486) | (97,571) | (114,449) |
Effect of exchange rate changes on cash and cash equivalents | 198 | (509) | (658) |
Change in cash and cash equivalents | 12,225 | (13,582) | 7,984 |
Cash and cash equivalents at beginning of year | 16,358 | 29,940 | 21,956 |
Cash and cash equivalents at end of year | $ 28,583 | $ 16,358 | $ 29,940 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance (in shares) at Dec. 31, 2016 | 41,090,000 | ||||
Balance at Dec. 31, 2016 | $ 205,210 | $ 41 | $ 403,162 | $ (183,915) | $ (14,078) |
Net income attributable to Pool Corporation | 191,633 | 0 | 0 | 191,633 | 0 |
Foreign currency translation | 5,545 | 0 | 0 | 0 | 5,545 |
Interest rate swaps, net of tax | 1,205 | $ 0 | 0 | 0 | 1,205 |
Interest rate swap, tax | (769) | ||||
Repurchases of common stock, net of retirements (in shares) | (1,353,000) | ||||
Repurchases of common stock, net of retirements | (146,006) | $ (1) | 0 | (146,005) | 0 |
Share-based compensation | 12,482 | $ 0 | 12,482 | 0 | 0 |
Issuance of shares under incentive stock plans (in shares) | 475,000 | ||||
Issuance of shares under incentive stock plans | 11,466 | $ 0 | 11,466 | 0 | 0 |
Proceeds from stock issued under share-based compensation plans | 11,466 | ||||
Declaration of cash dividends | (58,029) | 0 | 0 | (58,029) | 0 |
Redemption value adjustment of redeemable non-controlling interest | (360) | $ 0 | (360) | 0 | 0 |
Balance (in shares) at Dec. 31, 2017 | 40,212,000 | ||||
Balance at Dec. 31, 2017 | 223,146 | $ 40 | 426,750 | (196,316) | (7,328) |
Net income attributable to Pool Corporation | 234,461 | 0 | 0 | 0 | |
Foreign currency translation | (4,945) | 0 | 0 | 0 | (4,945) |
Interest rate swaps, net of tax | 1,276 | $ 0 | 0 | 0 | 1,276 |
Interest rate swap, tax | (425) | ||||
Repurchases of common stock, net of retirements (in shares) | (1,291,000) | ||||
Repurchases of common stock, net of retirements | (187,469) | $ 0 | 0 | (187,469) | 0 |
Share-based compensation | 12,874 | $ 0 | 12,874 | 0 | 0 |
Issuance of shares under incentive stock plans (in shares) | 585,000 | ||||
Issuance of shares under incentive stock plans | 13,569 | $ 0 | 0 | 0 | |
Proceeds from stock issued under share-based compensation plans | 13,569 | 13,569 | |||
Declaration of cash dividends | $ (69,322) | $ 0 | 0 | (69,322) | 0 |
Balance (in shares) at Dec. 31, 2018 | 39,506,067 | 39,506,000 | |||
Balance at Dec. 31, 2018 | $ 223,590 | $ 40 | 453,193 | (218,646) | (10,997) |
Net income attributable to Pool Corporation | 261,575 | 0 | 0 | 261,575 | 0 |
Foreign currency translation | 2,295 | 0 | 0 | 0 | 2,295 |
Interest rate swaps, net of tax | (1,657) | $ 0 | 0 | 0 | (1,657) |
Interest rate swap, tax | 552 | ||||
Repurchases of common stock, net of retirements (in shares) | (155,000) | ||||
Repurchases of common stock, net of retirements | (23,188) | $ 0 | 0 | (23,188) | 0 |
Share-based compensation | 13,472 | $ 0 | 13,472 | 0 | 0 |
Issuance of shares under incentive stock plans (in shares) | 723,000 | ||||
Issuance of shares under incentive stock plans | 18,574 | $ 0 | 0 | ||
Proceeds from stock issued under share-based compensation plans | 18,574 | 18,574 | 0 | ||
Declaration of cash dividends | $ (83,772) | $ 0 | 0 | (83,772) | 0 |
Balance (in shares) at Dec. 31, 2019 | 40,074,160 | 40,074,000 | |||
Balance at Dec. 31, 2019 | $ 410,180 | $ 40 | $ 485,239 | $ (64,740) | $ (10,359) |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Description of Business As of December 31, 2019, Pool Corporation and our subsidiaries (the Company , which may be referred to as we, us or our ) operated 373 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape products and hardscape, tile and stone products to pool builders, retail stores, service companies, landscape contractors and golf courses. We distribute products through four networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon) and National Pool Tile (NPT). Basis of Presentation and Principles of Consolidation We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All significant intercompany accounts and intercompany transactions have been eliminated. All of our subsidiaries are wholly owned. From July 31, 2014 to June 29, 2017, we owned a 60% interest in Pool Systems Pty. Ltd. (PSL), an Australian company. Our ownership percentage constituted a controlling interest in the acquired company, which required us to consolidate PSL’s financial position and results of operations from the date of acquisition. On June 29, 2017, we purchased the remaining 40% interest in PSL. Thus, we have continued to consolidate PSL, but there is no longer a separate noncontrolling interest reported on our Consolidated Statements of Income, nor Redeemable noncontrolling interest reported on our Consolidated Balance Sheets. Use of Estimates To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates. Newly Adopted Accounting Pronouncements On January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), and all the related amendments, which are codified into Accounting Standards Codification (ASC) 842. The adoption of ASU 2016-02 significantly increased assets and liabilities on our Consolidated Balance Sheet as we recorded a right-of-use asset and corresponding liability for each of our existing operating leases. We adopted this guidance using the modified retrospective approach by recognizing a cumulative adjustment to retained earnings on the adoption date, which was not material. Additionally, we elected to apply the practical expedient that allows us to exclude comparative presentation; thus, we did not restate our prior period balance sheet to reflect the new guidance. We recorded operating lease assets of approximately $175.7 million and operating lease liabilities of approximately $181.6 million as of January 1, 2019. To calculate the present value of our lease liabilities, we used the incremental borrowing rate on December 31, 2018, for operating leases that commenced prior to that date. The difference between the operating lease assets and operating lease liabilities primarily represents our straight-line rent liability of $5.1 million recorded under previous accounting guidance. Under ASU 2016-02, this liability is considered a reduction of the operating lease asset. We recorded the remaining difference between our operating lease assets and operating lease liabilities, net of the deferred tax impact, as an adjustment to our retained deficit. Additionally, we reclassified prepaid rent of $4.9 million as of January 1, 2019 to our operating lease asset resulting in a balance of $180.6 million as of the adoption date. The adoption of this guidance did not materially impact our results of operations or cash flows. For additional information regarding our adoption of this new guidance, see Note 9. On January 1, 2019, we adopted Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness. For qualifying cash flow and net investment hedges, the change in the fair value of the hedging instrument will be recorded in Other Comprehensive Income (OCI), and amounts deferred in OCI will be reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item. The adoption of this standard did not have a material impact on our financial position and we do not expect a material impact in future periods. On January 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue - Revenue from Contracts with Customers, and all the related amendments, which are also codified into Accounting Standards Codification (ASC) 606. We elected to adopt this guidance using the modified retrospective method. The adoption of this standard did not have a material impact on our financial position or results of operations. We did not restate prior period information for the effects of the new standard, nor did we adjust the opening balance of our retained deficit to account for the implementation of the new requirements of this standard. We do not expect the adoption of this guidance to have a material effect on our results of operations in future periods. See Revenue Recognition within this note for additional information. On January 1, 2018, we adopted ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments . The new guidance specifies how cash flows should be classified for debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds for the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, distributions from equity method investees and beneficial interests in securitization transactions. Our adoption of ASU 2016-15 had no impact on our Consolidated Statement of Cash Flows as our previous classifications related to contingent consideration payments and distributions from equity method investees is consistent with the requirements of ASU 2016-15. Segment Reporting Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. These similarities include (i) the nature of our products and services, (ii) the types of customers we sell to and (iii) the distribution methods we use. Our chief operating decision maker (CODM) evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income growth and accounts receivable and inventory management criteria. Each sales center manager and eligible field employee earns performance-based compensation based on these measures developed at the sales center level. A bottom-up approach is used to develop the operating budget for each individual sales center. The CODM approves the budget and routinely monitors budget to actual results for each sales center. Additionally, our CODM makes resource allocation decisions primarily on a sales center-by-sales center basis. No single sales center meets any of the quantitative thresholds (10% of revenues, profit or assets) for separately reporting information about an operating segment. We do not track sales by product lines and product categories on a consolidated basis. We lack readily available financial information due to the number of our product lines and product categories and the fact that we make ongoing changes to product classifications within these groups, thus making it impracticable to report our sales by product category. Seasonality and Weather Our business is highly seasonal and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are substantially lower during the first and fourth quarters. Revenue Recognition Under ASC 606, we recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. As under the previous accounting guidance, we continue to recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period. We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists under ASC 606. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We elected to continue to recognize shipping and handling costs associated with outbound freight in selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes. Vendor Programs Many of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income. Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements. Shipping and Handling Costs We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands): 2019 2018 2017 $ 51,580 $ 48,610 $ 45,247 Share-Based Compensation We record share-based compensation for stock options and other share-based awards based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. For additional discussion of share-based compensation, see Note 6. Advertising Costs We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2019 2018 2017 $ 7,842 $ 7,390 $ 7,477 Income Taxes In December 2017, the Tax Cuts and Jobs Act (the Act) enactment significantly changed U.S. tax law. Due to the complexities presented by the Act, particularly for companies with multi-national operations, the SEC issued Staff Accounting Bulletin (SAB) 118 (SAB 118) to provide guidance to allow companies to record provisional amounts based on reasonable estimates. As a result of this guidance, we recorded a provisional net benefit to our income tax provision in the fourth quarter of 2017. We filed our federal income tax return in the third quarter of 2018, and our return to provision adjustment, which addresses the provisional tax benefit we recorded under SAB 118 at December 31, 2017, was not material. We have considered the impact of the statutory changes from the Act on our estimated effective tax rate for 2019, including reasonable estimates of those provisions effective for the 2019 tax year. The Act also created a new requirement that certain income earned by foreign subsidiaries, global intangible low-taxed income (GILTI), be included in the gross income of their U.S. shareholder. Entities may make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or recognize such taxes as a current-period expense when incurred. We elected to treat the tax effect of GILTI as a current-period expense when incurred. We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense in the income statement in the period in which stock options are exercised or restrictions on stock awards lapse. For additional information regarding income taxes, see Note 7. Equity Method Investments We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment. Earnings Per Share We calculate basic earnings per share (EPS) by dividing Net income or loss attributable to Pool Corporation by the weighted average number of common shares outstanding. Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8. Foreign Currency The functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction loss of $1.3 million in 2019, which included a $0.9 million reclassification from Accumulated other comprehensive loss related to the closing of our sales center in Colombia. We realized a net foreign currency transaction loss of $0.6 million in 2018 and a gain of $0.2 million in 2017. Fair Value Measurements 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 contract, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands): Fair Value at December 31, 2019 2018 Level 2 Unrealized gains on interest rate swaps $ 655 $ 2,378 Unrealized losses on interest rate swaps 919 — Level 3 Contingent consideration liabilities $ 703 $ 1,117 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. As of December 31, 2019, our Consolidated Balance Sheets reflect $0.3 million in Accrued expenses and other current liabilities and $0.4 million in Other long-term liabilities related to our estimates for contingent consideration payouts. 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 determining the fair value of our interest rate swap and forward-starting interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs as defined in the accounting guidance) 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. The carrying value of long-term debt approximates fair value (Level 3 inputs). 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). Derivatives and Hedging Activities If determined to be effective cash flow hedges, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. To the extent our interest rate swaps are determined to be ineffective, we recognize the changes in the estimated fair value in Interest and other non-operating expenses, net on our Consolidated Statements of Income. We assess hedge effectiveness on a quarterly basis. 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. We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. For our interest rate swap contract currently in effect, 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 income (loss) to Interest and other non-operating expenses, net on the Consolidated Statements of Income. These amounts were not material in any period presented. For additional discussion of our interest rate swaps, see Note 5. Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Credit Risk and Allowance for Doubtful Accounts We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 and more than 60 days past due. Additionally, we perform a separate reserve analysis on the balance of our accounts receivables with emphasis on the remainder of the past due portion of the aging. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 6,182 $ 3,897 $ 4,050 Bad debt expense 2,768 4,164 916 Write-offs, net of recoveries (3,478) (1,879) (1,069) Balance at end of year $ 5,472 $ 6,182 $ 3,897 Product Inventories and Reserve for Inventory Obsolescence Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory turns by class with particular emphasis on stock keeping units with the weakest sales over the expected sellable period, which is the previous 12 months for most products. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit. In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including: • the level of inventory in relation to historical sales by product, including inventory usage by class based on product sales at both the sales center and on a company-wide basis; • changes in customer preferences or regulatory requirements; • seasonal fluctuations in inventory levels; • geographic location; and • superseded products and new product offerings. We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 7,726 $ 6,264 $ 6,531 Provision for inventory write-downs 3,656 3,998 2,660 Deduction for inventory write-offs (2,346) (2,536) (2,927) Balance at end of year $ 9,036 $ 7,726 $ 6,264 Property and Equipment Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1) For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. The table below presents depreciation expense for the past three years (in thousands): 2019 2018 2017 $ 27,885 $ 26,122 $ 24,157 Acquisitions We use the acquisition method of accounting and recognize assets acquired and liabilities assumed at fair value as of the acquisition date. