Kontoor Brands Inc

NOTE 20 —LEASES

The following table presents lease-related assets and liabilities recorded in the Company's balance sheets:

Kontoor Brands, Inc. 2023 Form 10-K 79

Lease costs

The following table presents certain information related to lease costs for operating leases:

The following table presents supplemental cash flow and non-cash information related to operating leases:

The following table presents future maturities of operating lease liabilities as of December 2023:

As of December 2023, the Company hadnot entered into any operating lease arrangements that had not yet commenced. The Company continuously monitors lease contracts and may negotiate amendments that include extensions or modifications to existing leases.

Refer to Note 14 to the Company's financial statements for additional information on the related fair value measurements.

NOTE 21 —COMMITMENTS

The Company is obligated under noncancelable operating leases. Refer to Note 20 to the Company's financial statements for additional information related to future lease payments.

The Company has entered into licensing agreements that provide the Company rights to market products under trademarks owned by other parties. Royalties under these agreements are recognized within "cost of goods sold" in the statements of operations. Certain of these agreements contain minimum royalty and minimum advertising requirements. Future minimum royalty payments, including any required advertising payments, are $1.0 million each year for 2024 through 2028. There are currentlyno contractual payments due beyond 2028.

80 Kontoor Brands, Inc. 2023 Form 10-K

In the ordinary course of business, the Company has entered into purchase commitments for raw materials, contract production and finished products. These agreements typically range fromone tofive months in duration and will require total payments of $492.5 million in 2024.

The Company has entered into commitments for (i) service and maintenance agreements related to management information systems, (ii) capital spending and (iii) advertising. Future payments under these agreements are $26.0 million, $7.9 million, $1.8 million, $0.8 million and $0.1 million for 2024 through 2028, respectively, and $0.1 million thereafter.

Surety bonds, customs bonds, standby letters of credit and international bank guarantees, all of which represent contingent guarantees of performance under self-insurance and other programs, totaled $29.9 million as of December 2023. These commitments would only be drawn upon if the Company were to fail to meet related claims or other obligations.

NOTE 22 —RESTRUCTURING

The Company generally incurs restructuring charges related to cost optimization of business activities, primarily related to severance and employee-related benefits. In 2023, the Company took actions to drive efficiencies in our operations, which included reducing our global workforce and streamlining and transferring select production within our internal manufacturing network. In 2022, restructuring costs related to the globalization of the Company's operating model and relocation of the European headquarters to Geneva, Switzerland. In 2021, restructuring costs primarily related to the decision to exit certain company-owned outlet stores and the transition of our India business to a licensing model. We do not expect material charges in future periods related to the initiatives discussed above.

Of the $11.5 million of restructuring charges recognized during the year ended December 2023, $5.7 million were reflected within "selling, general and administrative expenses" and $5.8 million within "cost of goods sold." All of the $13.7 million of restructuring charges recognized during the year ended December 2022 were reflected within "selling, general and administrative expenses." The Company also recognized a $2.6 million pension curtailment gain within "other expense, net" during the year ended December 2022. Refer to Note 13 to the Company's financial statements for additional information related to pension charges. All of the $1.0 million of restructuring charges recognized during the year ended December 2021 were reflected within "selling, general and administrative expenses."

All of the $0.8 million restructuring accrual reported in the Company's balance sheet at December 2023 is expected to be paid out within the next 12 months and is classified within "accrued liabilities." All of the $10.7 million restructuring accrual reported in the Company's balance sheet at December 2022 was classified within "accrued liabilities."

The following table presents the components of restructuring charges:

The following table presents the restructuring costs by business segment:

Kontoor Brands, Inc. 2023 Form 10-K 81

The following table presents activity in the restructuring accrual for the years ended December 2023 and December 2022: