What the changes say
- Mohawk added granular risks covering operations in Russia, AI integration, and patent litigation.
- Disclosures on international tariffs, emerging markets, and climate regulations were expanded.
What changed since the prior 10-K
New
- NewInternational Risks
The Company faces risks and uncertainties related to its operations in Russia
U.S. and European Union sanctions restrict Mohawk's operations, supply chains, and technology transfers in Russia.
- NewBusiness and Operational Risks
The Company may be unable to predict changing consumer preferences and demand effectively
Shifting consumer preferences and technological changes could reduce demand for Mohawk's flooring and building products.
- NewBusiness and Operational Risks
The Company faces risks in identifying suitable acquisition candidates or partners for strategic investments
Mohawk may fail to find suitable acquisition targets or secure required regulatory approvals for strategic transactions.
- NewRegulatory and Legal Risks
cannot assure investors that any patents owned by or issued to it will provide the Company with competitive advantages, that third parties will not challenge these patents, or that the Company’s pending patent applications will ultimately be granted
Competitors may design around Mohawk's patents or independent third parties may use technology without authorization.
- NewRegulatory and Legal Risks
In the past, third parties have claimed that certain technologies incorporated in the Company’s products infringe their patent rights. The Company cannot be certain that the Company’s products do not and will not infringe issued patents or other intellectual property rights of others
Third parties have claimed Mohawk's products infringe their patent rights, risking damages and sales injunctions.
- NewRegulatory and Legal Risks
The Company utilizes information systems within its own infrastructure as well as those provided by third-party service providers to manage its operations. Any failure, interruption, or deficiency in these systems could materially and adversely affect the Company’s business
Information system failures could disrupt Mohawk's inventory management, distribution network, and order fulfillment.
- NewRegulatory and Legal Risks
The Company is subject to cybersecurity risks and expects to incur increasing costs in an effort to minimize those risks
Cyber-attacks or data breaches could compromise sensitive proprietary information and increase security costs.
- NewRegulatory and Legal Risks
The Company is subject to risks related to artificial intelligence (“AI”) and emerging technologies
Integrating AI and machine learning into production planning and supply chain optimization carries implementation and operational disruption risks.
Dropped
- DroppedIndustry and Economic Risks
Significant or prolonged declines in the U.S. or global economies could have a material adverse effect on the Company’s business
U.S. and global economic downturns reducing construction and remodeling spending.
- DroppedBusiness and Operational Risks
The Company may be unable to predict customer preferences or demand accurately, or to respond effectively to technological developments
- DroppedBusiness and Operational Risks
The Company operates in a market sector where demand is strongly influenced by rapidly changing customer preferences as to product design, product category and technical features. There is no assurance the Company will be able to quickly and effectively respond to changing customer demand or technological developments
- DroppedBusiness and Operational Risks
A failure to identify suitable acquisition candidates or partners for strategic investments and to complete acquisitions could have a material adverse effect on the Company’s business
- DroppedBusiness and Operational Risks
Third parties may claim that the Company infringed their intellectual property or proprietary rights, which could cause the Company to incur significant expenses or prevent the Company from selling its products
- DroppedBusiness and Operational Risks
The Company relies on information systems in managing the Company’s operations and any system failure or deficiency of such systems may have an adverse effect on the Company’s business
- DroppedFinancial and Liquidity Risks
credit rating downgrades, market volatility, market disruption, or weakness in the Company’s businesses, the Company’s ability to finance its operations or repay existing debt obligations may be materially and adversely affected
Reworded
- 98% rewrittenRegulatory and Legal Risks
The Company may be unable to protect its intellectual property rights
Removed specific country law citations, shortening the description of patent, trade secret, and trademark protections.
Was: The Company’s inability to protect its intellectual property rights could have a material adverse effect on the Company’s business
- 97% rewrittenIndustry and Economic Risks
Index to Financial Statements
Replaced a broad list of international macroeconomic pressures with specific tariff actions and trade restriction impacts.
- 88% rewrittenIndustry and Economic Risks
Increased tariffs may increase the Company’s costs of goods sold and/or decrease consumer discretionary spending
Updated to state that U.S. tariffs have already increased cost of goods sold and lowered gross margins on imported products.
Was: Increased tariffs may increase the Company’s costs of goods sold and/or decrease consumer discretionary spending, which could have a material adverse effect on the Company’s business
- 70% rewrittenInternational Risks
The Company faces risks and uncertainties associated with doing business in emerging markets
Refined wording on emerging markets in Brazil, eastern Europe, Malaysia, Mexico, and Russia to highlight heightened operational risks.
Was: The Company is subject to risks and uncertainties associated with doing business in emerging markets
- 62% rewrittenInternational Risks
The Company manufactures, sources and sells many products internationally and is exposed to risks associated with doing business globally
Updated international sales percentage from approximately 45% to approximately 46% and specified carpet pad manufacturing in Mexico.
- 58% rewrittenBusiness and Operational Risks
The Company may be unable to maintain its patent licensing revenues
Added language emphasizing that patents both safeguard competitive position and generate recurring patent license revenues.
Was: The Company’s inability to maintain its patent licensing revenues could have a material adverse effect on the Company’s business
- 54% rewrittenRegulatory and Legal Risks
The Company has been, and in the future may be, subject to costs, liabilities and other obligations under existing or new laws and regulations
Added explicit examples regarding international treaties, industry standards, and climate change regulations impacting operations and supply chains.
