### 2011 Annual Report 

# Alw a ys in S tyleB Mohawk I ndustries, I nc. 

# Markets Contract. Markets Expand.

But the desire for beautiful and functional space never goes away.

T hat’s why Mohawk is Always in S tyle.B Mohawk I ndustries, I nc. 2011 Annual Report 1 

### Enjoying beautiful carpet should be worry-free. It’s important to today’s
value-conscious consumer that this major home investment can stand up
to the demands of everyday life. That’s why Mohawk ensures that softness, stain resistance, easy maintenance and durability are defining attributes of
our residential carpet collections. 

# Peace Of Mind Alw a

ys i n St yl e2 Mohawk I ndustries, I nc. 

### L et your space be your canvas, and our products your palette. Dal-Tile offers a vast array of tile colors, shapes, sizes and finishes. The breadth and depth of
this product portfolio provides tile customers the opportunity to transform a
purchase into a unique masterpiece. 

# Great Art

Alw a

ys i n St yl e



# Simple & Easy Alw a

ys i n St yl e2 Mohawk I ndustries, I nc. 

# Great Art

A new floor does not have to be a complex proposition. For consumers who
want to keep their makeovers simple, our Quick- S tep ® 

### and Mohawk ® 

### laminate flooring fulfills the desire for beautiful, tile- or hardwood-inspired floors with
uncomplicated installation and maintenance. 

# Simple & Easy Alw a

ys i n St yl e4 Mohawk I ndustries, I nc. 

### Whether it’s traditional oak or exotic Brazilian cherry or distressed maple,
character is the common denominator among our hardwood flooring choices.

Mohawk ® 

### , Columbia ® 

### and Century ®



### hardwood collections combine craftsmanship
with natural wood to bring timeless authenticity to a room. 

# Character

Alw a

ys i n St yl e4 Mohawk I ndustries, I nc. 2011 Annual Report 5 

# Alw a

ys i n St yl e

Beautiful flooring is not confined to residential applications. Our commercial
products are engineered to meet the durability requirements of heavy-traffic
public areas while also providing the right aesthetic quality to enhance the space. 

# Practical Matters Alw a

ys i n St yl e6 Mohawk I ndustries, I nc. 

# To Our Shareholders,

Mohawk’s financial performance continued to improve in 2011.
E ach of our businesses continued to grow sales through new product innovations and geographic expansion and to increase profitability through process improvements, asset realignments and cost reductions. As a result, Mohawk now has a leaner, smarter and more responsive business model which we will increasingly leverage as the flooring industry moves toward a more normalized level of business activity.



## A S t r engthening Pe r fo rma nce in 2011 During the past 12 months, there were some encouraging signs of strengthening market activity. In the United States, the Mohawk segment grew net sales in both the residential
and commercial markets. Dal-Tile sales in both the U.S. and Mexico expanded, with the commercial market outpacing residential sales in the U.S. Despite the challenging European economy, Unilin improved results from the prior year. Stronger end-markets translated into 2011 net sales of $5.6 billion, a six percent increase over 2010. Excluding unusual items, earnings rose 16 percent to $2.92 * 

### per share.

I n addition, we are pleased to report that our businesses continue to generate strong net cash from operating activities, totaling $301 million in 2011. During the year, we successfully implemented price increases to help offset raw material inflation, had efficiency and productivity gains, enhanced product engineering, increased use of alternative materials and aligned manufacturing assets with market conditions and changing consumer preferences.

*See page 22 for Non-GAAP Reconciliation6 Mohawk I ndustries, I nc. 2011 Annual Report 7 

# To Our Shareholders,

“

Jeff Lorberbaum 

## D i ff erentiating P r o du c ts in the M ar ket p l a ce The Mohawk segment is focused on ensuring its product mix aligns well with shifting market demands. We have broadened our product lines to offer those fibers and features most often requested by consumers. O ur popular and proprietary products, such as SmartStrand ® 

### in the triexta fiber category, are competitive differentiators for us in the residential market. We also have just introduced SmartStrand Silk T M 

### and SmartStrand Ultra T M 

### , brand extensions that represent a new generation of softness and durability in carpets and that should have an immediate impact on sales.

In addition, we are extending triexta to the commercial and multi-family markets where we believe the durability, stain-resistance and sustainability attributes of the fiber will make our new products well received there.

Just as we have adjusted production in our residential lines toward more profitable areas of the market, we also have increased manufacturing capacity in the commercial offerings to meet the growing demand for modular carpet tile, as well as invested in new technology for high-style hospitality print carpet.

Differentiated products continue to be an important part of Dal-Tile’s market strategy. Here, efforts are focused on incorporating our Reveal Imaging ®



### technology, which reproduces the natural looks of stone, wood or fabric with exceptional precision, into a broader array of product offerings. With a history of innovation, Unilin remains focused on product development, such as distressed wood and wide plank styles, for the premium market. Unilin’s insulation products business is growing rapidly in Europe, where regulatory requirements for increased energy efficiency are fueling demand.

