Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 21, 2018 | Jun. 30, 2017 | |
Document and Entity Information Abstract [Abstract] | |||
Entity Registrant Name | POOL CORP | ||
Entity Central Index Key | 945,841 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,704,253,988 | ||
Entity Common Stock, Shares Outstanding | 40,396,155 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net sales | $ 2,788,188 | $ 2,570,803 | $ 2,363,139 |
Cost of sales | 1,982,899 | 1,829,716 | 1,687,495 |
Gross profit | 805,289 | 741,087 | 675,644 |
Selling and administrative expenses | 520,918 | 485,228 | 459,422 |
Operating income | 284,371 | 255,859 | 216,222 |
Interest and other non-operating expenses, net | (15,189) | (14,481) | (8,072) |
Income before income taxes and equity earnings | 269,182 | 241,378 | 208,150 |
Provision for income taxes | 77,982 | 92,931 | 80,137 |
Equity earnings in unconsolidated investments, net | 139 | 156 | 211 |
Net income | 191,339 | 148,603 | 128,224 |
Net loss attributable to noncontrolling interest | 294 | 352 | 51 |
Net income attributable to Pool Corporation | $ 191,633 | $ 148,955 | $ 128,275 |
Earnings per share: | |||
Basic (in dollars per share) | $ 4.69 | $ 3.56 | $ 2.98 |
Diluted (in dollars per share) | $ 4.51 | $ 3.47 | $ 2.90 |
Weighted average shares outstanding: | |||
Basic (in shares) | 40,838 | 41,872 | 43,105 |
Diluted (in shares) | 42,449 | 42,984 | 44,254 |
Cash dividends declared per common share (in dollars per share) | $ 1.42 | $ 1.19 | $ 1 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net income | $ 191,339 | $ 148,603 | $ 128,224 |
Other comprehensive income (loss), net of tax [Abstract] | |||
Foreign currency translation adjustments | 5,545 | (1,661) | (9,046) |
Change in unrealized gains and losses on interest rate swaps, net of tax | 1,205 | 1,312 | (1,021) |
Total other comprehensive income (loss) | 6,750 | (349) | (10,067) |
Comprehensive income | 198,089 | 148,254 | 118,157 |
Comprehensive loss attributable to noncontrolling interest | 74 | 378 | 448 |
Comprehensive income attributable to Pool Corporation | $ 198,163 | $ 148,632 | $ 118,605 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other comprehensive income (loss), net of tax [Abstract] | |||
Tax effect of change in unrealized gains and losses on interest rate swaps | $ (769) | $ (839) | $ 653 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 29,940 | $ 21,956 |
Receivables, net | 76,597 | 61,437 |
Receivables pledged under receivables facility | 119,668 | 104,714 |
Inventory, net | 536,474 | 486,116 |
Prepaid expenses and other current assets | 19,569 | 15,318 |
Deferred income taxes | 0 | |
Deferred income taxes, net | 6,016 | |
Total current assets | 782,248 | 695,557 |
Property and equipment, net | 100,939 | 83,290 |
Goodwill | 189,435 | 184,795 |
Other intangible assets, net | 13,223 | 13,326 |
Equity interest investments | 1,127 | 1,172 |
Other assets | 14,090 | 15,955 |
Total assets | 1,101,062 | 994,095 |
Current liabilities: | ||
Accounts payable | 245,249 | 230,728 |
Accrued expenses and other current liabilities | 65,482 | 64,387 |
Short-term borrowings and current portion of long-term debt | 10,835 | 1,105 |
Total current liabilities | 321,566 | 296,220 |
Deferred income taxes | 24,585 | |
Deferred tax liabilities, net | 34,475 | |
Long-term debt, net | 508,815 | 436,937 |
Other long-term liabilities | 22,950 | 18,966 |
Total liabilities | 877,916 | 786,598 |
Redeemable noncontrolling interest | 0 | 2,287 |
Stockholders' equity: | ||
Common stock | 40 | 41 |
Additional paid-in capital | 426,750 | 403,162 |
Retained deficit | (196,316) | (183,915) |
Accumulated other comprehensive loss | (7,328) | (14,078) |
Total stockholders' equity | 223,146 | 205,210 |
Total liabilities and stockholders' equity | $ 1,101,062 | $ 994,095 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
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, shares issued (in shares) | 40,212,477 | 41,089,720 |
Common stock, outstanding (in shares) | 40,212,477 | 41,089,720 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net income | $ 191,339 | $ 148,603 | $ 128,224 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 24,157 | 20,338 | 16,373 |
Amortization | 1,568 | 1,639 | 1,015 |
Share-based compensation | 12,482 | 9,902 | 9,543 |
Excess tax benefits from share-based compensation | 0 | (7,370) | (7,706) |
Provision for doubtful accounts receivable, net of write-offs | (154) | (155) | 197 |
Provision for inventory obsolescence, net of write-offs | (267) | (448) | 576 |
Provision for deferred income taxes | (4,636) | 3,749 | 4,198 |
(Gains) losses on sale of property and equipment | (285) | (320) | 230 |
Equity earnings in unconsolidated investments, net | (139) | (156) | (211) |
Net (gains) losses on foreign currency transactions | (171) | 679 | 774 |
Impairment of goodwill and other non-operating assets | 1,200 | 4,113 | 500 |
Other | 166 | 923 | (869) |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Receivables | (21,903) | (5,666) | (16,656) |
Product inventories | (35,783) | (8,050) | (10,848) |
Prepaid expenses and other assets | (4,096) | (3,077) | (434) |
Accounts payable | 5,077 | (17,896) | 9,956 |
Accrued expenses and other current liabilities | 6,756 | 18,570 | 11,188 |
Net cash provided by operating activities | 175,311 | 165,378 | 146,050 |
Investing activities | |||
Acquisition of businesses, net of cash acquired | (12,834) | (19,730) | (4,483) |
Purchases of property and equipment, net of sale proceeds | (39,390) | (34,352) | (29,095) |
Payments to fund credit agreement | 0 | (5,322) | (8,860) |
Collections from credit agreement | 0 | 3,737 | 4,557 |
Other investments, net | 4 | 24 | 88 |
Net cash used in investing activities | (52,220) | (55,643) | (37,793) |
Financing activities | |||
Proceeds from revolving line of credit | 1,067,868 | 1,154,090 | 911,712 |
Payments on revolving line of credit | (1,011,977) | (1,072,557) | (890,406) |
Proceeds from asset-backed financing | 161,600 | 155,000 | 143,400 |
Payments on asset-backed financing | (145,100) | (126,500) | (156,000) |
Proceeds from short-term borrowings and current portion of long-term debt | 27,333 | 18,442 | 8,119 |
Payments on short-term borrowings and current portion of long-term debt | (17,603) | (19,037) | (7,948) |
Payments on deferred and contingent acquisition consideration | (324) | 0 | 0 |
Purchase of redeemable non-controlling interest | (2,573) | 0 | 0 |
Payments of deferred financing costs | (1,104) | (69) | (320) |
Excess tax benefits from share-based compensation | 0 | 7,370 | 7,706 |
Proceeds from stock issued under share-based compensation plans | 11,466 | 11,752 | 18,269 |
Payments of cash dividends | (58,029) | (49,749) | (43,117) |
Purchases of treasury stock | (146,006) | (178,414) | (99,219) |
Net cash used in financing activities | (114,449) | (99,672) | (107,804) |
Effect of exchange rate changes on cash and cash equivalents | (658) | (1,344) | (2,046) |
Change in cash and cash equivalents | 7,984 | 8,719 | (1,593) |
Cash and cash equivalents at beginning of year | 21,956 | 13,237 | 14,830 |
Cash and cash equivalents at end of year | $ 29,940 | $ 21,956 | $ 13,237 |
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, 2014 | 43,511,000 | ||||
Balance at Dec. 31, 2014 | $ 244,352 | $ 44 | $ 338,620 | $ (90,650) | $ (3,662) |
Net income attributable to Pool Corporation | 128,275 | 0 | 0 | 128,275 | 0 |
Foreign currency translation | (9,046) | 0 | 0 | 0 | (9,046) |
Interest rate swaps, net of tax | (1,021) | $ 0 | 0 | 0 | (1,021) |
Repurchases of common stock, net of retirements (in shares) | (1,448,000) | ||||
Repurchases of common stock, net of retirements | (99,219) | $ (2) | 0 | (99,217) | 0 |
Share-based compensation | 9,543 | $ 0 | 9,543 | 0 | |
Issuance of shares under incentive stock plans (in shares) | 648,000 | ||||
Issuance of shares under incentive stock plans, including tax benefit | 25,976 | $ 1 | 25,975 | 0 | 0 |
Declaration of cash dividends | (43,117) | $ 0 | 0 | (43,117) | 0 |
Balance (in shares) at Dec. 31, 2015 | 42,711,000 | ||||
Balance at Dec. 31, 2015 | 255,743 | $ 43 | 374,138 | (104,709) | (13,729) |
Net income attributable to Pool Corporation | 148,955 | 0 | 0 | 148,955 | 0 |
Foreign currency translation | (1,661) | 0 | 0 | 0 | (1,661) |
Interest rate swaps, net of tax | 1,312 | $ 0 | 0 | 0 | 1,312 |
Repurchases of common stock, net of retirements (in shares) | (2,064,000) | ||||
Repurchases of common stock, net of retirements | (178,414) | $ (2) | 0 | (178,412) | 0 |
Share-based compensation | 9,902 | $ 0 | 9,902 | 0 | 0 |
Issuance of shares under incentive stock plans (in shares) | 443,000 | ||||
Issuance of shares under incentive stock plans, including tax benefit | 19,122 | $ 0 | 19,122 | 0 | 0 |
Declaration of cash dividends | $ (49,749) | $ 0 | 0 | (49,749) | 0 |
Balance (in shares) at Dec. 31, 2016 | 41,089,720 | 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 |
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, including tax benefit | 11,466 | $ 0 | 11,466 | 0 | 0 |
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 | 40,212,477 | 40,212,000 | |||
Balance at Dec. 31, 2017 | $ 223,146 | $ 40 | $ 426,750 | $ (196,316) | $ (7,328) |
Consolidated Statements of Cha9
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Treasury stock, shares of common stock (in shares) | 1,353 | 2,064 | 1,448 |
Retirement of treasury shares (in shares) | (1,353) | (2,064) | (1,448) |
Interest rate swap, tax | $ (769) | $ (839) | $ 653 |
Exercise and lapse of share-based awards, tax benefit | $ 0 | $ 7,370 | $ 7,706 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 , Pool Corporation and our subsidiaries (the Company , which may be referred to as we, us or our ), operated 351 sales centers in North America, Europe, South America and Australia from which we sell swimming pool equipment, parts and supplies, irrigation and related 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 will continue to consolidate PSL, but there will no longer be a separate noncontrolling interest reported on our Consolidated Statements of Income, nor Redeemable noncontrolling interest reported on our Consolidated Balance Sheets. Variable Interest Entity In February 2015, we entered into a five -year credit agreement with a swimming pool retailer. Under this agreement and the related revolving note, we were the primary lender of operating funds for this entity. The total lending commitment under the credit agreement was $8.5 million . In December 2017, we ended our lending arrangement with this entity and exercised our rights to the collateral that secured this agreement. The collateral was sufficient to satisfy the net balance previously recorded within Other assets 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 incentives, income taxes, incentive 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 Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting , on a prospective basis and as such, our prior year presentation has not changed. The provisions of this update simplify many key aspects of the accounting for and cash flow presentation of employee share-based compensation transactions, including accounting for income taxes, forfeitures, and statutory withholding requirements. In accordance with the new guidance, we now record all excess tax benefits or tax deficiencies as a component of our Provision for income taxes on our Consolidated Statements of Income. As a result of the adoption, we recognized $12.6 million of excess tax benefits in 2017 , which reduced our Provision for income taxes and positively impacted our Net income. Historically, these amounts were recorded as Additional paid in capital in stockholders’ equity on our Consolidated Balance Sheets. Additionally, we now present excess tax benefits or deficiencies as operating cash flows versus reclassifying the amount out of operating cash flows and presenting it in financing activities on the Consolidated Statements of Cash Flows. Additional amendments from this guidance related to forfeitures and minimum statutory withholding tax requirements had no impact to our financial position, results of operations or cash flows. As permitted, we continue to estimate forfeitures to determine the amount of compensation cost to be recognized each period rather than electing to account for forfeitures as they occur, and we continue to present the value of shares withheld for minimum statutory tax withholding requirements on the Consolidated Statements of Cash Flows as a financing activity. Another impact of the adoption is that the calculation of the effect of dilutive securities now excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding of approximately 550,000 shares for the year ended December 31, 2017 . On January 1, 2017, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires we classify all deferred tax assets and liabilities as noncurrent on the balance sheet rather than separately presenting net deferred tax assets or liabilities as current or noncurrent. Additionally, we no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances are also now classified as noncurrent. As permitted, we elected to adopt this guidance on a prospective basis and as such, our prior year presentation has not changed. The adoption of ASU 2015-17 did not have a material impact on our financial position, results of operations and related disclosures. On January 1, 2017, we adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which requires that we measure inventory at the lower of cost or net realizable value rather than at the lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The adoption of ASU 2015-11 did not have a material impact on our financial position, results of operations and related disclosures. On January 1, 2017, we adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of ASU 2015-16 did not have a material impact on our financial position, results of operations and related disclosures. As required, we adopted ASU 2014-15, Presentation of Financial Statements - Going Concern, as of December 31, 2016. Based on management’s evaluation, which included forecasting results covering the one-year period following our 2017 Form 10-K filing date, we did not identify any conditions or events that raise substantial doubt about our ability to continue as a going concern. 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 incentive 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 decisions about how to allocate resources 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 as to how products are classified 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 both swimming pool use and installation and irrigation installations and maintenance. Sales are substantially lower during the first and fourth quarters, when we may incur net losses. Revenue Recognition We recognize revenue when four basic criteria are met: 1. persuasive evidence of an arrangement exists; 2. delivery has occurred or services have been rendered; 3. our price to the buyer is fixed or determinable; and 4. collectability is reasonably assured. Customers may take delivery of products in a variety of ways. Customers may pick up products at any sales center location, or we may deliver products to their premises or job sites via our trucks; in these instances, we record revenue upon delivery to the customers. We also deliver products through third party carriers, and we record revenue when we present the product to the third party carriers. Products shipped via third party carriers are considered delivered based on the shipping terms, which are generally FOB shipping point. We include shipping and handling fees billed to customers as freight out income within net sales. We offer volume incentives to some of our customers and we account for these incentives as an adjustment to 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 early buy programs, as an adjustment to sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. Other items that we record as adjustments to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. We also 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. Effective January 1, 2018, we will adopt ASU 2014-09, Revenue from Contracts with Customers, and subsequent amendments. Under the new standard, revenue will be recognized when we satisfy our performance obligation by transferring promised products to our customer. We expect to recognize revenue when control of the product has been transferred to the customer upon delivery to the customer or the freight carrier, if delivered by a third party, as we believe our performance obligation is satisfied at such point in time. This treatment is consistent with our current revenue recognition policies. We evaluated our bill and hold sales under the new guidance and determined that revenue may be recognized earlier under ASU 2014-09. However, at December 31, 2017, a cumulative catch-up adjustment related to bill and hold transactions would not be material due to the seasonal nature of our business. We reviewed our terms and conditions, marketing programs, coupons and customary business practices to determine if any variable consideration exists in our revenue transactions. We did not identify any arrangements that would cause different accounting treatment under the new guidance. The majority of our sales transactions do not require any additional performance obligation after delivery; therefore, we do not have multiple performance obligations for which we will have to allocate the transaction price. We will continue our accounting policy election to exclude from revenue all amounts we collect and remit to governmental authorities. As allowed under ASU 2014-09, we will apply the guidance using the modified retrospective transition method, whereby we will recognize the cumulative effect of initially applying the new standard as an adjustment to our opening balance of retained earnings (deficit). Based on our analysis, the adoption of ASU 2014-09 will not have a material impact on our financial position or results of operations. Our adoption will result in balance sheet reclassifications for recording our estimate for customer returns. Historically, our deferred revenue liability for customer returns has not been material. ASU 2014-09 requires the recognition of a current liability for the gross amount of the estimated returns and a current asset for the cost of the related products (each less than $1.0 million at December 31, 2017). We will also provide enhanced disclosures regarding our revenue recognition policies. 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 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 estimate 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): 2017 2016 2015 $ 45,247 $ 39,879 $ 36,783 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): 2017 2016 2015 $ 7,477 $ 7,011 $ 7,127 Income Taxes We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. In December 2017, the Tax Cuts and Jobs Act (TJCA or the Act) was enacted, which significantly changes U.S. tax law. In accordance with Accounting Standards Codification Topic (ASC) 740, Income Taxes , we are required to account for the new requirements in the period that includes the date of enactment. The Act reduces the overall corporate income tax rate to 21%, creates a territorial tax system (with a one-time mandatory transition tax on previously deferred foreign earnings), broadens the tax base and allows for the immediate capital expensing of certain qualified property. Due to the complexities presented by the Act, particularly for those companies with multi-national operations, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118) to provide guidance to companies who are not able to complete their accounting in the period of enactment prior to the reporting deadlines. Under the guidance in SAB 118, companies that have not completed their accounting for certain elements of the Act, but can determine a reasonable estimate of those effects, should include a provisional amount based on their reasonable estimate in their financial statements. This guidance resulted in us recording a provisional net benefit to the income tax provision during the period ended December 31, 2017. As of December 31, 2017, we have not completed our accounting for the tax effects of the Act. For additional discussion of the effects of the Act and our current estimates, see Note 7. We record a valuation allowance to reduce the carrying amounts of net deferred tax assets if there is uncertainty regarding their future realization. We consider many factors when assessing the likelihood of future realization including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to us for tax reporting purposes and other relevant factors. For additional discussion of 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. We include outstanding unvested restricted stock awards of our common stock in the basic weighted average share calculation. 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. As discussed above, as a result of the adoption of ASU 2016-09, the calculation of the effect of dilutive securities now excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding. 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 net foreign currency transaction gains of $0.2 million in 2017 and losses of $0.7 million in 2016 and $0.8 million in 2015 . 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 contracts, our forward-starting interest rate swap contract and our contingent consideration liabilities (in thousands): Fair Value at December 31, 2017 2016 Level 2 Unrealized gains on interest rate swaps $ 1,585 $ 1,521 Unrealized losses on interest rate swaps 703 3,138 Level 3 Contingent consideration liabilities $ 1,824 $ 1,611 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. 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. As of December 31, 2017 , our Consolidated Balance Sheets reflect $0.7 million in Accrued expenses and other current liabilities and $1.2 million in Other long-term liabilities for contingent consideration related to future payouts for our acquisitions of The Melton Corporation, which we acquired in November 2015, Metro Irrigation Supply Company Ltd. and Newline Pool Products. In determining our original estimates for contingent consideration, which are based on a percentage of gross profit for certain products for The Melton Corporation and a multiple of gross profit for Metro Irrigation Supply Company Ltd., we applied a linear model using our best estimate of gross profit projections for fiscal years 2016 to 2020. The payout for Newline Pool Products is based on a multiple of earnings for the first fiscal year of the acquisition. We based our estimate for the Newline payout on projected operating results for that year. All of our estimates of contingent consideration use Level 3 inputs as defined in the accounting guidance. The maximum total payouts for Metro Irrigation Supply Company Ltd. and Newline Pool Products over the related time periods are $1.0 million and AU$ 0.5 million , respectively. In 2017 , we paid approximately $0.2 million in contingent consideration to The Melton Corporation based on 2016 results. Since the acquisition dates, we have recorded minimal adjustments to our original estimates based on the calculated 2017 payouts related to the fiscal year ended December 31, 2016 and the calculated 2018 and future payouts considering results for the fiscal year ended December 31, 2017. Adjustments to the fair value of contingent consideration are recognized in earnings in the period in which we determine that the fair value changed. As of December 31, 2017 , we have determined that the contingent consideration liability was in a range of acceptable estimates for all applicable fiscal periods. The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments (Level 1 inputs). For the note receivable settled with our former variable interest entity in 2017 , our determination of the estimated fair value reflected a discounted cash flow model using our estimates, including assumptions related to collectability. In 2017 , we recorded $1.2 million of fair value adjustments to reduce the note receivable to the estimated realizable amount based on the results of our discounted cash flow model for expected payments under the note receivable. 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 We designated our interest rate swap and forward-starting interest rate swap contracts as cash flow hedges, and we assess hedge effectiveness on a quarterly basis. To the extent effective, we record the changes in the estimated fair value of the swaps 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 recognize any differences between the variable interest rate payments and the fixed interest rate settlements from our swap counterparties as an adjustment to interest expense over the life of the swaps. 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. For our interest rate swap contracts 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 2017 , 2016 or 2015 . In October 2016, we began reclassifying the fair values related to our original forward-starting swaps from Accumulated other comprehensive income (loss) to Interest and other non-operating expenses, net. These unrealized losses are being amortized over the effective period of the original forward-starting interest rate swap contracts from October 2016 to September 2018. 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): 2017 2016 2015 Balance at beginning of year $ 4,050 $ 4,205 $ 4,008 Bad debt expense 916 1,199 1,110 Write-offs, net of recoveries (1,069 ) (1,354 ) (913 ) Balance at end of year $ 3,897 $ 4,050 $ 4,205 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): 2017 2016 2015 Balance at beginning of year $ 6,531 $ 6,979 $ 6,403 Provision for inventory write-downs 2,660 2,036 3,043 Deduction for inventory write-offs (2,927 ) (2,484 ) (2,467 ) Balance at end of year $ 6,264 $ 6,531 $ 6,979 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): 2017 2016 2015 $ 24,157 $ 20,338 $ 16,373 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 i |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 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 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, subject to adjustments for standard holdback provisions per the terms of the purchase agreements, which are not material. These acquisitions did not have a material impact on our financial position or results of operations, either individually or in the aggregate. 2016 Acquisitions In April 2016, we acquired the distribution assets of Metro Irrigation Supply Company Ltd., an irrigation and landscape supply company with eight locations in Texas. 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. 2015 Acquisitions In April 2015, we acquired certain distribution assets from Poolwerx Development LLC and opened a satellite sales center location serving South Mesa, Arizona. In October 2015, we acquired the distribution assets of Seaboard Industries, Inc., a swimming pool supply wholesale distributor with one sales center location in Connecticut and two sales center locations in New Jersey. In November 2015, we acquired the distribution assets of The Melton Corporation, a masonry materials and supplies distributor with one sales center location in California and one sales center location in Arizona. We have completed our acquisition accounting for each of 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, 2017 | |
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, 2015 $ 182,027 Acquired goodwill 12,696 Foreign currency translation adjustments (49 ) Goodwill (gross) at December 31, 2016 194,674 Accumulated impairment losses at December 31, 2015 (9,266 ) Goodwill impairment (613 ) Accumulated impairment losses at December 31, 2016 (9,879 ) Goodwill (net) at December 31, 2016 $ 184,795 Goodwill (gross) at December 31, 2016 $ 194,674 Acquired goodwill 3,068 Foreign currency translation adjustments 1,572 Goodwill (gross) at December 31, 2017 199,314 Accumulated impairment losses at December 31, 2016 (9,879 ) Goodwill impairment — Accumulated impairment losses at December 31, 2017 (9,879 ) Goodwill (net) at December 31, 2017 $ 189,435 In October 2017 and October 2016 , we performed our annual goodwill impairment test and did not identify any goodwill impairment at the reporting unit level. As of October 1, 2017 , we had 221 reporting units with allocated goodwill balances. The most significant goodwill balance for a reporting unit was $5.7 million and the average goodwill balance was $0.8 million . In the third quarter of 2016 , we performed an interim goodwill impairment analysis for an at-risk reporting unit in Quebec, Canada. We had been monitoring this location’s results, which came in below expectations at the end of the 2016 pool season. Due to this impairment indicator, we performed an interim goodwill impairment analysis. We estimated the fair value of this reporting unit based on an income approach that incorporates our assumptions for determining the present value of future cash flows. We projected future cash flows using management’s assumptions for sales growth rates, operating margins, discount rates and multiples. Because the carrying value of this reporting unit’s goodwill exceeded its estimated fair value, we recorded a non-cash goodwill impairment charge in Selling and administrative expenses on the Consolidated Statements of Income in 2016. Other intangible assets consisted of the following (in thousands): December 31, 2017 2016 Horizon tradename (indefinite life) $ 8,400 $ 8,400 Pool Systems tradename and trademarks (indefinite lives) 1,109 1,023 National Pool Tile (NPT) tradename (20 year life) 1,500 1,500 Non-compete agreements (5 year weighted average useful life) 5,078 4,396 Patents (5 year weighted average useful life) 523 483 Other intangible assets 16,610 15,802 Less: Accumulated amortization (3,387 ) (2,476 ) Other intangible assets, net $ 13,223 $ 13,326 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 2017 , $1.0 million in 2016 and $0.4 million in 2015 . The table below presents estimated amortization expense for other intangible assets for the next five years (in thousands): 2018 $ 1,080 2019 905 2020 833 2021 353 2022 163 |
Details of Certain Balance Shee
Details of Certain Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Receivables, net: Trade accounts $ 26,681 $ 18,533 Vendor programs 50,302 44,842 Other, net 3,511 2,112 Total receivables 80,494 65,487 Less: Allowance for doubtful accounts (3,897 ) (4,050 ) Receivables, net $ 76,597 $ 61,437 Prepaid expenses and other current assets: Prepaid expenses $ 14,700 $ 13,584 Other current assets 4,869 1,734 Prepaid expenses and other current assets $ 19,569 $ 15,318 Property and equipment, net: Land $ 3,003 $ 1,685 Buildings 4,255 2,465 Leasehold improvements 41,908 38,348 Autos and trucks 70,570 53,371 Machinery and equipment 55,128 45,535 Computer equipment 38,194 39,251 Furniture and fixtures 9,670 9,951 Fixed assets in progress 1,072 2,065 Total property and equipment 223,800 192,671 Less: Accumulated depreciation (122,861 ) (109,381 ) Property and equipment, net $ 100,939 $ 83,290 Accrued expenses and other current liabilities: Salaries and payroll deductions $ 9,987 $ 8,878 Performance-based compensation 31,807 32,226 Taxes payable 7,970 8,424 Other current liabilities 15,718 14,859 Accrued expenses and other current liabilities $ 65,482 $ 64,387 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below presents the components of our debt (in thousands): December 31, 2017 2016 Variable rate debt Short-term borrowings $ 1,937 $ — Current portion of long-term debt: Australian credit facility 8,898 1,105 Short-term borrowings and current portion of long-term debt 10,835 1,105 Long-term portion: Revolving credit facility 410,439 354,549 Receivables securitization facility 100,000 83,500 Less: financing costs, net 1,624 1,112 Long-term debt, net $ 508,815 $ 436,937 Total debt $ 519,650 $ 438,042 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 . 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, 2017 , there was $410.4 million outstanding, a $4.2 million standby letter of credit outstanding and $335.4 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of December 31, 2017 was approximately 2.9% , 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 Dutch 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. Receivables Securitization Facility On November 28, 2017, we and certain of our subsidiaries entered into an amendment of our two -year accounts receivable securitization facility (the Receivables Facility). As amended, the Receivables Facility has a peak seasonal funding capacity of up to $255.0 million between May 1 and June 30, which includes an additional seasonal funding capacity that is available between March 1 and July 31. Other funding capacities range from $80.0 million to $220.0 million throughout the remaining months of the year. 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, 2017 , there was $100.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 2.3% , excluding commitment fees. Depending on the funding source used by the financial institutions to purchase the receivables, amounts outstanding under the Receivables Facility bear interest at one of the following and, in each case, plus an applicable margin of 0.75% : a. for financial institutions using the commercial paper market, commercial paper rates based on the applicable variable rates in the commercial paper market at the time of issuance; or b. for financial institutions not using the commercial paper market, LMIR. We also pay an unused fee of 0.35% on the excess of the facility limit over the average daily capital outstanding. We pay this fee monthly in arrears. Australian Seasonal Credit Facility In the second quarter of 2017, PSL entered into a new credit facility to fund expansion and supplement working capital needs. The new credit facility provides a borrowing capacity of AU$ 20.0 million , and the balance as of December 31, 2017 includes borrowings to fund the Newline Pool Products acquisition and the purchase of the noncontrolling interest. The previous credit facility, used to supplement working capital needs during peak season, provided a borrowing capacity of AU$ 3.0 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 We currently have 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 current market rates and extend the hedged period for future interest payments on our Credit Facility. As amended, these swap contracts terminate on November 20, 2019 . We recognized a benefit of $2.4 million in 2017 , expense of $0.1 million in 2016 and a benefit of $0.6 million in 2015 as a result of our determination of ineffectiveness for the period. 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 Amount (in millions) Fixed Interest Rate Interest rate swap 6 October 1, 2015 $ 75.0 2.273 % Interest rate swap 7 October 1, 2015 25.0 2.111 % Interest rate swap 8 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. At December 31, 2017 , the remaining balance of the unrealized losses was $1.4 million and is being amortized over the effective period of the original forward-starting interest rate swap contracts from October 2016 to September 2018. We recorded expense of $1.9 million in 2017 and $0.4 million in 2016 as amortization of the unrealized loss in Interest and other non-operating expenses, net. In July 2016, we entered into a new forward-starting interest rate swap contract to extend the hedged period for future interest payments on our Credit Facility to its maturity date. This swap contract will convert the variable interest rate to a fixed interest rate on borrowings under the Credit Facility. This contract becomes effective on November 20, 2019 and terminates on November 20, 2020 . The following table provides additional details related to this swap contract: Derivative Inception Date Notional Fixed Forward-starting interest rate swap July 6, 2016 $ 150.0 1.1425 % The net difference between interest paid and interest received related to our swap agreements resulted in incremental interest expense of $1.7 million in 2017 , $1.3 million in 2016 and $1.4 million in 2015 . In 2016 and 2015, we had five interest rate swap contracts in place to reduce our exposure to fluctuations in interest rates on the Credit Facility. Each of these swap contracts terminated on October 19, 2016 . These swaps converted the variable interest rates to fixed interest rates on borrowings under the Credit Facility. For these interest rate swaps, we recognized no gains or losses through income, nor was there any effect on income from hedge ineffectiveness over the term of these swap contracts. The following table provides additional details related to each of these swap contracts: Derivative Effective Date Notional Amount (in millions) Fixed Interest Rate Interest rate swap 1 November 21, 2011 $ 25.0 1.185 % Interest rate swap 2 November 21, 2011 25.0 1.185 % Interest rate swap 3 December 21, 2011 50.0 1.100 % Interest rate swap 4 January 17, 2012 25.0 1.050 % Interest rate swap 5 January 19, 2012 25.0 0.990 % 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 on the Credit 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 also limits 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), 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, 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 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, 2017 , we were in compliance with all covenants and financial ratio requirements related to the Credit 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, 2017 2016 Deferred financing costs: Balance at beginning of year $ 4,883 $ 4,814 Financing costs deferred 1,104 69 Write-off of fully amortized deferred financing costs (1,381 ) — Balance at end of year 4,606 4,883 Less: Accumulated amortization (2,982 ) (3,771 ) Deferred financing costs, net of accumulated amortization $ 1,624 $ 1,112 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Plans Current Plan In May 2007, our stockholders 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 stockholders 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, 2017 , we had 4,615,148 shares available for future issuance including 1,186,521 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 discussed above. The awards provide for a three -year performance period for the metric to be achieved. If the performance metric fails to be met, it may be extended by one or two years; however if it is not met by the end of the extended performance period, then all shares of performance-based restricted stock will be immediately forfeited and canceled. Since each grant date, we have concluded attainment of these performance conditions to be probable to be achieved in the first three-year performance period for the 2017 and 2016 performance-based grants. Stock Option Awards The following table summarizes stock option activity under our share-based plans for the year ended December 31, 2017 : Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2016 2,550,883 $ 34.70 Granted 108,275 116.99 Less: Exercised 364,984 26.88 Forfeited 6,775 94.20 Balance at December 31, 2017 2,287,399 $ 39.67 3.85 $ 205,820,051 Exercisable at December 31, 2017 1,650,386 $ 26.33 2.55 $ 170,526,117 The following table presents information about stock options outstanding and exercisable at December 31, 2017 : Outstanding Stock Options Exercisable Stock Options Range of Exercise Prices Shares Weighted Average Remaining Contractual Term (Years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $ 18.00 to $ 20.34 885,493 1.36 $ 19.54 885,493 $ 19.54 $ 20.35 to $ 45.61 811,756 3.91 33.75 695,031 31.76 $ 45.62 to $ 117.04 590,150 7.51 78.02 69,862 58.30 2,287,399 3.85 $ 39.67 1,650,386 $ 26.33 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) 2017 2016 2015 Options exercised 364,984 343,237 543,028 Cash proceeds $ 9,809 $ 10,340 $ 17,137 Intrinsic value of options exercised $ 33,302 $ 21,094 $ 22,676 Tax benefits realized $ 12,809 $ 7,891 $ 8,326 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) 2017 2016 2015 Expected volatility 26.6 % 29.7 % 33.8 % Expected term 7.3 years 7.1 years 7.2 years Risk-free interest rate 2.44 % 1.75 % 1.95 % Expected dividend yield 1.5 % 1.5 % 1.5 % Grant date fair value $ 32.00 $ 22.86 $ 22.57 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 that they provide 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 that employees meet the retirement provisions of 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 and the related recognized tax benefits for the past three years (in thousands): 2017 2016 2015 Option grant share-based compensation expense $ 3,553 $ 3,735 $ 3,688 Option grant recognized tax benefits 888 1,409 1,331 At December 31, 2017 , the unamortized compensation expense related to stock option awards totaled $3.5 million . We anticipate that this expense will be recognized over a weighted average period of 1.7 years. Restricted Stock Awards The table below presents restricted stock awards activity under our share-based plans for the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Balance unvested at December 31, 2016 285,019 $ 64.33 Granted (at market price) (1) 95,479 115.38 Less: Vested 79,224 52.73 Forfeited 3,750 80.69 Balance unvested at December 31, 2017 297,524 $ 83.36 (1) The majority of these shares contain performance-based vesting conditions. At December 31, 2017 , the unamortized compensation expense related to the restricted stock awards totaled $6.2 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): 2017 2016 2015 Restricted stock awards - shares vested 79,224 95,420 147,619 Fair value of restricted stock awards vested $ 9,260 $ 7,960 $ 10,182 The following table presents the total share-based compensation expense for restricted stock awards for the past three years (in thousands): 2017 2016 2015 Restricted stock awards share-based compensation expense $ 8,547 $ 5,993 $ 5,513 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 (prior to the amendment, the six month plan period ended on June 30 or December 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 2017, the one six month offering period in 2016, and the two six month offering periods in 2015, our employees purchased the following aggregate number of shares: 2017 2016 2015 16,610 8,649 22,555 The grant date fair value for the most recent ESPP purchase period ended July 31, 2017 was $17.30 per share. Share-based compensation expense related to our ESPP was $0.4 million in 2017 , $0.2 million in 2016 and $0.3 million in 2015 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes for 2017 was impacted by the Tax Cuts and Jobs Act (TCJA or the Act) enactment in December 2017 and our adoption of Accounting Standards Update (ASU) 2016-09, Improvements to Share-Based Payment Accounting , on January 1, 2017. As of December 31, 2017, we have not completed our accounting for the tax effects of the Act. In accordance with SAB 118 we have 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. Our accounting for the tax effects of the Act will be completed before the measurement period, which is one year from the Act’s enactment date. As a result of the Act, we recorded a provisional tax benefit of $12.0 million in the fourth quarter of 2017, which primarily reflects the re-measurement of our net deferred tax liability. We believe our net benefit is based on reasonable estimates for those tax effects of the Act. Changes to these estimates or new guidance issued by regulators may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. 