MOHAWK INDUSTRIES INC

1. General

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Mohawk,” or “the Company” as used in this Form 10-Q refer to Mohawk Industries, Inc.

Interim Reporting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with instructions to Form 10-Q and do not include all of the information and footnotes required by United States generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto, and the Company’s description of critical accounting policies, included in the Company’s 2025 Annual Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission. Results for interim periods are not necessarily indicative of the results for the year.

On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) by the executive branch are not lawful. On March 4, 2026, the Court of International Trade (CIT) ordered U.S. Customs and Border Protection (CBP) to begin the refund process for all importers who were subject to IEEPA tariffs. Because of the uncertainty regarding the nature, timing, and extent of potential IEEPA tariff refunds, the Company elected to account for such refunds as gain contingencies, based on the original tariff cost recognition in accordance with ASC 450, Contingencies (“ASC 450”).

Recent Accounting Pronouncements—Recently Adopted

On July 30, 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that allows public entities to assume that current conditions as of the balance sheet date will not change for the remaining life of the asset. That is, current information may be used without making adjustments for expected future changes to relevant data that may impact collectability of receivables. The Company adopted the practical expedient allowed in ASU 2025-05 as of January 1, 2026, with no material impact on reported financial results.

On November 26, 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company adopted the new guidance on a prospective basis as of January 1, 2026, with no impact on the reported financials, as there were no transactions occurring within the scope of the new guidance.

Recent Accounting Pronouncements—Effective in Future Periods

On November 4, 2024, the FASB issued ASU 2024-03, Disaggregation of income statement expense. ASU 2024-03, as amended by ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, requires disaggregated disclosure of income statement expenses for public business entities (“PBEs”). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance.

On September 19, 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to software development project stages, and requires entities to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform its intended function. The new guidance requires entities to consider two factors when determining whether there is significant development uncertainty when considering the probable to complete recognition threshold: (1) Whether the software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing; and (2) whether the entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The new guidance also supersedes the website development costs guidance and incorporates the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40.

ASU 2025-06 will be effective for annual and interim reporting periods beginning after December 15, 2027, and early adoption is permitted as of the beginning of an annual reporting period. The new guidance may be implemented on a prospective basis, a modified transition approach, or a retrospective transition approach. The Company is evaluating the impact of the new guidance.

On May 19, 2026, the FASB issued Accounting Standards Update 2026-02—Environmental Credits and Environmental Credit Obligations (Topic 818), which provides guidance on the recognition and measurement of environmental credits. Under the new ASU, an entity is required to recognize an environmental credit as an asset when it is probable that the environmental credit will be used to settle an environmental credit obligation, transferred in an exchange transaction, or used in a nonreciprocal transfer. In other circumstances (for example, environmental credits acquired to satisfy a voluntary net zero emission initiative), the cost to obtain the environmental credit is expensed when incurred. Entities will also be required to recognize an environmental credit obligation liability when events occurring on or before the reporting date result in an environmental credit obligation (for example, when emissions are created).

The guidance in this Update is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods with early adoption permitted as of the beginning of an annual reporting period. The guidance shall be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. However, prior period financial statements shall not be recast. The Company is currently evaluating the impact of the new guidance.

Revision of Previously Issued Financial Statements

As disclosed in Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, the Company identified an immaterial error related to intercompany activity impacting accounts receivable. The Company determined that the impacts of the error were not material, individually or in the aggregate, to its previously issued Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements for any of the prior quarters or the annual period in which they occurred. However, in accordance with Staff Accounting Bulletin No. 108 of the Securities and Exchange Commission, the Company concluded that correcting the cumulative error in the period during which the error was identified would be material to its results of operations for the fiscal year ended December 31, 2025. As a result, the opening retained earnings as presented in the Form 10-K was adjusted by $42.1 million.

The identified error does not impact the consolidated statements of operations or cash flows for any of the periods presented in this filing. Additional detail regarding the nature of the revision is included in Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.

2. Revenue from Contracts with Customers

Contract Liabilities

The Company records contract liabilities when it receives payment prior to fulfilling a performance obligation. Contract liabilities related to revenues are recorded in accounts payable and accrued expenses on the accompanying Condensed Consolidated Balance Sheets. The revenues related to these performance obligations are expected to be recognized within a twelve-month period. The Company had contract liabilities of $74.7 million and $74.3 million as of October 3, 2026, and December 31, 2025, respectively.

Performance Obligations

Substantially all of the Company’s revenue is recognized at a point in time when the product is either shipped or received from the Company’s facilities and control of the product is transferred to the customer. Accordingly, the Company doesnot recognize a significant amount of revenue from performance obligations satisfied, or partially satisfied, in prior periods, and the amount of such revenue recognized during the three and nine months ended October 3, 2026, and September 27, 2025, was immaterial.

Costs to Obtain a Contract

The Company incurs certain incremental costs to obtain revenue contracts. These costs relate to marketing display structures and are capitalized when the amortization period is greater than one year, with the amount recorded in other assets on the accompanying Condensed Consolidated Balance Sheets. Capitalized costs to obtain contracts were $73.1 million and $58.8 million as of October 3, 2026, and December 31, 2025, respectively. Straight-line amortization expense recognized during the nine months ended October 3, 2026, and September 27, 2025, related to these capitalized costs was $31.2 million and $32.9 million, respectively.

Revenue Disaggregation

The Company hasthree reporting segments: Global Ceramic, Flooring North America (“Flooring NA”) and Flooring Rest of the World (“Flooring ROW”). The following table presents the Company’s segment revenues disaggregated by the geographical market location of customer sales and product categories for the three months ended October 3, 2026, and September 27, 2025:

(1) Other includes roofing elements, insulation boards, chipboards and IP contracts.

The following table presents the Company's segment revenues disaggregated by the geographical market location of customer sales and product categories for the nine months ended October 3, 2026, and September 27, 2025:

(1) Other includes roofing elements, insulation boards, chipboards and IP contracts.

3. Restructuring, Acquisition and Integration-Related Costs

The Company incurs costs in connection with acquiring, integrating and restructuring acquisitions and in connection with its global cost-reduction and productivity initiatives. For example:

•In connection with acquisition activity, the Company typically incurs costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and

•In connection with the Company’s cost-reduction/productivity initiatives, it typically incurs costs and charges associated with site closings and other facility rationalization actions, including accelerated depreciation (“asset write-downs”) and workforce reductions.

Restructuring, acquisition transaction and integration-related costs consisted of the following during the three and nine months ended October 3, 2026, and September 27, 2025:

During 2024 and 2025, the Company implemented a number of restructuring actions, productivity initiatives and manufacturing enhancements focused on reducing costs to enhance future performance, including certain facility, asset and product rationalizations and workforce reductions. In 2026, the Company announced further restructuring actions to take advantage of additional opportunities related to the activities described above, including assets and product rationalizations and workforce reductions to further reduce costs and streamline the business for the future.

The following table summarizes the restructuring activities for the three months ended October 3, 2026:

The following table summarizes the restructuring activities for the nine months ended October 3, 2026:

The Company currently estimates that it will incur additional restructuring costs of approximately $20 to $30 million primarily related to asset disposals and other restructuring related costs, which are expected to be executed throughout the remainder of 2026 and into 2027.

As of October 3, 2026, the accrual balance related to restructuring activities was $0.7 million for plans approved during 2024, $6.8 million for plans approved during 2025 and $8.9 million for plans approved during 2026.

For the plans approved prior to 2024, restructuring expenses of $(0.1) million and $1.0 million were recorded during the three and nine months ended October 3, 2026, respectively. For the plans approved during 2024, restructuring expenses of $(0.4) million and $11.1 million were recorded during the three and nine months ended October 3, 2026, respectively. For the plans approved during 2025, restructuring expenses of $11.4 million and $50.3 million were recorded during the three and nine months ended October 3, 2026, respectively. For the plans approved during 2026, restructuring expenses of $1.4 million and $26.0 million were recorded during the three and nine months ended October 3, 2026, respectively.

The Company expects the remaining severance and other restructuring costs to be paid over the next 12 months.