I n v estments t o B uild a B etter Mo haw k We invested more than $275 million in capital expenditures in 2011, and we continue to make investments across all of our businesses that contribute to a stronger business model, build a more effective organization and lead to higher profit

ability. F or example, we are in the process of extending our use of SAP within Dal-Tile to further improve customer responsiveness and decrease the cost of sales.

O ur R&D initiatives include developing products with a higher percentage of recycled material and manufacturing processes that use natural resources more effectively. Mohawk is the only flooring company to make the Newsweek T op 500 G reen Rankings for three consecutive years, and Floor Covering Weekly in 2011 presented us with the G reen S tep Pinnacle Award for environmental leadership. Investing in our employees is also essential to our success, and we are proud to report that Training magazine recently ranked us fourth among U.S. companies for our employer-sponsored training and development programs.

I niti a tives T h a t Cap it a lize on G lo ba l Gr owth
O ur long-term strategy reflects the C ompany’s ongoing evolution from its foundation as a North American carpet



# Mohawk’s financial performance continued to improve in 2011. Each of our businesses continued to grow sales through new product innovations and geographic expansion and to increase profitability through process improvements, asset realignments and cost reductions.”8 Mohawk I ndustries, I nc. 

### Jeffrey S. Lorberbaum C hairman and C hief Executive O fficer business into a larger, more diverse total flooring company that operates in the global marketplace. We are expanding our portfolio of investments in fast-growing markets around the world and continually assessing new opportunities. I n each case, our approach is to enter new geographies in a way that is best suited to the local market – either through joint venture, acquisition or a greenfield initiative.

In Mexico, Dal-Tile has delivered strong sales growth as it adds
new wholesale and retail customers. We are on schedule to open a second manufacturing site this spring in Mexico for products that target the core segment of that market and broaden our offering across all price points. Dal-Tile’s joint
venture in C hina continues to help us establish a presence in the world’s largest tile market, while also manufacturing product for export to other regions.

Unilin’s sales initiative in Russia crossed a milestone in O ctober 2011 with the opening of a laminate plant that has already exceeded expectations. Local manufacturing will improve our cost structure and our ability to service Russian customers. During the year, Unilin consolidated facilities in Malaysia, reducing costs and increasing capacity, and acquired the largest distributor of laminate and wood flooring products in Australia to better serve the local market, a strategy that
has worked well in the United K ingdom.

A S tr o ng Capital S tru c ture and Organi z ati o n
O ur ability to expand internationally while continuing to make investments in our existing businesses reflects one of Mohawk’s greatest strengths – its balance sheet. At year-end, our net debt to adjusted EBIDTA ratio was 2.0, and we have liquidity of more than $900 million available to redeem our 2012 bonds and provide flexibility for future opportunities.

O ur management team represents another strength and will be instrumental in our ability to realize new market potential. We have recently promoted Brian C arson to succeed F rank Peters as President of the Mohawk division and John T urner, Jr., to succeed Harold Turk as President of Dal-Tile. These appoint

ments underscore the depth of our current management team and our commitment to effective succession planning. We are grateful to both F rank and Harold for their many years of leadership and for their willingness to remain with the C ompany throughout 2012 to help identify and explore strategic development opportunities in their respective business units.

We remain optimistic about the future of the flooring industry. Long-term, we expect the industry to outpace GDP growth, due to expected expansion of household formation as well as improvement in consumer confidence and employment levels, and lower housing inventories. Mohawk’s products will always be in style and in demand because of the timeless desire to enhance the residential and commercial spaces in which we
live and work. O ur focus will remain squarely on investments in growth initiatives, innovative products, a strong balance sheet and a low-cost infrastructure – all strategies that have proven to be as sound and timeless as our products.

W e appreciate your support.

# A Closer Look At Our Three Businesses

8 Mohawk I ndustries, I nc. 2011 Annual Report 9 

## Mohawk’s ability to manage successfully through business cycles results from our diversification of the business over the past decade. Today, the C ompany operates three distinct businesses that participate in multiple product categories, sales channels and geographic markets. As the flooring industry returns to growth, these businesses are poised to further strengthen their positions in the marketplace.

In the pages that follow, our business leaders review how their manufacturing and marketing strengths will capitalize on opportunities. International expansion, in particular, is important to our hard-surface products and should help spur long-term sales growth. Innovation is a priority for all of our businesses and is critical to their ability to differentiate our products in the marketplace. As we begin 2012, Mohawk remains forward focused and ready to reward our shareholders with profitable growth.

S incerely,

W

. C hristopher W ellborn President and C hief O perating O fficer 

### W . Christopher W ellborn President and Chief Operating Officer10 Mohawk I ndustries, I nc.Mohawk Flooring



# Brian Carson President, Mohawk Flooring a conve r s a tion with

What broad trends are you seeing in the carpet category?