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. Upon adoption of ASU 2016-09, we were required to record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. We recorded excess tax benefits of $12.6 million to our income tax provision in 2017 . Prior to the adoption of this guidance, we were required to record excess tax benefits in stockholders’ equity, of which we recorded $7.4 million in 2016 . For additional discussion of our adoption of this accounting guidance, see Note 1. Income before income taxes and equity earnings is attributable to the following jurisdictions (in thousands): Year Ended December 31, 2017 2016 2015 United States $ 259,436 $ 234,646 $ 203,269 Foreign 9,746 6,732 4,881 Total $ 269,182 $ 241,378 $ 208,150 The provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2017 2016 2015 Current: Federal $ 71,329 $ 77,000 $ 65,676 State and other 11,289 12,182 10,263 Total current provision for income taxes 82,618 89,182 75,939 Deferred: Federal (6,643 ) 4,079 4,568 State and other 2,007 (330 ) (370 ) Total deferred provision for income taxes (4,636 ) 3,749 4,198 Provision for income taxes $ 77,982 $ 92,931 $ 80,137 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, 2017 2016 2015 Federal statutory rate 35.00 % 35.00 % 35.00 % Change in valuation allowance (0.06 ) 0.10 0.20 Stock-based compensation (4.67 ) — — Re-measurement of net deferred tax liability (4.46 ) — — Other, primarily state income tax rate 3.16 3.40 3.30 Total effective tax rate 28.97 % 38.50 % 38.50 % Upon our adoption of ASU 2015-17, Balance Sheet Classification of Deferred Taxes , effective January 1, 2017, we classified all deferred tax assets and liabilities as noncurrent on the balance sheet rather than separately presenting net deferred tax assets or liabilities as current or noncurrent. Also, we no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances are also be required to be classified as noncurrent. We adopted this guidance on a prospective basis, and as such, our prior year balances or classifications have not changed. The table below presents the components of our deferred tax assets and liabilities (in thousands): December 31, 2017 2016 Deferred tax assets: Product inventories $ — $ 7,010 Accrued expenses — 3,978 Allowance for doubtful accounts — 396 Total current — 11,384 Component reclassified for net presentation — (5,368 ) Total current, net — 6,016 Product inventories 4,287 — Accrued expenses 1,804 — Allowance for doubtful accounts 154 — Leases 1,188 1,920 Share-based compensation 8,884 13,778 Uncertain tax positions 2,087 2,746 Net operating losses 5,441 5,735 Interest rate swaps — 674 Other 1,475 2,465 Total non-current 25,320 27,318 Less: Valuation allowance (5,440 ) (5,735 ) Component reclassified for net presentation (19,071 ) (20,781 ) Total non-current, net 809 802 Total deferred tax assets 809 6,818 Deferred tax liabilities: Trade discounts on purchases — 2,698 Prepaid expenses — 2,670 Total current — 5,368 Component reclassified for net presentation — (5,368 ) Total current, net — — Trade discounts on purchases 1,520 — Prepaid expenses 1,857 — Intangible assets, primarily goodwill 29,348 42,930 Depreciation 10,870 12,326 Interest rate swaps 61 — Total non-current 43,656 55,256 Component reclassified for net presentation (19,071 ) (20,781 ) Total non-current, net 24,585 34,475 Total deferred tax liabilities 24,585 34,475 Net deferred tax liability $ 23,776 $ 27,657 At December 31, 2017 , certain of our international subsidiaries had tax loss carryforwards totaling approximately $21.3 million , which expire in various years after 2018 . Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $5.4 million as of December 31, 2017 and $5.7 million as of December 31, 2016 . We have recorded a corresponding valuation allowance of $5.4 million and $5.7 million in the respective years. As of December 31, 2017 , 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. We are also still evaluating whether to change our indefinite reinvestment assertion in light of U.S. tax reform . The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands): 2017 2016 2015 Balance at beginning of year $ 7,846 $ 5,978 $ 4,690 Increases for tax positions taken during a prior period 129 10 410 Increases for tax positions taken during the current period 3,260 2,819 1,782 Decreases resulting from the expiration of the statute of limitations 869 961 904 Decreases relating to settlements 429 — — Balance at end of year $ 9,937 $ 7,846 $ 5,978 The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $7.9 million at December 31, 2017 and $5.1 million at December 31, 2016 . 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 $0.2 million in 2017 , $0.2 million in 2016 and $0.1 million in 2015 . Accrued interest related to unrecognized tax benefits was approximately $0.9 million at December 31, 2017 and $0.7 million at December 31, 2016 . 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 2014 . |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Net income $ 191,339 $ 148,603 $ 128,224 Net loss attributable to noncontrolling interest 294 352 51 Net income attributable to Pool Corporation $ 191,633 $ 148,955 $ 128,275 Weighted average shares outstanding: Basic 40,838 41,872 43,105 Effect of dilutive securities: Stock options and employee stock purchase plan (1) 1,611 1,112 1,149 Diluted 42,449 42,984 44,254 Earnings per share: Basic $ 4.69 $ 3.56 $ 2.98 Diluted $ 4.51 $ 3.47 $ 2.90 Anti-dilutive stock options excluded from diluted earnings per share computations (2) 108 1 — (1) As discussed in Note 1, as a result of the adoption of ASU 2016-09, the calculation of the effect of dilutive securities for 2017 excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding as compared to 2016 and 2015. (2) 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, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Commitments We lease facilities for our corporate office, sales centers and centralized shipping locations under operating leases that expire in various years through 2032 . Most of our leases contain renewal options, some of which involve rate increases. 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 minimum lease payments over the minimum lease term. The table below presents rent expense associated with facility, vehicle and equipment operating leases for the past three years (in thousands): 2017 2016 2015 $ 66,161 $ 63,940 $ 60,129 The table below sets forth the approximate future minimum lease payments as of December 31, 2017 related to non-cancelable facility operating leases and the non-cancelable portion of certain equipment operating leases with initial terms of one year or more (in thousands): 2018 $ 55,874 2019 49,540 2020 42,524 2021 30,756 2022 21,612 Thereafter 21,423 Upon adoption of ASU 2016-02, Leases , we will be required to record most leases on our balance sheets and recognize expenses in a manner similar to current guidance. We will also be required to provide enhanced disclosures related to our lease agreements. ASU 2016-02 will be effective for annual periods beginning after December 15, 2018. The guidance is required to be applied using a modified retrospective approach. The adoption of ASU 2016-02 will have a significant impact on our Consolidated Balance Sheets as we will be recording a right-of-use asset and corresponding liability for our current operating leases. We are evaluating the effect that ASU 2016-02 will have on our results of operations and related disclosures. 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, 2017 | |
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 In May 2005, we acquired a 50% membership interest in NCC through a $1.1 million cash contribution. NCC owns and operates an office building in Covington, Louisiana. We lease corporate and administrative offices from NCC, occupying approximately 59,100 square feet of office space. In May 2005, we amended the lease agreement, which had a ten-year term. In June 2013, we exercised an option to extend the term of a portion of the lease agreement through May 2020. In March 2015, we exercised a second option to extend the term of the lease agreement through May 2025. As of December 31, 2017 , we pay rent of $94,872 per month. The table below presents rent expense associated with this lease for the past three years (in thousands): 2017 2016 2015 NCC $ 1,122 $ 1,035 $ 1,016 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
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): 2017 2016 2015 Defined contribution and international retirement plans $ 6,946 $ 5,817 $ 5,583 Deferred compensation plan 325 194 218 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
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 2017 2016 First Second Third Fourth First Second Third Fourth Net sales $ 546,441 $ 988,163 $ 743,401 $ 510,183 $ 515,250 $ 918,889 $ 691,429 $ 445,235 Gross profit 153,621 289,664 216,606 145,398 143,023 270,736 199,551 127,777 Net income (1) 22,270 94,620 48,783 25,665 16,363 85,247 44,421 2,572 Net income attributable to Pool Corporation (1) 22,281 94,903 48,783 25,665 16,371 85,435 44,534 2,615 Earnings per share: Basic $ 0.54 $ 2.30 $ 1.20 $ 0.64 $ 0.39 $ 2.03 $ 1.06 $ 0.06 Diluted $ 0.52 $ 2.21 $ 1.16 $ 0.62 $ 0.38 $ 1.98 $ 1.03 $ 0.06 The sum of basic and diluted earnings per share for each of the quarters may not equal the total basic and diluted earnings per share for the annual periods because of rounding differences and a difference in the way that in-the-money stock options are considered from quarter to quarter. (1) Our Net income and Net income attributable to Pool Corporation reflect the adoption of ASU 2016-09 for all periods presented in 2017. For additional information related to the adoption of this accounting standard, see Note 1. Our fourth quarter 2017 Net income and Net income attributable to Pool Corporation reflects benefits recorded due to U.S. tax reform. For additional information related to the impact of U.S. tax reform on our financial statements, see Note 7. |
Organization and Summary of S22
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Description of Business As of December 31, 2017 , Pool Corporation and our subsidiaries (the Company , which may be referred to as we, us or our ), operated 351 sales centers in North America, Europe, South America and Australia from which we sell swimming pool equipment, parts and supplies, irrigation and related 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 will continue to consolidate PSL, but there will no longer be a separate noncontrolling interest reported on our Consolidated Statements of Income, nor Redeemable noncontrolling interest reported on our Consolidated Balance Sheets. Variable Interest Entity In February 2015, we entered into a five -year credit agreement with a swimming pool retailer. Under this agreement and the related revolving note, we were the primary lender of operating funds for this entity. The total lending commitment under the credit agreement was $8.5 million . In December 2017, we ended our lending arrangement with this entity and exercised our rights to the collateral that secured this agreement. The collateral was sufficient to satisfy the net balance previously recorded within Other assets on our Consolidated Balance Sheets. |
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 incentives, income taxes, incentive 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 | Newly Adopted Accounting Pronouncements Effective January 1, 2017, we adopted Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting , on a prospective basis and as such, our prior year presentation has not changed. The provisions of this update simplify many key aspects of the accounting for and cash flow presentation of employee share-based compensation transactions, including accounting for income taxes, forfeitures, and statutory withholding requirements. In accordance with the new guidance, we now record all excess tax benefits or tax deficiencies as a component of our Provision for income taxes on our Consolidated Statements of Income. As a result of the adoption, we recognized $12.6 million of excess tax benefits in 2017 , which reduced our Provision for income taxes and positively impacted our Net income. Historically, these amounts were recorded as Additional paid in capital in stockholders’ equity on our Consolidated Balance Sheets. Additionally, we now present excess tax benefits or deficiencies as operating cash flows versus reclassifying the amount out of operating cash flows and presenting it in financing activities on the Consolidated Statements of Cash Flows. Additional amendments from this guidance related to forfeitures and minimum statutory withholding tax requirements had no impact to our financial position, results of operations or cash flows. As permitted, we continue to estimate forfeitures to determine the amount of compensation cost to be recognized each period rather than electing to account for forfeitures as they occur, and we continue to present the value of shares withheld for minimum statutory tax withholding requirements on the Consolidated Statements of Cash Flows as a financing activity. Another impact of the adoption is that the calculation of the effect of dilutive securities now excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding of approximately 550,000 shares for the year ended December 31, 2017 . On January 1, 2017, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires we classify all deferred tax assets and liabilities as noncurrent on the balance sheet rather than separately presenting net deferred tax assets or liabilities as current or noncurrent. Additionally, we no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances are also now classified as noncurrent. As permitted, we elected to adopt this guidance on a prospective basis and as such, our prior year presentation has not changed. The adoption of ASU 2015-17 did not have a material impact on our financial position, results of operations and related disclosures. On January 1, 2017, we adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which requires that we measure inventory at the lower of cost or net realizable value rather than at the lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. The adoption of ASU 2015-11 did not have a material impact on our financial position, results of operations and related disclosures. On January 1, 2017, we adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of ASU 2015-16 did not have a material impact on our financial position, results of operations and related disclosures. As required, we adopted ASU 2014-15, Presentation of Financial Statements - Going Concern, as of December 31, 2016. Based on management’s evaluation, which included forecasting results covering the one-year period following our 2017 Form 10-K filing date, we did not identify any conditions or events that raise substantial doubt about our ability to continue as a going concern. |
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 incentive 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 decisions about how to allocate resources 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 as to how products are classified within these groups, thus making it impracticable to report our sales by product category. |