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if we can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). We re-measure any contingent liabilities at fair value in each subsequent reporting period. We expense all acquisition-related costs as incurred, including any restructuring costs associated with a business combination. If our initial acquisition accounting is incomplete by the end of the reporting period in which a business combination occurs, we report provisional amounts for incomplete items. Once we obtain information required to finalize the accounting for incomplete items, we adjust the provisional amounts recognized. We make adjustments to these provisional amounts during the measurement period. For all acquisitions, we include the results of operations in our Consolidated Financial Statements as of the acquisition date. For additional discussion of acquisitions, see Note 2. Goodwill and Other Intangible Assets Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. We test goodwill and other indefinite-lived intangible assets for impairment annually as of October 1st and at any other time when impairment indicators exist. We estimate fair value based on an income approach that incorporates our assumptions for determining the present value of future cash flows. We project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and multiples. These assumptions are considered unobservable inputs (Level 3 inputs as defined in the accounting guidance). If the estimated fair value of any of our reporting units falls below its carrying value, we compare the estimated fair value of the reporting unit’s goodwill to its carrying value. If the carrying value of a reporting unit’s goodwill exceeds its estimated fair value, we perform a calculation to measure impairment, which includes valuing the tangible and intangible assets. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, our reporting unit is an individual sales center. For additional discussion of goodwill and other intangible assets, see Note 3. Receivables Securitization Facility Our accounts receivable 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. 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 on our Consolidated Balance Sheets as we intend and have the ability 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. For additional discussion of the Receivables Facility, see Note 5. Self-Insurance We are self-insured for employee health benefits, workers’ compensation coverage, property and casualty, and automobile insurance. To limit our exposure, we also maintain excess and aggregate liability coverage. We establish self-insurance reserves based on estimates of claims incurred but not reported and information that we obtain from third-party service providers regarding known claims. Our management reviews these reserves based on consideration of various factors, including but not limited to the age of existing claims, estimated settlement amounts and other historical claims data. Redeemable Noncontrolling Interest In July 2014, we purchased a controlling interest in PSL. Included in the transaction documents was a put/call option deed that granted us an option to purchase the shares held by the noncontrolling interest and granted the holder of the noncontrolling interest an option to require us to purchase its shares in one or two transactions. In applying the guidance for this transaction, we determined that the financial instrument was embedded in the noncontrolling interest. As a public company, we were 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. On June 29, 2017, we purchased the remaining 40% interest in PSL. The actual redemption value exceeded the carrying amount, and we recorded an adjustment to Additional paid in capital as there were no retained earnings attributable to the noncontrolling interest. The table below presents the changes in Redeemable noncontrolling interest (in thousands): 2019 2018 2017 Redeemable noncontrolling interest, beginning of period $ — $ — $ 2,287 Redemption value adjustment of noncontrolling interest — — 360 Net loss attributable to noncontrolling interest — — (294) Other comprehensive income attributable to noncontrolling interest — — 220 Less: purchase of redeemable noncontrolling interest — — 2,573 Redeemable noncontrolling interest, end of period $ — $ — $ — Accumulated Other Comprehensive Loss The table below presents the components of our Accumulated other comprehensive loss balance (in thousands): December 31, 2019 2018 Foreign currency translation adjustments $ (10,127) $ (12,422) Unrealized (losses) gains on interest rate swaps, net of tax (1) (232) 1,425 Accumulated other comprehensive loss $ (10,359) $ (10,997) (1) In February 2018, the Financial Accounting Standards Board (FASB) issued guidance that allows entities the option to reclassify the tax effects related to items in accumulated other comprehensive income (loss) to retained earnings (deficit) if deemed to be stranded in accumulated other comprehensive income (loss) due to U.S. tax reform. We do not have any material amounts stranded in Accumulated other comprehensive loss from U.S. tax reform. Retained Deficit We account for the retirement of treasury share repurchases as an increase of our Retained deficit on our Consolidated Balance Sheets. As of December 31, 2019, the retained deficit reflects cumulative net income, the cumulative impact of adjustments f |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2019 Acquisitions In January 2019, we acquired the distribution assets of W.W. Adcock, Inc., a wholesale distributor of swimming pool products, equipment, parts and supplies adding two locations in Pennsylvania, one location in North Carolina and one location in Virginia. We have completed our acquisition accounting for this acquisition. This acquisition did not have a material impact on our financial position or results of operations. 2018 Acquisitions In January 2018, we acquired the distribution assets of Tore Pty. Ltd. (doing business as Pool Power), a wholesale distributor of pool and spa equipment in South Australia, with one distribution center in Adelaide, Australia. In November 2018, we acquired the distribution assets of Turf & Garden, Inc., a wholesale distributor of irrigation products and landscape maintenance equipment, parts and supplies with three locations in Virginia and one location in North Carolina. We have completed our acquisition accounting for these acquisitions. These acquisitions did not have a material impact on our financial position or results of operations, either individually or in the aggregate. 2017 Acquisitions In April 2017, we acquired the distribution assets of Lincoln Equipment, Inc. (Lincoln Aquatics), a national distributor of equipment and supplies to commercial and institutional swimming pool customers, with one location in California. In July 2017, we acquired New Star Holdings Pty. Ltd. (doing business as Newline Pool Products), a swimming pool equipment and supplies distributor with one distribution center in Brisbane, Australia. In October 2017, we acquired E-Grupa, a national swimming pool equipment and supplies distributor, with one location in Croatia. In December 2017, we acquired Kripsol Intermark Malaga S.L. (Intermark), a swimming pool equipment and supplies distributor, with one location in southern Spain. In December 2017, we acquired the distribution assets of Chem Quip, Inc. (Chem Quip), a wholesale distributor of residential and commercial swimming pool equipment, chemicals and supplies, with five distribution locations in central and northern California. We have completed our acquisition accounting for these acquisitions. These acquisitions did not have a material impact on our financial position or results of operations, either individually or in the aggregate. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands): Goodwill (gross) at December 31, 2017 $ 199,314 Acquired goodwill 334 Foreign currency translation adjustments (1,297) Goodwill (gross) at December 31, 2018 198,351 Accumulated impairment losses at December 31, 2017 (9,879) Goodwill impairment — Accumulated impairment losses at December 31, 2018 (9,879) Goodwill (net) at December 31, 2018 $ 188,472 Goodwill (gross) at December 31, 2018 $ 198,351 Foreign currency translation adjustments 124 Goodwill (gross) at December 31, 2019 198,475 Accumulated impairment losses at December 31, 2018 (9,879) Goodwill impairment — Accumulated impairment losses at December 31, 2019 (9,879) Goodwill (net) at December 31, 2019 $ 188,596 In October 2019 and October 2018, we performed our annual goodwill impairment test and did not record any goodwill impairment at the reporting unit level. As of October 1, 2019, we had 223 reporting units with allocated goodwill balances. The most significant goodwill balance for a reporting unit was $5.7 million and the average goodwill balance per reporting unit was $0.8 million. Other intangible assets consisted of the following (in thousands): December 31, Weighted Average Useful Life 2019 2018 Intangibles Gross Accumulated Amortization Intangibles Net Intangibles Gross Accumulated Amortization Intangibles Net Horizon tradename $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 Indefinite Pool Systems tradename and trademarks 990 — 990 1,002 — 1,002 Indefinite National Pool Tile (NPT) tradename 1,500 (887) 613 1,500 (812) 688 20 Non-compete agreements 4,611 (3,576) 1,035 5,019 (3,157) 1,862 4.85 Patents 470 (470) — 473 (421) 52 5 Total other intangibles $ 15,971 $ (4,933) $ 11,038 $ 16,394 $ (4,390) $ 12,004 The Horizon and Pool Systems tradenames and trademarks have indefinite useful lives and are not subject to amortization. However, we evaluate the useful lives of these intangible assets and test for impairment annually. The NPT tradename, our non-compete agreements and our patents have finite useful lives, and we amortize the estimated fair value of these agreements using the straight-line method over their respective useful lives. We have not identified any indicators of impairment related to these assets. The useful lives for our non-compete agreements are based on their contractual terms, and the useful lives for our patents are based on expected future cash flows. We recognize expenses related to patent renewal costs as incurred. Other intangible amortization expense was $1.0 million in 2019, $1.1 million in 2018 and $1.0 million in 2017. The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands): 2020 $ 856 2021 298 2022 108 2023 75 2024 75 |
Details of Certain Balance Shee
Details of Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Details of Certain Balance Sheet Accounts | Details of Certain Balance Sheet Accounts The table below presents additional information regarding certain balance sheet accounts (in thousands): December 31, 2019 2018 Receivables, net: Trade accounts $ 18,455 $ 16,451 Vendor programs 59,228 57,304 Other, net 4,437 1,920 Total receivables 82,120 75,675 Less: Allowance for doubtful accounts (5,472) (6,182) Receivables, net $ 76,648 $ 69,493 Prepaid expenses and other current assets: Prepaid expenses $ 14,568 $ 15,114 Other current assets 1,604 3,392 Prepaid expenses and other current assets $ 16,172 $ 18,506 Property and equipment, net: Land $ 3,608 $ 3,193 Buildings 7,132 5,318 Leasehold improvements 50,165 45,098 Autos and trucks 89,052 82,216 Machinery and equipment 69,027 61,945 Computer equipment 43,001 39,307 Furniture and fixtures 9,886 9,778 Fixed assets in progress 1,761 1,751 Total property and equipment 273,632 248,606 Less: Accumulated depreciation (161,386) (141,642) Property and equipment, net $ 112,246 $ 106,964 Accrued expenses and other current liabilities: Salaries and payroll deductions $ 13,688 $ 12,475 Performance-based compensation 22,907 25,261 Taxes payable 9,814 8,337 Other current liabilities 14,404 12,534 Accrued expenses and other current liabilities $ 60,813 $ 58,607 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below presents the components of our debt (in thousands): December 31, 2019 2018 Variable rate debt Short-term borrowings $ 1,647 $ — Current portion of long-term debt: Australian credit facility 10,098 9,168 Short-term borrowings and current portion of long-term debt 11,745 9,168 Long-term portion: Revolving credit facility 200,673 550,131 Term facility 185,000 — Receivables securitization facility 115,000 108,500 Less: financing costs, net 1,011 1,038 Long-term debt, net 499,662 657,593 Total debt $ 511,407 $ 666,761 Revolving Credit Facility On September 29, 2017, we, along with our wholly owned subsidiaries, SCP Distributors Canada Inc., as the Canadian Borrower, and SCP Pool B.V., as the Dutch Borrower, amended and restated our unsecured syndicated senior credit facility (the Credit Facility). The Credit Facility borrowing capacity increased to $750.0 million from $465.0 million under a five-year revolving credit facility. We also extended the maturity date of the agreement to September 29, 2022. As amended on November 7, 2019, SCP Pool B.V. was removed as the Dutch Borrower and replaced with SCP International, Inc. as the Euro Borrower. The Credit Facility includes sublimits for the issuance of swingline loans and standby letters of credit. Pursuant to an accordion feature, the aggregate maximum principal amount of the commitments under the Credit Facility may be increased at our request and with agreement by the lenders by up to $75.0 million, to a total of $825.0 million. Our obligations under the Credit Facility are guaranteed by substantially all of our existing and future direct and indirect domestic subsidiaries. The Credit Facility contains terms and provisions (including representations, covenants and conditions) and events of default customary for transactions of this type. If we default under the Credit Facility, the lenders may terminate their commitments under the Credit Facility and may require us to repay all amounts. At December 31, 2019, there was $200.7 million outstanding, a $4.8 million standby letter of credit outstanding and $544.5 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of December 31, 2019 was approximately 2.8%, excluding commitment fees. Revolving borrowings under the Credit Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin: a. a base rate, which is the highest of (i) the Wells Fargo Bank, National Association prime rate, (ii) the Federal Funds Rate plus 0.500% and (iii) the London Interbank Offered Rate (LIBOR) Market Index Rate plus 1.000%; or b. LIBOR. Borrowings by the Canadian Borrower bear interest, at the Canadian Borrower’s option, at either of the following and, in each case, plus an applicable margin: a. a base rate, which is the greatest of (i) the Canadian Reference Bank prime rate and (ii) the annual rate of interest equal to the sum of the Canadian Dealer Offered Rate (CDOR) plus 1.000%; or b. CDOR. Borrowings by the Euro Borrower bear interest at LIBOR plus an applicable margin. The interest rate margins on the borrowings and letters of credit are based on our leverage ratio and will range from 1.025% to 1.425% on CDOR, LIBOR and swingline loans, and from 0.025% to 0.425% on Base Rate and Canadian Base Rate loans. Borrowings under the swingline loans are based on the LIBOR Market Index Rate (LMIR) plus any applicable margin. We are also required to pay an annual facility fee ranging from 0.100% to 0.200%, depending on our leverage ratio. Term Facility On December 30, 2019, we along with certain of our subsidiaries entered into a $185.0 million term facility (the Term Facility) with Bank of America, N.A. The Term Facility matures on December 30, 2026. Proceeds from the Term Facility were used to pay down the Company's revolving credit facility, adding capacity for future share repurchases, acquisitions and growth-oriented working capital expansion. The Term Facility will be repaid in quarterly installments of 1.250% of the Term Facility on the last business day of each quarter beginning with the first quarter of 2020. The total of the quarterly payments will be equal to 33.75% of the Term Facility with the final principal repayment equal to 66.25% of the Term Facility due on the Maturity Date. We classify the entire outstanding balance as Long-term debt on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis. Our obligations under the Term Facility are guaranteed by substantially all of our existing and future domestic subsidiaries. The Term Facility contains terms and provisions (including representations, covenants and conditions) customary for transactions of this type. If we default under the Term Facility, the lenders may terminate their commitments under the Term Facility and may require us to repay all amounts. At December 31, 2019, the Term Facility was fully drawn with an outstanding balance of $185.0 million at a weighted average effective interest rate of 2.5%. Borrowings under the Term Facility bear interest, at our option, at either of the following and, in each case, plus an applicable margin: a. a base rate, which is the greatest of (i) the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus one-half of one percent (0.50%), (ii) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” or (iii) the Eurodollar Rate (defined below) plus one percent (1.00%); or b. the Eurodollar Rate, which is the rate per annum equal to the LIBOR as administered by the ICE Benchmark Administration (or any successor administrator), as published on the applicable Bloomberg screen page with a term equivalent to the applicable interest period. The interest rate margins on the borrowings are based on our leverage ratio and will range from 1.125% to 1.625% on Eurodollar Rate borrowings and 0.125% to 0.625% on Base Rate borrowings. Receivables Securitization Facility On November 1, 2019, we and certain of our subsidiaries entered into an amendment of our two 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 financial institutions. The Receivables Facility is subject to terms and conditions (including representations, covenants and conditions precedent) customary for transactions of this type. Failure to maintain certain ratios or meet certain of these covenants could trigger an amortization event. At December 31, 2019, there was $115.