O n the residential side, we’re beginning to see a turnaround in what has been a four-year downturn. Recently consumers have focused on price – often trading down on product selections to meet their budget constraints. Even so, consumers still look for high-quality products. To satisfy these needs, we have made significant R&D investments in fiber technology, with Mohawk’s exclusive SmartStrand ® 

### fiber representing the foremost innovation in this area.


# How well positioned is Mohawk against these market trends? SmartStrand fibers provide a truly differentiated product with performance attributes for which consumers are willing to pay a premium. We know of no other fiber technology that can match the combination of softness, durability and stain resistance that SmartStrand achieves. The recently introduced SmartStrand Silk T M 

### and
SmartStrand Ultra T M 

### lines are adding even more product depth in this category through a newly engineered level of luxurious softness and the same proven built-in soil and stain resistance. We’ve also added Scotchgard ® * 

### protection in some of our lines to create additional value and ha ve increased our filament fiber making capacity, adding 80 million pounds of capacity in 2011 alone.


# On the commercial carpet side, what trends are you seeing and how are you capitalizing on them?

C ommercial customers continue to move from broadloom carpet to carpet tile. We’ve increased our modular manufacturing capacity, adding approximately 35 percent more capacity in the past year. We also are leveraging the SmartStrand brand, in both broadloom and tile formats, into the commercial market, where we believe we can replicate its residential success. C ommercial project managers seeking LEED certification are requiring products with sustainability attributes. With a significant portion of the fibers made from renewable resources, SmartStrand
should be well received in this market.

* S cotchgard ® is a registered trademark of 3M C ompany.10 Mohawk I ndustries, I nc. 2011 Annual Report 11 

# Though carpet comprises the majority of sales in the Mohawk segment, you also offer Mohawk-branded hard-surface products. What is the strategy behind these product offerings?

C onsumers increasingly are looking for a variety of flooring surfaces in the same home that add a unique element of design and functionality in their living areas. E xpanding the Mohawk brand into hard surfaces allows us to provide complete flooring solutions for the home to capture a greater share of the customer’s total flooring purchase. In addition, by including hard-surface products in our mix, we can further leverage our distribution infrastructure, which helps to improve delivery time for our customers.


# Looking ahead, what are your priorities for the Mohawk segment? I am optimistic about our business and am confident that the residential remodeling consumer will return in a meaningful way as the market recovers. In addition, we believe our product line improvements and fiber innovations have us well positioned for continued commercial carpet growth. We are focused on product innovation that drives consumer demand and creates value for Mohawk and our retail partners. We can improve our sustainability and our cost position by increasing our usage of recycled materials. We’ve made great progress in this area, but there’s a lot more to do. We are increasing the effectiveness of our residential and commercial sales force with increased training and new technology to help them better understand retailers’ needs and deliver on them faster and more effectively. Each of these initiatives represents an opportunity to expand our margins and improve our
return on investment.12 Mohawk I ndustries, I nc. 

# Mohawk At-A-Glance

Highlights

Two brand extensions of SmartStrand ® 

### products were introduced. SmartStrand S ilk T M 

### features an unmatched combination of softness, performance and sustainability, while SmartStrand Ultra T M 

### is a collection of soft, stylized products with enhanced warranties that build in value.
In the commercial market, the premium Lees ® 

### brand introduced a SmartStrand collection that leverages stain resistance and environmental benefits. Also a Duracolor ® 

### collection with premium features and more economical price points was introduced.
Service performance for customers continued to improve through better delivery times and an expansion of quick-ship offerings.
Mohawk continued to invest in brand-building awareness promotions such as fundraising for breast cancer research and awareness through the introduction of the Decorate for the C ure T M 

### Mohawk Smart C ushion T M 

### and K arastan ® 

### K ara S tep Reserve T M 

### programs, which add depth to the well-established S pecify for a C ure ®* 

### commercial carpet program.
Mohawk Home launched a new website to help educate consumers about rug options and added new media initiatives such as QR codes on labels to provide consumers with a broad range of product-related information at the point of sale. C ustomers can also interact live with Mohawk Home via its pages on many social media, including F acebook, Myspace, Twitter and F riendster. 

# 1

2 K arastan ®



### Mohawk ®


### Aladdin ®


### Horizon ® 

### Bigelow ®



### L ees ®



### Durkan ®


### Mohawk Home T M 

# 3
4

5 Brands

*“Specify for a C ure” is a registered trademark of the Susan G. K omen F oundation, used under license.2011 Annual Report 13 12 Mohawk I ndustries, I nc. 

### Unique products that offer consumers added value are key to profitable growth. We continue to invest in talent and technology to drive internal product development. As we have integrated manufacturing backward into fiber and backing production, our internal R&D investment has stepped up as well and is rewarding us today with exciting new product innovations. 

# Investing To Drive Differentiation

The debut of SmartStrand Silk T M takes carpet softness to
a new level. As a result of our ongoing research, E ver S trand ® and Wear-Dated ® Revive T M now feature an industry-leading level of recycled content while still maintaining their attributes of softness, stain-resistance and durability.

C ollections with our Duracolor ® fiber offer premium performance attributes at an affordable price point for
commercial customers. O ur commitment to product innovation is matched by a commitment to develop the talents of our people in order to be responsive to marketplace needs.14 Mohawk I ndustries, I nc. 