4. Receivables, net

5. Inventories

6. Goodwill and Intangible Assets

The components of goodwill and other intangible assets are as follows:

Goodwill:

(1) Net of accumulated impairment losses of $2,886.7 million ($1,644.7 million in Global Ceramic, $557.9 million in Flooring NA and $684.1 million in Flooring ROW).

Intangible assets not subject to amortization:

Intangible assets subject to amortization:

7. Accounts Payable and Accrued Expenses

8. Accumulated Other Comprehensive Income (Loss)

9. Stock-Based Compensation

The Company recognizes compensation expense for all stock-based payments granted based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the awards’ estimated lives for fixed awards with ratable vesting provisions.

The Company granted 30,000 restricted stock units (“RSUs”) at a weighted average grant-date fair value of $124.72 per unit for the three months ended October 3, 2026. The Company granted 278,485 RSUs at a weighted average grant-date fair value of $123.19 per unit for the nine months ended October 3, 2026. The Company granted 9,830 RSUs for the three months ended September 27, 2025. The Company granted 314,819 RSUs at a weighted average grant-date fair value of $116.21 per unit for the nine months ended September 27, 2025. The Company recognized stock-based compensation expense related to RSUs of $8.5 million ($6.3 million net of taxes) and $7.5 million ($5.5 million net of taxes) for the three months ended October 3, 2026, and September 27, 2025, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. The Company recognized stock-based compensation expense related to RSUs of $22.7 million ($16.8 million net of taxes) and $22.6 million ($16.7 million net of taxes) for the nine months ended October 3, 2026, and September 27, 2025, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $31.8 million as of October 3, 2026, and will be recognized as expense over a weighted average period of approximately 2.01 years.

10. Other Income and Expense, net

11. Income Taxes

For the three months ended October 3, 2026, the Company recorded income tax expense of $20.1 million on earnings before income taxes of $183.3 million for an effective tax rate of 11.0%. For the three months ended September 27, 2025, the Company recorded income tax expense of $23.3 million on earnings before income taxes of $132.1 million, for an effective tax rate of 17.6%. The decrease in the effective tax rate was primarily attributable to a decrease in unrecognized tax benefits during the three months ended October 3, 2026, and a non-recurring tax benefit recorded during the three months ended October 3, 2026, related to a U.S. tax election. These favorable impacts were partially offset by the Company’s geographic dispersion of profits and losses for the respective periods.

For the nine months ended October 3, 2026, the Company recorded income tax expense of $63.6 million on earnings before income taxes of $540.1 million for an effective tax rate of 11.8%. For the nine months ended September 27, 2025, the Company recorded income tax expense of $74.8 million on earnings before income taxes of $402.7 million for an effective tax rate of 18.6%. The decrease in the effective tax rate was primarily attributable to a decrease in unrecognized tax benefits during the nine months ended October 3, 2026, and tax benefits recognized during the nine months ended October 3, 2026, including (i) a one-time tax benefit associated with a legal entity restructuring initiative, (ii) tax credits issued by the Brazilian government related to prior years, (iii) a foreign tax credit benefit recorded in connection with a U.S. amended return, and (iv) a non-recurring tax benefit related to a U.S. tax election. These favorable impacts were partially offset by the Company’s geographic dispersion of profits and losses for the respective periods.

12. Stockholders’ Equity

The following tables reflect the changes in stockholders’ equity for the three months ended October 3, 2026, and September 27, 2025:

(1) The Retained Earnings balance as of June 28, 2025 has been revised. See Note 1, "General - Revision of Previously Issued Financial Statements"

The following tables reflect the changes in stockholders’ equity for the nine months ended October 3, 2026, and September 27, 2025:

13. Earnings Per Share

Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted earnings per common share assumes the vesting of RSUs using the treasury stock method when the effects of such assumptions are dilutive. A reconciliation of net earnings attributable to Mohawk Industries, Inc. and weighted-average common shares outstanding for purposes of calculating basic and diluted earnings per share is as follows:

14. Segment Reporting

The Company hasthree reporting segments: Global Ceramic, Flooring NA and Flooring ROW. Global Ceramic designs, manufactures, sources and markets a broad line of ceramic tile, porcelain tile, natural stone, porcelain slabs, quartz countertops and other products, which it distributes primarily in North America, Europe and Latin America through its network of regional distribution centers and Company-operated service centers using Company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through Company-operated service centers, independent distributors, home centers, tile and flooring retailers, residential builders, residential and commercial contractors and commercial end users. Flooring NA designs, manufactures, sources and markets its floor covering product lines, including carpets, rugs, carpet pad, laminate, resilient (includes sheet vinyl and luxury vinyl tile (“LVT”)), wood flooring and flooring accessories, which it distributes through its network of regional distribution centers and satellite warehouses using Company-operated trucks, common carriers or rail transportation. The segment’s product lines are sold through independent floor covering retailers, independent distributors, home centers, mass merchandisers, department stores, shop at home, buying groups, residential builders, commercial contractors and commercial end users. Flooring ROW designs, manufactures, sources, licenses and markets laminate, sheet vinyl, LVT, carpet, carpet tile, wood flooring, roofing elements, insulation materials, medium- and high-density fiberboard (“MDF” and “HDF”), chipboards, decorative panels, and other wood products, which it distributes primarily in Europe and Oceania through independent floor covering retailers, Company-operated distributors, independent distributors and home centers.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands segment disclosures for public entities, including requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM and an explanation of how the CODM uses reported measures of segment profit or loss in assessing segment performance and allocating resources. The new guidance also expands disclosures about a reportable segment’s profit or loss and assets in interim periods and clarifies that a public entity may report additional measures of segment profit if the CODM uses more than one measure of a segment’s profit or loss. The new guidance does not remove existing segment disclosure requirements or change how a public entity identifies its operating segments, aggregates those operating segments, or determines its reportable segments. Effective January 1, 2024, the Company adopted the new disclosure guidance.

The Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Company collaborate to gather information that the CEO uses to assess performance and make resource allocation decisions for the operating segments. The CEO frequently makes operational and resource allocation decisions and is also responsible for strategic decisions. Since the CEO makes crucial operating and resource allocation decisions with support from the other senior executives, the CEO is the CODM for purposes of Topic 280.

The CODM considers Operating income (loss) as compared to prior year performance and forecast for each reporting segment to evaluate performance and allocate resources to the segments.

For the Global Ceramic, Flooring NA and Flooring ROW segments, the CODM uses segment Operating income (loss) to allocate resources (including employees and financial or capital resources) for each segment predominantly in the annual budget and forecasting process. The CODM considers forecast-to-actual variances in Operating income (loss) on a monthly basis when making decisions about allocating resources to the segments.

The Company internally provides the following discrete segment financial information to its CODM: total assets; geographic net sales; long-lived assets; net sales by product categories; net sales; cost of sales; selling, general, and administrative expenses; operating income; depreciation expenses and capital expenditures. This key segment information, including both significant segment expenses and assets, is used by the CODM to evaluate performance and allocate resources to the segments.

Significant segment sales, expenses and assets information is as follows:

(1) Russia revenue included in Europe.

(2)Other includes roofing elements, insulation boards, chipboards and IP contracts.

15. Commitments and Contingencies

From time to time in the regular course of its business, the Company is involved in various lawsuits, claims, investigations and other legal matters. Except as noted below, there are no material legal proceedings pending or known by the Company to be contemplated to which the Company is a party or to which any of its property is subject.

Perfluoroalkyl and Polyfluoroalkyl Substances (“PFAS”) Litigation

The Company has been named as a defendant in a number of lawsuits in Georgia, Alabama, and South Carolina relating to carpet products that allegedly contained perfluoroalkyl and polyfluoroalkyl substances (“PFAS”). These lawsuits have been brought against chemical manufacturers and carpet manufacturers and have been brought by four categories of plaintiffs: (i) municipalities and counties alleging contamination of their drinking water sources with PFAS, (ii) counties alleging contamination of their landfills with PFAS, (iii) private landowners alleging contamination of their real property with PFAS, and (iv) rate payers alleging that their drinking water rates have increased due to the costs associated with remediation of PFAS.