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 2.6%, excluding commitment fees. Depending on the funding source used by the financial institutions to purchase the receivables, amounts outstanding under the Receivables Facility bear interest at one of the following and, in each case, plus an applicable margin of 0.75%: a. for financial institutions using the commercial paper market, commercial paper rates based on the applicable variable rates in the commercial paper market at the time of issuance; or b. for financial institutions not using the commercial paper market, LMIR. We also pay an unused fee of 0.35% on the excess of the facility limit over the average daily capital outstanding. We pay this fee monthly in arrears. Australian Seasonal Credit Facility In the second quarter of 2017, PSL entered into a credit facility to fund expansion and supplement working capital needs. The credit facility provides a borrowing capacity of AU$20.0 million. Cash Pooling Arrangement 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. We also pay a commitment fee on the average outstanding balance. This fee is paid annually in advance. Our borrowing capacity is €12.0 million. Interest Rate Swaps In 2019, we had three interest rate swap contracts in place, which became effective on October 19, 2016. These swaps were previously forward-starting contracts that were amended in October 2015 to bring the fixed rates per our forward-starting contracts in line with market rates at that time and extend the hedged period for future interest payments on our variable rate borrowings. These swap contracts terminated on November 20, 2019. We recognized expense of $0.5 million in 2019, a benefit of $1.2 million in 2018 and a benefit of $2.4 million in 2017 as a result of ineffectiveness. These amounts were recorded in Interest and other non-operating expenses, net on our Consolidated Statements of Income. The following table provides additional details related to each of these amended swap contracts: Derivative Amendment Date Notional Fixed Interest rate swap 1 October 1, 2015 $ 75.0 2.273 % Interest rate swap 2 October 1, 2015 25.0 2.111 % Interest rate swap 3 October 1, 2015 50.0 2.111 % Upon amendment of the original hedge agreements, we were required to freeze the amounts related to the changes in the fair values of these swaps, which are recorded in Accumulated other comprehensive loss. On September 30, 2018, these balances became fully amortized. We recorded expense of $1.4 million in 2018 and $1.9 million in 2017 as amortization of the unrealized loss in Interest and other non-operating expenses, net. We currently have one interest rate swap in place, which became effective on November 20, 2019. This swap contract was previously forward-starting and converts the variable interest rate to a fixed interest rate on our variable rate borrowings. For this interest rate swap, we recognized no gains or losses through income, nor was there any effect on income from hedge ineffectiveness over the term of the swap contract. This contract terminates on November 20, 2020. The following table provides additional details related to this swap contract: Derivative Inception Date Notional Fixed Interest rate swap 4 July 6, 2016 $ 150.0 1.1425 % In May and July 2019, we entered into additional forward-starting interest rate swap contracts to extend the hedged period for future interest payments on our variable rate borrowings. These swap contracts will convert the variable interest rate to a fixed interest rate on our variable rate borrowings. The contracts become effective on November 20, 2020 and terminate on September 29, 2022. The following table provides additional details related to these swap contracts: Derivative Inception Date Notional Fixed Forward-starting interest rate swap 1 May 7, 2019 $ 75.0 2.0925 % Forward-starting interest rate swap 2 July 25, 2019 $ 75.0 1.5500 % On February 5, 2020, we entered into a forward-starting interest rate swap contract with a fixed interest rate of 1.3800% on a notional amount of $150.0 million. This contract becomes effective on February 26, 2021 and terminates on February 28, 2025. The net difference between interest paid and interest received related to our swap agreements resulted in an incremental interest benefit of $0.3 million in 2019, and an expense of $0.3 million in 2018 and $1.7 million in 2017. 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. Financial and Other Covenants Financial covenants of the Credit Facility, Term Facility and Receivables Facility are closely aligned and include a minimum fixed charge coverage ratio and maintenance of a maximum average total leverage ratio, which are our most restrictive covenants. The Credit Facility and the Term Facility also limit the declaration and payment of dividends on our common stock to no more than 50% of the preceding year’s Net Income (as defined in the Credit Facility and the Term Facility), provided no default or event of default has occurred and is continuing, or would result from the payment of dividends. Additionally, we may declare and pay quarterly dividends notwithstanding that the aggregate amount of dividends paid would be in excess of the 50% limit described above so long as (i) the amount per share of such dividends does not exceed the amount per share paid during the most recent fiscal year in which we were in compliance with the 50% limit and (ii) our Average Total Leverage Ratio is less than 3.00 to 1.00 both immediately before and after giving pro forma effect to such dividends. Further, dividends must be declared and paid in a manner consistent with our past practice. Under the Credit Facility and the Term Facility, we may repurchase shares of our common stock provided no default or event of default has occurred and is continuing, or would result from the repurchase of shares, and our maximum average total leverage ratio (determined on a pro forma basis) is less than 2.50 to 1.00. Other covenants include restrictions on our ability to grant liens, incur indebtedness, make investments, merge or consolidate, and sell or transfer assets. Failure to comply with any of our financial covenants or any other terms of the Credit Facility and Term Facility could result in penalty payments, higher interest rates on our borrowings or the acceleration of the maturities of our outstanding debt. As of December 31, 2019, we were in compliance with all covenants and financial ratio requirements related to the Credit Facility, the Term Facility and the Receivables Facility. Deferred Financing Costs We capitalize financing costs we incur related to implementing and amending our debt arrangements. We record these costs as a reduction of Long-term debt, net on our Consolidated Balance Sheets and amortize them over the contractual life of the related debt arrangements. The table below summarizes changes in deferred financing costs for the past two years (in thousands): December 31, 2019 2018 Deferred financing costs: Balance at beginning of year $ 4,712 $ 4,606 Financing costs deferred 406 106 Balance at end of year 5,118 4,712 Less: Accumulated amortization (4,107) (3,674) Deferred financing costs, net of accumulated amortization $ 1,011 $ 1,038 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Plans Current Plan In May 2007, our shareholders approved the 2007 Long-Term Incentive Plan (the 2007 LTIP), which authorizes the Compensation Committee of our Board of Directors (the Board) to grant non-qualified stock options and restricted stock awards to employees, directors, consultants or advisors. In May 2016, our shareholders approved an amendment and restatement of the 2007 Long-Term Incentive Plan (the Amended 2007 LTIP) and increased the number of shares that may be issued to a total of 9,315,000 shares. As of December 31, 2019, we had 4,319,501 shares available for future issuance including 1,037,669 shares that may be issued as restricted stock. Stock options granted under the Amended 2007 LTIP have an exercise price equal to our stock’s closing market price on the grant date and expire ten years from the grant date. Restricted stock awards granted under the Amended 2007 LTIP are issued at no cost to the grantee. Both stock options and restricted stock awards vest over time depending on an employee’s length of service with the Company. Share-based awards to our employees generally vest either five years from the grant date or on a three/five year split vest schedule, where half of the awards vest three years from the grant date and the remainder of the awards vest five years from the grant date. Share-based awards to our non-employee directors vest one year from the grant date. Beginning with 2016 grants, certain restricted stock awards to our employees contain performance-based criteria in addition to the service-based vesting criteria described above. The awards provide for a three one two Stock Option Awards The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2019: Shares Weighted Average Weighted Average Aggregate Balance at December 31, 2018 1,879,151 $ 48.19 Granted 65,525 160.67 Less: Exercised 640,475 26.29 Forfeited 2,150 150.29 Balance at December 31, 2019 1,302,051 $ 64.46 4.12 $ 192,600,967 Exercisable at December 31, 2019 877,812 $ 42.05 2.71 $ 149,516,227 The following table presents information about stock options outstanding and exercisable at December 31, 2019: Outstanding Exercisable Range of Exercise Prices Shares Weighted Average Weighted Average Exercise Price Shares Weighted Average Exercise Price $ 20.32 to $ 37.13 478,102 1.51 $ 29.12 478,102 $ 29.12 $ 37.14 to $ 69.85 436,266 4.10 57.19 345,202 53.84 $ 69.86 to $ 181.60 387,683 7.35 116.22 54,508 80.80 1,302,051 4.12 $ 64.46 877,812 $ 42.05 The following table summarizes the cash proceeds and tax benefits realized from the exercise of stock options: Year Ended December 31, (in thousands, except share amounts) 2019 2018 2017 Options exercised 640,475 491,448 364,984 Cash proceeds $ 16,839 $ 11,779 $ 9,809 Intrinsic value of options exercised $ 97,007 $ 61,469 $ 33,302 Tax benefits realized $ 24,252 $ 15,367 $ 12,809 We estimated the fair value of employee stock option awards at the grant date based on the assumptions summarized in the following table: Year Ended December 31, (Weighted average) 2019 2018 2017 Expected volatility 21.4 % 23.7 % 26.6 % Expected term 7.0 years 7.3 years 7.3 years Risk-free interest rate 2.52 % 2.87 % 2.44 % Expected dividend yield 1.3 % 1.5 % 1.5 % Grant date fair value $ 37.75 $ 35.71 $ 32.00 We calculated expected volatility over the expected term of the awards based on the historical volatility of our common stock. We use weekly price observations for our historical volatility calculation because we believe this provides the most appropriate measurement of volatility given the trading patterns of our common stock. We estimated the expected term based on the vesting period of the awards and our historical exercise activity for awards with similar characteristics. The weighted average expected term is impacted by a higher expected term estimate for stock option awards granted to our named executive officers. The risk-free interest rate is based on the U.S. Treasury zero-coupon issues with a remaining term approximating the expected term of the option. We determined the expected dividend yield based on the anticipated dividends over the expected term. For purposes of recognizing share-based compensation expense, we ratably expense the estimated fair value of employee stock options over the options’ requisite service period. The requisite service period for our share-based awards is either the vesting period, or if shorter, the period from the grant date to the date the employee becomes eligible to retire under our share-based award agreements. We recognize compensation cost for awards with graded vesting using the graded vesting recognition method. The following table presents the total share-based compensation expense for stock option awards for the past three years (in thousands): 2019 2018 2017 Option grants share-based compensation expense $ 3,021 $ 3,218 $ 3,553 Option grants share-based compensation tax benefits 755 805 888 At December 31, 2019, the unamortized compensation expense related to stock option awards totaled $2.7 million. We anticipate that this expense will be recognized over a weighted average period of 2.3 years. Restricted Stock Awards The table below presents restricted stock award activity under our share-based plans for the year ended December 31, 2019: Shares Weighted Average Balance unvested at December 31, 2018 307,773 $ 101.93 Granted (at market price) (1) 71,494 162.81 Less: Vested 75,143 74.45 Forfeited 820 109.93 Balance unvested at December 31, 2019 303,304 $ 123.13 (1) The majority of these shares contain performance-based vesting conditions. At December 31, 2019, the unamortized compensation expense related to the restricted stock awards totaled $8.8 million. We anticipate that this expense will be recognized over a weighted average period of 2.8 years. The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts): 2019 2018 2017 Restricted stock awards - shares vested 75,143 68,149 79,224 Fair value of restricted stock awards vested $ 12,316 $ 9,642 $ 9,260 The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands): 2019 2018 2017 Restricted stock awards share-based compensation expense $ 10,026 $ 9,151 $ 8,547 Employee Stock Purchase Plan In March 1998, the Board adopted the SCP Pool Corporation Employee Stock Purchase Plan (the ESPP). Under the ESPP, employees who meet minimum age and length of service requirements may purchase stock at 85% of the lower of: a. as amended in May 2016, the closing price of our common stock at the end of a six month plan period ending either July 31 or January 31; or b. the average of the beginning and ending closing prices of our common stock for such six month period. No more than 956,250 shares of our common stock may be issued under the ESPP. For the two six month offering periods in 2019, 2018 and 2017, our employees purchased the following aggregate number of shares: 2019 2018 2017 12,716 15,966 16,610 The grant date fair value for the most recent ESPP purchase period ended July 31, 2019 was $44.45 per share. Share-based compensation expense related to our ESPP was $0.4 million in 2019, $0.5 million in 2018 and $0.4 million in 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the Tax Cuts and Jobs Act (the Act) enactment significantly changed U.S. tax law. As of December 31, 2017, we had not completed our accounting for the tax effects of the Act. In accordance with SAB 118, we recorded provisional amounts related to the transition tax, impacts of the Act on state taxes, provisions of the Act related to deferred tax balances, and foreign tax implications. As a result of the Act, we recorded a provisional tax benefit of $12.0 million in the fourth quarter of 2017, which primarily reflected the re-measurement of our net deferred tax liability to the new U.S. Federal tax rate. As of December 31, 2018, we resolved our contingent accounting related to the tax effects of the Act. We filed our federal income tax return in the third quarter of 2018, and our return to provision adjustment, which addressed the provisional tax benefit recorded under SAB 118 and was not material. We reduce federal and state income taxes payable by the tax benefits associated with the exercise of deductible nonqualified stock options and the lapse of restrictions on deductible restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. We recorded excess tax benefits of $23.5 million to our income tax provision in 2019, $15.3 million in 2018 and $12.6 million in 2017. Income before income taxes and equity earnings is attributable to the following jurisdictions (in thousands): Year Ended December 31, 2019 2018 2017 United States $ 304,259 $ 278,311 $ 259,436 Foreign 13,215 14,682 9,746 Total $ 317,474 $ 292,993 $ 269,182 The provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 35,270 $ 39,504 $ 71,329 State and other 17,168 14,609 11,289 Total current provision for income taxes 52,438 54,113 82,618 Deferred: Federal 4,154 4,676 (6,643) State and other (431) (15) 2,007 Total deferred provision for income taxes 3,723 4,661 (4,636) Provision for income taxes $ 56,161 $ 58,774 $ 77,982 A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity earnings is as follows: Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.00 % 21.00 % 35.00 % Change in valuation allowance 0.10 (0.13) (0.06) Stock-based compensation (7.40) (5.23) (4.67) Re-measurement of net deferred tax liability — — (4.46) Other, primarily state income tax rate 3.99 4.42 3.16 Total effective tax rate 17.69 % 20.06 % 28.97 % The table below presents the components of our deferred tax assets and liabilities (in thousands): December 31, 2019 2018 Deferred tax assets: Product inventories $ 5,740 $ 5,413 Accrued expenses 927 776 Leases 42,698 1,189 Share-based compensation 9,245 9,427 Uncertain tax positions 2,852 2,558 Net operating losses 4,807 5,058 Interest rate swaps 66 — Other 2,889 2,080 Total non-current 69,224 26,501 Less: Valuation allowance (4,794) (5,058) Component reclassified for net presentation (63,699) (20,897) Total non-current, net 731 546 Total deferred tax assets 731 546 Deferred tax liabilities: Trade discounts on purchases 2,326 2,094 Prepaid expenses 2,821 1,804 Leases 41,418 — Intangible assets, primarily goodwill 32,331 30,988 Depreciation 17,401 14,924 Interest rate swaps — 486 Total non-current 96,297 50,296 Component reclassified for net presentation (63,699) (20,897) Total non-current, net 32,598 29,399 Total deferred tax liabilities 32,598 29,399 Net deferred tax liability $ 31,867 $ 28,853 At December 31, 2019, certain of our international subsidiaries had tax loss carryforwards totaling approximately $17.7 million, which expire in various years after 2020. Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $4.8 million as of December 31, 2019 and $5.1 million as of December 31, 2018. We have recorded a corresponding valuation allowance of $4.6 million and $5.1 million in the respective years. As of December 31, 2019, United States income taxes were not provided on earnings or cash balances of our foreign subsidiaries, outside of the provisions of the transition tax from U.S. tax reform. As we have historically invested or expect to invest the undistributed earnings indefinitely to fund current cash flow needs in the countries where held, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings and cash balances is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation. The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 12,179 $ 9,937 $ 7,846 Increases for tax positions taken during a prior period 771 76 129 Increases for tax positions taken during the current period 2,354 3,809 3,260 Decreases resulting from the expiration of the statute of limitations 1,390 1,603 869 Decreases relating to settlements 332 40 429 Balance at end of year $ 13,582 $ 12,179 $ 9,937 The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $10.7 million at December 31, 2019 and $9.6 million at December 31, 2018. We record interest expense related to unrecognized tax benefits in Interest and other non-operating expenses, net, while we record related penalties in Selling and administrative expenses on our Consolidated Statements of Income. For unrecognized tax benefits, we had interest expense of $0.6 million in 2019, $0.2 million in 2018 and $0.2 million in 2017. Accrued interest related to unrecognized tax benefits was approximately $1.7 million at December 31, 2019 and $1.1 million at December 31, 2018. We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net income $ 261,575 $ 234,461 $ 191,339 Net loss attributable to noncontrolling interest — — 294 Net income attributable to Pool Corporation $ 261,575 $ 234,461 $ 191,633 Weighted average shares outstanding: Basic 39,833 40,311 40,838 Effect of dilutive securities: Stock options and employee stock purchase plan 1,032 1,382 1,611 Diluted 40,865 41,693 42,449 Earnings per share: Basic $ 6.57 $ 5.82 $ 4.69 Diluted $ 6.40 $ 5.62 $ 4.51 Anti-dilutive stock options excluded from diluted earnings per share computations (1) — — 108 (1) Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Commitments We lease facilities for our corporate and administrative offices, sales centers and centralized shipping locations under operating leases that expire in various years through 2032. Most of our leases contain five-year terms with renewal options that allow us to extend the lease term beyond the initial period, subject to terms agreed upon at lease inception. Based on our leasing practices and contract negotiations, we determined that we are not reasonably certain to exercise the renewal options and, as such, we have not included optional renewal periods in our measurement of operating lease assets, liabilities and expected lease terms. We elected to apply the package of practical expedients available within ASU 2016-02, which is intended to provide some relief to issuers. Electing this option allowed us to retain our existing assessment of whether an arrangement is or contains a lease, is classified as an operating or financing lease and contains initial direct costs. We also elected the practical expedients that allow us to exclude short-term leases from our Consolidated Balance Sheets and to combine lease and non-lease components. For additional discussion of our adoption of this accounting guidance, see Note 1. For leases with step rent provisions whereby the rental payments increase incrementally over the life of the lease, we recognize expense on a straight-line basis determined by the total lease payments over the lease term. To the extent we determine that future obligations related to real estate taxes, insurance and other lease components are variable, we exclude them from the measurement of our operating lease assets and liabilities. Some of our real estate agreements include rental payments adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands): Lease Cost Classification 2019 2018 2017 Operating lease cost (1) Selling and administrative expenses $ 60,104 $ 57,235 $ 54,023 Variable lease cost Selling and administrative expenses $ 13,778 $ 12,867 $ 12,138 (1) Includes short-term lease cost, which is not material. Based on our lease portfolio as of December 31, 2019, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands): 2020 $ 51,621 2021 45,992 2022 37,044 2023 24,711 2024 14,060 Thereafter 15,939 Total lease payments 189,367 Less: interest 11,032 Present value of lease liabilities $ 178,335 To calculate the present value of our lease liabilities, we determined our incremental borrowing rate based on the effective interest rate on our Credit Facility adjusted for a collateral feature similar to that of our leased properties, as we are unable to derive implicit rates from our existing leases. The table below presents the weighted-average remaining lease term (years) of our operating leases and the weighted-average discount rate used in the above calculation: December 31, Lease Term and Discount Rate for Operating Leases 2019 Weighted-average remaining lease term (years) 4.57 Weighted-average discount rate 3.41 % The table below presents the amount of cash paid for amounts included in the measurement of lease liabilities (in thousands): Year Ended December 31, 2019 Operating cash flows for lease liabilities $ 56,617 Contingencies From time to time, we are subject to various claims and litigation arising in the ordinary course of business, including product liability, personal injury, commercial, contract and employment matters. Each quarter, we evaluate developments related to claims and litigation and record a liability if we deem a loss to be probable and estimable. When evaluating these matters for accrual and disclosure, we consider factors such as historical experience, specific facts and claims asserted, the likelihood we will prevail and the magnitude of any potential loss. The outcome of any litigation is inherently unpredictable. Based on currently available facts, we do not believe that the ultimate resolution of any of these claims and litigation matters will have a material adverse impact on our financial condition, results of operations or cash flows. We do not believe our exposure for any of these matters is material for disclosure, either individually or in the aggregate. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Policy Our policy for related party transactions is included in our written Audit Committee Charter. This policy requires that our Audit Committee review and approve all related party transactions required to be disclosed in our Annual Proxy Statement or required to be approved based on Nasdaq rules. Transactions We lease corporate and administrative offices from NCC, an entity we have held a 50% ownership interest in since 2005. NCC owns and operates an office building in Covington, Louisiana. We lease corporate and administrative offices from NCC, occupying approximately 60,000 square feet of office space and pay rent of $0.1 million per month. Our lease term ends May 2025. The table below presents rent expense associated with this lease for the past three years (in thousands): 2019 2018 2017 NCC $ 1,222 $ 1,155 $ 1,122 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Defined Contribution Plan [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We offer a 401(k) savings and retirement plan, which is a defined contribution plan and provides benefits for substantially all employees who meet length of service requirements. Eligible employees are able to contribute up to 75% of their compensation, subject to the federal dollar limit. For plan participants, we provide a matching contribution. We contribute a total maximum match on employee contributions of up to 4% of their compensation, with a 100% match on the first 3% of compensation deferred and a 50% match on deferrals between 3% and 5% of compensation. We also offer retirement plans for certain of our international entities. The plan funding is calculated as a percentage of the employee’s earnings and in compliance with local laws and practices. The related expense is not material and is included in the table below. We have a nonqualified deferred compensation plan that allows certain employees who occupy key management positions to defer salary and bonus amounts. This plan also provides a matching contribution similar to that provided under our 401(k) plan to the extent that a participant’s contributions to the 401(k) plan are limited by IRS deferral and compensation limitations. The total combined company matching contribution provided to a participant under the 401(k) plan and the nonqualified deferred compensation plan for any one year may not exceed 4% of a participant’s salary and bonus. The employee and company matching contributions are invested in certain equity and fixed income securities based on individual employee elections. The table below sets forth our contributions for the past three years (in thousands): 2019 2018 2017 Defined contribution and international retirement plans $ 7,373 $ 7,239 $ 6,946 Deferred compensation plan 195 245 325 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The table below summarizes the unaudited quarterly results of operations for the past two years (in thousands, except per share data): Quarter 2019 2018 First Second Third Fourth First Second Third Fourth Net sales $ 597,456 $ 1,121,328 $ 898,500 $ 582,234 $ 585,900 $ 1,057,804 $ 811,311 $ 543,082 Gross profit 174,631 330,314 257,931 162,050 166,073 308,655 235,003 160,442 Net income 32,637 131,390 79,525 18,024 31,339 117,049 69,261 16,811 Earnings per share: Basic $ 0.83 $ 3.30 $ 1.99 $ 0.45 $ 0.78 $ 2.89 $ 1.71 $ 0.42 Diluted $ 0.80 $ 3.22 $ 1.95 $ 0.44 $ 0.75 $ 2.80 $ 1.66 $ 0.41 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Description of Business As of December 31, 2019, Pool Corporation and our subsidiaries (the Company , which may be referred to as we, us or our ) operated 373 sales centers in North America, Europe and Australia from which we sell swimming pool supplies, equipment and related leisure products, irrigation and landscape products and hardscape, tile and stone products to pool builders, retail stores, service companies, landscape contractors and golf courses. We distribute products through four networks: SCP Distributors (SCP), Superior Pool Products (Superior), Horizon Distributors (Horizon) and National Pool Tile (NPT). Basis of Presentation and Principles of Consolidation We prepared the Consolidated Financial Statements following U.S. generally accepted accounting principles (GAAP) and the requirements of the Securities and Exchange Commission (SEC). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The Consolidated Financial Statements include the accounts of Pool Corporation and our subsidiaries. All significant intercompany accounts and intercompany transactions have been eliminated. |
Use of estimates | Use of Estimates To prepare financial statements that conform to GAAP, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Our most significant estimates relate to the allowance for doubtful accounts, inventory obsolescence reserves, vendor programs, income taxes, performance-based compensation accruals and goodwill impairment evaluations. We continually review our estimates and make adjustments as necessary, but actual results could be significantly different from what we expected when we made these estimates. |
Newly adopted accounting pronouncements and Recent accounting pronouncements pending adoption | Newly Adopted Accounting Pronouncements On January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), and all the related amendments, which are codified into Accounting Standards Codification (ASC) 842. The adoption of ASU 2016-02 significantly increased assets and liabilities on our Consolidated Balance Sheet as we recorded a right-of-use asset and corresponding liability for each of our existing operating leases. We adopted this guidance using the modified retrospective approach by recognizing a cumulative adjustment to retained earnings on the adoption date, which was not material. Additionally, we elected to apply the practical expedient that allows us to exclude comparative presentation; thus, we did not restate our prior period balance sheet to reflect the new guidance. We recorded operating lease assets of approximately $175.7 million and operating lease liabilities of approximately $181.6 million as of January 1, 2019. To calculate the present value of our lease liabilities, we used the incremental borrowing rate on December 31, 2018, for operating leases that commenced prior to that date. The difference between the operating lease assets and operating lease liabilities primarily represents our straight-line rent liability of $5.1 million recorded under previous accounting guidance. Under ASU 2016-02, this liability is considered a reduction of the operating lease asset. We recorded the remaining difference between our operating lease assets and operating lease liabilities, net of the deferred tax impact, as an adjustment to our retained deficit. Additionally, we reclassified prepaid rent of $4.9 million as of January 1, 2019 to our operating lease asset resulting in a balance of $180.6 million as of the adoption date. The adoption of this guidance did not materially impact our results of operations or cash flows. For additional information regarding our adoption of this new guidance, see Note 9. On January 1, 2019, we adopted Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness. For qualifying cash flow and net investment hedges, the change in the fair value of the hedging instrument will be recorded in Other Comprehensive Income (OCI), and amounts deferred in OCI will be reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item. The adoption of this standard did not have a material impact on our financial position and we do not expect a material impact in future periods. On January 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue - Revenue from Contracts with Customers, and all the related amendments, which are also codified into Accounting Standards Codification (ASC) 606. We elected to adopt this guidance using the modified retrospective method. The adoption of this standard did not have a material impact on our financial position or results of operations. We did not restate prior period information for the effects of the new standard, nor did we adjust the opening balance of our retained deficit to account for the implementation of the new requirements of this standard. We do not expect the adoption of this guidance to have a material effect on our results of operations in future periods. See Revenue Recognition within this note for additional information. On January 1, 2018, we adopted ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments . The new guidance specifies how cash flows should be classified for debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds for the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance, distributions from equity method investees and beneficial interests in securitization transactions. Our adoption of ASU 2016-15 had no impact on our Consolidated Statement of Cash Flows as our previous classifications related to contingent consideration payments and distributions from equity method investees is consistent with the requirements of ASU 2016-15. |
Segment reporting | Segment Reporting Since all of our sales centers have similar operations and share similar economic characteristics, we aggregate our sales centers into a single reportable segment. These similarities include (i) the nature of our products and services, (ii) the types of customers we sell to and (iii) the distribution methods we use. Our chief operating decision maker (CODM) evaluates each sales center based on individual performance that includes both financial and operational measures. These measures include operating income growth and accounts receivable and inventory management criteria. Each sales center manager and eligible field employee earns performance-based compensation based on these measures developed at the sales center level. |
Seasonality and weather | Seasonality and Weather Our business is highly seasonal and weather is one of the principal external factors affecting our business. In general, sales and net income are highest during the second and third quarters, which represent the peak months of swimming pool use, pool and irrigation installation and remodeling and repair activities. Sales are substantially lower during the first and fourth quarters. |
Revenue recognition | Revenue Recognition Under ASC 606, we recognize a sale when a customer obtains control of the product, and we record the amount that reflects the consideration we expect to receive in exchange for such product. As under the previous accounting guidance, we continue to recognize a sale when a customer picks up product at any sales center, when we deliver product to their premises or job sites via our trucks or when we present the product to a third-party carrier. For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period. We consider our distribution of products to represent one reportable revenue stream. Our products are similar in nature, and our revenue recognition policy is the same across our distribution networks. Our customers share similar characteristics and purchase products across all categories. We recognize revenue when our customers take control of our products. We include shipping and handling fees billed to customers as freight out income within net sales. We measure revenue as the amount of consideration we expect to receive in exchange for transferring our products. Consideration may vary due to volume incentives and expected customer returns. We offer volume incentives to some of our customers and account for these incentives as a reduction of sales. We estimate the amount of volume incentives earned based on our estimate of cumulative sales for the fiscal year relative to our customers’ progress toward achieving minimum purchase requirements. We record customer returns, including those associated with customer early buy programs, as a reduction of sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. We regularly review our marketing programs, coupons and customary business practices to determine if any variable consideration exists under ASC 606. Other items that we record as reductions to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. The majority of our sales transactions do not contain additional performance obligations after delivery; therefore, we do not have multiple performance obligations for which to allocate the transaction price. We elected to continue to recognize shipping and handling costs associated with outbound freight in selling and administrative expenses. We report sales net of tax amounts that we collect from our customers and remit to governmental authorities. These tax amounts may include, but are not limited to, sales, use, value-added and some excise taxes. |
Vendor programs | Vendor Programs Many of our arrangements with our vendors provide for us to receive specified amounts of consideration when we achieve any of a number of measures. These measures are generally related to the volume level of purchases from our vendors, or our net cost of products sold, and may include negotiated pricing arrangements. We account for vendor programs as a reduction of the prices of the vendors’ products and as a reduction of inventory until we sell the products, at which time such considerations are recognized as a reduction of Cost of sales on our Consolidated Statements of Income. Throughout the year, we estimate the amount earned based on our expectation of total purchases for the fiscal year relative to the purchase levels that mark our progress toward earning each program. We accrue vendor benefits on a monthly basis using these estimates, provided that we determine they are probable and reasonably estimable. We continually revise these estimates to reflect actual credits earned based on actual purchase levels and trends related to sales and purchasing mix. When we make adjustments to our estimates, we determine whether any portion of the adjustment impacts the amount of vendor credits that are deferred in inventory. We recognize changes in our estimates as a cumulative catch-up adjustment to the amounts recognized to date in our Consolidated Financial Statements. |
Shipping and handling costs | Shipping and Handling Costs We record shipping and handling costs associated with inbound freight as cost of sales. The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands): 2019 2018 2017 $ 51,580 $ 48,610 $ 45,247 |
Share-based compensation | Share-Based Compensation We record share-based compensation for stock options and other share-based awards based on the estimated fair value as measured on the grant date. For stock option awards, we use a Black-Scholes model for estimating the grant date fair value. For additional discussion of share-based compensation, see Note 6. |
Advertising costs | Advertising Costs We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2019 2018 2017 $ 7,842 $ 7,390 $ 7,477 |
Income taxes | Income Taxes In December 2017, the Tax Cuts and Jobs Act (the Act) enactment significantly changed U.S. tax law. Due to the complexities presented by the Act, particularly for companies with multi-national operations, the SEC issued Staff Accounting Bulletin (SAB) 118 (SAB 118) to provide guidance to allow companies to record provisional amounts based on reasonable estimates. As a result of this guidance, we recorded a provisional net benefit to our income tax provision in the fourth quarter of 2017. We filed our federal income tax return in the third quarter of 2018, and our return to provision adjustment, which addresses the provisional tax benefit we recorded under SAB 118 at December 31, 2017, was not material. We have considered the impact of the statutory changes from the Act on our estimated effective tax rate for 2019, including reasonable estimates of those provisions effective for the 2019 tax year. The Act also created a new requirement that certain income earned by foreign subsidiaries, global intangible low-taxed income (GILTI), be included in the gross income of their U.S. shareholder. Entities may make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or recognize such taxes as a current-period expense when incurred. We elected to treat the tax effect of GILTI as a current-period expense when incurred. We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit. We record all excess tax benefits as a component of income tax benefit or expense in the income statement in the period in which stock options are exercised or restrictions on stock awards lapse. For additional information regarding income taxes, see Note 7. |
Equity method investments | Equity Method Investments We account for our 50% investment in Northpark Corporate Center, LLC (NCC) using the equity method of accounting. Accordingly, we report our share of income or loss based on our ownership interest in this investment. |
Earnings per share | Earnings Per Share We calculate basic earnings per share (EPS) by dividing Net income or loss attributable to Pool Corporation by the weighted average number of common shares outstanding. Diluted EPS reflects the dilutive effects of potentially dilutive securities, which include in-the-money outstanding stock options and shares to be purchased under our employee stock purchase plan. Using the treasury stock method, the effect of dilutive securities includes these additional shares of common stock that would have been outstanding based on the assumption that these potentially dilutive securities had been issued. For additional discussion of earnings per share, see Note 8. |
Foreign currency | Foreign CurrencyThe functional currency of each of our foreign subsidiaries is its applicable local currency. We translate our foreign subsidiary financial statements into U.S. dollars based on published exchange rates. We include these translation adjustments as a component of Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We include realized transaction gains and losses that arise from exchange rate fluctuations in Interest and other non-operating expenses, net on the Consolidated Statements of Income. We realized a net foreign currency transaction loss of $1.3 million in 2019, which included a $0.9 million reclassification from Accumulated other comprehensive loss related to the closing of our sales center in Colombia. We realized a net foreign currency transaction loss of $0.6 million in 2018 and a gain of $0.2 million in 2017. |
Fair value measurements | Fair Value Measurements 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 contract, our forward-starting interest rate swap contracts and our contingent consideration liabilities (in thousands): Fair Value at December 31, 2019 2018 Level 2 Unrealized gains on interest rate swaps $ 655 $ 2,378 Unrealized losses on interest rate swaps 919 — Level 3 Contingent consideration liabilities $ 703 $ 1,117 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. As of December 31, 2019, our Consolidated Balance Sheets reflect $0.3 million in Accrued expenses and other current liabilities and $0.4 million in Other long-term liabilities related to our estimates for contingent consideration payouts. 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 determining the fair value of our interest rate swap and forward-starting interest rate swap contracts, we use significant other observable market data or assumptions (Level 2 inputs as defined in the accounting guidance) 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. The carrying value of long-term debt approximates fair value (Level 3 inputs). 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). |
Derivatives | Derivatives and Hedging Activities If determined to be effective cash flow hedges, we record the changes in the estimated fair value of our interest rate swap contracts to Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. To the extent our interest rate swaps are determined to be ineffective, we recognize the changes in the estimated fair value in Interest and other non-operating expenses, net on our Consolidated Statements of Income. We assess hedge effectiveness on a quarterly basis. 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. We recognize any differences between the variable interest rate in effect and the fixed interest rate per our swap contracts as an adjustment to interest expense over the life of the swaps. |
Cash equivalents | Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Credit risk and allowance for doubtful accounts | Credit Risk and Allowance for Doubtful Accounts We record trade receivables at the invoiced amounts less an allowance for doubtful accounts for estimated losses we may incur if customers do not pay. We perform periodic credit evaluations of our customers and we typically do not require collateral. Consistent with industry practices, we generally require payment from our North American customers within 30 days, except for sales under early buy programs for which we provide extended payment terms to qualified customers. At the end of each quarter, we perform a reserve analysis of all accounts with balances greater than $20,000 and more than 60 days past due. Additionally, we perform a separate reserve analysis on the balance of our accounts receivables with emphasis on the remainder of the past due portion of the aging. During the year, we write off account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against our allowance for doubtful accounts. The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 6,182 $ 3,897 $ 4,050 Bad debt expense 2,768 4,164 916 Write-offs, net of recoveries (3,478) (1,879) (1,069) Balance at end of year $ 5,472 $ 6,182 $ 3,897 |
Product inventories and reserve for inventory obsolescence | Product Inventories and Reserve for Inventory Obsolescence Product inventories consist primarily of goods we purchase from manufacturers to sell to our customers. We record inventory at the lower of cost, using the average cost method, or net realizable value. We establish our reserve for inventory obsolescence based on inventory turns by class with particular emphasis on stock keeping units with the weakest sales over the expected sellable period, which is the previous 12 months for most products. The reserve is intended to reflect the net realizable value of inventory that we may not be able to sell at a profit. In evaluating the adequacy of our reserve for inventory obsolescence, we consider a combination of factors including: • the level of inventory in relation to historical sales by product, including inventory usage by class based on product sales at both the sales center and on a company-wide basis; • changes in customer preferences or regulatory requirements; • seasonal fluctuations in inventory levels; • geographic location; and • superseded products and new product offerings. We periodically adjust our reserve for inventory obsolescence as changes occur in the above-identified factors. The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 7,726 $ 6,264 $ 6,531 Provision for inventory write-downs 3,656 3,998 2,660 Deduction for inventory write-offs (2,346) (2,536) (2,927) Balance at end of year $ 9,036 $ 7,726 $ 6,264 |
Property and equipment | Property and Equipment Property and equipment are stated at cost. We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1) For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. The table below presents depreciation expense for the past three years (in thousands): 2019 2018 2017 $ 27,885 $ 26,122 $ 24,157 |
Acquisitions | Acquisitions We use the acquisition method of accounting and recognize assets acquired and liabilities assumed at fair value as of the acquisition date. Any contingent assets acquired and contingent liabilities assumed are also recognized at fair value if we can reasonably estimate fair value during the measurement period (which cannot exceed one year from the acquisition date). We re-measure any contingent liabilities at fair value in each subsequent reporting period. We expense all acquisition-related costs as incurred, including any restructuring costs associated with a business combination. If our initial acquisition accounting is incomplete by the end of the reporting period in which a business combination occurs, we report provisional amounts for incomplete items. Once we obtain information required to finalize the accounting for incomplete items, we adjust the provisional amounts recognized. We make adjustments to these provisional amounts during the measurement period. For all acquisitions, we include the results of operations in our Consolidated Financial Statements as of the acquisition date. For additional discussion of acquisitions, see Note 2. |
Goodwill and other intangible assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable intangible assets acquired, less liabilities assumed. We test goodwill and other indefinite-lived intangible assets for impairment annually as of October 1st and at any other time when impairment indicators exist. We estimate fair value based on an income approach that incorporates our assumptions for determining the present value of future cash flows. We project future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and multiples. These assumptions are considered unobservable inputs (Level 3 inputs as defined in the accounting guidance). If the estimated fair value of any of our reporting units falls below its carrying value, we compare the estimated fair value of the reporting unit’s goodwill to its carrying value. If the carrying value of a reporting unit’s goodwill exceeds its estimated fair value, we perform a calculation to measure impairment, which includes valuing the tangible and intangible assets. We recognize any impairment loss in operating income. Since we define an operating segment as an individual sales center and we do not have operations below the sales center level, our reporting unit is an individual sales center. For additional discussion of goodwill and other intangible assets, see Note 3. |
Receivables securitization facility | Receivables Securitization Facility Our accounts receivable 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. 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 on our Consolidated Balance Sheets as we intend and have the ability 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. For additional discussion of the Receivables Facility, see Note 5. |
Self insurance | Self-Insurance We are self-insured for employee health benefits, workers’ compensation coverage, property and casualty, and automobile insurance. To limit our exposure, we also maintain excess and aggregate liability coverage. We establish self-insurance reserves based on estimates of claims incurred but not reported and information that we obtain from third-party service providers regarding known claims. Our management reviews these reserves based on consideration of various factors, including but not limited to the age of existing claims, estimated settlement amounts and other historical claims data. |
Redeemable noncontrolling interest | Redeemable Noncontrolling Interest In July 2014, we purchased a controlling interest in PSL. Included in the transaction documents was a put/call option deed that granted us an option to purchase the shares held by the noncontrolling interest and granted the holder of the noncontrolling interest an option to require us to purchase its shares in one or two transactions. In applying the guidance for this transaction, we determined that the financial instrument was embedded in the noncontrolling interest. As a public company, we were 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. On June 29, 2017, we purchased the remaining 40% interest in PSL. The actual redemption value exceeded the carrying amount, and we recorded an adjustment to Additional paid in capital as there were no retained earnings attributable to the noncontrolling interest. The table below presents the changes in Redeemable noncontrolling interest (in thousands): 2019 2018 2017 Redeemable noncontrolling interest, beginning of period $ — $ — $ 2,287 Redemption value adjustment of noncontrolling interest — — 360 Net loss attributable to noncontrolling interest — — (294) Other comprehensive income attributable to noncontrolling interest — — 220 Less: purchase of redeemable noncontrolling interest — — 2,573 Redeemable noncontrolling interest, end of period $ — $ — $ — |
Accumulated other comprehensive loss | Accumulated Other Comprehensive Loss The table below presents the components of our Accumulated other comprehensive loss balance (in thousands): December 31, 2019 2018 Foreign currency translation adjustments $ (10,127) $ (12,422) Unrealized (losses) gains on interest rate swaps, net of tax (1) (232) 1,425 Accumulated other comprehensive loss $ (10,359) $ (10,997) |