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 both swimming pool use and installation and irrigation installations and maintenance. Sales are substantially lower during the first and fourth quarters, when we may incur net losses. |
Revenue recognition | Revenue Recognition We recognize revenue when four basic criteria are met: 1. persuasive evidence of an arrangement exists; 2. delivery has occurred or services have been rendered; 3. our price to the buyer is fixed or determinable; and 4. collectability is reasonably assured. Customers may take delivery of products in a variety of ways. Customers may pick up products at any sales center location, or we may deliver products to their premises or job sites via our trucks; in these instances, we record revenue upon delivery to the customers. We also deliver products through third party carriers, and we record revenue when we present the product to the third party carriers. Products shipped via third party carriers are considered delivered based on the shipping terms, which are generally FOB shipping point. We include shipping and handling fees billed to customers as freight out income within net sales. We offer volume incentives to some of our customers and we account for these incentives as an adjustment to 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 early buy programs, as an adjustment to sales. Based on available information related to our customers’ returns, we record an allowance for estimated returns, which historically has not been material. Other items that we record as adjustments to sales include cash discounts, pricing adjustments and credit card fees related to customer payments. We also 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. Effective January 1, 2018, we will adopt ASU 2014-09, Revenue from Contracts with Customers, and subsequent amendments. Under the new standard, revenue will be recognized when we satisfy our performance obligation by transferring promised products to our customer. We expect to recognize revenue when control of the product has been transferred to the customer upon delivery to the customer or the freight carrier, if delivered by a third party, as we believe our performance obligation is satisfied at such point in time. This treatment is consistent with our current revenue recognition policies. We evaluated our bill and hold sales under the new guidance and determined that revenue may be recognized earlier under ASU 2014-09. However, at December 31, 2017, a cumulative catch-up adjustment related to bill and hold transactions would not be material due to the seasonal nature of our business. We reviewed our terms and conditions, marketing programs, coupons and customary business practices to determine if any variable consideration exists in our revenue transactions. We did not identify any arrangements that would cause different accounting treatment under the new guidance. The majority of our sales transactions do not require any additional performance obligation after delivery; therefore, we do not have multiple performance obligations for which we will have to allocate the transaction price. We will continue our accounting policy election to exclude from revenue all amounts we collect and remit to governmental authorities. As allowed under ASU 2014-09, we will apply the guidance using the modified retrospective transition method, whereby we will recognize the cumulative effect of initially applying the new standard as an adjustment to our opening balance of retained earnings (deficit). Based on our analysis, the adoption of ASU 2014-09 will not have a material impact on our financial position or results of operations. Our adoption will result in balance sheet reclassifications for recording our estimate for customer returns. Historically, our deferred revenue liability for customer returns has not been material. ASU 2014-09 requires the recognition of a current liability for the gross amount of the estimated returns and a current asset for the cost of the related products (each less than $1.0 million at December 31, 2017). We will also provide enhanced disclosures regarding our revenue recognition policies. |
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 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 estimate 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): 2017 2016 2015 $ 45,247 $ 39,879 $ 36,783 |
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): 2017 2016 2015 $ 7,477 $ 7,011 $ 7,127 |
Income taxes | Income Taxes We record deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using currently enacted rates and laws that will be in effect when we expect the differences to reverse. Due to changing tax laws and state income tax rates, significant judgment is required to estimate the effective tax rate expected to apply to tax differences that are expected to reverse in the future. In December 2017, the Tax Cuts and Jobs Act (TJCA or the Act) was enacted, which significantly changes U.S. tax law. In accordance with Accounting Standards Codification Topic (ASC) 740, Income Taxes , we are required to account for the new requirements in the period that includes the date of enactment. The Act reduces the overall corporate income tax rate to 21%, creates a territorial tax system (with a one-time mandatory transition tax on previously deferred foreign earnings), broadens the tax base and allows for the immediate capital expensing of certain qualified property. Due to the complexities presented by the Act, particularly for those companies with multi-national operations, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118) to provide guidance to companies who are not able to complete their accounting in the period of enactment prior to the reporting deadlines. Under the guidance in SAB 118, companies that have not completed their accounting for certain elements of the Act, but can determine a reasonable estimate of those effects, should include a provisional amount based on their reasonable estimate in their financial statements. This guidance resulted in us recording a provisional net benefit to the income tax provision during the period ended December 31, 2017. As of December 31, 2017, we have not completed our accounting for the tax effects of the Act. For additional discussion of the effects of the Act and our current estimates, see Note 7. We record a valuation allowance to reduce the carrying amounts of net deferred tax assets if there is uncertainty regarding their future realization. We consider many factors when assessing the likelihood of future realization including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to us for tax reporting purposes and other relevant factors. For additional discussion of 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. We include outstanding unvested restricted stock awards of our common stock in the basic weighted average share calculation. 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. As discussed above, as a result of the adoption of ASU 2016-09, the calculation of the effect of dilutive securities now excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding. For additional discussion of earnings per share, see Note 8. |
Foreign currency | 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 net foreign currency transaction gains of $0.2 million in 2017 and losses of $0.7 million in 2016 and $0.8 million in 2015 . |
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 contracts, our forward-starting interest rate swap contract and our contingent consideration liabilities (in thousands): Fair Value at December 31, 2017 2016 Level 2 Unrealized gains on interest rate swaps $ 1,585 $ 1,521 Unrealized losses on interest rate swaps 703 3,138 Level 3 Contingent consideration liabilities $ 1,824 $ 1,611 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. 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. As of December 31, 2017 , our Consolidated Balance Sheets reflect $0.7 million in Accrued expenses and other current liabilities and $1.2 million in Other long-term liabilities for contingent consideration related to future payouts for our acquisitions of The Melton Corporation, which we acquired in November 2015, Metro Irrigation Supply Company Ltd. and Newline Pool Products. In determining our original estimates for contingent consideration, which are based on a percentage of gross profit for certain products for The Melton Corporation and a multiple of gross profit for Metro Irrigation Supply Company Ltd., we applied a linear model using our best estimate of gross profit projections for fiscal years 2016 to 2020. The payout for Newline Pool Products is based on a multiple of earnings for the first fiscal year of the acquisition. We based our estimate for the Newline payout on projected operating results for that year. All of our estimates of contingent consideration use Level 3 inputs as defined in the accounting guidance. The maximum total payouts for Metro Irrigation Supply Company Ltd. and Newline Pool Products over the related time periods are $1.0 million and AU$ 0.5 million , respectively. In 2017 , we paid approximately $0.2 million in contingent consideration to The Melton Corporation based on 2016 results. Since the acquisition dates, we have recorded minimal adjustments to our original estimates based on the calculated 2017 payouts related to the fiscal year ended December 31, 2016 and the calculated 2018 and future payouts considering results for the fiscal year ended December 31, 2017. Adjustments to the fair value of contingent consideration are recognized in earnings in the period in which we determine that the fair value changed. As of December 31, 2017 , we have determined that the contingent consideration liability was in a range of acceptable estimates for all applicable fiscal periods. The carrying values of cash, receivables, accounts payable and accrued liabilities approximate fair value due to the short maturity of those instruments (Level 1 inputs). For the note receivable settled with our former variable interest entity in 2017 , our determination of the estimated fair value reflected a discounted cash flow model using our estimates, including assumptions related to collectability. In 2017 , we recorded $1.2 million of fair value adjustments to reduce the note receivable to the estimated realizable amount based on the results of our discounted cash flow model for expected payments under the note receivable. 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 We designated our interest rate swap and forward-starting interest rate swap contracts as cash flow hedges, and we assess hedge effectiveness on a quarterly basis. To the extent effective, we record the changes in the estimated fair value of the swaps 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 recognize any differences between the variable interest rate payments and the fixed interest rate settlements from our swap counterparties as an adjustment to interest expense over the life of the swaps. 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. For our interest rate swap contracts 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 2017 , 2016 or 2015 . In October 2016, we began reclassifying the fair values related to our original forward-starting swaps from Accumulated other comprehensive income (loss) to Interest and other non-operating expenses, net. These unrealized losses are being amortized over the effective period of the original forward-starting interest rate swap contracts from October 2016 to September 2018. For additional discussion of our interest rate swaps, see Note 5. |
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): 2017 2016 2015 Balance at beginning of year $ 4,050 $ 4,205 $ 4,008 Bad debt expense 916 1,199 1,110 Write-offs, net of recoveries (1,069 ) (1,354 ) (913 ) Balance at end of year $ 3,897 $ 4,050 $ 4,205 |
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): 2017 2016 2015 Balance at beginning of year $ 6,531 $ 6,979 $ 6,403 Provision for inventory write-downs 2,660 2,036 3,043 Deduction for inventory write-offs (2,927 ) (2,484 ) (2,467 ) Balance at end of year $ 6,264 $ 6,531 $ 6,979 |
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): 2017 2016 2015 $ 24,157 $ 20,338 $ 16,373 |
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 recognize the difference as an 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. The put/call option deed in this transaction was considered an equity contract and therefore a financial instrument under the accounting guidance. In applying the guidance for this transaction, we determined that the financial instrument was embedded in the noncontrolling interest. As a public company, we are required to classify the noncontrolling interest and the embedded financial instrument as redeemable noncontrolling interest in a separate section of our Consolidated Balance Sheets, between liabilities and equity. 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): 2017 2016 2015 Redeemable noncontrolling interest, beginning of period $ 2,287 $ 2,665 $ 3,113 Redemption value adjustment of noncontrolling interest 360 — — Net loss attributable to noncontrolling interest (294 ) (352 ) (51 ) Other comprehensive income (loss) attributable to noncontrolling interest 220 (26 ) (397 ) Less: purchase of redeemable noncontrolling interest 2,573 — $ — Redeemable noncontrolling interest, end of period $ — $ 2,287 $ 2,665 |
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, 2017 2016 Foreign currency translation adjustments $ (7,478 ) $ (13,024 ) Unrealized gains (losses) on interest rate swaps, net of tax (1) 150 (1,054 ) Accumulated other comprehensive loss $ (7,328 ) $ (14,078 ) |
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, 2017 , 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 $1,239.3 million and cumulative dividends of $425.8 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, 2017 2016 2015 Cash paid during the year for: Interest $ 12,957 $ 8,052 $ 6,316 Income taxes, net of refunds 84,251 80,378 65,668 |
Organization and Summary of S23
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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): 2017 2016 2015 $ 45,247 $ 39,879 $ 36,783 |
Advertising expense | We expense advertising costs when incurred. The table below presents advertising expense for the past three years (in thousands): 2017 2016 2015 $ 7,477 $ 7,011 $ 7,127 |
Fair value measurements | Fair Value at December 31, 2017 2016 Level 2 Unrealized gains on interest rate swaps $ 1,585 $ 1,521 Unrealized losses on interest rate swaps 703 3,138 Level 3 Contingent consideration liabilities $ 1,824 $ 1,611 |