Was: The Company has been, and in the future may be, subject to costs, liabilities and other obligations under existing or new laws and regulations, which could have a material adverse effect on the Company’s business
- 47% rewrittenFinancial and Liquidity Risks
A downturn in the U.S. or global economies could impact the Company’s ability to obtain financing in the future, including any financing necessary to refinance existing indebtedness
Retained credit rating assessment risks with minor formatting adjustments regarding debt refinancing.
- 42% rewrittenRegulatory and Legal Risks
The Company is exposed to litigation, claims and other legal proceedings relating to its products, operations and compliance with various laws and regulations
Was: The Company may be exposed to litigation, claims and other legal proceedings relating to its products, operations and compliance with various laws and regulations, which could have a material adverse effect on the Company’s business
- 41% rewrittenFinancial and Liquidity Risks
Declines in the Company’s business conditions have in the past and may in the future result in an impairment of the Company’s assets, which in turn has resulted in and could result in future material non-cash charges
- 32% rewrittenIndustry and Economic Risks
The Company faces intense competition in the flooring industry that could decrease demand for the Company’s products or force it to lower prices
Was: The Company faces intense competition in the flooring industry that could decrease demand for the Company’s products or force it to lower prices, which could have a material adverse effect on the Company’s business
- 28% rewrittenBusiness and Operational Risks
The Company may experience certain risks associated with acquisitions, joint ventures and strategic investments
- 27% rewrittenBusiness and Operational Risks
The Company may be unable to obtain raw materials or sourced product on a timely basis
Was: The Company may be unable to obtain raw materials or sourced product on a timely basis, which could have a material adverse effect on the Company’s business
- 23% rewrittenBusiness and Operational Risks
In periods of rising costs, the Company may be unable to pass increases in raw materials, labor, energy and fuel-related costs on to its customers
Was: In periods of rising costs, the Company may be unable to pass raw materials, labor, energy and fuel-related cost increases on to its customers, which could have a material adverse effect on the Company’s business
- 23% rewrittenRegulatory and Legal Risks
Failure to attain certain sustainability targets and goals could have a material adverse effect on the Company's business
All 28 risk factors
Headings as the filing states them, in filing order.
Industry and Economic Risks
- 01The Company faces intense competition in the flooring industry that could decrease demand for the Company’s products or force it to lower prices32% rewritten
- 02Increased tariffs may increase the Company’s costs of goods sold and/or decrease consumer discretionary spending88% rewritten
- 03Index to Financial Statements97% rewritten
International Risks
- 04The Company manufactures, sources and sells many products internationally and is exposed to risks associated with doing business globally62% rewritten
- 05The Company faces risks and uncertainties associated with doing business in emerging markets70% rewritten
- 06Fluctuations in currency exchange rates may impact the Company’s financial condition and results of operations and may affect the comparability of results between the Company’s financial periods
- 07The Company faces risks and uncertainties related to its operations in RussiaNew
Business and Operational Risks
- 08The Company may be unable to predict changing consumer preferences and demand effectivelyNew
- 09In periods of rising costs, the Company may be unable to pass increases in raw materials, labor, energy and fuel-related costs on to its customers23% rewritten
- 10The Company may be unable to obtain raw materials or sourced product on a timely basis27% rewritten
- 11The Company’s business operations could suffer significant losses from climate change, natural disasters, catastrophes, fire, pandemics or other unexpected events
- 12The Company makes significant capital investments in its business, and such capital investments may not be successful or achieve their intended results
- 13The long-term performance of the Company’s business relies on its ability to attract, develop and retain talented personnel
- 14The Company may be unable to maintain its patent licensing revenues58% rewritten
- 15The Company may experience certain risks associated with acquisitions, joint ventures and strategic investments28% rewritten
- 16The Company faces risks in identifying suitable acquisition candidates or partners for strategic investmentsNew
Regulatory and Legal Risks
- 17The Company has been, and in the future may be, subject to costs, liabilities and other obligations under existing or new laws and regulations54% rewritten
- 18Failure to attain certain sustainability targets and goals could have a material adverse effect on the Company's business23% rewritten
- 19The Company is exposed to litigation, claims and other legal proceedings relating to its products, operations and compliance with various laws and regulations42% rewritten
- 20The Company may be unable to protect its intellectual property rights98% rewritten
- 21cannot assure investors that any patents owned by or issued to it will provide the Company with competitive advantages, that third parties will not challenge these patents, or that the Company’s pending patent applications will ultimately be grantedNew
- 22In the past, third parties have claimed that certain technologies incorporated in the Company’s products infringe their patent rights. The Company cannot be certain that the Company’s products do not and will not infringe issued patents or other intellectual property rights of othersNew
- 23The Company utilizes information systems within its own infrastructure as well as those provided by third-party service providers to manage its operations. Any failure, interruption, or deficiency in these systems could materially and adversely affect the Company’s businessNew
- 24The Company is subject to cybersecurity risks and expects to incur increasing costs in an effort to minimize those risksNew
- 25The Company is subject to risks related to artificial intelligence (“AI”) and emerging technologiesNew
Financial and Liquidity Risks
- 26A downturn in the U.S. or global economies could impact the Company’s ability to obtain financing in the future, including any financing necessary to refinance existing indebtedness47% rewritten
- 27Declines in the Company’s business conditions have in the past and may in the future result in an impairment of the Company’s assets, which in turn has resulted in and could result in future material non-cash charges41% rewritten
- 28Negative tax consequences could materially and adversely affect the Company’s business
Other Mohawk Industries 10-Ks
- FY2024 10-K risk factors27 risks
Housing market downturns and residential and commercial remodeling spending drive the company's core flooring demand risks.
Filed Feb 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.