Retained deficit | Retained Deficit We account for the retirement of treasury share repurchases as an increase of our Retained deficit on our Consolidated Balance Sheets. As of December 31, 2019, the retained deficit 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 $1,450.0 million and cumulative dividends of $578.9 million. |
Supplemental cash flow information | Supplemental Cash Flow Information The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands): Year Ended December 31, 2019 2018 2017 Cash paid during the year for: Interest $ 20,960 $ 17,796 $ 12,957 Income taxes, net of refunds 51,076 50,091 84,251 |
Description of New Accounting Pronouncements Not yet Adopted | Recent Accounting Pronouncements Pending Adoption The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods: Standard Description Effective Date Effect on Financial Statements and Other Significant Matters ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The guidance must be applied using a cumulative-effect transition method. Annual periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial position or results of operations. ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the current guidance). Rather, the measurement of a goodwill impairment charge will be based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the current guidance). This guidance should be applied prospectively. Annual and interim impairment tests performed in periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial positions, results of operations and related disclosures. ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Annual periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial positions, results of operations and related disclosures. ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes Simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance should generally be applied prospectively. Annual periods beginning after December 15, 2020 We are currently evaluating the effect this will have on our financial position, results of operations and related disclosures. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Shipping and handling costs associated with outbound freight | The table below presents shipping and handling costs associated with outbound freight, which we include in selling and administrative expenses (in thousands): 2019 2018 2017 $ 51,580 $ 48,610 $ 45,247 |
Advertising expense | We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2019 2018 2017 $ 7,842 $ 7,390 $ 7,477 |
Fair value measurements | Fair Value at December 31, 2019 2018 Level 2 Unrealized gains on interest rate swaps $ 655 $ 2,378 Unrealized losses on interest rate swaps 919 — Level 3 Contingent consideration liabilities $ 703 $ 1,117 |
Summary of changes in allowance for doubtful accounts | The following table summarizes the changes in our allowance for doubtful accounts for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 6,182 $ 3,897 $ 4,050 Bad debt expense 2,768 4,164 916 Write-offs, net of recoveries (3,478) (1,879) (1,069) Balance at end of year $ 5,472 $ 6,182 $ 3,897 |
Summary of changes in allowance for inventory obsolescence | The following table summarizes the changes in our reserve for inventory obsolescence for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 7,726 $ 6,264 $ 6,531 Provision for inventory write-downs 3,656 3,998 2,660 Deduction for inventory write-offs (2,346) (2,536) (2,927) Balance at end of year $ 9,036 $ 7,726 $ 6,264 |
Estimated useful lives of property and equipment | We depreciate property and equipment on a straight-line basis over the following estimated useful lives: Buildings 40 years Leasehold improvements (1) 1 - 10 years Autos and trucks 3 - 6 years Machinery and equipment 3 - 15 years Computer equipment 3 - 7 years Furniture and fixtures 5 - 10 years (1) For substantial improvements made near the end of a lease term where we are reasonably certain the lease will be renewed, we amortize the leasehold improvement over the remaining life of the lease including the expected renewal period. |
Depreciation expense | The table below presents depreciation expense for the past three years (in thousands): 2019 2018 2017 $ 27,885 $ 26,122 $ 24,157 |
Redeemable noncontrolling interest | The table below presents the changes in Redeemable noncontrolling interest (in thousands): 2019 2018 2017 Redeemable noncontrolling interest, beginning of period $ — $ — $ 2,287 Redemption value adjustment of noncontrolling interest — — 360 Net loss attributable to noncontrolling interest — — (294) Other comprehensive income attributable to noncontrolling interest — — 220 Less: purchase of redeemable noncontrolling interest — — 2,573 Redeemable noncontrolling interest, end of period $ — $ — $ — |
Accumulated other comprehensive loss | The table below presents the components of our Accumulated other comprehensive loss balance (in thousands): December 31, 2019 2018 Foreign currency translation adjustments $ (10,127) $ (12,422) Unrealized (losses) gains on interest rate swaps, net of tax (1) (232) 1,425 Accumulated other comprehensive loss $ (10,359) $ (10,997) |
Supplemental disclosures to Consolidated Statements of Cash Flows | The following table presents supplemental disclosures to the accompanying Consolidated Statements of Cash Flows (in thousands): Year Ended December 31, 2019 2018 2017 Cash paid during the year for: Interest $ 20,960 $ 17,796 $ 12,957 Income taxes, net of refunds 51,076 50,091 84,251 |
Schedule of recent accounting pronouncements pending adoption | The following table summarizes the remaining recent accounting pronouncements that we plan to adopt in future periods: Standard Description Effective Date Effect on Financial Statements and Other Significant Matters ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Changes the way companies evaluate credit losses for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination for most financing receivables. The guidance must be applied using a cumulative-effect transition method. Annual periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial position or results of operations. ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (commonly referred to as Step 2 under the current guidance). Rather, the measurement of a goodwill impairment charge will be based on the excess of a reporting unit’s carrying value over its fair value (Step 1 under the current guidance). This guidance should be applied prospectively. Annual and interim impairment tests performed in periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial positions, results of operations and related disclosures. ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Annual periods beginning after December 15, 2019 We do not expect this accounting pronouncement will have a material impact on our financial positions, results of operations and related disclosures. ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes Simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance should generally be applied prospectively. Annual periods beginning after December 15, 2020 We are currently evaluating the effect this will have on our financial position, results of operations and related disclosures. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands): Goodwill (gross) at December 31, 2017 $ 199,314 Acquired goodwill 334 Foreign currency translation adjustments (1,297) Goodwill (gross) at December 31, 2018 198,351 Accumulated impairment losses at December 31, 2017 (9,879) Goodwill impairment — Accumulated impairment losses at December 31, 2018 (9,879) Goodwill (net) at December 31, 2018 $ 188,472 Goodwill (gross) at December 31, 2018 $ 198,351 Foreign currency translation adjustments 124 Goodwill (gross) at December 31, 2019 198,475 Accumulated impairment losses at December 31, 2018 (9,879) Goodwill impairment — Accumulated impairment losses at December 31, 2019 (9,879) Goodwill (net) at December 31, 2019 $ 188,596 |
Other intangible assets | Other intangible assets consisted of the following (in thousands): December 31, Weighted Average Useful Life 2019 2018 Intangibles Gross Accumulated Amortization Intangibles Net Intangibles Gross Accumulated Amortization Intangibles Net Horizon tradename $ 8,400 $ — $ 8,400 $ 8,400 $ — $ 8,400 Indefinite Pool Systems tradename and trademarks 990 — 990 1,002 — 1,002 Indefinite National Pool Tile (NPT) tradename 1,500 (887) 613 1,500 (812) 688 20 Non-compete agreements 4,611 (3,576) 1,035 5,019 (3,157) 1,862 4.85 Patents 470 (470) — 473 (421) 52 5 Total other intangibles $ 15,971 $ (4,933) $ 11,038 $ 16,394 $ (4,390) $ 12,004 |
Estimated amortization expense for other intangible assets for next five years | The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands): 2020 $ 856 2021 298 2022 108 2023 75 2024 75 |
Details of Certain Balance Sh_2
Details of Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Additional information regarding certain balance sheet accounts | The table below presents additional information regarding certain balance sheet accounts (in thousands): December 31, 2019 2018 Receivables, net: Trade accounts $ 18,455 $ 16,451 Vendor programs 59,228 57,304 Other, net 4,437 1,920 Total receivables 82,120 75,675 Less: Allowance for doubtful accounts (5,472) (6,182) Receivables, net $ 76,648 $ 69,493 Prepaid expenses and other current assets: Prepaid expenses $ 14,568 $ 15,114 Other current assets 1,604 3,392 Prepaid expenses and other current assets $ 16,172 $ 18,506 Property and equipment, net: Land $ 3,608 $ 3,193 Buildings 7,132 5,318 Leasehold improvements 50,165 45,098 Autos and trucks 89,052 82,216 Machinery and equipment 69,027 61,945 Computer equipment 43,001 39,307 Furniture and fixtures 9,886 9,778 Fixed assets in progress 1,761 1,751 Total property and equipment 273,632 248,606 Less: Accumulated depreciation (161,386) (141,642) Property and equipment, net $ 112,246 $ 106,964 Accrued expenses and other current liabilities: Salaries and payroll deductions $ 13,688 $ 12,475 Performance-based compensation 22,907 25,261 Taxes payable 9,814 8,337 Other current liabilities 14,404 12,534 Accrued expenses and other current liabilities $ 60,813 $ 58,607 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative | |
Components of debt | The table below presents the components of our debt (in thousands): December 31, 2019 2018 Variable rate debt Short-term borrowings $ 1,647 $ — Current portion of long-term debt: Australian credit facility 10,098 9,168 Short-term borrowings and current portion of long-term debt 11,745 9,168 Long-term portion: Revolving credit facility 200,673 550,131 Term facility 185,000 — Receivables securitization facility 115,000 108,500 Less: financing costs, net 1,011 1,038 Long-term debt, net 499,662 657,593 Total debt $ 511,407 $ 666,761 |
Changes in deferred financing costs | The table below summarizes changes in deferred financing costs for the past two years (in thousands): December 31, 2019 2018 Deferred financing costs: Balance at beginning of year $ 4,712 $ 4,606 Financing costs deferred 406 106 Balance at end of year 5,118 4,712 Less: Accumulated amortization (4,107) (3,674) Deferred financing costs, net of accumulated amortization $ 1,011 $ 1,038 |
Interest Rate Swap [Member] | |
Derivative | |
Schedule of interest rate swaps | The following table provides additional details related to this swap contract: Derivative Inception Date Notional Fixed Interest rate swap 4 July 6, 2016 $ 150.0 1.1425 % |
Forward-starting Interest Rate Swap Agreements [Member] | |
Derivative | |
Schedule of interest rate swaps | The following table provides additional details related to these swap contracts: Derivative Inception Date Notional Fixed Forward-starting interest rate swap 1 May 7, 2019 $ 75.0 2.0925 % Forward-starting interest rate swap 2 July 25, 2019 $ 75.0 1.5500 % |
Terminated Interest Rate Swaps [Member] | |
Derivative | |
Schedule of interest rate swaps | The following table provides additional details related to each of these amended swap contracts: Derivative Amendment Date Notional Fixed Interest rate swap 1 October 1, 2015 $ 75.0 2.273 % Interest rate swap 2 October 1, 2015 25.0 2.111 % Interest rate swap 3 October 1, 2015 50.0 2.111 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Option Activity | The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2019: Shares Weighted Average Weighted Average Aggregate Balance at December 31, 2018 1,879,151 $ 48.19 Granted 65,525 160.67 Less: Exercised 640,475 26.29 Forfeited 2,150 150.29 Balance at December 31, 2019 1,302,051 $ 64.46 4.12 $ 192,600,967 Exercisable at December 31, 2019 877,812 $ 42.05 2.71 $ 149,516,227 |
Stock options outstanding and exercisable by exercise price range | The following table presents information about stock options outstanding and exercisable at December 31, 2019: Outstanding Exercisable Range of Exercise Prices Shares Weighted Average Weighted Average Exercise Price Shares Weighted Average Exercise Price $ 20.32 to $ 37.13 478,102 1.51 $ 29.12 478,102 $ 29.12 $ 37.14 to $ 69.85 436,266 4.10 57.19 345,202 53.84 $ 69.86 to $ 181.60 387,683 7.35 116.22 54,508 80.80 1,302,051 4.12 $ 64.46 877,812 $ 42.05 |
Summary of cash proceeds and tax benefits realized from stock option exercise. | The following table summarizes the cash proceeds and tax benefits realized from the exercise of stock options: Year Ended December 31, (in thousands, except share amounts) 2019 2018 2017 Options exercised 640,475 491,448 364,984 Cash proceeds $ 16,839 $ 11,779 $ 9,809 Intrinsic value of options exercised $ 97,007 $ 61,469 $ 33,302 Tax benefits realized $ 24,252 $ 15,367 $ 12,809 |
Summary of assumptions for estimated fair value of employee stock option awards at grant date | We estimated the fair value of employee stock option awards at the grant date based on the assumptions summarized in the following table: Year Ended December 31, (Weighted average) 2019 2018 2017 Expected volatility 21.4 % 23.7 % 26.6 % Expected term 7.0 years 7.3 years 7.3 years Risk-free interest rate 2.52 % 2.87 % 2.44 % Expected dividend yield 1.3 % 1.5 % 1.5 % Grant date fair value $ 37.75 $ 35.71 $ 32.00 |
Summary of restricted share actvity | The table below presents restricted stock award activity under our share-based plans for the year ended December 31, 2019: Shares Weighted Average Balance unvested at December 31, 2018 307,773 $ 101.93 Granted (at market price) (1) 71,494 162.81 Less: Vested 75,143 74.45 Forfeited 820 109.93 Balance unvested at December 31, 2019 303,304 $ 123.13 |
Total restricted stock awards that vested for the past three years and related fair value | The table below presents the total number of restricted stock awards that vested for the past three years and the related fair value of those awards (in thousands, except share amounts): 2019 2018 2017 Restricted stock awards - shares vested 75,143 68,149 79,224 Fair value of restricted stock awards vested $ 12,316 $ 9,642 $ 9,260 |
Number of shares purchased by employees under the employee stock purchase plan | For the two six month offering periods in 2019, 2018 and 2017, our employees purchased the following aggregate number of shares: 2019 2018 2017 12,716 15,966 16,610 |
Restricted [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of share-based compensation expense and recognized tax benefits [Table Text Block] | The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands): 2019 2018 2017 Restricted stock awards share-based compensation expense $ 10,026 $ 9,151 $ 8,547 |
Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of share-based compensation expense and recognized tax benefits [Table Text Block] | The following table presents the total share-based compensation expense for stock option awards for the past three years (in thousands): 2019 2018 2017 Option grants share-based compensation expense $ 3,021 $ 3,218 $ 3,553 Option grants share-based compensation tax benefits 755 805 888 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income before income taxes and equity earnings (losses) | Income before income taxes and equity earnings is attributable to the following jurisdictions (in thousands): Year Ended December 31, 2019 2018 2017 United States $ 304,259 $ 278,311 $ 259,436 Foreign 13,215 14,682 9,746 Total $ 317,474 $ 292,993 $ 269,182 |
Provision for income taxes | The provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current: Federal $ 35,270 $ 39,504 $ 71,329 State and other 17,168 14,609 11,289 Total current provision for income taxes 52,438 54,113 82,618 Deferred: Federal 4,154 4,676 (6,643) State and other (431) (15) 2,007 Total deferred provision for income taxes 3,723 4,661 (4,636) Provision for income taxes $ 56,161 $ 58,774 $ 77,982 |
Reconciliation of the U.S. federal statutory tax rate to effective tax rate on income before income taxes and equity earnings (losses) | A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity earnings is as follows: Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.00 % 21.00 % 35.00 % Change in valuation allowance 0.10 (0.13) (0.06) Stock-based compensation (7.40) (5.23) (4.67) Re-measurement of net deferred tax liability — — (4.46) Other, primarily state income tax rate 3.99 4.42 3.16 Total effective tax rate 17.69 % 20.06 % 28.97 % |
Components of deferred tax assets and liabilities | The table below presents the components of our deferred tax assets and liabilities (in thousands): December 31, 2019 2018 Deferred tax assets: Product inventories $ 5,740 $ 5,413 Accrued expenses 927 776 Leases 42,698 1,189 Share-based compensation 9,245 9,427 Uncertain tax positions 2,852 2,558 Net operating losses 4,807 5,058 Interest rate swaps 66 — Other 2,889 2,080 Total non-current 69,224 26,501 Less: Valuation allowance (4,794) (5,058) Component reclassified for net presentation (63,699) (20,897) Total non-current, net 731 546 Total deferred tax assets 731 546 Deferred tax liabilities: Trade discounts on purchases 2,326 2,094 Prepaid expenses 2,821 1,804 Leases 41,418 — Intangible assets, primarily goodwill 32,331 30,988 Depreciation 17,401 14,924 Interest rate swaps — 486 Total non-current 96,297 50,296 Component reclassified for net presentation (63,699) (20,897) Total non-current, net 32,598 29,399 Total deferred tax liabilities 32,598 29,399 Net deferred tax liability $ 31,867 $ 28,853 |
Summary of activity related to uncertain tax positions | The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands): 2019 2018 2017 Balance at beginning of year $ 12,179 $ 9,937 $ 7,846 Increases for tax positions taken during a prior period 771 76 129 Increases for tax positions taken during the current period 2,354 3,809 3,260 Decreases resulting from the expiration of the statute of limitations 1,390 1,603 869 Decreases relating to settlements 332 40 429 Balance at end of year $ 13,582 $ 12,179 $ 9,937 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data): Year Ended December 31, 2019 2018 2017 Net income $ 261,575 $ 234,461 $ 191,339 Net loss attributable to noncontrolling interest — — 294 Net income attributable to Pool Corporation $ 261,575 $ 234,461 $ 191,633 Weighted average shares outstanding: Basic 39,833 40,311 40,838 Effect of dilutive securities: Stock options and employee stock purchase plan 1,032 1,382 1,611 Diluted 40,865 41,693 42,449 Earnings per share: Basic $ 6.57 $ 5.82 $ 4.69 Diluted $ 6.40 $ 5.62 $ 4.51 Anti-dilutive stock options excluded from diluted earnings per share computations (1) — — 108 (1) Since these options have exercise prices that are higher than the average market prices of our common stock, including them in the calculation would have an anti-dilutive effect on earnings per share. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of rent expense associated with operating leases | The table below presents rent expense associated with facility and vehicle operating leases for the past three years (in thousands): Lease Cost Classification 2019 2018 2017 Operating lease cost (1) Selling and administrative expenses $ 60,104 $ 57,235 $ 54,023 Variable lease cost Selling and administrative expenses $ 13,778 $ 12,867 $ 12,138 |
Lease cost table text block | Based on our lease portfolio as of December 31, 2019, the table below sets forth the approximate future lease payments related to operating leases with initial terms of one year or more (in thousands): 2020 $ 51,621 2021 45,992 2022 37,044 2023 24,711 2024 14,060 Thereafter 15,939 Total lease payments 189,367 Less: interest 11,032 Present value of lease liabilities $ 178,335 |
us-gaap_LeaseCostTableTextBlock | The table below presents the weighted-average remaining lease term (years) of our operating leases and the weighted-average discount rate used in the above calculation: December 31, Lease Term and Discount Rate for Operating Leases 2019 Weighted-average remaining lease term (years) 4.57 Weighted-average discount rate 3.41 % |
us-gaap_LeaseCostTableTextBlock1 | The table below presents the amount of cash paid for amounts included in the measurement of lease liabilities (in thousands): Year Ended December 31, 2019 Operating cash flows for lease liabilities $ 56,617 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Rent Expense [Table Text Block] | The table below presents rent expense associated with this lease for the past three years (in thousands): 2019 2018 2017 NCC $ 1,222 $ 1,155 $ 1,122 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Defined Contribution Plan [Abstract] | |
Matching contributions [Table Text Block] | The table below sets forth our contributions for the past three years (in thousands): 2019 2018 2017 Defined contribution and international retirement plans $ 7,373 $ 7,239 $ 6,946 Deferred compensation plan 195 245 325 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited quarterly results of operations | The table below summarizes the unaudited quarterly results of operations for the past two years (in thousands, except per share data): Quarter 2019 2018 First Second Third Fourth First Second Third Fourth Net sales $ 597,456 $ 1,121,328 $ 898,500 $ 582,234 $ 585,900 $ 1,057,804 $ 811,311 $ 543,082 Gross profit 174,631 330,314 257,931 162,050 166,073 308,655 235,003 160,442 Net income 32,637 131,390 79,525 18,024 31,339 117,049 69,261 16,811 Earnings per share: Basic $ 0.83 $ 3.30 $ 1.99 $ 0.45 $ 0.78 $ 2.89 $ 1.71 $ 0.42 Diluted $ 0.80 $ 3.22 $ 1.95 $ 0.44 $ 0.75 $ 2.80 $ 1.66 $ 0.41 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |||
Gains (losses) on foreign currency transactions | $ (1,347,000) | $ (560,000) | $ 171,000 |
Number of sales centers in North America, Europe and Australia | 373 | ||
Number of distribution networks | 4 | ||
Advertising expense | $ 7,842,000 | 7,390,000 | 7,477,000 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 1,400,000 | 1,900,000 | |
Threshold past due account balances for reserve analysis | $ 20,000 | ||
Threshold past due days for reserve analysis | 60 | ||
Sales period (in months) for establishing reserve for inventory obsolescence | 12 | ||
Depreciation expense | $ 27,885,000 | 26,122,000 | 24,157,000 |
Cumulative Share Repurchases | 1,450,000,000 | ||
Cumulative Dividends | 578,900,000 | ||
Cash paid during the year for [Abstract] | |||
Income taxes, net of refunds | 51,076,000 | 50,091,000 | 84,251,000 |
Interest Paid, Excluding Capitalized Interest, Operating Activities | 20,960,000 | 17,796,000 | 12,957,000 |
COLOMBIA | |||
Business Acquisition [Line Items] | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 900,000 | ||
PSL [Member] | Initial Ownership Percentage [Member] | |||
Business Acquisition [Line Items] | |||
Controlling interest by parent | 60.00% | ||
Shipping and Handling Costs | |||
Business Acquisition [Line Items] | |||
Shipping and handling costs associated with outbound freight | $ 51,580,000 | 48,610,000 | 45,247,000 |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Shipping and handling costs associated with outbound freight | $ 51,580,000 | $ 48,610,000 | $ 45,247,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies Newly Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 180,600 | $ 176,689 |
Present Value of Lease Liability | $ 178,335 | |
Straight Line Rent Liability | 5,100 | |
Prepaid Rent | 4,900 | |
ASU 2016-02, Leases | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | 175,700 | |
Present Value of Lease Liability | $ 181,600 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 6,182 | $ 3,897 | $ 4,050 |
Bad debt expense | 2,768 | 4,164 | 916 |
Write-offs, net of recoveries | (3,478) | (1,879) | (1,069) |
Balance at end of year | 5,472 | 6,182 | 3,897 |
SEC Schedule, 12-09, Reserve, Inventory [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 7,726 | 6,264 | 6,531 |
Provision for inventory write-downs | 3,656 | 3,998 | 2,660 |
Deductions for inventory write-offs | (2,346) | (2,536) | (2,927) |
Balance at end of year | $ 9,036 | $ 7,726 | $ 6,264 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies Equity Method Investments (Details) | Dec. 31, 2019 |
NCC [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment (as a percent) | 50.00% |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Unrealized Losses on Interest Rate Swaps | $ 919 | $ 0 |
Unrealized Gains on Interest Rate Swaps | 655 | 2,378 |
Business Combination, Contingent Consideration, Liability | $ 703 | $ 1,117 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies Fair Value Measurement 2 (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Contingent consideration liability, current | $ 300 |
Contingent consideration liability, noncurrent | $ 400 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 40 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 - 10 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 - 10 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 - 6 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 - 15 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 - 7 years |
Organization and Summary of _11
Organization and Summary of Significant Accounting Policies Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Redeemable Noncontrolling Interest [Roll Forward] | |||
Redeemable noncontrolling interest, beginning of period | $ 0 | $ 0 | $ 2,287 |
Redemption value adjustment of noncontrolling interest | 0 | 360 | |
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | 0 | 0 | (294) |
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Noncontrolling Interest | 0 | 0 | 220 |
Less: purchase of redeemable noncontrolling interest | 0 | 0 | 2,573 |
Redeemable noncontrolling interest, end of period | $ 0 | $ 0 | $ 0 |
Organization and Summary of _12
Organization and Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | $ (10,127) | $ (12,422) |
Unrealized (losses) gains on interest rate swaps, net of tax (1) | (232) | 1,425 |
Accumulated other comprehensive loss | $ (10,359) | $ (10,997) |
Acquisitions (Details)
Acquisitions (Details) | 1 Months Ended | |||||||
Jan. 31, 2019locations | Nov. 30, 2018locations | Jan. 31, 2018distribution_center | Dec. 31, 2017locations | Oct. 31, 2017locations | Jul. 31, 2017distribution_center | Apr. 30, 2017locations | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||||||
Number of sales centers | 373 | |||||||
Tore Pty. Ltd. (Pool Power) [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | distribution_center | 1 | |||||||
Lincoln Equipment, Inc. (Lincoln Aquatics) [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
New Star Holdings Pty. Ltd. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | distribution_center | 1 | |||||||
E-Grupa [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
Kripsol Intermark Malaga S.L. (Intermark) [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
Chem Quip, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 5 | |||||||
Turf & Garden, Inc., Virginia [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 3 | |||||||
Turf & Garden, Inc., North Carolina [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
Virginia | W.W. Adcock, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
North Carolina | W.W. Adcock, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 1 | |||||||
PENNSYLVANIA | W.W. Adcock, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Number of Locations | 2 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2019USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Highest goodwill balance among other reporting units | $ 5,700 | ||
Average goodwill balance among other reporting units | $ 800 | ||
Number of reporting units with allocated goodwill balances | 223 | ||
Goodwill [Roll Forward] | |||
Balance, beginning of period | $ 198,351 | $ 199,314 | |
Acquired goodwill | 334 | ||
Goodwill, Translation Adjustments | 124 | (1,297) | |
Balance, end of period | 198,475 | 198,351 | |
Accumulated goodwill impairment losses | (9,879) | (9,879) | |
Goodwill impairment | 0 | 0 | |
Accumulated goodwill impairment losses | (9,879) | (9,879) | |
Goodwill | $ 188,596 | $ 188,472 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets [Line Items] | |||
Other intangible assets, net | $ 11,038 | $ 12,004 | |
Total other intangible assets, gross | 15,971 | 16,394 | |
Amortization of Intangible Assets | 1,000 | 1,100 | $ 1,000 |
Other intangible assets, future amortization expense [Abstract] | |||
2020 | 856 | ||
2021 | 298 | ||
2022 | 108 | ||
2023 | 75 | ||
2024 | 75 | ||
National Pool Tile (NPT) tradename | |||
Intangible Assets [Line Items] | |||
Intangibles Gross | 1,500 | 1,500 | |
Accumulated Amortization | (887) | (812) | |
Intangibles Net | $ 613 | 688 | |
Weighted Average Useful Life | 20 years | ||
Non-compete agreements | |||
Intangible Assets [Line Items] | |||
Intangibles Gross | $ 4,611 | 5,019 | |
Accumulated Amortization | (3,576) | (3,157) | |
Intangibles Net | $ 1,035 | 1,862 | |
Weighted Average Useful Life | 4 years 10 months 6 days | ||
Patents | |||
Intangible Assets [Line Items] | |||
Intangibles Gross | $ 470 | 473 | |
Accumulated Amortization | (470) | (421) | |
Intangibles Net | $ 0 | 52 | |
Weighted Average Useful Life | 5 years | ||
Total other intangibles | |||
Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (4,933) | (4,390) | |
Horizon tradename | |||
Intangible Assets [Line Items] | |||
Acquired Indefinite-lived Intangibles | 8,400 | 8,400 | |
Pool Systems tradename and trademarks | |||
Intangible Assets [Line Items] | |||
Acquired Indefinite-lived Intangibles | $ 990 | $ 1,002 |
Details of Certain Balance Sh_3
Details of Certain Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables, net [Abstract] | ||
Trade accounts | $ 18,455 | $ 16,451 |
Vendor programs | 59,228 | 57,304 |
Other, net | 4,437 | 1,920 |
Total receivables | 82,120 | 75,675 |
Less allowance for doubtful accounts | (5,472) | (6,182) |
Receivables, net | 76,648 | 69,493 |
Prepaid expenses and other current assets [Abstract] | ||
Prepaid expenses | 14,568 | 15,114 |
Other current assets | 1,604 | 3,392 |
Prepaid expenses and other current assets | 16,172 | 18,506 |
Property and equipment, net [Abstract] | ||
Land | 3,608 | 3,193 |
Buildings | 7,132 | 5,318 |
Leasehold improvements | 50,165 | 45,098 |
Autos and trucks | 89,052 | 82,216 |
Machinery and equipment | 69,027 | 61,945 |
Computer equipment | 43,001 | 39,307 |
Furniture and fixtures | 9,886 | 9,778 |
Fixed assets in progress | 1,761 | 1,751 |
Total property and equipment | 273,632 | 248,606 |
Less accumulated depreciation | (161,386) | (141,642) |
Property and equipment, net | 112,246 | 106,964 |
Accrued expenses and other current liabilities [Abstract] | ||
Salaries and payroll deductions | 13,688 | 12,475 |
Performance-based compensation | 22,907 | 25,261 |
Taxes payable | 9,814 | 8,337 |
Other current liabilities | 14,404 | 12,534 |
Accrued expenses and other current liabilities | $ 60,813 | $ 58,607 |
Debt (Details)
Debt (Details) € in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019AUD ($) | Dec. 31, 2019EUR (€) | Sep. 29, 2017USD ($) | Sep. 28, 2017USD ($) | |
Current portion [Abstract] | |||||||
Short-term borrowings | $ 1,647 | $ 0 | |||||
Short-term borrowings and current portion of long-term debt | 11,745 | 9,168 | |||||
Long-term portion [Abstract] | |||||||
Long-term debt, net | 499,662 | 657,593 | |||||
Debt | |||||||
Standby Letters of Credit | 4,800 | ||||||
Loss on Cash Flow Hedge Ineffectiveness | $ 500 | ||||||
Gain on Cash Flow Hedge Ineffectiveness | 1,200 | $ 2,400 | |||||
Average total leverage ratio, dividend declarations | 300.00% | 300.00% | 300.00% | ||||
Maximum average total leverage ratio, share repurchases | 250.00% | 250.00% | 250.00% | ||||
Deferred financing costs [Abstract] | |||||||
Balance at beginning of year | $ 4,712 | 4,606 | |||||
Financing costs deferred | 406 | 106 | 1,104 | ||||
Balance at end of year | 5,118 | 4,712 | $ 4,606 | ||||
Less: Accumulated amortization | (4,107) | (3,674) | |||||
Deferred financing costs, net of accumulated amortization | $ 1,011 | 1,038 | |||||
Financial and other covenants [Abstract] | |||||||
Financial covenants, dividend limitation as percent of preceding year's net income, maximum (in hundredths) | 50.00% | ||||||
Debt, Long-term and Short-term, Combined Amount | $ 511,407 | 666,761 | |||||
London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum | 1.025% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum | 1.425% | ||||||
Base Rate [Member] | |||||||
Debt | |||||||
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum | 0.025% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum | 0.425% | ||||||
Canadian Dealer Offered Rate [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||||
Federal Funds Rate [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||
Commercial Paper [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||||
Unsecured Syndicated Senior Credit Facility [Member] | |||||||
Long-term portion [Abstract] | |||||||
Long-term Line of Credit, Noncurrent | $ 200,673 | 550,131 | |||||
Debt | |||||||
Line of Credit, maximum borrowing capacity | $ 750,000 | $ 465,000 | |||||
Line of credit facility, term (in years) | five | ||||||
Line of Credit, Accordian Feature Increase in borrowing capacity | $ 75,000 | ||||||
Line of Credit Facility, Maximum Capacity Including Accordian | 825,000 | ||||||
Line of Credit Facility, Amount Outstanding | 200,700 | ||||||
Line of credit facility, remaining borrowing capacity | $ 544,500 | ||||||
Weighted average effective interest rate (in hundredths) | 2.80% | 2.80% | 2.80% | ||||
Annual facility fee, minimum (in hundredths) | 0.10% | ||||||
Annual facility fee, maximum (in hundredths) | 0.20% | ||||||
Long-term Line of Credit, Noncurrent | $ 200,673 | 550,131 | |||||
Term Facility | |||||||
Long-term portion [Abstract] | |||||||
Long-term Line of Credit, Noncurrent | 185,000 | ||||||
Debt | |||||||
Line of Credit, maximum borrowing capacity | $ 185,000 | ||||||
Weighted average effective interest rate (in hundredths) | 2.50% | 2.50% | 2.50% | ||||
Long-term Line of Credit, Noncurrent | $ 185,000 | ||||||
Term Facility Quarterly Principal Payment | 1.25% | 1.25% | 1.25% | ||||
Term Facility Total of Quarterly Principal Payments | 33.75% | 33.75% | 33.75% | ||||
Term Facility Final Principal Payment | 66.25% | 66.25% | 66.25% | ||||
Term Facility | Base Rate [Member] | |||||||
Debt | |||||||
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum | 0.125% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum | 0.625% | ||||||
Term Facility | Eurodollar [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.00% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum | 1.125% | ||||||
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum | 1.625% | ||||||
Term Facility | Prime Rate [Member] | |||||||
Debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||