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): 2017 2016 2015 Balance at beginning of year $ 4,050 $ 4,205 $ 4,008 Bad debt expense 916 1,199 1,110 Write-offs, net of recoveries (1,069 ) (1,354 ) (913 ) Balance at end of year $ 3,897 $ 4,050 $ 4,205 |
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): 2017 2016 2015 Balance at beginning of year $ 6,531 $ 6,979 $ 6,403 Provision for inventory write-downs 2,660 2,036 3,043 Deduction for inventory write-offs (2,927 ) (2,484 ) (2,467 ) Balance at end of year $ 6,264 $ 6,531 $ 6,979 |
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): 2017 2016 2015 $ 24,157 $ 20,338 $ 16,373 |
Redeemable noncontrolling interest | The table below presents the changes in Redeemable noncontrolling interest (in thousands): 2017 2016 2015 Redeemable noncontrolling interest, beginning of period $ 2,287 $ 2,665 $ 3,113 Redemption value adjustment of noncontrolling interest 360 — — Net loss attributable to noncontrolling interest (294 ) (352 ) (51 ) Other comprehensive income (loss) attributable to noncontrolling interest 220 (26 ) (397 ) Less: purchase of redeemable noncontrolling interest 2,573 — $ — Redeemable noncontrolling interest, end of period $ — $ 2,287 $ 2,665 |
Accumulated other comprehensive loss | The table below presents the components of our Accumulated other comprehensive loss balance (in thousands): December 31, 2017 2016 Foreign currency translation adjustments $ (7,478 ) $ (13,024 ) Unrealized gains (losses) on interest rate swaps, net of tax (1) 150 (1,054 ) Accumulated other comprehensive loss $ (7,328 ) $ (14,078 ) |
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, 2017 2016 2015 Cash paid during the year for: Interest $ 12,957 $ 8,052 $ 6,316 Income taxes, net of refunds 84,251 80,378 65,668 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Line Items] | |
Goodwill | The table below presents changes in the carrying amount of goodwill and our accumulated impairment losses (in thousands): Goodwill (gross) at December 31, 2015 $ 182,027 Acquired goodwill 12,696 Foreign currency translation adjustments (49 ) Goodwill (gross) at December 31, 2016 194,674 Accumulated impairment losses at December 31, 2015 (9,266 ) Goodwill impairment (613 ) Accumulated impairment losses at December 31, 2016 (9,879 ) Goodwill (net) at December 31, 2016 $ 184,795 Goodwill (gross) at December 31, 2016 $ 194,674 Acquired goodwill 3,068 Foreign currency translation adjustments 1,572 Goodwill (gross) at December 31, 2017 199,314 Accumulated impairment losses at December 31, 2016 (9,879 ) Goodwill impairment — Accumulated impairment losses at December 31, 2017 (9,879 ) Goodwill (net) at December 31, 2017 $ 189,435 |
Other intangible assets | Other intangible assets consisted of the following (in thousands): December 31, 2017 2016 Horizon tradename (indefinite life) $ 8,400 $ 8,400 Pool Systems tradename and trademarks (indefinite lives) 1,109 1,023 National Pool Tile (NPT) tradename (20 year life) 1,500 1,500 Non-compete agreements (5 year weighted average useful life) 5,078 4,396 Patents (5 year weighted average useful life) 523 483 Other intangible assets 16,610 15,802 Less: Accumulated amortization (3,387 ) (2,476 ) Other intangible assets, net $ 13,223 $ 13,326 |
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): 2018 $ 1,080 2019 905 2020 833 2021 353 2022 163 |
Details of Certain Balance Sh25
Details of Certain Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Receivables, net: Trade accounts $ 26,681 $ 18,533 Vendor programs 50,302 44,842 Other, net 3,511 2,112 Total receivables 80,494 65,487 Less: Allowance for doubtful accounts (3,897 ) (4,050 ) Receivables, net $ 76,597 $ 61,437 Prepaid expenses and other current assets: Prepaid expenses $ 14,700 $ 13,584 Other current assets 4,869 1,734 Prepaid expenses and other current assets $ 19,569 $ 15,318 Property and equipment, net: Land $ 3,003 $ 1,685 Buildings 4,255 2,465 Leasehold improvements 41,908 38,348 Autos and trucks 70,570 53,371 Machinery and equipment 55,128 45,535 Computer equipment 38,194 39,251 Furniture and fixtures 9,670 9,951 Fixed assets in progress 1,072 2,065 Total property and equipment 223,800 192,671 Less: Accumulated depreciation (122,861 ) (109,381 ) Property and equipment, net $ 100,939 $ 83,290 Accrued expenses and other current liabilities: Salaries and payroll deductions $ 9,987 $ 8,878 Performance-based compensation 31,807 32,226 Taxes payable 7,970 8,424 Other current liabilities 15,718 14,859 Accrued expenses and other current liabilities $ 65,482 $ 64,387 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative [Line Items] | |
Components of debt | The table below presents the components of our debt (in thousands): December 31, 2017 2016 Variable rate debt Short-term borrowings $ 1,937 $ — Current portion of long-term debt: Australian credit facility 8,898 1,105 Short-term borrowings and current portion of long-term debt 10,835 1,105 Long-term portion: Revolving credit facility 410,439 354,549 Receivables securitization facility 100,000 83,500 Less: financing costs, net 1,624 1,112 Long-term debt, net $ 508,815 $ 436,937 Total debt $ 519,650 $ 438,042 |
Changes in deferred financing costs | The table below summarizes changes in deferred financing costs for the past two years (in thousands): December 31, 2017 2016 Deferred financing costs: Balance at beginning of year $ 4,883 $ 4,814 Financing costs deferred 1,104 69 Write-off of fully amortized deferred financing costs (1,381 ) — Balance at end of year 4,606 4,883 Less: Accumulated amortization (2,982 ) (3,771 ) Deferred financing costs, net of accumulated amortization $ 1,624 $ 1,112 |
Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Schedule of interest rate swaps | The following table provides additional details related to each of these amended swap contracts: Derivative Amendment Date Notional Amount (in millions) Fixed Interest Rate Interest rate swap 6 October 1, 2015 $ 75.0 2.273 % Interest rate swap 7 October 1, 2015 25.0 2.111 % Interest rate swap 8 October 1, 2015 50.0 2.111 % |
Forward-starting Interest Rate Swap Agreements [Member] | |
Derivative [Line Items] | |
Schedule of interest rate swaps | The following table provides additional details related to this swap contract: Derivative Inception Date Notional Fixed Forward-starting interest rate swap July 6, 2016 $ 150.0 1.1425 % |
Terminated Interest Rate Swaps [Member] | |
Derivative [Line Items] | |
Schedule of interest rate swaps | For these interest rate swaps, we recognized no gains or losses through income, nor was there any effect on income from hedge ineffectiveness over the term of these swap contracts. The following table provides additional details related to each of these swap contracts: Derivative Effective Date Notional Amount (in millions) Fixed Interest Rate Interest rate swap 1 November 21, 2011 $ 25.0 1.185 % Interest rate swap 2 November 21, 2011 25.0 1.185 % Interest rate swap 3 December 21, 2011 50.0 1.100 % Interest rate swap 4 January 17, 2012 25.0 1.050 % Interest rate swap 5 January 19, 2012 25.0 0.990 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 : Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance at December 31, 2016 2,550,883 $ 34.70 Granted 108,275 116.99 Less: Exercised 364,984 26.88 Forfeited 6,775 94.20 Balance at December 31, 2017 2,287,399 $ 39.67 3.85 $ 205,820,051 Exercisable at December 31, 2017 1,650,386 $ 26.33 2.55 $ 170,526,117 |
Stock options outstanding and exercisable by exercise price range | The following table presents information about stock options outstanding and exercisable at December 31, 2017 : Outstanding Stock Options Exercisable Stock Options Range of Exercise Prices Shares Weighted Average Remaining Contractual Term (Years) Weighted Average Exercise Price Shares Weighted Average Exercise Price $ 18.00 to $ 20.34 885,493 1.36 $ 19.54 885,493 $ 19.54 $ 20.35 to $ 45.61 811,756 3.91 33.75 695,031 31.76 $ 45.62 to $ 117.04 590,150 7.51 78.02 69,862 58.30 2,287,399 3.85 $ 39.67 1,650,386 $ 26.33 |
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) 2017 2016 2015 Options exercised 364,984 343,237 543,028 Cash proceeds $ 9,809 $ 10,340 $ 17,137 Intrinsic value of options exercised $ 33,302 $ 21,094 $ 22,676 Tax benefits realized $ 12,809 $ 7,891 $ 8,326 |
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) 2017 2016 2015 Expected volatility 26.6 % 29.7 % 33.8 % Expected term 7.3 years 7.1 years 7.2 years Risk-free interest rate 2.44 % 1.75 % 1.95 % Expected dividend yield 1.5 % 1.5 % 1.5 % Grant date fair value $ 32.00 $ 22.86 $ 22.57 |
Summary of restricted share actvity | The table below presents restricted stock awards activity under our share-based plans for the year ended December 31, 2017 : Shares Weighted Average Grant Date Fair Value Balance unvested at December 31, 2016 285,019 $ 64.33 Granted (at market price) (1) 95,479 115.38 Less: Vested 79,224 52.73 Forfeited 3,750 80.69 Balance unvested at December 31, 2017 297,524 $ 83.36 |
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): 2017 2016 2015 Restricted stock awards - shares vested 79,224 95,420 147,619 Fair value of restricted stock awards vested $ 9,260 $ 7,960 $ 10,182 |
Number of shares purchased by employees under the employee stock purchase plan | For the two six month offering periods in 2017, the one six month offering period in 2016, and the two six month offering periods in 2015, our employees purchased the following aggregate number of shares: 2017 2016 2015 16,610 8,649 22,555 |
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): 2017 2016 2015 Restricted stock awards share-based compensation expense $ 8,547 $ 5,993 $ 5,513 |
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 and the related recognized tax benefits for the past three years (in thousands): 2017 2016 2015 Option grant share-based compensation expense $ 3,553 $ 3,735 $ 3,688 Option grant recognized tax benefits 888 1,409 1,331 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 United States $ 259,436 $ 234,646 $ 203,269 Foreign 9,746 6,732 4,881 Total $ 269,182 $ 241,378 $ 208,150 |
Provision for income taxes | The provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2017 2016 2015 Current: Federal $ 71,329 $ 77,000 $ 65,676 State and other 11,289 12,182 10,263 Total current provision for income taxes 82,618 89,182 75,939 Deferred: Federal (6,643 ) 4,079 4,568 State and other 2,007 (330 ) (370 ) Total deferred provision for income taxes (4,636 ) 3,749 4,198 Provision for income taxes $ 77,982 $ 92,931 $ 80,137 |
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, 2017 2016 2015 Federal statutory rate 35.00 % 35.00 % 35.00 % Change in valuation allowance (0.06 ) 0.10 0.20 Stock-based compensation (4.67 ) — — Re-measurement of net deferred tax liability (4.46 ) — — Other, primarily state income tax rate 3.16 3.40 3.30 Total effective tax rate 28.97 % 38.50 % 38.50 % |
Components of deferred tax assets and liabilities | The table below presents the components of our deferred tax assets and liabilities (in thousands): December 31, 2017 2016 Deferred tax assets: Product inventories $ — $ 7,010 Accrued expenses — 3,978 Allowance for doubtful accounts — 396 Total current — 11,384 Component reclassified for net presentation — (5,368 ) Total current, net — 6,016 Product inventories 4,287 — Accrued expenses 1,804 — Allowance for doubtful accounts 154 — Leases 1,188 1,920 Share-based compensation 8,884 13,778 Uncertain tax positions 2,087 2,746 Net operating losses 5,441 5,735 Interest rate swaps — 674 Other 1,475 2,465 Total non-current 25,320 27,318 Less: Valuation allowance (5,440 ) (5,735 ) Component reclassified for net presentation (19,071 ) (20,781 ) Total non-current, net 809 802 Total deferred tax assets 809 6,818 Deferred tax liabilities: Trade discounts on purchases — 2,698 Prepaid expenses — 2,670 Total current — 5,368 Component reclassified for net presentation — (5,368 ) Total current, net — — Trade discounts on purchases 1,520 — Prepaid expenses 1,857 — Intangible assets, primarily goodwill 29,348 42,930 Depreciation 10,870 12,326 Interest rate swaps 61 — Total non-current 43,656 55,256 Component reclassified for net presentation (19,071 ) (20,781 ) Total non-current, net 24,585 34,475 Total deferred tax liabilities 24,585 34,475 Net deferred tax liability $ 23,776 $ 27,657 |
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): 2017 2016 2015 Balance at beginning of year $ 7,846 $ 5,978 $ 4,690 Increases for tax positions taken during a prior period 129 10 410 Increases for tax positions taken during the current period 3,260 2,819 1,782 Decreases resulting from the expiration of the statute of limitations 869 961 904 Decreases relating to settlements 429 — — Balance at end of year $ 9,937 $ 7,846 $ 5,978 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Net income $ 191,339 $ 148,603 $ 128,224 Net loss attributable to noncontrolling interest 294 352 51 Net income attributable to Pool Corporation $ 191,633 $ 148,955 $ 128,275 Weighted average shares outstanding: Basic 40,838 41,872 43,105 Effect of dilutive securities: Stock options and employee stock purchase plan (1) 1,611 1,112 1,149 Diluted 42,449 42,984 44,254 Earnings per share: Basic $ 4.69 $ 3.56 $ 2.98 Diluted $ 4.51 $ 3.47 $ 2.90 Anti-dilutive stock options excluded from diluted earnings per share computations (2) 108 1 — (1) As discussed in Note 1, as a result of the adoption of ASU 2016-09, the calculation of the effect of dilutive securities for 2017 excludes any derived excess tax benefits or deficiencies from assumed future proceeds, resulting in an increase in diluted weighted average shares outstanding as compared to 2016 and 2015. (2) 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, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of rent expense associated with operating leases | The table below presents rent expense associated with facility, vehicle and equipment operating leases for the past three years (in thousands): 2017 2016 2015 $ 66,161 $ 63,940 $ 60,129 |
Future minimum lease payments related to non-cancelable operating leases | The table below sets forth the approximate future minimum lease payments as of December 31, 2017 related to non-cancelable facility operating leases and the non-cancelable portion of certain equipment operating leases with initial terms of one year or more (in thousands): 2018 $ 55,874 2019 49,540 2020 42,524 2021 30,756 2022 21,612 Thereafter 21,423 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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): 2017 2016 2015 NCC $ 1,122 $ 1,035 $ 1,016 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Plan [Abstract] | |