# What current trends are defining the tile category? The single largest trend is producing tile that is a realistic replica of another material, whether it be real natural stone, a piece of fabric or a hardwood plank. At Dal-Tile, we have developed proprietary technology called Reveal Imaging ® 

### . This technology produces ceramic tile that can replicate almost any natural stone, such as marble, slate or travertine; or hardwood flooring with knots and graining characteristics; and even fabrics such as linen, silk or tweed. This will revolutionize where tile can go in the future.


# What are some applications for Reveal Imaging technology that open new opportunities?

Think about how hardwood in a bathroom or C arrera marble in a high-traffic area was never a practical flooring option for these spaces due to maintenance requirements. With Reveal Imaging technology, you can achieve the look of hardwood or marble, while receiving the performance benefits of ceramic and porcelain tile. We have introduced more product applications with this technology than any other North American supplier – taking its possibilities to an unprecedented level. We continue to lead the industry by extending the Reveal Imaging product line beyond floor tile to include wall, mosaic, trim and decorative tiles. No other tile manufacturer currently has that capability.


# Dal-Tile already has a leading position in the U.S. tile market. Where will you be able to grow domestically?

F or Dal-Tile, the mid-market has always represented our greatest area of strength. We have significant opportunities in other categories at both the value and the high end of the product spectrum. We will continue to hone our expertise while identifying newly emerging product categories and leveraging our distribution network to grow market share. Technical porcelain and thin tiles, for example, are high-performance products in the commercial arena that we believe will take share from other finishes in the future. We have established positions in each and are poised for strong growth.Dal-Tile



# John Turner, Jr.

President, Dal-Tile a conve r s a tion with14 Mohawk I ndustries, I nc. 2011 Annual Report 15 

# What other opportunities do you see in the U.S. tile market? Natural stone is a major growth opportunity. As a product, natural stone has broad consumer appeal and many applications. As a market category, natural stone is still very fragmented. We believe our national customer relationships provide a valuable entry point to this market, particularly as the new construction market rebounds. The home center channel is another significant opportunity. In this channel, we are aligning our manufacturing assets with the mass-market needs of national, big-box retailers. F inally, the premium end of the commercial business presents a sizeable avenue for market growth.


# Describe the global opportunity for Dal-Tile and the competitive picture around the world.

C eramic tile is the most popular flooring product in the world outside the United States. Tile has been used as flooring for centuries, so it’s very well accepted. As with natural stone, the global tile market is generally fragmented. Dal-Tile’s scale, in both manufacturing and distribution, gives us a unique advantage to grow sales and increase our market share. In most markets, there is usually no single supplier with the degree of share that Dal-Tile has in the U.S.


# Can you leverage and replicate Dal-Tile’s U.S. business model in other countries? Every market is different. We have to assess each opportunity and determine the best strategy to tackle it. In the U.S., Dal-Tile started with a single plant in Dallas and sold its products through independent distributors. Eventually,
the C ompany bought several distributorships, which became the basis for our current sales and service center network, then integrated backward into other types of product manufacturing. The unique dynamics of each market will shape how our business evolves there. There are two important takeaways. F irst, the global tile market is extremely large; and second, Dal-Tile has a wealth of expertise in tile manufacturing and marketing. That’s a great combination and creates long-term opportunity for us around the world.16 Mohawk I ndustries, I nc. 

# Dal-Tile At-A-Glance

Highlights

During 2011, renovation projects drove commercial sales with the hospitality, healthcare, restaurant/retail and government sectors leading growth.
Dal-Tile recently launched the Statements by daltile T M 

### program, a unique marketing program designed to increase ceramic tile sales among floor covering retailers. L everaging our tile and stone expertise and extensive product portfolio, Dal-Tile developed a turnkey ceramic tile “showroom within a showroom” concept that presents the complete Daltile ® 

### product portfolio. Beyond the merchandising designed to aid customers through the selection process, Statements by daltile dealers receive innovative marketing benefits such as an internet-based lead generation program, customized technology kiosk, advertising/promotional support, training and operational and financial benefits. This program is the first of its kind in the ceramic tile category and is designed to further grow share in the residential remodeling segment.
Expanded offerings of both floor and wall tile led to an increased presence in the home center channel. Also, broader design alternatives for larger ceramic tiles at all price levels were introduced to meet growing demand. 

# 1
2 Daltile ®


### American O lean ®



# 3 Brands2011 Annual Report 17 16 Mohawk I ndustries, I nc. N ew Y ork G allery H ouston G allery 

### An internal distribution network helps to support Dal-Tile’s leading share of the U.S. tile market and complements its presence in specialty and do-it-yourself (DIY) retail stores. This network includes C ompany-owned sales and service centers, as well as stone centers and design galleries, each located in strategic markets throughout the U.S. These facilities enable Dal-Tile to provide a high level of customer service throughout the country. In addition, Dal-Tile’s American O lean ® 

### brand is available through qualified independent distributors and select C ompany sales centers. 

# A Well-Designed Market Strategy

Market Opportunity: Mexico

Dal-Tile’s growing business in Mexico will receive a significant boost this spring when a new plant in Salamanca becomes operational. This facility will manufacture product targeted to the value segment of the Mexican market, which comprises the majority of sales in Mexico. The new plant also will enable Dal-Tile to better penetrate the major metropolitan centers of Mexico C ity and Guadalajara.18 Mohawk I ndustries, I nc. 