The municipalities and counties assert common law and statutory claims seeking to recover the costs of installing water filtration systems to filter out the PFAS that is allegedly in the drinking water sources. The counties that claim contamination of their landfills assert common law and statutory claims seeking to recover the costs of remediating the PFAS that is allegedly in the landfills. The private landowners allege that biosolids sludge applied on or near their real property contained PFAS or allege that PFAS from nearby manufacturing facilities ended up on their real property. Those landowners assert common law and statutory claims seeking to recover the costs of remediating the PFAS that is allegedly on their real property. Finally, the rate payers that claim their drinking water rates have increased due to PFAS include a proposed class of water subscribers with the Rome Water and Sewer Division and/or the Floyd County Water Department in Georgia. The rate payers assert common law and statutory claims and seek to recover past and future damages due to the rate increases.

The Company believes that it has significant defenses against the allegations in these lawsuits and will continue to vigorously defend against these claims.

Silica Litigation

The Company is subject to certain claims related to exposure to silica dust that have been submitted against it or its subsidiaries. A majority of these outstanding claims have been filed against the Company by a single plaintiff group in California. Approximately 480 cases are currently outstanding, including 113 of which that are pending dismissal. The Company believes it has substantial defenses against the allegations and will continue to vigorously defend against these claims.

Belgian Tax Matter

The Company is in a dispute with the Belgian Tax Authority (the “BTA”) in relation to certain intercompany loans to or from IVC BV, Unilin BV, and Unilin Holding BV, each of which is one of the Company’s subsidiaries in Belgium. The BTA has asserted that these loans were not genuine loans for Belgian tax purposes. The BTA issued assessments for the years ended December 31, 2017, 2018, 2019, 2020, and 2021 totaling approximately €1.2 billion (including penalties but excluding late payment interest) combined on the three entities, whereby it rejected certain interest deductions and the deduction for dividends received and asserted the inclusion of income related to these loans. Each of these assessments is under dispute. Certain matters remain in the administrative appeals process before the BTA, while others have advanced to proceedings in the Belgian courts. The Company believes that its tax position in Belgium was correct and intends to vigorously defend its position.

General

The Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable losses that are reasonably estimable. These contingencies are subject to significant uncertainties and the Company is unable to estimate the amount or range of loss, if any, in excess of amounts accrued. The Company does not believe that the ultimate outcome of these actions will be significantly above amounts accrued, or that the ultimate outcome of these actions will have a material adverse effect on its financial condition; however, litigation is inherently uncertain and actual losses could result in unfavorable outcomes that could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

The Company is subject to various federal, state, local and foreign environmental health and safety laws and regulations, including those governing air emissions, wastewater discharges, the use, storage, treatment, recycling and disposal of solid and hazardous materials and finished product, and the cleanup of contamination associated therewith. Because of the nature of the Company’s business, the Company has incurred, and will continue to incur, costs relating to compliance with such laws and regulations. The Company is involved in various proceedings relating to environmental matters and is currently engaged in environmental investigation, remediation and post-closure care programs at certain sites. The Company has provided accruals for such activities that it has determined to be both probable and reasonably estimable. The Company does not expect that the ultimate liability with respect to such activities will have a material adverse effect on its financial condition; however, litigation is inherently uncertain and actual losses could result in unfavorable outcomes that could have a material adverse effect on its results of operations, cash flows or liquidity in a given quarter or year.

16. Debt

Senior Credit Facility

On May 12, 2026, the Company entered into a senior revolving credit agreement (the “Senior Credit Facility”), by and among the Company and certain of its domestic and foreign subsidiaries, as borrowers (the “Borrowers”), certain lenders party thereto from time to time (the “Lenders”), JPMorgan Chase Bank, N.A. and J.P. Morgan SE, as U.S. administrative agent and non-U.S. administrative agent (together, the “Administrative Agent”). Contemporaneously with the entry into the Senior Credit Facility, the Company terminated all outstanding commitments and repaid all outstanding obligations under its existing senior revolving credit facility. The Senior Credit Facility provides for unsecured revolving credit commitments in an initial aggregate amount of up to $1,500.0 million that includes: (i) revolving credit loans up to the maximum amount available under the Senior Credit Facility, (ii) the issuance of letters of credit up to a $125.0 million sublimit, and (iii) swingline loans in an initial aggregate amount up to $150.0 million, with an accordion feature pursuant to which the Borrowers may request to increase the revolving commitments by an additional aggregate amount of up to $600.0 million, subject to the satisfaction of certain conditions. The proceeds of any borrowings under the Senior Credit Facility will be used to (a) refinance the Company’s existing senior revolving credit facility, (b) pay fees, commissions and expenses in connection with the transaction related to the Senior Credit Facility and (c) finance ongoing working capital requirements and other general corporate purposes.