Matching contributions [Table Text Block] | The table below sets forth our contributions for the past three years (in thousands): 2017 2016 2015 Defined contribution and international retirement plans $ 6,946 $ 5,817 $ 5,583 Deferred compensation plan 325 194 218 |
Quarterly Financial Data (Una33
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 2017 2016 First Second Third Fourth First Second Third Fourth Net sales $ 546,441 $ 988,163 $ 743,401 $ 510,183 $ 515,250 $ 918,889 $ 691,429 $ 445,235 Gross profit 153,621 289,664 216,606 145,398 143,023 270,736 199,551 127,777 Net income (1) 22,270 94,620 48,783 25,665 16,363 85,247 44,421 2,572 Net income attributable to Pool Corporation (1) 22,281 94,903 48,783 25,665 16,371 85,435 44,534 2,615 Earnings per share: Basic $ 0.54 $ 2.30 $ 1.20 $ 0.64 $ 0.39 $ 2.03 $ 1.06 $ 0.06 Diluted $ 0.52 $ 2.21 $ 1.16 $ 0.62 $ 0.38 $ 1.98 $ 1.03 $ 0.06 The sum of basic and diluted earnings per share for each of the quarters may not equal the total basic and diluted earnings per share for the annual periods because of rounding differences and a difference in the way that in-the-money stock options are considered from quarter to quarter. (1) Our Net income and Net income attributable to Pool Corporation reflect the adoption of ASU 2016-09 for all periods presented in 2017. For additional information related to the adoption of this accounting standard, see Note 1. Our fourth quarter 2017 Net income and Net income attributable to Pool Corporation reflects benefits recorded due to U.S. tax reform. For additional information related to the impact of U.S. tax reform on our financial statements, see Note 7. |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | |||
Number of sales centers in North America, Europe, South America and Australia | 351 | ||
Number of distribution networks | 4 | ||
Shipping and handling costs associated with outbound freight | $ 45,247,000 | $ 39,879,000 | $ 36,783,000 |
Advertising expense | 7,477,000 | 7,011,000 | 7,127,000 |
Gains (losses) on foreign currency transactions | 171,000 | (679,000) | (774,000) |
Threshold past due account balances for reserve analysis | $ 20,000 | ||
Threshold past due days for reserve analysis | 60 days | ||
Sales period (in months) for establishing reserve for inventory obsolescence | 12 months | ||
Depreciation expense | $ 24,157,000 | 20,338,000 | 16,373,000 |
Cumulative Share Repurchases | 1,239,297,000 | ||
Cumulative Dividends | $ 425,777,000 | ||
Controlling interest by parent | 60.00% | ||
Cash paid during the year for [Abstract] | |||
Interest | $ 12,957,000 | 8,052,000 | 6,316,000 |
Income taxes, net of refunds | $ 84,251,000 | $ 80,378,000 | $ 65,668,000 |
Organization and Summary of S35
Organization and Summary of Significant Accounting Policies Variable Interest Entity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Variable Interest Entity [Abstract] | |
Variable Interest Entity, Nonconsolidated, Credit Agreement Capacity | $ 8,500 |
Organization and Summary of S36
Organization and Summary of Significant Accounting Policies Newly Adopted Accounting Pronouncements (Details) - Adjustments for New Accounting Pronouncement [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Excess tax benefits recognized as a result of the adoption | $ | $ 12.6 |
Increase in diluted weighted average shares outstanding (in shares) | shares | 550,000 |
Organization and Summary of S37
Organization and Summary of Significant Accounting Policies Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 4,050 | $ 4,205 | $ 4,008 |
Bad debt expense | 916 | 1,199 | 1,110 |
Write-offs, net of recoveries | (1,069) | (1,354) | (913) |
Balance at end of year | 3,897 | 4,050 | 4,205 |
Inventory Valuation Reserve [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 6,531 | 6,979 | 6,403 |
Provision for inventory write-downs | 2,660 | 2,036 | 3,043 |
Deductions for inventory write-offs | (2,927) | (2,484) | (2,467) |
Balance at end of year | $ 6,264 | $ 6,531 | $ 6,979 |
Organization and Summary of S38
Organization and Summary of Significant Accounting Policies Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Unrealized Losses on Interest Rate Swaps | $ 703 | $ 3,138 |
Unrealized Gains on Interest Rate Swaps | 1,585 | 1,521 |
Business Combination, Contingent Consideration, Liability | $ 1,824 | $ 1,611 |
Organization and Summary of S39
Organization and Summary of Significant Accounting Policies Fair Value Measurement 2 (Details) - 12 months ended Dec. 31, 2017 $ in Thousands, AUD in Millions | USD ($) | AUD |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liability, current | $ 653 | |
Contingent consideration liability, noncurrent | 1,171 | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 1,000 | AUD 0.5 |
Note receivable fair value adjustment | (1,200) | |
The Melton Corporation [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration paid | $ 200 |
Organization and Summary of S40
Organization and Summary of Significant Accounting Policies Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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 S41
Organization and Summary of Significant Accounting Policies Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Redeemable Noncontrolling Interest [Roll Forward] | |||
Redeemable noncontrolling interest, beginning of period | $ 2,287 | $ 2,665 | $ 3,113 |
Redemption value adjustment of noncontrolling interest | 360 | 0 | 0 |
Net loss attributable to noncontrolling interest | (294) | (352) | (51) |
Other comprehensive income (loss) attributable to noncontrolling interest | 220 | (26) | (397) |
Less: purchase of redeemable noncontrolling interest | 2,573 | 0 | 0 |
Redeemable noncontrolling interest, end of period | $ 0 | $ 2,287 | $ 2,665 |
Organization and Summary of S42
Organization and Summary of Significant Accounting Policies Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | $ (7,478) | $ (13,024) |
Unrealized gains (losses) on interest rate swaps, net of tax (1) | 150 | (1,054) |
Accumulated other comprehensive loss | $ (7,328) | $ (14,078) |
Acquisitions (Details)
Acquisitions (Details) | Dec. 31, 2017store |
Business Acquisition [Line Items] | |
Number of sales centers | 351 |
Lincoln Equipment, Inc. (Lincoln Aquatics) [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
New Star Holdings Pty. Ltd. [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
E-Grupa [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
Kripsol Intermark Malaga S.L. (Intermark) [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
Chem Quip, Inc. [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 5 |
Metro Irrigation Supply Company Ltd. [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 8 |
PoolwerxDevelopmentLLC [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 1 |
Seaboard Industries Inc [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 3 |
The Melton Corporation [Member] | |
Business Acquisition [Line Items] | |
Number of sales centers | 2 |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | |
Goodwill [Line Items] | |||
Highest goodwill balance among other reporting units | $ 5,675 | ||
Average goodwill balance among other reporting units | $ 840 | ||
Number of reporting units with allocated goodwill balances | 221 | ||
Goodwill [Roll Forward] | |||
Balance, beginning of period | $ 194,674 | $ 182,027 | |
Acquired goodwill | 3,068 | 12,696 | |
Goodwill, Translation Adjustments | 1,572 | (49) | |
Balance, end of period | 199,314 | 194,674 | |
Accumulated goodwill impairment losses | (9,879) | (9,266) | |
Goodwill impairment | 0 | (613) | |
Accumulated goodwill impairment losses | (9,879) | (9,879) | |
Goodwill | $ 189,435 | $ 184,795 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible Assets [Line Items] | |||
Other intangible assets, gross | $ 16,610 | $ 15,802 | |
Less: Accumulated amortization (Finite-lived intangible assets) | (3,387) | (2,476) | |
Finite and Indefinite lived intangible assets, net | 13,223 | 13,326 | |
Amortization of Intangible Assets | 976 | 1,012 | $ 400 |
Other intangible assets, future amortization expense [Abstract] | |||
2,018 | 1,080 | ||
2,019 | 905 | ||
2,020 | 833 | ||
2,021 | 353 | ||
2,022 | 163 | ||
Npt tradename [Member] | |||
Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 1,500 | 1,500 | |
Useful life | 20 years | ||
Noncompete agreements [Member] | |||
Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 5,078 | 4,396 | |
Weighted average useful life | 5 years | ||
Patents [Member] | |||
Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 523 | 483 | |
Weighted average useful life | 5 years | ||
Horizon tradename [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 8,400 | 8,400 | |
Pool System tradename and trademarks [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 1,109 | $ 1,023 |
Details of Certain Balance Sh46
Details of Certain Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables, net [Abstract] | ||
Trade accounts | $ 26,681 | $ 18,533 |
Vendor programs | 50,302 | 44,842 |
Other, net | 3,511 | 2,112 |
Total receivables | 80,494 | 65,487 |
Less allowance for doubtful accounts | (3,897) | (4,050) |
Receivables, net | 76,597 | 61,437 |
Prepaid expenses and other current assets [Abstract] | ||
Prepaid expenses | 14,700 | 13,584 |
Other current assets | 4,869 | 1,734 |
Prepaid expenses and other current assets | 19,569 | 15,318 |
Property and equipment, net [Abstract] | ||
Land | 3,003 | 1,685 |
Buildings | 4,255 | 2,465 |
Leasehold improvements | 41,908 | 38,348 |
Autos and trucks | 70,570 | 53,371 |
Machinery and equipment | 55,128 | 45,535 |
Computer equipment | 38,194 | 39,251 |
Furniture and fixtures | 9,670 | 9,951 |
Fixed assets in progress | 1,072 | 2,065 |
Total property and equipment | 223,800 | 192,671 |
Less accumulated depreciation | (122,861) | (109,381) |
Property and equipment, net | 100,939 | 83,290 |
Accrued expenses and other current liabilities [Abstract] | ||
Salaries and payroll deductions | 9,987 | 8,878 |
Performance-based compensation | 31,807 | 32,226 |
Taxes payable | 7,970 | 8,424 |
Other current liabilities | 15,718 | 14,859 |
Accrued expenses and other current liabilities | $ 65,482 | $ 64,387 |
Debt (Details)
Debt (Details) € in Thousands, $ in Thousands | 12 Months Ended | ||||||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | Sep. 29, 2017USD ($) | Sep. 28, 2017USD ($) | Jun. 30, 2017AUD | May 31, 2017AUD | |
Current portion [Abstract] | |||||||||
Short-term borrowings | $ 0 | $ 1,937 | |||||||
Short-term borrowings and current portion of long-term debt | 1,105 | 10,835 | |||||||
Long-term portion [Abstract] | |||||||||
Long-term debt, net | 436,937 | 508,815 | |||||||
Total debt | 438,042 | 519,650 | |||||||
Debt | |||||||||
Standby Letters of Credit | $ 4,200 | ||||||||
Average total leverage ratio, dividend declarations | 300.00% | 300.00% | |||||||
Maximum average total leverage ratio, share repurchases | 250.00% | 250.00% | |||||||
Financial and other covenants [Abstract] | |||||||||
Financial covenants, dividend limitation as percent of preceding year's net income, maximum (in hundredths) | 50.00% | ||||||||
Deferred financing costs [Abstract] | |||||||||
Balance at beginning of year | $ 4,883 | 4,814 | |||||||
Financing costs deferred | 1,104 | 69 | $ 320 | ||||||
Write-off of fully amortized deferred financing costs | (1,381) | 0 | |||||||
Balance at end of year | $ 4,606 | 4,883 | $ 4,814 | ||||||
Less: Accumulated amortization | (3,771) | $ (2,982) | |||||||
Deferred financing costs, net of accumulated amortization | 1,112 | 1,624 | |||||||
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% | ||||||||
Debt Instrument, Interest Rate Margins on Variable Rates, Minimum | 1.15% | ||||||||
Debt Instrument, Interest Rate Margins on Variable Rate, Maximum | 1.65% | ||||||||
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 | 354,549 | 410,439 | |||||||
Debt | |||||||||
Line of credit facility facility, maximum borrowing capacity | $ 750,000 | $ 465,000 | |||||||
Line of credit facility, term (in years) | 5 years | ||||||||
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 | 410,439 | ||||||||
Line of credit facility, remaining borrowing capacity | $ 335,361 | ||||||||
Weighted average effective interest rate (in hundredths) | 2.90% | 2.90% | |||||||
Annual facility fee, minimum (in hundredths) | 0.10% | ||||||||
Annual facility fee, maximum (in hundredths) | 0.20% | ||||||||
Receivables Securitization Facility [Member] | |||||||||
Long-term portion [Abstract] | |||||||||
Receivable Securitization Facility | 83,500 | $ 100,000 | |||||||
Debt | |||||||||
Receivables Facility, Borrowing Capacity Peak Seasonal Maximum | 255,000 | ||||||||
Receivables Facility, Borrowing Capacity NonSeasonal Minimum | 80,000 | ||||||||
Receivables Facility, Borrowing Capacity NonSeasonal Maximum | 220,000 | ||||||||
Receivables Facility, Term (in years) | 2 years | ||||||||
Receivable Securitization Facility | 83,500 | $ 100,000 | |||||||
Weighted average effective interest rate | 2.30% | 2.30% | |||||||
Receivables facility, unused fee | 0.35% | ||||||||
Australian Seasonal Credit Facility [Member] | |||||||||
Current portion [Abstract] | |||||||||
Australian credit facility | $ 1,105 | $ 8,898 | |||||||
Debt | |||||||||
Line of credit facility facility, maximum borrowing capacity | AUD | AUD 20,000,000 | AUD 3,000,000 | |||||||
Bank Overdrafts [Member] | |||||||||
Debt | |||||||||
Borrowing Capacity, Bank Overdraft Facility (in Euros) | € | € 12,000 |
Debt Interest Rate Swaps (Detai
Debt Interest Rate Swaps (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Incremental interest expense arising from difference between interest paid and interest received related to swap agreements | $ 1,691 | $ 1,308 | $ 1,388 |
Interest Rate Swap 1, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, fixed interest rate | 1.185% | ||
Interest rate swap agreement, notional amount | $ 25,000 | ||
Interest Rate Swap 2, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, fixed interest rate | 1.185% | ||
Interest rate swap agreement, notional amount | $ 25,000 | ||
Interest Rate Swap 3, Credit Facility Member | |||
Derivative [Line Items] | |||
Interest rate swap agreement, fixed interest rate | 1.10% | ||
Interest rate swap agreement, notional amount | $ 50,000 | ||
Interest Rate Swap 4, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, fixed interest rate | 1.05% | ||
Interest rate swap agreement, notional amount | $ 25,000 | ||
Interest Rate Swap 5, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, fixed interest rate | 0.99% | ||
Interest rate swap agreement, notional amount | $ 25,000 |
Debt Interest Rate Swaps 2 (Det