# Unilin participates in multiple product categories across multiple markets. What is the best way to view this diverse portfolio? We always look at Unilin as having three product lines: flooring, panels and insulation products. F looring spans both the hardwood and laminate categories in the U.S. and Europe. Panels include chipboards, MD F and HD F boards, as well as decorative panels, wall systems and furniture. The insulation line focuses on structural insulated roof panels and insulation boards for floors, walls and roofs.


# Where do you see the most significant opportunities for growth of the flooring business in the next few years? We are looking beyond Europe to expand into large growth markets such as Russia and Brazil. To date, Russia has been our focus, and we have successfully opened our manufacturing facility there to grow our presence in that important market. We have further enhanced our presence outside the U.S. and Europe with our acquisition in
Australia of Premium F loors, distributor of laminate and wood flooring products, and realignment of our Malaysian operations. We continue to explore opportunities around the world. Within Europe, we are expanding our laminate and wood products further into the DIY market.


# What are the dynamics of the panel and insulation product lines? The market for panels is mature, so the focus has been to develop new applications to bring added value to this
business. O ne strategy is to deliver innovative new applications for the panels, such as our new furniture line, didit T M



### . We also are focusing our marketing of the panels to trade professionals, who value the higher level of service that we can provide. I nsulation is an excellent business right now because of E uropean regulations that require increased energy efficiency in buildings. We believe demand for our insulation products will stay strong in the foreseeable future. As a result, we will expand our existing insulation capacity by 50 percent in 2012 and plan to construct an additional plant in F rance in 2013.Unilin



# Bernard Thiers President, Unilin a conve r s a tion with18 Mohawk I ndustries, I nc. 2011 Annual Report 19 

# What is your strategy for the DIY channel in Europe and how does it differ from the U.S.? The European DIY channel is fragmented. There is no pan-European chain; rather, DIY retail brands tend to be country-specific. This environment allows us to partner with retailers who will offer Quick-Step ® 

### flooring as a premium brand with a point-of-sale concept shop within their stores. As a result, we can maintain the same premium price point in both the DIY and the specialty retail channels. The DIY retailer gets a higher-end product with better margins, and we gain expanded distribution while ensuring the integrity of the brand. The U.S. model is entirely different because distribution is concentrated among a small number of national DIY chains. In this situation, it works much better for the retailer to utilize private label products from us.


# How does the growth strategy in the U.S. differ from that in Europe? In each, we develop products that maximize use of the manufacturing facilities and the production expertise we have. In Europe, the product expansion has been enhanced with our use of HD F for the core, combined with premium veneers and surface effects. In the U.S., we are expanding our offerings to focus more on domestic exotic woods and products that feature a wide range of textured, distressed and high-performance surfaces.


# Unilin has established a growing business in Russia. What are the competitive dynamics of the Russian market, and how will the new plant in Russia improve your business? Importing product from Western Europe is difficult. High import duties and freight add to our costs. Lead times also are long and logistics are not optimal. There are several suppliers with local production, but there is very little product targeted to the high end of the market. As a premium laminate, Quick-Step flooring is very well positioned. Local production will improve our cost position and logistics, so we can better serve our customers, with room for growth without additional investment in new construction.

# Unilin At-A-Glance

Highlights

Unilin’s patented Uniclic ® 

### technology has been extended to ready-to-assemble furniture, with the didit T M 

### line. Designed to take the difficulty out of ready-toassemble furniture, the technology has the potential to create a new product category. Initial distribution is underway through a national retailer in the U. K

. Unilin acquired Premium F loors, the largest distributor of laminate and wood flooring products in Australia. The acquisition follows a successful partnership with the distributor, which covers the entire continent with five regional distribution points.
In Malaysia, Unilin is completing consolidation of its two hardwood manufacturing plants into one plant to realize improved operating efficiencies and productivity. The newly configured plant will support growth in Europe and the Asia-Pacific region.
Floor Covering Weekly honored Quick-Step with its 2011 Dealers’ C hoice award for the V eresque T M 

### laminate collection. 

# 1

2 C olumbia ®


### C entury ® 

### Quick-Step ®


### Unilin ®



### didit TM 

### F urniture



# 3

4 Brands

20 Mohawk I ndustries, I nc.2011 Annual Report 21 20 Mohawk I ndustries, I nc. Quick-Step V ogue T M with highly textured antique character. Quick-Step Elite T M with a multi-gloss finish and
more natural look. 

### Since its founding more than 50 years ago, Unilin has placed innovation at the forefront of its culture. The organization looks continually for new ways to leverage its technology into new products. Its Uniclic ® 

### installation technology, for example, has been successfully added to the hardwood category, luxury vinyl tile and now into ready-to-assemble furniture. 

# Innovative Ideas

Sales By Product

FLOO R ING
N O N- F L OO RING 

# Sales By Geography

20% 80% 

## N O N-U.S.
U.S.

Unilin has worldwide sales strength and in 2011 increased its global coverage in Russia
and Australia.

Unilin continues to have strong flooring product

coverage. Decorwood ® Brazilian Walnut.