The Senior Credit Facility is scheduled to mature on May 12, 2031. The Company may request up totwo extensions of the maturity date, with each extension subject to lender consent and certain other conditions and providing for an extended maturity date no later than five years following the applicable extension date. The Company may voluntarily prepay borrowings and terminate or reduce the commitments under the Senior Credit Facility, subject to applicable notice requirements, without premium or penalty (other than customary breakage costs).

The Senior Credit Facility is available in United States Dollars and in alternative currencies including Australian Dollars, Canadian Dollars, Euro and Sterling (each, an “Alternative Currency”). At the Company’s election, United States Dollars denominated revolving loans under the Senior Credit Facility bear interest at annual rates equal to (a) a forward-looking term rate based on the secured overnight financing rate for the applicable 1, 3, or 6-month interest period (“Term SOFR”), as selected by the Company, plus an applicable margin ranging from 0.750% per annum to 1.250% per annum (1.00% as of October 3, 2026), or (b) the highest of (i) the prime rate in effect on such date, (ii) the Federal funds effective rate in effect on such day plus 0.50%, and (iii) Term SOFR for a one month tenor in effect on such day plus 1.00% (“Base Rate”) plus an applicable margin ranging from 0.000% per annum to 0.250% per annum (0.0% as of October 3, 2026). Borrowings in Australian Dollars, Canadian Dollars and Euro bear interest at the Eurocurrency Rate (as defined in the Senior Credit Facility), plus an applicable margin ranging from 0.750% per annum to 1.250% per annum (1.00% as of October 3, 2026). Borrowings in Sterling bear interest based on Daily Simple RFR (as defined in the Senior Credit Facility), plus an applicable margin ranging from 0.750% per annum to 1.250% per annum (1.00% as of October 3, 2026). The Company will also pay a commitment fee to the lenders at a rate ranging from 0.055% per annum to 0.150% per annum (0.08% as of October 3, 2026). The applicable margins and the commitment fee are determined based on whichever of the Company’s Consolidated Net Leverage Ratio (as defined in the Senior Credit Facility) or its senior unsecured debt rating (or if not available, corporate family rating) results in the lower applicable margins and commitment fee (with applicable margins and the commitment fee increasing as that ratio increases or those ratings decline, as applicable).

Borrowings under the Senior Credit Facility are unsecured.

All obligations of the several domestic borrowers are guaranteed by the other domestic borrowers party to the Senior Credit Facility, and all obligations of the several foreign borrowers are guaranteed by the other foreign borrowers and all of the domestic borrowers party to the Senior Credit Facility, in each case subject to certain limitations set forth in the Senior Credit Facility and the applicable guaranties.

The Senior Credit Facility includes certain affirmative and negative covenants that impose restrictions on the Company’s financial and business operations, including limitations on liens, indebtedness, certain fundamental changes, and changes in the nature of the Company’s business. Many of these limitations are subject to numerous exceptions. The Company is also required to maintain a Consolidated Interest Coverage Ratio (as defined in the Senior Credit Facility) of at least 3.50 to 1.00 as of the last day of any fiscal quarter.

The Senior Credit Facility also contains customary representations and warranties and events of default, subject to customary grace periods.

Upon the occurrence and continuation of certain events of default, the Administrative Agent may, at the request of or with the consent of the Required Lenders, among other remedies, terminate the commitments and the obligations of the letter of credit issuers to make letter of credit extensions, declare outstanding loans and other obligations under the Senior Credit Facility immediately due and payable, and require the Company to cash collateralize outstanding letter of credit obligations. Certain bankruptcy or insolvency events result in automatic termination of commitments and acceleration of outstanding obligations.

In 2026, the Company paid financing costs of $2.2 million in connection with its entry into its Senior Credit Facility. The unamortized costs from the previous Senior Credit Facility were written off in the quarter ended July 4, 2026.

