Nature of Operations
|12 Months Ended|
Dec. 31, 2016
|Segment Reporting [Abstract]|
|Nature of Operations||
NATURE OF OPERATIONS
Resilient Flooring — Our Resilient Flooring segment designs, manufactures, sources and sells a broad range of floor coverings primarily for homes and commercial buildings under various brands, including the Armstrong brand. Manufactured products in this segment include vinyl sheet, vinyl tile, and luxury vinyl tile (“LVT”) flooring. In addition, our Resilient Flooring segment sources and sells laminate flooring products, vinyl tile products, vinyl sheet products, LVT products, and linoleum products, as well as installation and maintenance materials and accessories. Resilient Flooring products are offered in a wide variety of designs, colors and installation options. We sell these products to independent wholesale flooring distributors, large home centers, retailers, flooring contractors and to the manufactured homes industry, and secured specifications for these products through architects, designers and end users. When market conditions and available capacity warrant, we also provide products on an original equipment manufacturer (“OEM”) basis to other flooring companies.
Wood Flooring — Our Wood Flooring segment designs, manufactures, sources and sells branded hardwood flooring products, including the Armstrong and Bruce brands, for use in residential construction and renovation, with some commercial applications in stores, restaurants and high-end offices. The product offering includes pre-finished solid and engineered wood floors in various wood species, and dimensions, as well as related accessories. Our Wood Flooring products are generally sold to independent wholesale flooring distributors, large home centers, retailers, and flooring contractors, and through secured specifications with regional and national builders. When market conditions and available capacity warrant, we also provide products on an OEM basis to other flooring companies.
NOTE 3. NATURE OF OPERATIONS (continued)
(1) Total assets for 2016 will differ from the totals on our Consolidated Balance Sheets due to unallocated assets which primarily consist of cash and deferred income taxes.
(2) Totals for 2014 will differ from the totals on our Consolidated Statement of Cash Flow by the amounts that have been classified as discontinued operations.
Segment operating income (loss) is the measure of segment profit reviewed by our Chief Operating Decision Maker. The sum of the segments’ operating income (loss) equals the total operating income (loss) as reported on our Consolidated Statements of Operations and Comprehensive Income (Loss). The following reconciles our total operating income (loss) to income (loss) from continuing operations before income taxes, which are only measured and managed on a combined basis:
NOTE 3. NATURE OF OPERATIONS (continued)
Accounting policies of the segments are the same as those described in the summary of significant accounting policies.
The sales in the table below are allocated to geographic areas based upon the location of the customer.
Impairment testing of our tangible assets occurs whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In 2014, we disposed of certain idle equipment at five of our wood flooring manufacturing facilities in the United States and as a result we recorded a $4.4 million impairment charge in cost of goods sold.
During 2014, we decided to close our resilient flooring plant in Thomastown, Australia and our engineered wood flooring plant in Kunshan, China. We recorded $2.2 million in cost of goods sold for accelerated depreciation due to the closure of the Thomastown, Australia plant. We subsequently sold the Thomastown, Australia plant in 2015 for a gain of approximately $2.0 million. We also recorded $4.0 million in cost of goods sold for accelerated depreciation and $0.8 million for the impairment of intangible assets due to the closure of the Kunshan, China plant in 2014.
During 2014, we recorded an asset impairment charge of $11.9 million related to AWI’s DLW subsidiary, which was our former European flooring business, due to continued disappointing operating results.
Information about Major Customers
In 2016, total revenues from The Home Depot, Inc. and J.J. Haines and Company, Inc., included within our Resilient Flooring and Wood Flooring segments, were $288.7 million. Net sales to each of these customers exceeded 10% of our total net sales. We monitor the creditworthiness of our customers and generally do not require collateral.
The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.
Reference 1: http://www.xbrl.org/2003/role/presentationRef