Debt Interest Rate Swaps 2 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Gain on cash flow hedge ineffectiveness | $ 2,400 | $ 600 | |
Loss on Cash Flow Hedge Ineffectiveness | $ (100) | ||
Cumulative fair value of de-designated cash flow hedges, gross | (1,400) | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 1,900 | $ 400 | |
Interest Rate Swap 6, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, notional amount | $ 75,000 | ||
Interest rate swap agreement, fixed interest rate | 2.273% | ||
Interest Rate Swap 7, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, notional amount | $ 25,000 | ||
Interest rate swap agreement, fixed interest rate | 2.111% | ||
Interest Rate Swap 8, Credit Facility [Member] | |||
Derivative [Line Items] | |||
Interest rate swap agreement, notional amount | $ 50,000 | ||
Interest rate swap agreement, fixed interest rate | 2.111% |
Debt Interest Rate Swaps 3 (Det
Debt Interest Rate Swaps 3 (Details) - Forward-starting Interest Rate Swap 1 [Member] $ in Millions | Dec. 31, 2017USD ($) |
Derivative [Line Items] | |
Derivative, Forward Starting Notional Amount | $ 150 |
Derivative, Forward-starting interest rate swap agreement, fixed interest rate | 1.1425% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Grant Date Fair Value Assumptions [Abstract] | |||
Share-based compensation | $ 12,482,000 | $ 9,902,000 | $ 9,543,000 |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Stock option activity [Roll Forward] | |||
Beginning balance (in shares) | 2,550,883 | ||
Granted (in shares) | 108,275 | ||
Exercised (in shares) | 364,984 | 343,237 | 543,028 |
Forfeited (in shares) | 6,775 | ||
Ending balance (in shares) | 2,287,399 | 2,550,883 | |
Exercisable (In Shares) | 1,650,386 | ||
Stock option weighted average exercise price [Abstract] | |||
Beginning balance (in dollars per share) | $ 34.70 | ||
Granted (in dollars per share) | 116.99 | ||
Exercised (in dollars per share) | 26.88 | ||
Forfeited (in dollars per share) | 94.20 | ||
Ending balance (in dollars per share) | 39.67 | $ 34.70 | |
Exercisable at end of period (in dollars per share) | $ 26.33 | ||
Weighted Average Remaining Contractual Term [Abstract] | |||
Weighted average remaining contractual term of shares outstanding (in years) | 3 years 10 months 6 days | ||
Weighted average remaining contractual term of shares exercisable at end of period (in years) | 2 years 6 months 19 days | ||
Aggregate Intrinsic Value [Abstract] | |||
Ending balance | $ 205,820,051 | ||
Exercisable at end of period | $ 170,526,117 | ||
Cash Proceeds and Tax Benefits [Abstract] | |||
Exercised (in shares) | 364,984 | 343,237 | 543,028 |
Cash proceeds | $ 9,809,000 | $ 10,340,000 | $ 17,137,000 |
Intrinsic value of options exercised | 33,302,000 | 21,094,000 | 22,676,000 |
Tax benefits realized | $ 12,809,000 | $ 7,891,000 | $ 8,326,000 |
Grant Date Fair Value Assumptions [Abstract] | |||
Expected volatility (in hundredths) | 26.60% | 29.70% | 33.80% |
Expected term (in years) | 7 years 3 months 4 days | 7 years 1 month 6 days | 7 years 2 months 12 days |
Risk-free interest rate (in hundredths) | 2.44% | 1.75% | 1.95% |
Expected dividend yield (in hundredths) | 1.50% | 1.50% | 1.50% |
Grant date fair value (in dollars per share) | $ 32 | $ 22.86 | $ 22.57 |
Share-based compensation | $ 3,553,000 | $ 3,735,000 | $ 3,688,000 |
Recognized tax benefits | 888,000 | 1,409,000 | 1,331,000 |
Unamortized compensation expense | $ 3,472,000 | ||
Expense recognition over weighted average period (in years) | 1 year 8 months 10 days | ||
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Award performance period | 3 years | ||
Shares available for grant | 1,186,521 | ||
Grant Date Fair Value Assumptions [Abstract] | |||
Share-based compensation | $ 8,547,000 | $ 5,993,000 | $ 5,513,000 |
Unamortized compensation expense | $ 6,151,000 | ||
Expense recognition over weighted average period (in years) | 2 years 9 months 15 days | ||
Restricted stock awards [Roll Forward] | |||
Beginning balance (in shares) | 285,019 | ||
Granted (at market price) (in shares) | 95,479 | ||
Vested (in shares) | 79,224 | 95,420 | 147,619 |
Forfeited (in shares) | 3,750 | ||
Ending balance (in shares) | 297,524 | 285,019 | |
Restricted stock awards weighted average grant date fair value [Abstract] | |||
Beginning balance (in dollars per share) | $ 64.33 | ||
Granted (at market price) (in dollars per share) | 115.38 | ||
Vested (in dollars per share) | 52.73 | ||
Forfeited (in dollars per share) | 80.69 | ||
Ending balance (in dollars per share) | $ 83.36 | $ 64.33 | |
Vested (in shares) | 79,224 | 95,420 | 147,619 |
Fair value of restricted stock awards vested | $ 9,260,000 | $ 7,960,000 | $ 10,182,000 |
ESPP Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased under the ESPP (in shares) | 16,610 | 8,649 | 22,555 |
Grant Date Fair Value of most recent ESPP Purchase (per share) | $ 17.30 | ||
Grant Date Fair Value Assumptions [Abstract] | |||
Share-based compensation | $ 355,000 | $ 173,000 | $ 342,000 |
LTIP 2007 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 10 years | ||
Number of shares allocated for issuance (in shares) | 9,315,000 | ||
Shares available for grant | 4,615,148 | ||
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 | ||
Split Vesting [Member] | Minimum [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Split Vesting [Member] | Minimum [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Split Vesting [Member] | Maximum [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Split Vesting [Member] | Maximum [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years |
Share-Based Compensation Share-
Share-Based Compensation Share-Based Compensation Price Ranges (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 2,287,399 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 3 years 10 months 6 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ 39.67 |
Exercisable Stock Options (in shares) | shares | 1,650,386 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ 26.33 |
Exercise Price Range 18.00 to 20.34 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 885,493 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 1 year 4 months 10 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ 19.54 |
Exercisable Stock Options (in shares) | shares | 885,493 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ 19.54 |
Exercise price range per share, lower range (in dollars per share) | 18 |
Exercise price range per share, upper range (in dollars per share) | $ 20.34 |
Exercise Price Range 20.35 to 45.61 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 811,756 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 3 years 10 months 28 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ 33.75 |
Exercisable Stock Options (in shares) | shares | 695,031 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ 31.76 |
Exercise price range per share, lower range (in dollars per share) | 20.35 |
Exercise price range per share, upper range (in dollars per share) | $ 45.61 |
Exercise Price Range 45.62 to 117.04 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Outstanding Stock Options (in shares) | shares | 590,150 |
Outstanding Stock Options Weighted Average Remaining Contractual Term (in years) | 7 years 6 months 4 days |
Outstanding Stock Options Weighted Average Exercise Price (in dollars per share) | $ 78.02 |
Exercisable Stock Options (in shares) | shares | 69,862 |
Exercisable Stock Options, Weighted Average Exercise Price (in dollars per share) | $ 58.30 |
Exercise price range per share, lower range (in dollars per share) | 45.62 |
Exercise price range per share, upper range (in dollars per share) | $ 117.04 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provisional tax benefit recognized for remeasurement of deferred tax liability | $ 12,000 | |||
United States | $ 259,436 | $ 234,646 | $ 203,269 | |
Foreign | 9,746 | 6,732 | 4,881 | |
Total | 269,182 | 241,378 | 208,150 | |
Current [Abstract] | ||||
Federal | 71,329 | 77,000 | 65,676 | |
State and other | 11,289 | 12,182 | 10,263 | |
Current tax | 82,618 | 89,182 | 75,939 | |
Deferred [Abstract] | ||||
Federal | (6,643) | 4,079 | 4,568 | |
State and other | 2,007 | (330) | (370) | |
Deferred tax | (4,636) | 3,749 | 4,198 | |
Total | $ 77,982 | $ 92,931 | $ 80,137 | |
Reconciliation of U.S. federal statutory tax rate to effective tax rate [Abstract] | ||||
Federal statutory rate (in hundredths) | 35.00% | 35.00% | 35.00% | |
Change in valuation allowance (in hundredths) | (0.06%) | 0.10% | 0.20% | |
Stock-based compensation (as a percent) | (4.67%) | (0.00%) | (0.00%) | |
Federal tax reform (as a percent) | (4.46%) | 0.00% | 0.00% | |
Other, primarily state income tax rate (in hundredths) | 3.16% | 3.40% | 3.30% | |
Total effective tax rate (in hundredths) | 28.97% | 38.50% | 38.50% | |
Deferred tax assets [Abstract] | ||||
Product inventories | $ 7,010 | |||
Accrued expenses | 3,978 | |||
Allowance for doubtful accounts | 396 | |||
Total current | 11,384 | |||
Component reclassified for net presentation | (5,368) | |||
Total current, net | 6,016 | |||
Product inventories | 4,287 | $ 4,287 | ||
Accrued expenses | 1,804 | 1,804 | ||
Allowance for doubtful accounts | 154 | 154 | ||
Leases | 1,188 | 1,188 | 1,920 | |
Share-based compensation | 8,884 | 8,884 | 13,778 | |
Uncertain tax positions | 2,087 | 2,087 | 2,746 | |
Net operating losses | 5,441 | 5,441 | 5,735 | |
Interest rate swaps | 0 | 0 | 674 | |
Other | 1,475 | 1,475 | 2,465 | |
Total noncurrent | 25,320 | 25,320 | 27,318 | |
Less: Valuation allowance, non-current | (5,440) | (5,440) | (5,735) | |
Component reclassified for net presentation | (19,071) | (19,071) | (20,781) | |
Total non-current, net | 809 | 809 | 802 | |
Total deferred tax assets | 809 | 809 | 6,818 | |
Deferred tax liabilities [Abstract] | ||||
Trade discounts on purchases | 2,698 | |||
Prepaid expenses | 2,670 | |||
Total current | 5,368 | |||
Component reclassified for net presentation | (5,368) | |||
Total current, net | 0 | |||
Trade discounts on purchases | 1,520 | 1,520 | ||
Prepaid expenses | 1,857 | 1,857 | ||
Intangible assets, primarily goodwill | 29,348 | 29,348 | 42,930 | |
Depreciation | 10,870 | 10,870 | 12,326 | |
Interest rate swaps | 61 | 61 | 0 | |
Total non-current | 43,656 | 43,656 | 55,256 | |
Component reclassified for net presentation | (19,071) | (19,071) | (20,781) | |
Deferred income taxes | 24,585 | 24,585 | ||
Total non-current, net | 34,475 | |||
Total deferred tax liabilities | 24,585 | 24,585 | 34,475 | |
Net deferred tax liability | 23,776 | 23,776 | 27,657 | |
Loss Carryforwards [Line Items] | ||||
Excess Tax Benefit (Tax Deficiency) from Share-based Compensation, Financing Activities | 0 | 7,370 | $ 7,706 | |
Uncertain tax positions activity [Roll Forward] | ||||
Beginning balance | 7,846 | 5,978 | 4,690 | |
Increases for tax positions taken during a prior period | 129 | 10 | 410 | |
Increases for tax positions taken during the current period | 3,260 | 2,819 | 1,782 | |
Decreases resulting from the expiration of the statute of limitations | 869 | 961 | 904 | |
Decreases relating to settlements | 429 | 0 | 0 | |
Ending balance | 9,937 | 9,937 | 7,846 | 5,978 |
Unrecognized tax benefits that, if recognized, would decrease the effective tax rate | 7,850 | 7,850 | 5,100 | |
Interest expense related to unrecognized tax benefits | 249 | 156 | $ 136 | |
Accrued interest on unrecognized tax benefits | 866 | 866 | 685 | |
International Subsidiaries [Member] | ||||
Loss Carryforwards [Line Items] | ||||
Tax loss carry-forwards | 21,346 | 21,346 | ||
Deferred tax asset, valuation allowance | $ 5,441 | $ 5,441 | $ 5,735 |
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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Net income | $ 25,665 | $ 48,783 | $ 94,620 | $ 22,270 | $ 2,572 | $ 44,421 | $ 85,247 | $ 16,363 | $ 191,339 | $ 148,603 | $ 128,224 |
Net loss attributable to noncontrolling interest | 294 | 352 | 51 | ||||||||
Net income attributable to Pool Corporation | $ 25,665 | $ 48,783 | $ 94,903 | $ 22,281 | $ 2,615 | $ 44,534 | $ 85,435 | $ 16,371 | $ 191,633 | $ 148,955 | $ 128,275 |
Weighted average shares outstanding [Abstract] | |||||||||||
Basic (in shares) | 40,838 | 41,872 | 43,105 | ||||||||
Effect of dilutive securities [Abstract] | |||||||||||
Stock options and employee stock purchase plan (in shares) | 1,611 | 1,112 | 1,149 | ||||||||
Diluted (in shares) | 42,449 | 42,984 | 44,254 | ||||||||
Basic (in dollars per share) | $ 0.64 | $ 1.20 | $ 2.30 | $ 0.54 | $ 0.06 | $ 1.06 | $ 2.03 | $ 0.39 | $ 4.69 | $ 3.56 | $ 2.98 |
Diluted (in dollars per share) | $ 0.62 | $ 1.16 | $ 2.21 | $ 0.52 | $ 0.06 | $ 1.03 | $ 1.98 | $ 0.38 | $ 4.51 | $ 3.47 | $ 2.90 |
Anti-dilutive stock options whose exercise prices were higher than the common stock's average market price during the period (in shares) | 108 | 1 | 0 |
Commitments and Contingencies55
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating Leases, Rent Expense, Net | $ 66,161 | $ 63,940 | $ 60,129 |
Future minimum lease payments [Abstract] | |||
2,018 | 55,874 | ||
2,019 | 49,540 | ||
2,020 | 42,524 | ||
2,021 | 30,756 | ||
2,022 | 21,612 | ||
Thereafter | $ 21,423 |
Related Party Transactions (Det
Related Party Transactions (Details) - NCC [Member] | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Related Party Transaction [Line Items] | |||
Equity Method Investment, Ownership Percentage | 50.00% | ||
Cash contribution for acquisition of membership interest | $ 1,121,000 | ||
Office space occupied (in square feet) | 59,100 | ||
Monthly rent expense (per month) | $ 94,872 | ||
Related Party Rent expense | $ 1,122,000 | $ 1,035,000 | $ 1,016,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | $ 325 | $ 194 | $ 218 |
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 | $ 6,946 | $ 5,817 | $ 5,583 |
Quarterly Financial Data (Una58
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Net sales | $ 510,183 | $ 743,401 | $ 988,163 | $ 546,441 | $ 445,235 | $ 691,429 | $ 918,889 | $ 515,250 | $ 2,788,188 | $ 2,570,803 | $ 2,363,139 |
Gross profit | 145,398 | 216,606 | 289,664 | 153,621 | 127,777 | 199,551 | 270,736 | 143,023 | 805,289 | 741,087 | 675,644 |
Net income | 25,665 | 48,783 | 94,620 | 22,270 | 2,572 | 44,421 | 85,247 | 16,363 | 191,339 | 148,603 | 128,224 |
Net income attributable to Pool Corporation | $ 25,665 | $ 48,783 | $ 94,903 | $ 22,281 | $ 2,615 | $ 44,534 | $ 85,435 | $ 16,371 | $ 191,633 | $ 148,955 | $ 128,275 |
Earnings (loss) per share: | |||||||||||
Basic (in dollars per share) | $ 0.64 | $ 1.20 | $ 2.30 | $ 0.54 | $ 0.06 | $ 1.06 | $ 2.03 | $ 0.39 | $ 4.69 | $ 3.56 | $ 2.98 |
Diluted (in dollars per share) | $ 0.62 | $ 1.16 | $ 2.21 | $ 0.52 | $ 0.06 | $ 1.03 | $ 1.98 | $ 0.38 | $ 4.51 | $ 3.47 | $ 2.90 |