Receivables Securitization Facility [Member] | |||||||
Long-term portion [Abstract] | |||||||
Receivable Securitization Facility | $ 115,000 | 108,500 | |||||
Debt | |||||||
Receivables Facility, Borrowing Capacity Peak Seasonal Maximum | 295,000 | ||||||
Receivables Facility, Borrowing Capacity NonSeasonal Minimum | 120,000 | ||||||
Receivables Facility, Borrowing Capacity NonSeasonal Maximum | $ 275,000 | ||||||
Receivables Facility, Term (in years) | 2 years | ||||||
Receivable Securitization Facility | $ 115,000 | 108,500 | |||||
Weighted average effective interest rate | 2.60% | 2.60% | 2.60% | ||||
Receivables facility, unused fee | 0.35% | ||||||
Australian Seasonal Credit Facility [Member] | |||||||
Current portion [Abstract] | |||||||
Australian credit facility | $ 10,098 | $ 9,168 | |||||
Debt | |||||||
Line of Credit, maximum borrowing capacity | $ 20,000 | ||||||
Bank Overdrafts [Member] | |||||||
Debt | |||||||
Borrowing Capacity, Bank Overdraft Facility (in Euros) | € | € 12,000 | ||||||
Forward-starting Interest Rate Swap 1 [Member] | |||||||
Interest rate swap agreement, fixed interest rate | 2.0925% | 2.0925% | 2.0925% | ||||
Derivative | |||||||
Derivative, Notional Amount | $ 75,000 | ||||||
Interest rate swap agreement, fixed interest rate | 2.0925% | 2.0925% | 2.0925% | ||||
Forward-starting Interest Rate Swap 2 [Member] | |||||||
Interest rate swap agreement, fixed interest rate | 1.55% | 1.55% | 1.55% | ||||
Derivative | |||||||
Derivative, Notional Amount | $ 75,000 | ||||||
Interest rate swap agreement, fixed interest rate | 1.55% | 1.55% | 1.55% |
Debt Interest Rate Swaps (Detai
Debt Interest Rate Swaps (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 05, 2020 | |
Derivative | ||||
Incremental interest benefit arising from difference between interest paid and interest received related to swap agreements | $ 300 | |||
Incremental interest expense arising from difference between interest paid and interest received related to swap agreements | $ 300 | $ 1,700 | ||
Forward-starting Interest Rate Swap 3 [Member] | Subsequent Event [Member] | ||||
Derivative | ||||
Interest rate swap agreement, fixed interest rate | 1.38% | |||
Derivative, Notional Amount | $ 150,000 | |||
Interest Rate Swap 1 | ||||
Derivative | ||||
Interest rate swap agreement, fixed interest rate | 2.273% | |||
Derivative, Notional Amount | $ 75,000 | |||
Interest Rate Swap 2 | ||||
Derivative | ||||
Interest rate swap agreement, fixed interest rate | 2.111% | |||
Derivative, Notional Amount | $ 25,000 | |||
Interest Rate Swap 3 | ||||
Derivative | ||||
Interest rate swap agreement, fixed interest rate | 2.111% | |||
Derivative, Notional Amount | $ 50,000 |
Debt Interest Rate Swaps 2 (Det
Debt Interest Rate Swaps 2 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative | |||
Gain on cash flow hedge ineffectiveness | $ 1,200 | $ 2,400 | |
Loss on Cash Flow Hedge Ineffectiveness | $ (500) | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 1,400 | $ 1,900 | |
Interest Rate Swap 4 | |||
Derivative | |||
Interest rate swap agreement, fixed interest rate | 1.1425% | ||
Derivative, Notional Amount | $ 150,000 |
Debt Interest Rate Swaps 3 (Det
Debt Interest Rate Swaps 3 (Details) - USD ($) $ in Millions | Feb. 05, 2020 | Dec. 31, 2019 |
Forward-starting Interest Rate Swap 1 [Member] | ||
Derivative | ||
Derivative, Forward-starting interest rate swap agreement, fixed interest rate | 2.0925% | |
Derivative, Notional Amount | $ 75 | |
Forward-starting Interest Rate Swap 2 [Member] | ||
Derivative | ||
Derivative, Forward-starting interest rate swap agreement, fixed interest rate | 1.55% | |
Derivative, Notional Amount | $ 75 | |
Forward-starting Interest Rate Swap 3 [Member] | Subsequent Event [Member] | ||
Derivative | ||
Derivative, Forward-starting interest rate swap agreement, fixed interest rate | 1.38% | |
Derivative, Notional Amount | $ 150 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2019 | |
Grant Date Fair Value Assumptions [Abstract] | ||||
Share-based compensation | $ 13,472,000 | $ 12,874,000 | $ 12,482,000 | |
Stock Options [Member] | ||||
Stock option activity [Roll Forward] | ||||
Beginning balance (in shares) | 1,879,151 | |||
Granted (in shares) | 65,525 | |||
Exercised (in shares) | 640,475 | 491,448 | 364,984 | |
Forfeited (in shares) | 2,150 | |||
Ending balance (in shares) | 1,302,051 | 1,879,151 | ||
Exercisable (In Shares) | 877,812 | |||
Stock option weighted average exercise price [Abstract] | ||||
Beginning balance (in dollars per share) | $ 48.19 | |||
Granted (in dollars per share) | 160.67 | |||
Exercised (in dollars per share) | 26.29 | |||
Forfeited (in dollars per share) | 150.29 | |||
Ending balance (in dollars per share) | 64.46 | $ 48.19 | ||
Exercisable at end of period (in dollars per share) | $ 42.05 | |||
Weighted Average Remaining Contractual Term [Abstract] | ||||
Weighted average remaining contractual term of shares outstanding (in years) | 4 years 1 month 13 days | |||
Weighted average remaining contractual term of shares exercisable at end of period (in years) | 2 years 8 months 15 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Ending balance | $ 192,600,967 | |||
Exercisable at end of period | $ 149,516,227 | |||
Cash Proceeds and Tax Benefits [Abstract] | ||||
Exercised (in shares) | 640,475 | 491,448 | 364,984 | |
Cash proceeds | $ 16,839,000 | $ 11,779,000 | $ 9,809,000 | |
Intrinsic value of options exercised | 97,007,000 | 61,469,000 | 33,302,000 | |
Tax benefits realized | $ 24,252,000 | $ 15,367,000 | $ 12,809,000 | |
Grant Date Fair Value Assumptions [Abstract] | ||||
Expected volatility (in hundredths) | 21.40% | 23.70% | 26.60% | |
Expected term (in years) | 7 years | 7 years 3 months 18 days | 7 years 3 months 18 days | |
Risk-free interest rate (in hundredths) | 2.52% | 2.87% | 2.44% | |
Expected dividend yield (in hundredths) | 1.30% | 1.50% | 1.50% | |
Grant date fair value (in dollars per share) | $ 37.75 | $ 35.71 | $ 32 | |
Share-based compensation | $ 3,021,000 | $ 3,218,000 | $ 3,553,000 | |
Recognized tax benefits | 755,000 | 805,000 | 888,000 | |
Unamortized compensation expense | $ 2,700,000 | |||
Expense recognition over weighted average period (in years) | 2 years 3 months 18 days | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award performance period | 3 years | |||
Shares available for grant | 1,037,669 | |||
Grant Date Fair Value Assumptions [Abstract] | ||||
Share-based compensation | $ 10,026,000 | $ 9,151,000 | $ 8,547,000 | |
Unamortized compensation expense | $ 8,800,000 | |||
Expense recognition over weighted average period (in years) | 2 years 9 months 18 days | |||
Restricted stock awards [Roll Forward] | ||||
Beginning balance (in shares) | 307,773 | |||
Granted (at market price) (in shares) | 71,494 | |||
Vested (in shares) | 75,143 | 68,149 | 79,224 | |
Forfeited (in shares) | 820 | |||
Ending balance (in shares) | 303,304 | 307,773 | ||
Restricted stock awards weighted average grant date fair value [Abstract] | ||||
Beginning balance (in dollars per share) | $ 101.93 | |||
Granted (at market price) (in dollars per share) | 162.81 | |||
Vested (in dollars per share) | 74.45 | |||
Forfeited (in dollars per share) | 109.93 | |||
Ending balance (in dollars per share) | $ 123.13 | $ 101.93 | ||
Vested (in shares) | 75,143 | 68,149 | 79,224 | |
Fair value of restricted stock awards vested | $ 12,316,000 | $ 9,642,000 | $ 9,260,000 | |
ESPP Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares purchased under the ESPP (in shares) | 12,716 | 15,966 | 16,610 | |
Grant Date Fair Value of most recent ESPP Purchase (per share) | $ 44.45 | |||
Grant Date Fair Value Assumptions [Abstract] | ||||
Share-based compensation | $ 400,000 | $ 500,000 | $ 400,000 | |
LTIP 2007 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares allocated for issuance (in shares) | 9,315,000 | |||
Shares available for grant | 4,319,501 | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares allocated for issuance (in shares) | 956,250 | |||
Discounted percentage rate offered under the employee stock purchase plan (in hundredths) | 85.00% | |||
Minimum [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award performance period, extension period | 1 year | |||
Maximum [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award performance period, extension period | 2 years |
Share-Based Compensation Share-
Share-Based Compensation Share-Based Compensation Price Ranges (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 1,302,051 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 4 years 1 month 13 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 64.46 |
Exercisable Stock Options (in shares) | shares | 877,812 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 42.05 |
Exercise Price Range 18.44 to 24.50 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 478,102 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 1 year 6 months 3 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 29.12 |
Exercisable Stock Options (in shares) | shares | 478,102 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 29.12 |
Exercise Price Range 24.51 to 69.85 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 436,266 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 4 years 1 month 6 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 57.19 |
Exercisable Stock Options (in shares) | shares | 345,202 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 53.84 |
Exercise Price Range 69.86 to 138.11 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 387,683 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 7 years 4 months 6 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 116.22 |
Exercisable Stock Options (in shares) | shares | 54,508 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 80.80 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Provisional tax benefit recognized for remeasurement of deferred tax liability | $ 12,000 | ||
United States | $ 304,259 | $ 278,311 | 259,436 |
Foreign | 13,215 | 14,682 | 9,746 |
Total | 317,474 | 292,993 | 269,182 |
Current [Abstract] | |||
Federal | 35,270 | 39,504 | 71,329 |
State and other | 17,168 | 14,609 | 11,289 |
Current tax | 52,438 | 54,113 | 82,618 |
Deferred [Abstract] | |||
Federal | 4,154 | 4,676 | (6,643) |
State and other | (431) | (15) | 2,007 |
Deferred tax | 3,723 | 4,661 | (4,636) |
Total | $ 56,161 | $ 58,774 | $ 77,982 |
Reconciliation of U.S. federal statutory tax rate to effective tax rate [Abstract] | |||
Federal statutory rate (in hundredths) | 21.00% | 21.00% | 35.00% |
Change in valuation allowance (in hundredths) | 0.10% | (0.13%) | (0.06%) |
Stock-based compensation (as a percent) | (7.40%) | (5.23%) | (4.67%) |
Federal tax reform (as a percent) | 0.00% | 0.00% | (4.46%) |
Other, primarily state income tax rate (in hundredths) | 3.99% | 4.42% | 3.16% |
Total effective tax rate (in hundredths) | 17.69% | 20.06% | 28.97% |
Deferred tax assets [Abstract] | |||
Product inventories | $ 5,740 | $ 5,413 | |
Accrued expenses | 927 | 776 | |
Leases | 42,698 | 1,189 | |
Share-based compensation | 9,245 | 9,427 | |
Uncertain tax positions | 2,852 | 2,558 | |
Net operating losses | 4,807 | 5,058 | |
Deferred Tax Assets, Hedging Transactions | 66 | ||
Other | 2,889 | 2,080 | |
Total noncurrent | 69,224 | 26,501 | |
Less: Valuation allowance, non-current | (4,794) | (5,058) | |
Component reclassified for net presentation | (63,699) | (20,897) | |
Total non-current, net | 731 | 546 | |
Total deferred tax assets | 731 | 546 | |
Deferred tax liabilities [Abstract] | |||
Trade discounts on purchases | 2,326 | 2,094 | |
Prepaid expenses | 2,821 | 1,804 | |
Deferred Tax Liabilities, Leasing Arrangements | 41,418 | ||
Intangible assets, primarily goodwill | 32,331 | 30,988 | |
Depreciation | 17,401 | 14,924 | |
Interest rate swaps | 0 | 486 | |
Total non-current | 96,297 | 50,296 | |
Component reclassified for net presentation | (63,699) | (20,897) | |
Deferred income taxes | 32,598 | 29,399 | |
Total deferred tax liabilities | 32,598 | 29,399 | |
Net deferred tax liability | 31,867 | 28,853 | |
Uncertain tax positions activity [Roll Forward] | |||
Beginning balance | 12,179 | 9,937 | $ 7,846 |
Increases for tax positions taken during a prior period | 771 | 76 | 129 |
Increases for tax positions taken during the current period | 2,354 | 3,809 | 3,260 |
Decreases resulting from the expiration of the statute of limitations | 1,390 | 1,603 | 869 |
Decreases relating to settlements | 332 | 40 | 429 |
Ending balance | 13,582 | 12,179 | 9,937 |
Unrecognized tax benefits that, if recognized, would decrease the effective tax rate | 10,700 | 9,600 | |
Interest expense related to unrecognized tax benefits | 600 | 200 | 200 |
Accrued interest on unrecognized tax benefits | 1,700 | 1,100 | |
International Subsidiaries [Member] | |||
Loss Carryforwards [Line Items] | |||
Tax loss carry-forwards | 17,700 | ||
Deferred tax asset, valuation allowance | 4,600 | 5,100 | |
Adjustments for New Accounting Pronouncement [Member] | |||
Loss Carryforwards [Line Items] | |||
Excess tax benefits recognized as a result of the adoption | $ 23,500 | $ 15,300 | $ 12,600 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net income | $ 18,024 | $ 79,525 | $ 131,390 | $ 32,637 | $ 16,811 | $ 69,261 | $ 117,049 | $ 31,339 | $ 261,575 | $ 234,461 | $ 191,339 |
Net loss attributable to noncontrolling interest | 0 | 0 | 294 | ||||||||
Net income attributable to Pool Corporation | $ 261,575 | $ 234,461 | $ 191,633 | ||||||||
Weighted average shares outstanding [Abstract] | |||||||||||
Basic (in shares) | 39,833 | 40,311 | 40,838 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Stock options and employee stock purchase plan (in shares) | 1,032 | 1,382 | 1,611 | ||||||||
Diluted (in shares) | 40,865 | 41,693 | 42,449 | ||||||||
Basic (in dollars per share) | $ 0.45 | $ 1.99 | $ 3.30 | $ 0.83 | $ 0.42 | $ 1.71 | $ 2.89 | $ 0.78 | $ 6.57 | $ 5.82 | $ 4.69 |
Diluted (in dollars per share) | $ 0.44 | $ 1.95 | $ 3.22 | $ 0.80 | $ 0.41 | $ 1.66 | $ 2.80 | $ 0.75 | $ 6.40 | $ 5.62 | $ 4.51 |
Anti-dilutive stock options whose exercise prices were higher than the common stock's average market price during the period (in shares) | 0 | 0 | 108 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Future minimum lease payments [Abstract] | |||
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 51,621 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 45,992 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 37,044 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Four | 24,711 | ||
Lessee, Operating Lease, Liability, Payments, Due Year Five | 14,060 | ||
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 15,939 | ||
Lessee, Operating Lease, Liability, Payments, Due | 189,367 | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 11,032 | ||
Present Value of Lease Liability | $ 178,335 | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years 6 months 25 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.41% | ||
Operating Lease, Cost | $ 60,104 | $ 57,235 | $ 54,023 |
Variable Lease, Cost | 13,778 | $ 12,867 | $ 12,138 |
Operating Lease, Payments | $ 56,617 |
Related Party Transactions (Det
Related Party Transactions (Details) - NCC [Member] | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | |||
Equity method investment (as a percent) | 50.00% | ||
Office space occupied (in square feet) | 60,000 | ||
Monthly rent expense (per month) | $ 100,000 | ||
Related party rent expense | $ 1,222,000 | $ 1,155,000 | $ 1,122,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Compensation Plan [Line Items] | |||
Percent company total match on employee deferred compensation plan contributions, maximum (in hundredths) | 4.00% | ||
Matching contributions - deferred compensation plan | $ 195 | $ 245 | $ 325 |
Savings and Retirement 401K [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Eligible employees' maximum allowable contribution as a percentage of compensation (in hundredths) | 75.00% | ||
Percentage company total match on employee contributions, maximum (in hundredths) | 4.00% | ||
Company match on the first three percent of compensation deferred (in hundredths) | 100.00% | ||
Company match on deferrals between three percent and five percent of compensation (in hundredths) | 50.00% | ||
Compensation deferred percentage eligible for one hundred percent match on employees' contributions (in hundredths) | 3.00% | ||
Compensation deferred percentage eligible for fifty percent match on employee contributions (in hundredths) | 5.00% | ||
Defined contribution and international retirement plans expense | $ 7,373 | $ 7,239 | $ 6,946 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Net sales | $ 582,234 | $ 898,500 | $ 1,121,328 | $ 597,456 | $ 543,082 | $ 811,311 | $ 1,057,804 | $ 585,900 | $ 3,199,517 | $ 2,998,097 | $ 2,788,188 |
Cost of sales | 420,184 | 640,569 | 791,014 | 422,825 | 382,640 | 576,308 | 749,149 | 419,827 | 2,274,592 | 2,127,924 | 1,982,899 |
Gross profit | 162,050 | 257,931 | 330,314 | 174,631 | 160,442 | 235,003 | 308,655 | 166,073 | 924,925 | 870,173 | 805,289 |
Net income | $ 18,024 | $ 79,525 | $ 131,390 | $ 32,637 | $ 16,811 | $ 69,261 | $ 117,049 | $ 31,339 | 261,575 | 234,461 | 191,339 |
Net income attributable to Pool Corporation | $ 261,575 | $ 234,461 | $ 191,633 | ||||||||
Earnings (loss) per share: | |||||||||||
Basic (in dollars per share) | $ 0.45 | $ 1.99 | $ 3.30 | $ 0.83 | $ 0.42 | $ 1.71 | $ 2.89 | $ 0.78 | $ 6.57 | $ 5.82 | $ 4.69 |
Diluted (in dollars per share) | $ 0.44 | $ 1.95 | $ 3.22 | $ 0.80 | $ 0.41 | $ 1.66 | $ 2.80 | $ 0.75 | $ 6.40 | $ 5.62 | $ 4.51 |
Uncategorized Items - pool-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (709,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (709,000) |