### 32% 68%22 Mohawk I ndustries, I nc. 

# Financial Highlights

(in thousands, except per share data)
Y

ears Ended December 31, 2011 2010 2009 2008 2007
N et sales $ 5,642,258 5,319,072 5,344,024 6,826,348 7,586,018 G ross profit 1,416,879 1,402,600 1,232,230 1,737,764 2,114,784 O perating income (loss) (a) 315,542 314,169 43,730 (1,124,134) 750,106 Net earnings (loss) attributable to

Mohawk I ndustries, I nc. (a) (b) $ 173,922 185,471 (5,499) (1,458,228) 706,814 Basic earnings (loss) per share (a) (b) $ 2.53 2.66 (0.08) (21.32) 10.37 Diluted earnings (loss) per share (a) (b) $ 2.52 2.65 (0.08) (21.32) 10.32
Balance sheet data: C ash and cash equivalents (including restricted cash) $ 311,945 382,171 531,458 93,519 89,604 Receivables, net 686,165 614,473 673,931 696,284 821,113 I nventories 1,113,630 1,007,503 892,981 1,168,272 1,276,568 T

otal current assets 2,398,164 2,248,613 2,359,000 2,246,249 2,449,720 Property, plant and equipment, net 1,712,154 1,687,124 1,791,412 1,925,742 1,975,721 G oodwill and intangibles 1,980,275 2,046,521 2,196,470 2,247,284 3,969,208 T

otal assets (a) (b) $ 6,206,228 6,098,926 6,391,446 6,446,175 8,680,050 Accounts payable and accrued expenses $ 715,091 698,326 831,115 782,131 951,061 T

otal current liabilities 1,101,346 1,048,914 884,022 876,916 1,211,500 Long-term debt (including current portion) 1,586,439 1,653,582 1,854,479 1,954,786 2,281,834 T

otal stockholders’ equity 3,415,785 3,271,556 3,200,823 3,153,803 4,707,357 T

otal liabilities and stockholders’ equity $ 6,206,228 6,098,926 6,391,446 6,446,175 8,680,050 Cash flow data: N et cash provided by operating activities $ 300,993 319,712 672,205 576,086 880,395 Depreciation and amortization 297,734 296,773 303,004 295,054 306,437 C apital expenditures 275,573 156,180 108,925 217,824 163,076 Acquisitions 24,097 79,917 5,924 8,276 147,097 W

orking capital (c) 1,296,818 1,199,699 1,474,978 1,369,333 1,238,220 C hanges in debt $ (67,672) (200,804) (103,558) (333,112) (534,201)

The year 2011 consolidated financial statements and management’s discussion and analysis of financial condition and results of operations are provided in the C ompany’s 2012 Proxy Statement under Appendix B. (a) In 2009, the C ompany recorded pre-tax charges related to: discontinued carpet tiles of $133,492, business restructurings of $61,725 and $61,794 related to unusually high

raw material costs incurred in the latter part of 2008, flowing through cost of sales in the first quarter of 2009. (b) During 2007, the C ompany implemented a change in residency in one of its foreign subsidiaries. This tax restructuring resulted in a step-up in the subsidiary’s taxable

basis, which resulted in the recognition of a deferred tax asset of approximately $245,000 and a related income tax benefit of approximately $272,000. During 2008, the C ompany recorded a valuation allowance of approximately $253,000 against the deferred tax asset described above. (c) Working capital is defined as current assets less current liabilities. 

# Reconciliation of Non-GAAP Measures

(in thousands, except per share data) Adjusted N et Earnings Attributable to Mohawk Industries, Inc. and Adjusted Diluted Earnings Per S hare Attributable to Mohawk Industries, Inc. 2011 2010
N et earnings attributable to Mohawk I ndustries, I nc. $ 173,922 185,471 Reconciling items:

Unrealized foreign currency losses (a) 9,085

– O perating lease correction (b) 6,035

–

Business restructurings 23,209 13,156 Debt extinguishment costs 1,116 7,514 Acquisitions purchase accounting

– 1,713 U.S. customs refund

– (7,730) Discrete tax items, net

– (24,407) Income taxes (11,749) (2,592)

Adjusted net earnings attributable to Mohawk Industries, Inc. 201,618 173,125 Adjusted diluted earnings per share attributable to Mohawk Industries, Inc. $ 2.92 2.52 Weighted-average common shares outstanding – diluted 68,964 68,764

(a) Unrealized foreign currency losses in Q3 2011 for certain of the C ompany’s consolidated foreign subsidiaries that measure financial position and results using the

U.S. dollar rather than the local currency. (b) C orrection of an immaterial error related to accounting for operating leases.

