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. 2024 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 2024:

As of December 2024, 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 in this Form 10-K 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 in this Form 10-K 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. As of December 2024, future minimum royalty payments, including any required advertising payments, are $1.6 million, $1.8 million, $1.3 million and $1.1 million for 2025 through 2028, respectively. There are currentlyno contractual payments due beyond 2028.

80 Kontoor Brands, Inc. 2024 Form 10-K

In the ordinary course of business, the Company has entered into purchase commitments for raw materials, contract production and finished products that typically range fromone tofive months in duration. As of December 2024, these agreements will require total payments of $576.1 million in 2025.

The Company has entered into commitments for (i) service and maintenance agreements related to management information systems, (ii) capital spending and (iii) advertising. As of December 2024, future payments under these agreements are $23.6 million, $17.5 million, $11.7 million, $6.8 million and $0.4 million for 2025 through 2029, respectively. There are currentlyno contractual payments due beyond 2029.

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 $41.2 million as of December 2024. 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. In 2024, the Company incurred additional restructuring charges related to actions to streamline and transfer select production within our internal manufacturing network and other business optimization activities. 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.

The following table presents the restructuring costs included in the Company's statements of operations:

The following table presents the components of restructuring charges:

The following table presents the restructuring costs by business segment:

Kontoor Brands, Inc. 2024 Form 10-K 81

The following table presents activity in the restructuring accrual, primarily related to severance and employee-related benefits, for the years ended December 2024 and December 2023:

Of the $1.9 million total restructuring accrual reported in the Company's balance sheet at December 2024, $1.8 million is expected to be paid out within the next 12 months and was classified within "accrued and other current liabilities," and the remaining $0.1 million was classified within "other liabilities." All of the $0.8 million restructuring accrual reported in the Company's balance sheet at December 2023 was classified within "accrued and other current liabilities."

NOTE 23 —SUBSEQUENT EVENTS

Dividend

On February 13, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.52 per share of the Company's Common Stock. The cash dividend will be payable on March 20, 2025, to shareholders of record at the close of business on March 10, 2025.

Helly Hansen Acquisition

On February 18, 2025, the Company entered into a definitive agreement to acquire the global outdoor and workwear brand Helly Hansen, a wholly-owned subsidiary of Canadian Tire Corporation, Limited, for $1.276 billion Canadian dollars ("CAD") or approximately $900 million as of the agreement date, subject to working capital and other closing adjustments. On February 19, 2025, the Company entered into foreign currency exchange contracts totaling $1.275 billion CAD to mitigate any impact of foreign currency fluctuations prior to the closing date. The transaction is expected to close in the second fiscal quarter of 2025, upon receipt of required regulatory approval and completion of customary closing conditions.

82 Kontoor Brands, Inc. 2024 Form 10-K