POOL CORPORATION (Exact name of registrant as specified in its - PDF document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2017 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-26640 POOL CORPORATION (Exact name of registrant as specified in its charter) Delaware 36-3943363 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 109 Northpark Boulevard, Covington, Louisiana 70433-5001 (Address of principal executive offices) (Zip Code) 985-892-5521 (Registrant’s telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer x Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Emerging growth company o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x As of October 26, 2017, there were 40,166,800 shares of common stock outstanding.

POOL CORPORATION Form 10-Q For the Quarter Ended September 30, 2017 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Statements of Income 1 Consolidated Statements of Comprehensive Income 2 Consolidated Balance Sheets 3 Condensed Consolidated Statements of Cash Flows 4 Notes to Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosures about Market Risk 28 Item 4. Controls and Procedures 28 PART II. OTHER INFORMATION Item 1. Legal Proceedings 29 Item 1A. Risk Factors 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 6. Exhibits 30 SIGNATURE 31

PART I. FINANCIAL INFORMATION Item 1. Financial Statements POOL CORPORATION Consolidated Statements of Income (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net sales $ 743,401 $ 691,429 $ 2,278,005 $ 2,125,568 Cost of sales 526,795 491,878 1,618,114 1,512,258 Gross profit 216,606 199,551 659,891 613,310 Selling and administrative expenses 134,678 125,385 392,779 367,194 Operating income 81,928 74,166 267,112 246,116 Interest and other non-operating expenses, net 4,009 2,989 11,608 9,954 Income before income taxes and equity earnings 77,919 71,177 255,504 236,162 Provision for income taxes 29,179 26,807 89,951 90,244 Equity earnings in unconsolidated investments, net 43 51 121 113 Net income 48,783 44,421 165,674 146,031 Net loss attributable to noncontrolling interest — 113 294 309 $ 48,783 $ 44,534 $ 165,968 $ 146,340 Net income attributable to Pool Corporation Earnings per share: $ 1.20 $ 1.06 $ 4.04 $ 3.48 Basic $ 1.16 $ 1.03 $ 3.89 $ 3.39 Diluted Weighted average shares outstanding: Basic 40,659 42,020 41,065 42,092 Diluted 42,207 43,119 42,691 43,201 Cash dividends declared per common share $ 0.37 $ 0.31 $ 1.05 $ 0.88 The accompanying Notes are an integral part of the Consolidated Financial Statements. 1

POOL CORPORATION Consolidated Statements of Comprehensive Income (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net income $ 48,783 $ 44,421 $ 165,674 $ 146,031 Other comprehensive income (loss): Foreign currency translation adjustments 1,842 96 6,432 1,367 Change in unrealized gains and losses on interest rate swaps, net of change in taxes of $(181), $(400), $(432) and $882 283 625 675 (1,379) Total other comprehensive income (loss) 2,125 721 7,107 (12) Comprehensive income 50,908 45,142 172,781 146,019 Comprehensive loss attributable to noncontrolling interest — 45 74 198 Comprehensive income attributable to Pool Corporation $ 50,908 $ 45,187 $ 172,855 $ 146,217 The accompanying Notes are an integral part of the Consolidated Financial Statements. 2

POOL CORPORATION Consolidated Balance Sheets (In thousands, except share data) September 30, September 30, December 31, 2017 2016 2016 (1) (Unaudited) (Unaudited) Assets Current assets: Cash and cash equivalents $ 36,398 $ 30,292 $ 21,956 Receivables, net 90,142 81,072 61,437 Receivables pledged under receivables facility 172,654 152,333 104,714 Product inventories, net 484,287 455,156 486,116 Prepaid expenses and other current assets 14,832 12,084 15,318 Deferred income taxes — 5,288 6,016 Total current assets 798,313 736,225 695,557 Property and equipment, net 103,880 84,643 83,290 Goodwill 189,024 185,486 184,795 Other intangible assets, net 13,206 13,645 13,326 Equity interest investments 1,168 1,152 1,172 Other assets 16,333 16,370 15,955 Total assets 1,121,924 $ 1,037,521 $ 994,095 $ Liabilities, redeemable noncontrolling interest and stockholders’ equity Current liabilities: Accounts payable $ 209,062 $ 199,922 $ 230,728 Accrued expenses and other current liabilities 87,887 126,654 64,387 Short-term borrowings and current portion of long-term debt and other long-term liabilities 8,609 1,298 1,105 Total current liabilities 305,558 327,874 296,220 Deferred income taxes 27,244 28,359 34,475 Long-term debt, net 555,964 388,891 436,937 Other long-term liabilities 22,614 17,945 18,966 Total liabilities 911,380 763,069 786,598 Redeemable noncontrolling interest — 2,467 2,287 Stockholders’ equity: Common stock, $0.001 par value; 100,000,000 shares authorized; 40,122,935, 41,711,888 and 41,089,720 shares issued and outstanding at September 30, 2017, September 30, 2016 and December 31, 2016, respectively 40 42 41 Additional paid-in capital 420,946 399,071 403,162 Retained deficit (202,693) (113,276) (183,915) Accumulated other comprehensive loss (7,749) (13,852) (14,078) Total stockholders’ equity 210,544 271,985 205,210 Total liabilities, redeemable noncontrolling interest and stockholders’ $ 1,121,924 $ 1,037,521 $ 994,095 equity (1) Derived from audited financial statements. The accompanying Notes are an integral part of the Consolidated Financial Statements. 3