The C ompany believes it is useful for itself and investors to review, as applicable, both GAAP and the above non-GAAP measures in order to assess the performance of the C ompany’s business for planning and forecasting in subsequent periods.22 Mohawk I ndustries, I nc. 2011 Annual Report 23 

# Reconciliation of Non-GAAP Measures (continued)
(in thousands) Adjusted operating income and Adjusted EBITDA 2011 2010 2009 2008 2007

O perating income (loss) $ 315,542 314,169 43,730 (1,124,134) 750,106

Add: Impairment of goodwill and other intangibles

– – – 1,543,397

–

Business restructurings 23,209 13,156 61,725 29,670 14,200 O perating lease correction (e) 6,035

– – – – C ommercial carpet tile reserve

– – 133,492 44,338

– H igher cost inventory flow through (f)

– – 61,794

– – Adjusted operating income (a) $ 344,786 327,325 300,741 493,271 764,306

Less: Net earnings attributable to noncontrolling interest (4,303) (4,464) (4,480) (5,694) (7,599) Add: Depreciation and amortization 297,734 296,773 303,004 295,054 306,437 O ther income (expense), net (14,051) 3,900 5,588 (21,288) 6,925 Unrealized foreign currency losses (g) 9,085

– – – – U.S. customs refund

– 7,730

– – 9,154 Adjusted EBITDA (b) $ 633,251 631,264 604,853 761,343 1,079,223
N et Debt Long-term debt (including current portion) $ 1,586,439 1,653,582 1,854,479 1,954,786 2,281,834 Less: C ash and cash equivalents (including restricted cash) (311,945) (382,171) (531,458) (93,519) (89,604)
N et Debt (c ) $ 1,274,494 1,271,411 1,323,021 1,861,267 2,192,230
C apital Long-term debt (including current portion) $ 1,586,439 1,653,582 1,854,479 1,954,786 2,281,834 T

otal stockholders’ equity 3,415,785 3,271,556 3,200,823 3,153,803 4,707,357
C apital $ 5,002,224 4,925,138 5,055,302 5,108,589 6,989,191 Net debt to adjusted EBITDA (d) 2.0 2.0 2.2 2.4 2.0 N et Debt to C apital (c ) 25.5% 25.8% 26.2% 36.4% 31.4%

(a) The non-GAAP measure “Adjusted O perating Income” is used to compare operating results. Management uses the information to review results excluding items that are not

necessarily indicative of ongoing results. (b) The non-GAAP measure “Adjusted EBITDA” is used to more clearly evaluate our cash generation from operations. (c) The non-GAAP measures “Net Debt” and “Net Debt to C apital” are used to more clearly evaluate our capital structure and leverage. (d) The non-GAAP measure “Net Debt to Adjusted EBITDA” is used to more clearly show the number of times our operating cash flow covers leverage. (e) C orrection of an immaterial error related to accounting for operating leases. (f) Unusually high raw material costs incurred in the latter part of 2008, flowing through cost of sales in the first quarter of 2009. (g) Unrealized foreign currency losses in Q3 2011 for certain of the C ompany’s consolidated foreign subsidiaries that measure financial position and results using the

U.S. dollar rather than the local currency.



## Cash and Cash Equivalents
$ in millions

Year-end cash declined due to a bond redemption earlier in the year.

90 2007 312 2011 

## Net Debt to Capital

percentage

O ur balance sheet leverage remains close to historical lows. 31.4 2007 25.5 2011 

## Net Debt to Adjusted EBITDA

Despite an industry recession, our balance sheet strength has remained consistent. 2.0 2007 2.0 2011 

## Consolidated Adjusted EBITDA

$ in millions

O ur businesses continue to generate a healthy level of operating cash. 1,079 2007 633 201124 Mohawk I ndustries, I nc. Joseph A. Onorato (1)(2) F ormer C hief F inancial O fficer of Echlin, Inc. (a manufacturer of automotive parts)
W

. Christopher W ellborn President and C hief O perating O fficer Phyllis O. Bonanno (3) F ormer President and C hief Executive O fficer of I nternational T rade S olutions, I nc. (an international trade consulting firm)
Frans De Cock F ormer President of Unilin
Richard C. III (1) C hairman of Triumph Group, Inc. (a public, international aviation services company) Jeffrey S

. L orberbaum C hairman and C hief Executive O fficer Karen A. Smith Bogart (2) President of Pacific T ributes, I nc., (a start-up firm providing web-based printing services)
Bruce C. Bruckmann (1)(3) Managing Director of Bruckmann, Rosser, Sherrill & C o., Inc. (a venture capital firm) John F. Fiedler (2) F ormer C hairman and C hief Executive O fficer of Borg-Warner Automotive Inc. (a manufacturer of automotive parts)
David L . Kolb (3) F ormer C hairman and C hief Executive O fficer of Mohawk I ndustries, I nc. 