As of October 3, 2026, amounts used under the Senior Credit Facility included $0.0 million of borrowings and $0.9 million of standby letters of credit related to various insurance contracts and foreign vendor commitments. Any outstanding borrowings under the Company’s United States and European commercial paper programs reduce the availability of the Senior Credit Facility. Including commercial paper borrowings, the Company has used $35.9 million under the Senior Credit Facility, resulting in a total of $1,464.1 million available as of October 3, 2026.

Commercial Paper

On February 28, 2014, and July 31, 2015, the Company established programs for the issuance of unsecured commercial paper in the United States and European capital markets, respectively. Commercial paper issued under the United States and European programs will have maturities ranging up to 397 and 183 days, respectively. None of the commercial paper notes may be voluntarily prepaid or redeemed by the Company and rank pari passu with the Company’s other unsecured and unsubordinated indebtedness. To the extent that the Company issues European commercial paper notes through a subsidiary of the Company, the notes will be fully and unconditionally guaranteed by the Company.

The Company uses its Senior Credit Facility as a liquidity backstop for its commercial paper programs. Accordingly, the total amount outstanding under the Company’s commercial paper programs may not exceed $1,500.0 million (less any amounts drawn on the Senior Credit Facility) at any time.

The proceeds from the issuance of commercial paper notes will be available for general corporate purposes. As of October 3, 2026, there was $35.0 million outstanding under the United States commercial paper program, andno amounts outstanding under the European program. The weighted-average interest rate and maturity period for the U.S. program were 3.98% and 3 days, respectively.

Senior Notes

On September 18, 2023, the Company completed the issuance and sale of $600.0 million aggregate principal amount of 5.850% Senior Notes (“5.850% Senior Notes”) due September 18, 2028. The 5.850% Senior Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s other existing and future senior unsecured indebtedness. Interest on the 5.850% Senior Notes is payable semi-annually in cash on March 18 and September 18 of each year, commencing on March 18, 2024. The Company paid financing costs of $5.6 million in connection with the 5.850% Senior Notes. These costs were deferred and are being amortized over the term of the 5.850% Senior Notes.

On June 12, 2020, Mohawk Capital Finance S.A. (“Mohawk Finance”), an indirect wholly owned finance subsidiary of the Company, completed the issuance and sale of €500.0 million aggregate principal amount of 1.750% Senior Notes (“1.750% Senior Notes”) due June 12, 2027. The 1.750% Senior Notes are senior unsecured obligations of Mohawk Finance and rank pari passu with Mohawk Finance’s other existing and future senior unsecured indebtedness. The 1.750% Senior Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis. Interest on the 1.750% Senior Notes is payable annually in cash on June 12 of each year, commencing on June 12, 2021. The Company paid financing costs of $4.4 million in connection with the 1.750% Senior Notes. These costs were deferred and are being amortized over the term of the 1.750% Senior Notes.

On May 14, 2020, the Company completed the issuance and sale of $500.0 million aggregate principal amount of 3.625% Senior Notes (“3.625% Senior Notes”) due May 15, 2030. The 3.625% Senior Notes are senior unsecured obligations of the Company and rank pari passu with the Company’s existing and future unsecured indebtedness. Interest on the 3.625% Senior Notes is payable semi-annually in cash on May 15 and November 15 of each year, commencing on November 15, 2020. The Company paid financing costs of $5.5 million in connection with the 3.625% Senior Notes. These costs were deferred and are being amortized over the term of the 3.625% Senior Notes.

As defined in the related agreements, the Company’s senior notes contain covenants, representations and warranties and events of default, subject to exceptions, and restrictions on the Company’s financial and business operations, including limitations on liens, restrictions on entering into sale and leaseback transactions, fundamental changes, and a provision allowing the holder of the notes to require repayment upon a change of control triggering event.

The fair values and carrying values of the Company’s debt instruments are detailed as follows:

The fair values of the Company’s debt instruments were estimated using observable market inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

17. Supplemental Cash Flow Information

18. Subsequent Events

On October 26, 2026, the Company's Board of Directors approved the 2026 Share Repurchase Program. For further information, see the discussion set forth in Part II, Item 2.