# Board of Directors

Please see the C ompany’s 2011 Proxy Statement for a listing of our E xecutive O fficers. The Proxy Statement is available via the Internet at www.mohawkind.com under Investor Information. (1) Audit C ommittee (2) C ompensation C ommittee (3) Nominating and C orporate Governance C ommittee From Left to Right: Joseph A. Onorato, W. Christopher Wellborn, Phyllis O. Bonanno, Frans De Cock, Richard C. III, Jeffrey S. Lorberbaum, Karen A. Smith Bogart, Bruce C. Bruckmann, John F. Fiedler, David L. Kolb24 Mohawk I ndustries, I nc. 2011 Annual Report 25Design byCorporate Reports Inc., Atlanta, GA www.corporatereport.com C o rp o rate H eadquarters P. O . Box 12069 160 S outh I ndustrial Boulevard C alhoun, Georgia 30703 (706) 624-2246

I ndependent R egistered P ubli c Acco unting Firm
K PM G LL P Atlanta, G eorgia

C o rp o rate C o unsel Alston & Bird LL P Atlanta, G eorgia

Tra nsfe r Agent a n d Regist rar American Stock Transfer and Trust C ompany C orporate T rust C lient S ervices 16633 N. Dallas Parkway, Suite 600 Addison, T exas 75001 (972) 588-1889

P ubli c ati o ns The C ompany’s Annual Report, Proxy Statement, F orm 8- K , 10- K and 10-Q reports are available without charge and can be ordered via our stockholder communications service at (800) 625-7721 or via the Internet at www.mohawkind.com under Investor Information. Written requests should be sent to Deby F orbus at the C ompany’s headquarters address above.

P r o du c t I nquiries F or more information about Mohawk’s products, visit our websites: www.mohawkflooring.com. www.daltile.com www.unilin.com I nvesto r /An a lyst C ont a ct F or additional information about Mohawk, please contact F rank H . Boykin at (706) 624-2695 or at the C ompany’s headquarters address above.

A nnualM eeting of S tockhol d e r s
T he Annual Meeting of S tockholders of Mohawk I ndustries, I nc., will be held at the C ompany’s headquarters on S outh I ndustrial Boulevard in C alhoun, Georgia, on May 9, 2012, at 10:00 a.m. F or directions and a map, call Deby F orbus at (706) 624-2246.

C o mm on S tock P r ice R a nge Mohawk’s common stock is traded on the New York Stock Exchange under the symbol M HK

. T he table below sets forth the high and low sales prices per share of the common stock as reported by the exchange, for each period indicated.

Moh a wk C o mm on S tock 2011 H igh L ow F irst Quarter $63.12 $54.42 Second Quarter 68.86 57.43 Third Quarter 61.47 39.93 F ourth Quarter 61.30 40.19

2010 H igh L ow F irst Quarter $55.52 $41.33 Second Quarter 66.93 43.58 Third Quarter 54.94 42.61 F ourth Quarter 61.28 51.55 S ustainability Mohawk is recognized as a leader in sustainability and environmental stewardship, with a determined focus on responsible use of raw materials, recycling, waste management and water and energy conservation throughout its business and operations.

E qual Opp o rtunity
Mohawk is an E qual O pportunity/ Affirmative Action employer committed to attracting a diverse pool of applicants and sustaining an inclusive workforce.

NYSE Affi rma tion C e r tific a tions As a listed C ompany with the New York Stock Exchange (“NYSE”), Mohawk is subject to certain C orporate G overnance standards as required by the NYSE and/or the S ecurities and Exchange C ommission (“SE C ”). Among other requirements, Mohawk’s C E O , as required by Section 303A.12(a) of the NYSE Listing C ompany Manual, must certify to the NYSE each year whether or not he is aware of any violations by the C ompany of NYSE C orporate G overnance listing standards as of the date of the certification. O n June 2, 2011, Mohawk’s C E O Jeffrey S. Lorberbaum, submitted such a certification to the NYSE which stated that he was not aware of any violation by Mohawk of the NYSE C orporate G overnance listing standards.

The C ompany has filed the certifications of its C hief E xecutive O fficer and C hief F inancial O fficer required by Section 302 of SarbanesO xley Act of 2002 as an exhibit to the C ompany’s F orm 10- K for the year ended December 31, 2011. 

# Shareholder Information

• Mohawk I ndustries, I nc • S&P 500 Index – Total Returns • Peer G roup $ 40 $ 60 $ 80 $100 $120

2006 2007 2008 2009 20 1 0 20 1 1 $100 $98.76

$79.98 $90.57 

# Stock Performance Graph

The following is a line graph comparing the yearly percentage change in the C ompany’s cumulative total stockholder returns to those of the Standard & Poor’s 500 Index and a group of peer issuers beginning on December 31, 2006 and ending on December 31, 2011.

The peer group includes the following companies: Armstrong World Industries, Inc.; Dixie Group, Inc.; Interface, Inc.; Leggett & Platt, Inc.; MAS CO C orporation; and Stanley Black & Decker, Inc. Total return values were calculated based on cumulative total return, assuming the value of the investment in the C ompany’s C ommon Stock and in each index on December 31, 2006 was $100 and that all dividends were reinvested. The C ompany is not included in the peer group because management believes that, by excluding the C ompany, investors will have a more accurate view of the C ompany’s performance relative to peer companies.160 South Industrial Boulevard Calhoun, Georgia 30701 www.mohawkind.com Mohawk Industries, Inc. is one of the world’s leading flooring companies with operations in North America, Europe, Asia and Australia. O ur products and brands span every major flooring category across a wide range of price points and distribution channels. W e are headquartered in C alhoun, Georgia, and our shares trade on the New York Stock Exchange under the ticker symbol “MH K .” 

# Alw a

ys i n St yl e

© All rights reserved Mohawk Industries, Inc. 2012